
<PAGE>
 
                                                                    EXHIBIT 10.1





                                ASTROPOWER, INC.

                              401(k) SAVINGS PLAN



                           PREPARED AS OF MAY 1, 1995
<PAGE>
 
                               ASTROPOWER.  INC.
                               ---------------- 

              CERTIFIED COPY OF RESOLUTIONS OF BOARD OF DIRECTORS
              ---------------------------------------------------

    "RESOLVIED: That this Amendment and Restatement to the AstroPower, Inc.
401(k) Savings Plan to be effective January 1, 1994 in the form presented to
this Meeting with such changes as may be approved by counsel, is hereby adopted
and the proper officers of the Employer are hereby authorized to execute said
Amended and Restated Plan and to perform all acts and take all actions necessary
or desirable in connection with the same."

    "RESOLVED:  That AstroPower, Inc. is hereby reappointed as the Plan
Administrator and Robert B. Hall, Cheryl Keith and Thomas J. Stiner are hereby
reappointed as the Trustees, to serve until death, resignation, or prior removal
by this Board. The Board of Directors hereby appoints Robert B. Hall, Cheryl
Keith and Thomas J. Stiner as members of the Committee, whose duties shall be to
administer the 401(k) Savings Plan in accordance with the provisions set forth
herein."

    This is to certify that the above is a true and accurate copy of a
resolution adopted by the Board of Directors of AstroPower, Inc. at a Board
Meeting held at the Institute of Energy Conversion in Newark, Delaware on the
29th day of May, 1996.



                                             ________________________(Seal)
                                               Assistant Secretary
<PAGE>
 
                               ASTROPOWER, INC.
                               --------------- 

              CERTIFIED COPY OF RESOLUTION OF BOARD OF DIRECTORS
              --------------------------------------------------

     "RESOLVED:  That AstroPower, Inc. shall contribute for taxable years
beginning January 1, 1994, until changed by further Resolution of Board of
Directors, the following amount: A Matching Contribution equal to $0.25 for each
dollar of a Participant's Elective Deferral Contribution."

     This is to certify that the above is a true and accurate copy of a
resolution adopted by the Board of Directors of AstroPower, Inc. at a Board
Meeting held at the Institute of Energy Conversion in Newark, Delaware on the
29th day of May, 1996.


                                             ________________________(Seal)
                                               Assistant Secretary
<PAGE>
 
                   TABLE OF CONTENTS
                   -----------------

                                                    Page No.
                                                    --------
 
STATEMENT OF PURPOSE.................................  1
                                                     
ARTICLE I                                            
  DEFINITIONS........................................  2
                                                     
ARTICLE II                                           
  ELIGIBILITY AND PARTICIPATION...................... 15
                                                     
ARTICLE III                                          
  CONTRIBUTIONS...................................... 17
                                                     
ARTICLE IV                                           
  CONTRIBUTION LIMITATIONS........................... 24
                                                     
ARTICLE V                                            
  MAINTENANCE OF ACCOUNTS, INVESTMENT FUNDS          
  AND VALUATION OF THE TRUST FUND.................... 33
                                                     
ARTICLE VI                                           
  BENEFITS PAYABLE UPON TERMINATION OF EMPLOYMENT.... 35
                                                     
ARTICLE VII                                          
  DISTRIBUTION OF BENEFITS........................... 40
                                                     
ARTICLE VIII                                         
  ADMINISTRATION OF THE PLAN......................... 48
                                                     
ARTICLE IX                                           
  AMENDMENT AND TERMINATION.......................... 56
                                                     
ARTICLE X                                            
  PARTICIPATING COMPANIES............................ 58
                                                     
ARTICLE XI                                           
  TOP-HEAVY PROVISIONS............................... 60
                                                     
ARTICLE XII                                          
  WITHDRAWAL OF FUNDS DURING EMPLOYMENT.............. 65
                                                     
ARTICLE XIII                                         
  LOANS.............................................. 68
                                                     
ARTICLE XIV                                          
  GENERAL PROVISIONS................................. 70
<PAGE>
 
                     ASTROPOWER, INC. 401(k) SAVINGS PLAN
                     ------------------------------------
                                        
                             STATEMIENT OF PUPPOSE
                             ---------------------

AstroPower, Inc. has had in effect since September 1, 1990 the AstroPower, Inc.
401(k) Savings Plan, to which it made contributions for the purpose of sharing
its profits with its employees and incenting eligible employees to save in order
to provide for the accumulation of funds for the benefit of eligible employees
and their beneficiaries in the manner and to the extent set forth in such plan.

The AstroPower, Inc. 401(k) Savings Plan, hereinafter set forth, constitutes an
amendment in its entirety to said Plan which is continued effective as of
January 1, 1994 with respect to employees and Participants who had not yet
retired, terminated employment or died as of such date.

The rights of anyone covered under the Plan prior to January 1, 1994, who
retired, terminated employment or died before that date, shall be determined in
accordance with the terms and provisions of the plan in effect on the date of
such retirement, termination of employment or death, except as otherwise
specifically provided herein.

Unless otherwise provided herein, those provisions added or amended to comply
with the Tax Reform Act of 1986 required to be effective as of the first day of
the first Plan Year beginning after December 31, 1986 shall be effective as of
such date.

                                       1
<PAGE>
 
                                 ARTICLE     I
                                 -------------
                                        
                                  DEFINITIONS
                                  -----------


For purposes of the Plan, the following words and phrases shall have the
following meanings unless a different meaning is plainly required by the
context.  Wherever used, the masculine pronoun shall include the feminine
pronoun and the feminine pronoun shall include the masculine and the singular
shall include the plural and the plural shall include the singular.

1.01 "Account"
      --------

     The interest of a Participant in the Trust Fund as represented by his
     accounts as designated below.

     (a)   "Elective Deferral Contribution Account" - Portion of Trust Fund
            --------------------------------------                         
           attributable to a Participant's Elective Deferral Contributions in
           accordance with the provisions of Section 3.01 and the provisions of
           the Plan in effect prior to the Supplemental Effective Date.

     (b)   "Matching Contribution Account" - Portion of Trust Fund attributable
            -----------------------------                                      
           to the Company's

           (i)  Matching Contributions in accordance with the provisions of
                Subsection 3.03(a) and the provisions of the Plan in effect
                prior to the Supplemental Effective Date.

           (ii) Additional Matching Contributions in accordance with the
                provisions of Subsection 3.03(b) and with the provisions of the
                Plan in effect prior to the Supplemental Effective Date.

     (c)   "Regular Contribution Account" - Portion of Trust Fund attributable
            ----------------------------                                      
           to the Company's Regular Contributions in accordance with the
           provisions of Subsection 3.03(d) and the provisions of the Plan in
           effect prior to the Supplemental Effective Date, and Top-Heavy
           Contributions in accordance with Article XI.

     (d)   "Rollover Account" - Portion of Trust Fund attributable to funds
            ----------------                                               
           rolled over from another qualified plan or conduit Individual
           Retirement Account or Annuity in accordance with Section 3.06.

     (e)   "Qualified Matching Contribution Account" - Portion of Trust Fund
            ---------------------------------------                         
           attributable to the Company's Qualified Matching Contributions in
           accordance with the provisions of Subsection 3.03(c).

                                       2
<PAGE>
 
     (f)   "Qualified Nonelective Contribution Account" - Portion-of Trust Fund
            ------------------------------------------                         
           attributable to the Company's Qualified Nonelective Contributions in
           accordance with the provisions of Subsection 3.03(e).

1.02 "Anniversary Date"
      ---------------- 

     Each January 1 commencing after the Supplemental Effective Date.

1.03 "Annuity Starting Date"
      --------------------- 

     The first day of the first period for which an amount is payable as an
     annuity.  If a benefit is not payable in the form of an annuity, the first
     day on which all events have occurred which entitle the Participant to such
     benefit.

1.04 "Applicable Computation Period"
      ----------------------------- 

     (a)   For purposes of Hours of Employment for eligibility in accordance
           with Section 2.01, an Eligible Employee's first Applicable
           Computation Period shall be the 12-month period beginning as of the
           date a person first completed an Hour of Employment with an Employer.
           Thereafter, such Eligible Employee's Applicable Computation Period
           shall be each Plan Year, commencing with the Plan Year which begins
           after the date he first completed an Hour of Employment.

     (b)   For all other purposes, Applicable Computation Period shall be the
           Plan Year.


1.05 "Beneficiary"
      ----------- 

     The person designated to receive benefits payable under the Plan in the
     event of death.  In the event a Beneficiary is not designated, the
     Participant's surviving spouse shall be deemed his Beneficiary or in the
     absence of a surviving spouse, the benefits shall be paid to the
     Participant's estate.

1.06 "Board of Directors"
      ------------------ 

     The Board of Directors of AstroPower, Inc.

1.07 "Committee"
      --------- 

     The persons appointed to administer the Plan in accordance with Section
     8.01 of the Plan.  In the absence of such designation, the Company shall
     serve as the Committee and in such case all references herein to the
     Committee shall be deemed a reference to the Company.

                                       3
<PAGE>
 
1.08 "Company"
      ------- 

     (a)   AstroPower, Inc. and any successor which shall maintain this Plan;
           and

     (b)   any other business entity which duly adopts the Plan with the
           approval of the Board of Directors.

1.09 "Compensation"
      ------------

     (a)   Unless otherwise indicated, for purposes of Sections 3.01, 3.03 and
           3.04, the amount described in Subsection (c).  For purposes of
           Section 3.01, third party insurance payments shall be excluded.

     (b)   For purposes of Section 4.03, the Participant's wages for the Plan
           Year paid by the Employer of the type reported on Form W-2.  Such
           wages shall include amounts within the meaning of Section 3401(a) of
           the Code plus any other amounts paid to the Participant by the
           Employer for which the Employer is required to furnish a written
           statement under Section 604 1(d) and 6051(a)(3) of the Code,
           determined without regard to any rules that limit the amount required
           to be reported based on the nature or location of the employment or
           services performed, exclusive of

           (i)    severance pay on a non payroll basis;

           (ii)   non-qualified deferred compensation payments;

           (iii)  any amounts paid or reimbursed by the Employer for moving
                  expenses which the Employer reasonably believes at the time of
                  such payment to be deductible by the Employee under Section
                  217 of the Code; and

           (iv)   welfare benefits, fringe benefits (cash and noncash),
                  reimbursements of other expense allowances, moving expenses
                  and deferred compensation.

           For purposes of self-employed individuals, earned income which shall
           be defined as the net earnings from self-employment in the trade or
           business with respect to which the Plan is established, for which
           personal services of the individual are a material income-producing
           factor.  Net earnings will be determined without regard to items not
           included in gross income and the deductions allowable to such items.
           For taxable years beginning after December 31, 1989, net earnings are
           determined with regard to the deduction allowed to the taxpayer by
           Section 164(f) of the Code.  Net 

                                       4
<PAGE>
 
           earnings are reduced by contributions by the Employer to a qualified
           plan to the extent deductible under Section 404 of the Code.

      (c)  For purposes of Sections 1.16 and 4.02 and Article XI, the amount
           described in Subsection (b) increased by the amount of any
           contributions made by the Employer under any salary reduction or
           similar arrangement to a qualified deferred compensation, pension or
           cafeteria plan, contributions to a simplified employee pension plan
           described in Section 408(k) of the Code, contributions towards the
           purchase of an annuity contract described in Section 403(b) of the
           Code, compensation deferred under a deferred compensation plan within
           the meaning of Section 457(b) of the Code and Employee contributions
           (under governmental plans described in Section 414(h)(2) of the Code)
           Which are picked up and treated as Employer contributions. For
           purposes of Section 1.16, the amount described above shall be for the
           applicable period for making the determination of Highly Compensated
           Employees.

     Notwithstanding the foregoing provisions, for any Plan Year the amounts
     described above in Subsections (a), (b) and (c) shall not exceed $200,000
     in accordance with Section 401(a)(17) of the Code, adjusted annually for
     increases in the cost-of-living in accordance with Section 415(d) of the
     Code, effective as of January 1 of the calendar year such increase is
     promulgated and applicable to the Plan Year which begins with or within
     such calendar year, or such other amount as determined under Section
     401(a)(17) of the Code and Regulations thereunder.  For purposes of
     determining such $200,000 limitation, the rules of Section 414(q)(6) of the
     Code, pertaining to family members, shall apply, except that the term
     "family member" shall include only the spouse of the Participant and any
     lineal descendants of the Participant who have not attained age 19 before
     the close of the year.  Any Compensation in excess of that amount shall be
     prorated among family members in accordance with Section 401(a)(17) of the
     Code.

     In addition to other applicable limitations set forth in the Plan, and
     notwithstanding any other provision of the Plan to the contrary, for Plan
     Years beginning on or after January 1, 1994, the annual Compensation of
     each Employee taken into account under the Plan shall not exceed the OBRA
     '93 annual Compensation limit.  The OBRA '93 annual Compensation limit is
     $150,000, as adjusted by the Commissioner for increases in the cost-of-
     living in accordance with section 401(a)(17)(B) of the Code.  The cost-of-
     living adjustment in effect for a calendar year applies to any period, not
     exceeding 12 months, over which Compensation is determined (determination
     period) beginning in such calendar year.  If a determination period
     consists of fewer than 12 months, the OBRA '93 annual Compensation limit
     will be multiplied by a fraction, the numerator of which is the number of
     months in the determination period, and the denominator of which is 12.

                                       5
<PAGE>
 
     For Plan Years beginning on and after January 1, 1994, any reference in
     this Plan to the limitation under section 401(a)(17) of the Code shall mean
     the OBRA '93 annual Compensation limit set forth in this provision.


1.10 "Controlled or Affiliated Service Group"
      -------------------------------------- 

     (a)   "Controlled Group" - Any group of business entities under common
            ----------------                                               
           control, including but not limited to proprietorships and
           partnerships, or a controlled group of corporations within the
           meaning of Section 414(b), (c) and (o) of the Code.

     (b)   "Affiliated Service Group"' - Any group of business entities within
            ------------------------
           the meaning of Section 414(m) of the Code.


1.11 "Disability"
      ---------- 

     Any physical or mental condition which may reasonably be expected to be
     permanent and which renders the Participant incapable of continuing as an
     Employee for his customary Hours of Employment.  The determination of
     disability shall be by a licensed physician chosen by the Committee.  The
     determination shall be applied uniformly to all Participants.

1.12 "Effective Date"
      -------------- 

     September 1, 1990, the date as of which the Plan was established.

     "Supplemental Effective Date"
      --------------------------- 

     January 1, 1994, the last date as of which the Plan was amended in its
     entirety.

     Unless otherwise provided herein, those provisions added or amended to
     comply with the Tax Reform Act of 1986 required to be effective as of the
     first day of the first Plan Year beginning after December 31, 1986 shall be
     effective as of such date.

1.13 "Election Period"
      --------------- 

     The period commencing 90 days before the Annuity Starting Date and ending
     on such Annuity Starting Date.

1.14 "Employee"
      -------- 

     Any person in the employ of the Company.

                                       6
<PAGE>
 
     Leased Employees within the meaning of Section 414(n) of the Code shall be
     included as Employees unless (i) such individual is covered by a money
     purchase pension plan providing (A) a nonintegrated employer contribution
     rate of at least 10 percent of compensation, as defined in Section
     415(c)(3) of the Code, but including amounts contributed by the employer
     pursuant to a salary reduction agreement which are excludable from the
     Leased Employee's gross income under Section 125, 401(a)(8), 402(h) or
     403(b) of the Code; (B) immediate participation; and (C) full and immediate
     vesting and (ii) Leased Employees do not constitute more than 20% of the
     Employer's Nonhighly Compensated Employee workforce.

     "Eligible Employee"
      ----------------- 

     An Employee for whom the Company is required to contribute Federal
     Insurance Contributions Act taxes excluding persons (a) who are Leased
     Employees, or (b) under the jurisdiction of a collective bargaining unit
     (i) having a pension or profit sharing plan to which the Employer is
     required to contribute under the terms of the collective bargaining
     agreement and (ii) for whom retirement benefits were the subject of good
     faith bargaining.

     Notwithstanding the above, Leased Employees shall be included in the
     definition of Eligible Employee if the requirements of Section 414(n)(2) of
     the Code require such inclusion in order to meet the plan qualification
     requirements enumerated in Section 414(n) and then only if the coverage
     requirements of Section 410(b) of the Code would otherwise not be met.

     "Leased Employee"
      --------------- 

     Any person (other than an Employee of the recipient) who pursuant to an
     agreement between the recipient and any other person ("leasing
     organization") has performed services for the recipient (or for the
     recipient and related persons determined in accordance with Section
     414(n)(6) of the Code) on a substantially full time basis for a period of
     at least one year, and such services are of a type historically performed
     by employees in the business field of the recipient employer.
     Contributions or benefits provided a Leased Employee by the leasing
     organization which are attributable to services performed for the recipient
     employer shall be treated as provided by the recipient employer.

     "Owner-Employee"
      -------------- 

     An individual who is a sole proprietor, or who is a partner owning more
     than 10 percent of either the capital or profits interest of the
     partnership.

     "Self-Employed Individual"
      ------------------------ 

     An individual who has earned income for the taxable year from the trade or
     business for which the plan is established; also, an individual who would
     have had 

                                       7
<PAGE>
 
     earned income but for the fact that the trade or business had no net
     profits for the taxable year. A Self-Employed Individual shall be treated
     as an Eligible Employee.



1.15 "Employer"
      -------- 

     The Company and any other business entity in a Controlled or Affiliated
     Service Group which includes the Company.

1.16 "Highly Compensated Employee"
      --------------------------- 

     (a)   An Employee who is a Highly Compensated Active Employee or a Highly
           Compensated Former Employee.

     (b)   A Highly Compensated Active Employee is any Employee who performs
           Service with the Employer during the Determination Year and is
           described in either the Look-back Year Group or the Determination
           Year Group or both such groups.

           (i)  The Look-back Year Group includes any Employee who (A) was at
                any time during the Look-back Year a 5% owner, as defined in
                Section 416(i)(1) of the Code; (B) received Compensation from
                the Employer in excess of $75,000; (C) received Compensation
                from the Employer in excess of $50,000 and was in the Top-Paid
                Group, as defined in Section 414(q) of the Code, of employees
                for such Look-back Year; or (D) was at any time an officer and
                received Compensation greater than 5O% of the maximum dollar
                limitation under Section 415(b)(1)(A) of the Code.

                The Code Section 415(6)(1)(A) limitation and the $75,000 and
                $50,000 thresholds set forth above shall be adjusted annually
                for increases in the cost-of-living in accordance with Section
                415(d) of the Code, effective as of January 1 of the calendar
                year such increase is promulgated and applicable to the Plan
                Year which begins with or within such calendar year.

           (ii) The Determination Year Group includes any Eligible Employee who
                (A) was at any time during the Determination Year a 5% owner, as
                defined in Section 416(i)(1) of the Code; or (B) is both (1)
                described in Subparagraphs (i)(B), (i)(C) or (i)(D) above
                substituting the Determination Year for the Look-back Year; and
                (2) a member of the group consisting of the 100 employees paid

                                       8
<PAGE>
 
                the greatest Compensation during the Determination Year of
                reference.

     (c)  A Highly Compensated Former Employee for a Determination Year is any
          former Employee who separated from Service prior to such Determination
          Year and was a Highly Compensated Active Employee for either the year
          in which such Employee separated from Service or any Determination
          Year ending on or after such Employee's 55th birthday.

     (d)  For purposes of this definition, the following shall be applicable:

          (i)    The Determination Year is the applicable Plan Year for which a
                 determination is being made and the Look-back Year is the 12-
                 month period immediately preceding such Plan Year.

          (ii)   If there are no officers as described above in either the
                 Determination Year or the Look-back Year, then the highest paid
                 officer of the Employer in each such year shall be deemed a
                 Highly Compensated Employee with respect to such year.

          (iii)  The determination of Highly Compensated Employees, including
                 the determinations of the number and identity of Employees in
                 the Top-Paid Group, the top 100 Employees and the number of
                 Employees treated as officers shall be governed by Section
                 414(q) of the Code and Treasury Regulation 1.414(q)-IT.

          (iv)   The Compensation and contributions under the Plan of a Highly
                 Compensated Employee who is a 5% owner or in the group
                 consisting of the 10 Highly Compensated Employees paid the
                 greatest Compensation during any Determination Year or Look-
                 back Year shall be determined by aggregating such amounts with
                 the Compensation and contributions of each other Employee who
                 is the spouse, lineal ascendant or descendant or Spouse of a
                 lineal ascendant or descendant of such Highly Compensated
                 Employee.

     (e)  The Company may make the following elections as provided for in
          Treasury Regulation 1-.414(q)-IT:

          (i)    the special rule for determining Highly Compensated Former
                 Employees who separated from Service before January 1, 1987 in
                 accordance with Treasury Regulation 1.414(q)-lT, Q&A 4(d).
                 However, once such an election is made it may not be changed
                 without the consent of the Commissioner;

          (ii)   the calendar year election for the Look-back Year in accordance
                 with Treasury Regulation 1.414(q)-IT, Q&A 14(b);

                                       9
<PAGE>
 
          (iii)  the modification on a consistent and uniform basis of the
                 permissible age and service exclusions in accordance with
                 Treasury Regulation 1.414(q)-IT, Q&A 9(b)(2);

          (iv)   the inclusion of employees covered under a collective
                 bargaining agreement in accordance with Treasury Regulation
                 1.414(q)-lT, Q&A 9(b)(2);

          (v)    the inclusion of leased employees in determining the highly
                 compensated group in accordance with Treasury Regulation
                 1.414(q)-lT, Q&A 7(b)(4); and

          (vi)   the transitional rule in accordance with Treasury Regulation
                 1.414(q)-lT, Q&A 15.

     "Nonhighly Compensated Employee" - An Employee who is not deemed to be a
      ------------------------------                                         
     Highly Compensated Employee.

1.17 "Internal Revenue Code" or "Code"
      ------------------------------- 

     The Internal Revenue Code of 1986, and any amendments thereto.

1.18 "Participant"
      ----------- 

     (a)   An Employee who is eligible to participate under the Plan in
           accordance with Section 2.01 of the Plan.

     (b)   Each other Employee or former Employee for whom an Account is
           maintained.

1.19 "Plan"
      ---- 

     The Plan of the Company, as herein set forth and as from time to time
     supplemented and amended, which Plan is intended to be a profit sharing
     plan for purposes of Sections 401(a), 402, 412 and 417 of the Code.

1.20 "Plan Year"
      --------- 

     A period of 12 consecutive months commencing on the Supplemental Effective
     Date and each Anniversary Date thereof.

1.21 "Protected Spouse"
      ---------------- 

     The spouse to whom the Participant had been legally married on the date of
     the Participant's death.

                                       10
<PAGE>
 
     (a)  In the case of a Participant who is not married on his Annuity
          Starting Date, an immediate annuity payable for the life of the
          Participant.  Upon the Participant's death, all benefits cease.

1.22 "Qualified Domestic Relations Order"
      ---------------------------------- 

     A domestic relations order as defined in Section 8.09 in accordance with
     Section 414(p) of the Code.

1.23 "Retirement"
      ---------- 

     The termination of employment of a Participant on his Early, Normal or
     Deferred Retirement Date.

1.24 "Retirement Dates"
      ---------------- 

     (a)   "Normal Retirement Date" - The first day of the month coincident with
            ----------------------                                              
           or next following the date on which the Participant attains age 65.

     (b)   "Early Retirement Date" - The first day of any month coincident with
            ---------------------                                              
           or next following the date on which the Participant attains age 55,
           provided he has completed 10 Years of Service as of such date.

     (c)   "Deferred Retirement Date" - The first day of any month subsequent to
            ------------------------                                            
           the Participant's Normal Retirement Date.

1.25 "Service"
      ------- 

     (a)   All Hours of Employment with the Employer during an Applicable
           Computation Period.

     (b)   "Break-in-Service" - An Applicable Computation Period during which an
            ----------------                                                    
           Employee fails to receive credit for 501 Hours of Employment.

           If, commencing on or after the first day of the first Plan Year
           beginning after December 31, 1984, an Employee is absent by reason of
           (i) the pregnancy of the Employee, (ii) the birth of a child of the
           Employee, (iii) the placement of a child with the Employee in
           connection with an adoption of such child by such Employee, or (iv)
           caring for such child immediately following such birth or placement,
           such Employee will be credited with the number of Hours of Employment
           which would normally have been credited but for such absence, or, in
                                                       ---                     
           any case in which the Committee is unable to determine such hours
           normally credited, eight Hours of Employment per day. The Hours of
           Employment required to be credited for such absence shall not exceed
           501.

                                       11
<PAGE>
 
          Hours of Employment shall be credited for the Plan Year in which the
          absence from work begins, only if credit is necessary to prevent the
          Employee from incurring a Break-in-Service, or, in any other case, in
          the immediately following Plan Year.

          If an Employee who did not have a vested interest in his Account in
          accordance with the provisions of Section 6.04 incurs five or more
          consecutive Breaks-in-Service and is then reemployed by the Employer,
          he shall be deemed a new Employee and shall not receive credit for his
          Service prior to the date he incurred such Breaks-in-Service unless
          his Service was equal to or greater than the period of his absence.

     (c)  "Year of Service" - An Applicable Computation Period during which the
           ---------------                                                     
          Employee receives credit for at least 1,000 Hours of Employment.

     (d)  "Month of Service" - A calendar month during which the Employee
           ----------------                                              
          receives credit for continuous, uninterrupted service and is entitled
          to payment for said services.

     (e)  "Hour of Employment" -
           ------------------   

          (i)    Each hour during an Applicable Computation Period for which the
                 person is directly or indirectly paid or entitled to payment
                 for the performance of duties or for the period of time when no
                 duties are performed, irrespective of whether the employment
                 relationship has terminated, such as vacation, holiday, lay-
                 off, jury duty or approved Leave of Absence.

                 As used herein and in Section 3.03 of the Plan, Leave of
                 Absence shall mean a leave granted for pregnancy, Disability,
                 illness, death or any other family obligation or status;
                 personal or family hardship or special business circumstances;
                 educational purposes; and/or civic, charitable or governmental
                 services, provided that all Employees under similar
                 circumstances shall be treated in a similar manner.

                 No more than 501 Hours of Employment are required to be
                 credited to an Employee on account of any single continuous
                 period during which the Employee performs no duties (whether or
                 not such period occurs in a single computation period);

          (ii)   A person shall receive an Hour of Employment for each hour for
                 which back pay has been awarded or agreed to irrespective of
                 mitigation of damages, provided that each such hour shall be
                 credited to the Applicable Computation Period to which it
                 pertains, 

                                       12
<PAGE>
 
                 rather than the Applicable Computation Period in which the
                 award or agreement is made, and further provided that no such
                 award or agreement shall have the effect of crediting an Hour
                 of Employment for any hour for which the person previously
                 received credit under (i) above.

          (iii)  Notwithstanding the foregoing, Hours of Employment shall be
                 computed and credited in accordance with Department of Labor
                 Regulation 2530.200b-2, Subparagraphs (b) and (c).

          (iv)   If the Employer's payroll records are normally kept on other
                 than an hourly basis, the following equivalencies may be
                 utilized in determining the number of Hours of Employment to
                 which the Employee is entitled to be credited:


  BASIS UPON WHICH THE              CREDIT GRANTED IF EMPLOYEE
   EMPLOYEE'S PAYROLL                EARNS AT LEAST ONE (1) HOUR
  RECORDS MAINTAINED                  OF SERVICE DURING PERIOD
-----------------------------------------------------------------

     Shift                           Actual Hours for Full Shift
     Daily                           10 Hours of Employment
     Weekly                          45 Hours of Employment
     Semi-monthly                    95 Hours of Employment
     Monthly                         190 Hours of Employment

     (f)  An Employee shall receive credit for the period of his employment with
          another business entity to which he had been transferred by the
          Company solely for purposes of determining his vested interest in
          accordance with Section 6.04 of the Plan.

1.26 "Trust Agreement"
      --------------- 

     The instrument executed by the Company and the Trustee fixing the rights
     and liabilities of each with respect to holding and administering the Trust
     Fund for the purposes of the Plan.

1.27 "Trustee"
      ------- 

     The Trustee or any successor Trustee, appointed by the Board of Directors,
     acting in accordance with the terms of the Trust Agreement.

1.28 "Trust Fund"
      ---------- 

     All assets held by the Trustee in accordance with the terms of the Trust
     Agreement.

                                       13
<PAGE>
 
1.29 "Valuation Date"
      --------------

     The last day March, June, September and December or such other date as the
     Committee may determine from time to time.  For all Plan purposes, the
     Valuation Date for Plan distributions shall be the Valuation Date
     immediately preceding the date of such distribution.

                                       14
<PAGE>
 
                                   ARTICLE II
                                   ----------
                                        
                         ELIGIBRLITY AND PARTICIPATION
                         -----------------------------

                                        
2.01  Eligibility for Participation
      -----------------------------

     An Employee may become a Participant upon satisfaction of the following
     requirements, provided he elects to contribute in accordance with Section
     3.01.

     (a)   Each Eligible Employee on the Supplemental Effective Date who was a
           Participant of the Plan shall continue as a Participant as of the
           Supplemental Effective Date and each Eligible Employee on the
           Supplemental Effective Date who was not yet a Participant in the Plan
           on such date shall become a Participant of the Plan on the
           Supplemental Effective Date.

     (b)   For the period effective January 2, 1994 through June 30, 1995, each
           other Eligible Employee shall become a Participant as of the January
           1, April 1, July 1 or October 1 next following the later of the date
           he completes 6 Months of Service or attains age 21.

     (c)   Effective July 1, 1995, each other Eligible Employee shall become a
           Participant as of the January 1, April 1, July I or October 1 next
           following the later of the date he completes one Month of Service or
           attains age 21.

     (d)   If a former Participant is reemployed, he shall be eligible to resume
           his participation as of the date of his reemployment and may elect to
           comply with the provisions of Section 3.01 as of any subsequent
           January 1, April 1, July 1, or October 1.

2.02  Change in Employment Status
      ---------------------------

     (a)  In the event a Participant ceases to be an Eligible Employee as the
          result of becoming part of an excluded class, only Compensation up to
          the date he ceased to be an Eligible Employee shall be considered for
          purposes of contributions in accordance with Articles III and XI.
          Such Employee shall remain a Participant but shall not be permitted to
          either make Elective Deferral Contributions in accordance with Section
          3.01, or share in any Company contributions or forfeitures allocated
          in accordance with Articles III and XI for the period beyond the date
          he ceased to be an Eligible Employee.

                                       15
<PAGE>
 
          In the event such Participant returns to an eligible class and again
          becomes an Eligible Employee, he shall be permitted to share in
          Company contributions or forfeitures allocated in accordance with
          Articles III and XI as of the date he again became an Eligible
          Employee and may elect to comply with the provisions of Sections 3.01
          as of such date or any subsequent January 1, April 1, July 1, or
          October 1. Only Compensation from the date he again became an Eligible
          Employee shall be considered for purposes of such contributions under
          Article III. However, all Compensation in accordance with Regulation
          Section 1.416-1 shall be considered for Article XI.

     (b)  If a person otherwise satisfied the eligibility requirements of
          Section 2.01 and subsequently becomes an Employee, he shall be
          eligible to become a Participant as of the date he became an Employee.

     (c)  Effect of Collective Bargaining - In the event a collective bargaining
          -------------------------------                                       
          agreement is entered into between the Company and a representative for
          any class of Employees in the employ of the Company subsequent to the
          Supplemental Effective Date, eligibility for participation in the Plan
          by such Employees who are not Participants shall not be extended
          beyond the effective date of the collective bargaining agreement
          unless the agreement extends participation in the Plan to such
          Employees.  The provisions of Subsection (a) shall apply to those
          Employees who are currently Participants.

                                       16
<PAGE>
 
                                  ARTICLE III
                                  -----------
                                        
                                 CONTRIBUTIONS
                                 -------------


3.01  Elective Deferral Contributions
      -------------------------------

      A Participant may elect to save through pay reduction each payroll period
      when first eligible or as of any subsequent January 1, April 1, July 1, or
      October 1 , no less than 1% nor more than 15%, in whole percentages, of
      that portion of his Compensation (exclusive of third party insurance
      payments) attributable to such payroll period, subject to the limitations
      on Elective Deferral Contributions under Sections 4.01 and 4.02 and the
      limitations on annual additions under Section 4.03.

      Such contributions shall take the form of before tax contributions
      (hereinafter known as "Elective Deferral Contributions") and shall be
      deemed to be Company contributions for purposes of Section 414(h) of the
      Code.

      (a)  An initial written election must be made by an Employee and submitted
           to the Committee at least 30 days (or such other period as the
           Committee may fix from time to time) prior to the first date the
           Employee would be eligible to become a Participant of the Plan in
           accordance with Section 2.01 of the Plan.

      (b)  An election, once made, shall remain in effect until subsequently
           changed by the Employee in accordance with the provisions of this
           Article III.

3.02  Reduction of Excess Elective Deferral Contributions
      ---------------------------------------------------

      If Elective Deferral Contributions under Section 3.01 of the Plan are
      projected to exceed the limitations of Sections 4.01 or 4.02 of the Plan
      at any time during a Plan Year, the Committee, in a good faith effort to
      comply with such limitations, retains the right to reduce the rate of
      Elective Deferral Contributions made by Highly Compensated Employees. Such
      reduction shall be made in the sole discretion of the Committee and for
      purposes of Section 4.02 of the Plan shall be accomplished by
      progressively reducing the Elective Deferral Contributions of those Highly
      Compensated Employees with the highest deferral percentage until the
      limitations are met.

3.03  Matching and Regular Contributions
      ----------------------------------

      Subject to the limitations on annual additions under Section 4.03 of the
      Plan, the Company shall contribute the following amounts:

                                       17
<PAGE>
 
     (c)  Qualified Matching Contributions - For any Plan Year, the Company may
          --------------------------------                                     
          contribute such additional amounts as it shall determine.  Such
          Qualified Matching Contributions shall be allocated to those
          Participants who are Nonhighly Compensated Employees who are in the
                                                                   ---       
          employ of the Company on the last business day of such Plan Year, in
          the same proportion that the Elective Deferral Contributions of each
          such Participant for such Plan Year bear to the aggregate Elective
          Deferral Contributions of all such Participants for such Plan Year.

          Such contributions shall be subject to Treasury Regulation 1.401(k)-
          1(g)(7).

          Notwithstanding the foregoing provision, a Participant otherwise
          eligible shall share in such Qualified Matching Contributions for the
          Plan Year of (i) his Retirement, Disability or death, (ii) the
          commencement of a "Leave of Absence" authorized by the Company or
          (iii) his transfer to another business entity to which such
          Participant had been transferred by the Company, even if the
          Participant is not in the employ of the Company on the last business
          day of such Plan Year.

          A Participant shall not share in the allocation of the Company's
          Qualified Matching Contributions for any Plan Year during which he
          terminated his employment for reasons other than specified in (i),
          (ii) or (iii) above.

     (d)  Regular Contributions
          ---------------------

          (i)  Such amount as the Company shall determine for each Plan Year, as
               evidenced by a Company Resolution, which shall be allocated to
               Participants who are in the employ of the Company on the last day
               of such Plan Year, which amount shall be credited at the end of
               the Plan Year.

               Effective as of the last day of each Plan Year beginning on or
               after January 1, 1989, the Company shall allocate to the Accounts
               of eligible Participants amounts contributed by the Company as
               its contribution with respect to such Plan Year in the order set
               forth below.

          (A)  If the Plan Year in question is determined to be top heavy as
               provided for under the provisions of Article XI of the Plan, the
               following allocations shall be made:

               (1)  First, each eligible Participant shall have allocated to his
                    Account 3% of his Compensation, or the percentage of
                    Compensation determined under Section 11.03 of the Plan,

                                       18
<PAGE>
 
               (2)  Second, each eligible Participant shall have allocated to
                    his Account 3% of his Excess Compensation, defined in (C)
                    below, or the percentage of Compensation determined under
                    Section 11.03 of the Plan,

               (3)  Third, the balance of the contribution, after the
                    application of Subsections (A)(1) and (A)(2) above, shall be
                    allocated to the Accounts of eligible Participants in the
                    proportion that the ratio of the sum of each such
                    Participant's total Compensation plus such Participant's
                    Excess Compensation is to the sum of the total Compensation
                    and Excess Compensation of all eligible Participants.
                    Notwithstanding the foregoing, the amount allocated to an
                    eligible Participant under this Subsection (A)(3) shall not
                    exceed the "applicable percentage" of the sum of the
                    eligible Participant's (1) Compensation and (2) Excess
                    Compensation.  The "applicable percentage shall be the
                    difference between (1) the greater of 5.7% or the Current
                    Tax Rate as defined in (D), below, and (2) the percentage of
                    Compensation determined under Section 11.03 of the Plan.

               (4)  The balance of the contribution, if any, after the
                    application of the preceding subsections shall be allocated
                    to the Accounts of eligible Participants in the proportion
                    that the ratio of the Compensation of each eligible
                    Participant is to the total Compensation of all eligible
                    Participants for the Plan Year.

               (5)  To the extent Company contributions are not sufficient to
                    make the full allocation under Subsection (1), (2) or (3)
                    above, then each Participant eligible to share in the
                    allocation shall have an amount allocated to his Account of
                    an equal percentage of the amount which would have been
                    allocated to him under Subsection (1), (2) or (3), above.,
                    as the case may be, if the full allocation was made.

          (B)  If the Plan Year in question is not top-heavy, the following
               allocations shall be made:

               (1)  First, each eligible Participant shall have allocated to his
                    Account an amount equal to the proportion that the ratio of
                    the sum of each such Participant's total Compensation and
                    Excess Compensation, defined in (C) below, is to the sum of
                    the total Compensation and Excess Compensation of all

                                       19
<PAGE>
 
                    eligible Participants.  Notwithstanding the foregoing, the
                    amount allocated to an eligible Participant under this
                    subsection shall not exceed the greater of 5.7% or the
                    Current Tax Rate as defined in (D), below, of the sum of the
                    eligible Participant's Compensation plus such eligible
                    Participant's Excess Compensation.

               (2)  Second, the balance of the contribution, if any, after the
                    application of the preceding subsection shall be allocated
                    to the Accounts of eligible Participants in the proportion
                    that the ratio of the Compensation of each eligible
                    Participant is to the total Compensation of all eligible
                    Participants for the Plan Year.

               (3)  To the extent Company contributions are not sufficient to
                    make the full allocation under Subsection (1), above, then
                    each Participant eligible to share in the allocation shall
                    have an amount allocated to his Account of an equal
                    percentage of the amount which would have been allocated to
                    him under Subsection (1), above, as the case may be, if the
                    full allocation was made.

          (C)  Excess Compensation is a Participant's Compensation in excess of
               the Social Security Taxable Wage Base.

          (D)  The Current Tax Rate shall mean the rate of tax applicable under
               the Code Sections 3111(a) or 401(l)(2)(A)(ii) attributable to old
               age insurance, which is in effect on the first day of the Plan
               Year in reference.

          (E)  Social Security Taxable Wage Base shall mean the maximum amount
               of earning which may be considered wages under Section 312 1
               (a)(1) of the Code as of the first day of the Plan Year in
               reference.


          (ii) Exception to Allocation Requirements:   Notwithstanding the
               ---------------------------------------                    
               foregoing provision, a Participant shall be entitled to a share
               of the Company's contributions for the Plan Year of (1) his
               Retirement, Disability or death, (2) the commencement or end of a
               Leave of Absence authorized by the Company or (3) his transfer to
               another business entity to which such Participant had been
               transferred by the Company, even if the Participant is not in the
               employ of the Company on the last day of such Plan Year.

                                       20
<PAGE>
 
               A Participant shall not share in the allocation of the Company's
               contributions for any Plan Year during which he terminated his
               employment for reasons other than specified in (1), (2) or (3).

               Notwithstanding Section 3.03(a) above, in the event the Plan
               fails to meet the requirements of Section 401(a)(26) or 410(b) of
               the Code, those Participants who are in the employ of the Company
               as of the last day of the Plan Year shall share in the allocation
               of the Company's contribution to the extent necessary by
               progressively including those Participants with the greatest
               number of Hours of Employment until such requirements are met.
               If after the inclusion of such Participants the requirements of
               Section 401(a)(26) or 410(b) are still not met, those
               Participants who are not in the employ of the Company on the last
               business day of the Plan Year shall share in the allocation of
               the Company's contribution to the extent necessary by
               progressively including those Participants with the greatest
               number of Hours of Employment to a minimum of 501 such hours
               until such requirements are met.

     (e)  Qualified Nonelective Contributions - Such amount as the Company shall
          -----------------------------------                                   
          determine for any Plan Year, which shall be allocated to those
          Participants who are Nonhighly Compensated Employees in the same
          proportion that each Participant's Compensation bears to the aggregate
          Compensation of all such Participants for such Plan Year, provided the
          Participant is in the employ of the Company on the last business day
          of such Plan Year, which amount shall be credited at the end of the
          Plan Year.

          Such contributions shall be subject to Treasury Regulation Section
          1.401(k)-l(g)(7).

          Notwithstanding the foregoing provision, a Participant otherwise
          eligible shall be entitled to a share of the Company's Qualified
          Nonelective Contributions for the Plan Year of (i) his Retirement,
          Disability or death, (ii), the commencement or end of a "Leave of
          Absence" authorized by the Company or (iii) his transfer to another
          business entity to which such Participant had been transferred by the
          Company, even if the Participant is not in the employ of the Company
          on the last business day of such Plan Year.

          A Participant shall not share in the allocation of the Company's
          Qualified Nonelective Contributions for any Plan Year during which he
          terminated his employment for reasons other than specified in (i),
          (ii) or (iii) above.

3.04 Contribution Changes
     --------------------

                                       21
<PAGE>
 
     A Participant may, subject to the minimum and maximum percentages specified
     in Section 3.01, increase or decrease the percentage rate of his Elective
     Deferral Contributions as of any January 1, April 1, July 1, or  October 1
     (or as of such other dates as the Committee may fix from time to time), by
     written notification to the Committee at least 30 days (or such other
     period as the Committee may fix from time to time) prior to the effective
     date of such change.

3.05 Discontinuance of Contributions
     -------------------------------

     (a)   A Participant may discontinue his Elective Deferral Contributions at
           any time by written notification to the Committee at least 30 days
           (or such other period as the Committee may fix from time to time)
           prior to the effective date of such discontinuance.

     (b)   A Participant may resume his Elective Deferral Contributions as of
           any subsequent January 1, April 1, July 1, or October 1 (or such
           other dates as the Committee may fix from time to time) by written
           notification to the Committee at least 30 days (or such other period
           as the Committee may fix from time to time) prior to the effective
           date of such resumption.

     (c)   The discontinuance of Elective Deferral Contributions will
           automatically include a discontinuance of the Matching Contributions.

3.06 Rollover Contributions from Other Qualified Plans
     -------------------------------------------------

     (a)   Any Eligible Employee upon commencement of employment may make a
           rollover contribution to the Trust Fund of all or any portion of the
           entire amount (including money or any other property acceptable to
           the Committee and Trustee) which is an eligible rollover
           distribution, as defined in Section 402(c)(4) of the Code and
           temporary Treasury Regulation Section 1.402(c)-2T, Q&A 3 and 4,
           provided such rollover contribution is either (i) a direct transfer
           from another qualified plan or (ii) received on or before the 60th
           day immediately following the date the Employee received such
           distribution from a qualified plan or conduit Individual Retirement
           Account or Annuity.

           Such Eligible Employee must complete and sign the Plan's rollover
           request form and provide such evidence as is requested by the
           Committee, including evidence supporting the satisfaction of the
           remaining provisions of this Section.

     (b)   The distribution intended to be rolled over must be an eligible
           rollover distribution from a:

           (i)   qualified trust, as verified by written evidence from the
                 administrator of the distributing plan; or

                                       22
<PAGE>
 
           (ii)  conduit IRA, as verified in writing by the custodian or
                 insurance company that the original distribution from the
                 qualified trust was an eligible rollover distribution; or

           (iii) qualified trust as a direct rollover as provided for in Section
                 402(c) of the Code.

     (c)   The Committee shall credit the fair market value of any rollover
           contribution and investment earnings attributable thereto to the
           Participant's Rollover Account. Such rollover contributions shall not
           be considered annual additions for purposes of Section 4.03 of the
           Plan.

     (d)   An Eligible Employee who becomes a Participant by virtue of the
           acceptance of such rollover contribution, but who is not otherwise
           eligible for participation in accordance with Section 2.01, shall not
           be entitled to make contributions or share in any Company
           contribution allocated in accordance with this Article III or Article
           XI.

     (e)   The Committee may promulgate specific rules and regulations governing
           all aspects of this Section.


3.07 Deposit of Contributions
     ------------------------

     The Company shall deposit the Elective Deferral Contributions with the
     Trustee as soon as practicable (in no event to exceed 90 days) following
     the date on which such amounts would otherwise have been paid to the
     Participant.  All other Company contributions must be deposited by the
     earlier of the end of the subsequent Plan Year or after the end of the
     period described in Code Section 404(a)(6) applicable to the tax year of
     the Company with or within which the Plan Year ends.

3.08 Payment of Expenses
     -------------------

     In addition to its contributions, the Company may elect to pay all the
     administrative expenses of the Plan and all fees and retainers of the
     Plan's Trustee, accountant, counsel, consultant, administrator or other
     specialist so long as the Plan or Trust Fund remains in effect.  If the
     Company does not pay all or part of such expenses, the Trustee shall pay
     these expenses from the Trust Fund.  All expenses relating directly to the
     investments of the Trust Fund, including taxes, brokerage commissions and
     registration charges, must be paid from the Trust Fund.

                                       23
<PAGE>
 
                                  ARTICLE IV-
                                  ---------- 

                           CONTRIBUTION LIMITATIONS
                           ------------------------


4.01 $7,000 Limitation on Elective Deferral Contributions
     ----------------------------------------------------

     Each Participant's Elective Deferral Contributions under Section 3.01, when
     added to any additional elective deferrals, as defined in Section 402(g) of
     the Code, under all other plans maintained by the Employer, shall be
     limited to $7,000 during any calendar year, adjusted annually for increases
     in the cost-of-living in accordance with Section 415(d) of the Code, or
     such other maximum permitted under Section 402 of the Code.

     To the extent a Participant's Elective Deferral Contributions exceed the
     above limitation the Employer will notify the Plan of such excess and such
     amount will be designated as an excess deferral.  Such excess deferral will
     be distributed to such Participant with investment experience no later than
     April 15 following the close of the calendar year to which such excess
     relates.  Such excess may be distributed prior to the close of the calendar
     year of reference provided the correcting distribution is made after the
     date on which the plan received the excess deferral and is specifically
     designated as an excess deferral.  Investment experience will be determined
     in accordance with the fourth paragraph of Section 4.02(d) below.

4.02 Limitation on Elective Deferral and Matching Contributions
     ----------------------------------------------------------

     (a)   The Actual Deferral Percentage of Eligible Highly Compensated
           Employees in the Testing Group for any Plan Year shall be limited to
           the greater of

           (i)  the Actual Deferral Percentage for the Eligible Nonhighly
                Compensated Employees in the Testing Group multiplied by 1.25;
                or

           (ii) the Actual Deferral Percentage for the Eligible Nonhighly
                Compensated Employees in the Testing Group multiplied by 2.00,
                provided, however, that the Actual Deferral Percentage for the
                Eligible Highly Compensated Employees in the Testing Group may
                not exceed the Actual Deferral Percentage for the Nonhighly
                Compensated Employees by more than two percentage points.

     (b)   The Actual Contribution Percentage of Eligible Highly Compensated
           Employees in the Testing Group for any Plan Year shall be limited to
           the greater of

                                       24
<PAGE>
 
           (i)  the Actual Contribution Percentage for Eligible Nonhighly
                Compensated Employees in the Testing Group multiplied by 1.25;
                or

           (ii) the Actual Contribution Percentage for Eligible Nonhighly
                Compensated Employees in the Testing Group multiplied by 2.00,
                provided, however, that the Actual Contribution Percentage for
                the Eligible Highly Compensated Employees in the Testing Group
                may not exceed the Actual Contribution Percentage for the
                Nonhighly Compensated Employees by more than two percentage
                points.

     (c)   If one or more Highly Compensated Employees are eligible for both
           Elective Deferral Contributions and to receive Matching Contributions
           or, if applicable to this Plan, to make Voluntary Contributions, such
           contributions shall be limited to the greater of (i) or (ii) below.
           Notwithstanding the above, this Subsection (c) shall only be
           applicable if both the Actual Deferral Percentage and the Actual
           Contribution Percentage of the Highly Compensated Employees exceeds
           1.25 multiplied by the respective Nonhighly Compensated Employee
           percentages.

           (i)  The sum of

                (A)  1.25 times the greater of

                     (1)  the Actual Deferral Percentage for the Nonhighly
                          Compensated Employees, or

                     (2)  the Actual Contribution Percentage for the Nonhighly
                          Compensated Employees; and

                (B)  two plus the lesser of Subparagraph (1) or (2) above,
                     provided that such amount may not exceed 200% of the lesser
                     of Subparagraph (1) or (2).

           (ii) The sum of

                (A)  1.25 times the lesser of

                     (1)  the Actual Deferral Percentage for the Nonhighly
                          Compensated Employees, or

                     (2)  the Actual Contribution Percentage for the Nonhighly
                          Compensated Employees; and

                                       25
<PAGE>
 
                (B)  two plus the greater of Subparagraph (1) or (2) above,
                     provided that such amount may not exceed 200% of the
                     greater of Subparagraph (1) or (2).

     (d)  To the extent the otherwise applicable Elective Deferral, Matching,
          and, if applicable, Voluntary Contributions for any Plan Year must be
          limited due to the restrictions described in Subsections (a), (b) and
          (c), such limitations shall be applied to the Highly Compensated
          Employees' Elective Deferral, Matching, and/or, if applicable,
          Voluntary Contribution percentages, whichever applicable, beginning
          with the highest of such percentages until the limitations are met. In
          satisfying the limited percentages applicable to any individual Highly
          Compensated Employee, reductions will first be made to Voluntary
          Contributions, if applicable. Additional reductions to satisfy
          Subsection (c) shall be applied first to unmatched Elective Deferral
          Contributions, if any, and then to matched Elective Deferral
          Contributions and Matching Contributions proportionately.

          Excess Elective Deferral, Matching, and, if applicable, Voluntary
          Contributions shall be allocated to Participants who are subject to
          the family aggregation rules of Section 414(q)(6) of the Code in
          proportion to their unadjusted deferrals and contributions.

          Any excess Elective Deferral or, if applicable, Voluntary
          Contributions that result from the above limitations shall be refunded
          to such Highly Compensated Employees with investment experience, no
          later than the last day of the Plan Year subsequent to the Plan Year
          to which the excess relates.  The limitation on Matching Contributions
          is effected by limiting the otherwise applicable Matching
          Contributions in accordance with Subsection 3.03(a).

          Investment experience shall be the income or loss allocable to the
          Participant's Elective Deferral Contribution Account or, if
          applicable, Voluntary Contribution Account for the Plan Year
          multiplied by a fraction, the numerator of which is such Participant's
          excess Elective Deferral or, if applicable, Voluntary Contributions
          for the year and the denominator is the sum of (i) the Participant's
          Elective Deferral Contribution Account or, if applicable, Voluntary
          Contribution Account balance as of the beginning of the Plan Year and
          (ii) the Participant's Elective Deferral or, if applicable, Voluntary
          Contributions for the Plan Year.

     (e)  Definitions and Special Rules
          -----------------------------

          (i)  The Actual Deferral Percentage for the Eligible Highly
               Compensated Employees and Eligible Nonhighly Compensated

                                       26
<PAGE>
 
               Employees for a Plan Year shall be the average of the ratios
               (calculated separately for each Eligible Employee in the Testing
               Group) of

               (A)  the amount of contributions credited to the Elective
                    Deferral Contribution Account on behalf of each such
                    Eligible Employee in the Testing Group during such Plan
                    Year, to

               (B)  the Compensation of each such Participant in the Testing
                    Group for such Plan Year.

               For purposes of the above, Qualified Matching Contributions and
               Qualified Nonelective Contributions may be taken into account in
               determining the Actual Deferral Percentage for each Eligible
               Employee in the Testing Group for such Plan Year provided such
               amounts comply with the provisions of Treasury Regulation Section
               1.401(k)-l(b).

               Qualified Matching Contributions, Qualified Nonelective
               Contributions, and Elective Deferral Contributions included in
               the calculation of the Actual Contribution Percentages will not
               be included in the calculation of Actual Deferral Percentages.

          (ii) The Actual Contribution Percentage for the Eligible Highly
               Compensated and Eligible Nonhighly Compensated Employees in the
               Testing Group for a Plan Year shall be the average of the ratios
               (calculated separately for each Eligible Employee in the Testing
               Group) of

               (A)  the amount of Matching Contribution and recharacterized
                    Elective Deferral Contributions credited on behalf of each
                    such Eligible Employee in the Testing Group for such Plan
                    Year, and any recharacterized Elective Deferral
                    Contributions as a result of Subsection 4.02(d) for such
                    Plan Year, to

               (B)  the Compensation of each such Participant in the Testing
                    Group for such Plan Year.

               For purposes of the above, Qualified Matching Contributions,
               Qualified Nonelective Contributions, and Elective Deferral
               Contributions may be taken into account in determining the Actual
               Contribution Percentage for each Eligible Employee in the Testing
               Group for such Plan Year provided such amounts comply with the
               provisions of Treasury Regulation Section 1.401(m)-l(b).

                                       27
<PAGE>
 
               Qualified Matching Contributions, Qualified Nonelective
               Contributions, and Elective Deferral Contributions included in
               the calculation of the Actual Deferral Percentages will not be
               included in the calculation of Actual Contribution Percentages.

               Testing Group shall mean the group of all Eligible Employees
               eligible for participation in accordance with Section 2.01.

     (iv)   All Eligible Employees in the Testing Group will be included in
            determining the Actual Deferral Percentages and/or the Actual
            Contribution Percentages, whichever is applicable. The ratio
            averaged into the respective percentages will be zero for any
            Eligible Employee in the Testing Group if the otherwise applicable
            numerator is zero.

     (v)    All such ratios and the average of such ratios shall be calculated
            to the nearest one-hundredth of one percent.

     (vi)   The deferral percentage and/or contribution percentage for a Plan
            Year for any Highly Compensated Employee who is eligible to
            participate under two or more plans or arrangements described in
            Section 401(a) or 401(k) of the Code that are maintained by the
            Employer shall be determined as if all contributions were made under
            a single plan.

     (vii)  In the event that this Plan satisfies the requirements of Section
            410(b) of the Code only if aggregated with one or more other plans,
            or if one or more other plans satisfy the requirements of Section
            410(b) of the Code only if aggregated with this Plan, deferral and
            contribution percentages shall be determined as if all such plans
            were a single plan. Any other plan may be aggregated with this Plan
            at the discretion of the Company, provided such plans have the same
            plan year.

     (viii) The ratio for any 5% owner, as defined in Section 416(i)(1) of the
            Code, and for any Highly Compensated Employee in the group
            consisting of the 10 Highly Compensated Employees paid the greatest
            Compensation shall be determined by aggregating the Elective
            Deferral Contributions or Matching Contributions and Compensation of
            such individual with the respective amounts of each other Eligible
            Employee who is a family member of such Highly Compensated Employee.

            Once the ratio for the family group is determined, the individual
            ratios of the family members are not taken into account.

            For purposes of this paragraph, family member shall mean the spouse,
            lineal ascendant or descendant or spouse of a lineal ascendant or
            descendant of the Highly Compensated Employee.

                                       28
<PAGE>
 
4.03 Limitation on Allocations
     -------------------------

     (a)  The "annual addition" for any Participant shall not exceed the amount
          determined hereunder.  Annual addition shall mean the sum of Employer
          contributions, Employee contributions and forfeitures allocated on
          behalf of a Participant for a Plan Year, which is defined to be the
          limitation year.  Annual additions shall also include excess
          deferrals, excess contributions and excess aggregate contributions,
          other than excess deferrals distributed in accordance with Treasury
          Regulation 1.402(g)-1(e)(2) or (3).
          
          The determination of the annual addition will be made as if all
          defined contribution plans of the Employer were one plan and any
          Participant contributions to defined benefit plans will be treated as
          contributions to defined contribution plans.  Annual additions will
          be applied to the applicable Plan Year in accordance with Section
          1.415-6(b) of the Treasury Regulations.
          
          For purposes of Subsection (b)(i), annual addition shall also include
          amounts allocated, after March 31, 1984, to an individual medical
          account, as defined in Section 415(l) of the Code which is part of a
          defined benefit plan maintained by the Employer and amounts derived
          from contributions paid or accrued after December 31, 1985, in
          taxable years ending after such date, which are attributable to post-
          retirement medical benefits allocated to the separate account of a
          Key Employee (as defined in Section 11.02) under a welfare benefit
          plan (as defined in Section 419A(d) of the Code) maintained by the
          Employer.

     (b)  The annual addition for any Participant shall not exceed the lesser of
          (i) or (ii) below:

          (i)  $30,000, or if greater, one-fourth of the defined benefit dollar
               limitation set forth in Section 415(b)(1)(A) of the Code as in
               effect for the limitation year.

               In the event of a short Plan Year, the maximum dollar limitation
               shall be divided by 12 and multiplied by the number of months in
               the short Plan Year.

          (ii) 25% of the Participant's Compensation.

     (c)  If a Participant also is or has been a participant in one or more
          defined benefit plans of the Employer, whether or not terminated, the
          projected annual benefit from such defined benefit plans shall be
          reduced so that a 

                                       29
<PAGE>
 
          "combined benefit factor" in excess of 1.0 shall not result. The
          combined benefit factor is the sum of (i) the defined benefit factor
          and (ii) the defined contribution factor where

          (i)  the defined benefit factor is a fraction

               (A)  the numerator of which is the Participant's projected annual
                    benefit under all defined benefit plans of the Employer at
                    the end of the limitation year of the Plan, and

               (B)  the denominator of which is the lesser of

                    (1)  1.25 multiplied by the maximum allowable annual benefit
                         under Sections 415(b)(1)(A) and 415(d) of the Code at
                         the end of the limitation year of the Plan, or

                    (2)  1.4 multiplied by the maximum allowable annual benefit
                         under Section 415(b)(1)(B) of the Code at the end of
                         the limitation year of the Plan, and

          (ii) the defined contribution factor is a fraction

               (A)  the numerator of which is the sum of the annual additions
                    for such Participant under all defined contribution plans of
                    the Employer, whether or not terminated, for all such years
                    during which he was a participant in such plans, and

               (B)  the denominator of which is the sum of the lesser of the
                    amounts determined in (1) or (2) for the current year and
                    each prior year during which the Participant was employed by
                    the Employer, regardless of whether or not a plan was in
                    existence during those years:

                    (1)  1.25 multiplied by the maximum dollar limitation as
                         defined in Subsection (b)(i), or

                    (2)  1.4 multiplied by the compensation limitation as
                         defined in Subsection (b)(ii).

     (d)  A Participant shall not be permitted to defer Compensation or
          contribute amounts, nor shall he be entitled to an allocation of any
          Employer contributions or forfeitures under any qualified defined
          contribution plan which exceeds the limitations described herein.

                                       30
<PAGE>
 
     (e)  The limitations on allocations to a Participant's Account will be
          applied by limiting otherwise allocable amounts starting with the
          latest allocations during the limitation year.  To the extent more
          than one type of addition is allocated, as of any date, the limitation
          will be applied in the following order:

          (i)    forfeitures;

          (ii)   Employer contributions under profit-sharing plans other than
                 matching contributions;

          (iii)  Employer contributions under money purchase plans other than
                 matching contributions;

          (iv)   Employer matching contributions under money purchase plans.

          (v)    Employer matching contributions under profit-sharing plans;

          (vi)   Employee contributions; and

          (vii)  elective deferrals.

          Amounts listed above which would have been added to a Participant's
          Account based on an allocation method specified in a Plan will be
          reallocated among the remaining Participants eligible to share under
          the Plan.

          Amounts listed above which would have been added to the Participant's
          Account based on an individually defined entitlement will reduce the
          Employer's contribution commitment.

          Employee contributions and elective deferrals will be limited at the
          time deposited and will not be permitted to the extent the limits of
          this Section would be violated.

          In the event annual additions on behalf of a Participant participating
          in more than one plan of the same type during a Plan Year are required
          to be limited under this Section, the limitation shall be ratably
          apportioned among all such plans.

     (f)  Notwithstanding the above, if an excess allocation occurs as a result
          of

     (i)  an allocation of forfeitures;

     (ii) a reasonable error in determining a Participant's Compensation;

                                       31
<PAGE>
 
     (iii)  a reasonable error in determining the amount of elective deferrals
            that may be made under this Section; or

     (iv)   any other reason acceptable to the Internal Revenue Service,



     the resulting additions to the Participant's Account will be reduced by
     first eliminating Employee contributions and elective deferrals to the
     extent otherwise required to be refunded under Sections 402(g), 401(k)(3)
     or 401(m)(2) of the Code.  Any additional reductions permitted under this
     Subsection will be applied in the manner described in Subsection (e).

     However, any amounts paid to the Trust for the limitation year which are
     not allocated to other Participants will be held in a suspense account,
     without investment earnings, and allocated and reallocated in the following
     limitation year and, to the extent necessary, each subsequent limitation
     year.  Allocations from a suspense account in a money purchase plan will be
     viewed as an allocation of accrual requirement for the year in which the
     amount is ultimately allocated.

     In the event a plan is terminated, suspense accounts shall revert to the
     Employer to the extent such accounts may not then be allocated on behalf of
     any remaining eligible Participants.

(g)  The annual addition for any Plan Years beginning before January 1, 1987
     shall not be recomputed to include all Employee contributions.

(h)  Notwithstanding any provision of the Plan to the contrary, transitional
     rules provided in conjunction with legislative changes and changes in the
     Plan's top-heavy status will be applied in accordance with Internal Revenue
     Service promulgation's and legislative history.

                                       32
<PAGE>
 
                                   ARTICLE V
                                   ---------

   MAINTENANCE OF ACCOUNTS, INVESTMENT FUNDS AND VALUATION OF THE TRUST FUND
   -------------------------------------------------------------------------

5.01 Maintenance of Accounts
     -----------------------

     The Committee shall establish and maintain a separate accounting in the
     name of each Participant to which it shall credit all amounts contributed
     in accordance with Articles III and XI.

5.02 Investment Election
     -------------------

     (a)  Initial Election - Each Participant shall -designate one or more of
          ----------------                                                   
          the investment funds established in accordance with Section 5.03 for
          the investment of his Account.  The percentage elected for investment
          in any one of the investment funds must be a multiple of 10%, and the
          same percentage shall be applied equally to each of the Participant's
          Accounts.

          Such initial election may only be made as of January 1, April 1, July
          1, or October 1. Contributions or transfers to the Participant's
          Account prior to such date shall automatically be invested in the
          Guaranteed Income Contract Fund until the next January 1, April 1,
          July 1 or October 1.

     (b)  Subsequent Election - A Participant may, by written notice to the
          -------------------                                              
          Committee at least 30 days prior to the January 1, April 1, July 1, or
          October 1 as of which such election is to be effective, change his
          investment fund election with respect to all current and subsequent
          contributions.  However, until changed, an investment fund election,
          once made, shall remain in effect for all subsequent Plan Years.

     (c)  In the absence of an investment direction from any Participant, the
          Committee shall retain complete discretion with respect to the
          investment of such Participant's Account.

     (d)  No person or persons, other than the Participant, shall be liable for
          any loss resulting from a Participant's direction of the investment of
          any part of his Account.

     (e)  The Committee may promulgate any additional rules and regulations it
          deems necessary or appropriate to govern all aspects of this Section.

5.03 Investment Funds
     ----------------

                                       33
<PAGE>
 
     The Trust Fund shall be divided into such investment funds as designated by
     the Committee and approved by the Trustee for the investment of all
     Accounts, which shall be administered as a unit.

5.04 Valuation of Trust Fund
     -----------------------

     (a)  The Trust Fund shall be valued by the Trustee as of each Valuation
          Date on the basis of its fair market value.

     (b)  The Trust Fund may also be valued by the Trustee as of any other date
          as the Committee may authorize for any reason the Committee deems
          appropriate.


5.05 Allocation of Investment Earnings and Expenses
     ----------------------------------------------

     On the basis of the valuation as of a Valuation Date, subject to the
     provisions of Subsection 7.03(h), the Accounts of all Participants, shall
     be (a) proportionately adjusted to reflect expenses in accordance with
     Section 3. 10 and investment earnings such as interest, dividends, realized
     and unrealized investment profits and losses; and (b) directly adjusted to
     reflect all other applicable transactions during the Plan Year attributable
     to such Accounts including, but not limited to, any contributions or
     distributions.

                                       34
<PAGE>
 
                                   ARTICLE VI
                                   ----------

                BENEFITS PAYABLE UPON TERMINATION OF EMPLOYMENT
                -----------------------------------------------


6.01 Upon Retirement
     ---------------

     (a)  Vesting - A Participant shall be 100% vested in his Account at all
          -------                                                           
          times after first becoming eligible for Retirement.

     (b)  A Participant shall be eligible to retire on his Early, Normal or
          Deferred Retirement Date.

     (c)  In the event a Participant does not retire on his Early or Normal
          Retirement Date, he shall continue to be credited with contributions
          in accordance with Articles III and XI until his actual retirement and
          shall be entitled to receive his Account upon his election while still
          employed by the Company.

6.02 Upon Disability
     ---------------

     (a)  Vesting - A Participant who incurs a Disability prior to termination
          -------                                                             
          of employment shall be 100% vested in his Account.

     (b)  In determining the existence of a Participant's Disability, the
          Committee may select a physician to examine such Participant and
          render a medical opinion.  The final determination shall be made by
          the Committee on the basis of the evidence requested and made
          available.

     (c)  If such Participant returns to the employ of the Company, he shall
          resume his participation as of the date of his return.  The
          Participant's vested interest in that portion of his Account
          attributable to Service from the date of his last reemployment shall
          be determined in accordance with the provisions of Article VI, without
          regard to his prior Disability.


6.03 Upon Death
     ----------

     (a)   Vesting - A Participant who dies prior to termination of employment
           -------                                                            
           shall be 100% vested in his Account.

     (b)   Upon the death of a Participant, his Beneficiary shall be entitled to
           100% of such Participant's vested Account.

     (c)   Beneficiary Designation - Each Participant, upon becoming eligible
           -----------------------                                           
           for participation in the Plan, may designate a primary Beneficiary to
           receive 

                                       35
<PAGE>
 
           the benefits payable in the event of his death, may designate a
           secondary Beneficiary to receive any benefits payable in the event of
           the death of the primary Beneficiary. If a Participant designates a
           primary Beneficiary but not a secondary Beneficiary or if any such
           secondary Beneficiary dies, the Beneficiary last in receipt of or
           entitled to any benefit shall have the right to designate a successor
           Beneficiary to receive any benefits payable in the event of his
           death. In the absence of any such designation, benefits payable upon
           the death of the last living Beneficiary shall be paid in a lump sum
           to such Beneficiary's estate. A Participant may change his
           Beneficiary designation at any time. All Beneficiary designations and
           changes shall be made on an appropriate form and filed with the
           Committee.

           If the primary Beneficiary designated by the Participant is anyone
           other than the Participant's Protected Spouse, such designation must
           include the written acknowledgment and consent of such spouse and be
           witnessed by a Plan representative or a notary public, to the extent
           required by law and the Committee.  Such consent will bE limited to a
           specific alternate Beneficiary and any change in such alternate
           Beneficiary will require a new spousal consent.

6.04 Upon Other Termination of Employment
     ------------------------------------

     (a)  Upon a Participant's termination of employment for reasons other than
          Retirement Disability or death, the following provisions shall be
          applicable:

          (i)  Such Participant shall have a 100% vested interest in his
               Elective Deferral Contribution, Matching, Rollover, Transfer,
               Qualified Matching Contribution and Qualified Nonelective
               Contribution Accounts.

          (ii) Such Participant's vested interest in his Regular Contribution
               Account shall, subject to Subsection 6.05(a) of the Plan, be
               determined in accordance with the following schedule on the basis
               of such Participant's full Years of Service excluding any Service
               before the month within which the Participant attained age 18.

                  Number of Years                 Percentage of Account
                  ---------------                 ---------------------
                                         
                  Less than  2 full years                   0%
                             2 full years                   40%
                             3 full years                   60%
                             4 full years                   80%
                             5 or more full years           100%

                                       36
<PAGE>
 
          (iii)  The above notwithstanding, prior to July 1, 1994, a
                 Participant's vested interest in his Matching Contribution and
                 Regular Contribution Accounts shall, subject to Subsection
                 6.05(a) of the Plan, be determined in accordance with the
                 following schedule on the basis of such Participant's full
                 Years of Service excluding any Service before the month within
                 which the Participant attained age 18.


                      Number of Years             Percentage of Account
                      ---------------             ---------------------

             Less than  1 full year                         0%
                        1 full year                         20%
                        2 full years                        40%
                        3 full years                        60%
                        4 full years                        80%
                        5 or more full years                100%


     (b)  The vested interest of all Participants with three or more Years of
          Service as of the later of the adoption date or effective date of any
          amendment to the vesting schedule, shall be determined on the basis of
          the provisions of the vesting schedule prior to such amendment to the
          extent that such schedule provides a greater vested percentage.  All
          other Participants shall be entitled to the vested percentage
          determined under the schedule in Subsection (a) above, provided that
          such vested percentage shall not be less than the vested percentage at
          the time of the change determined on, the basis of the provisions of
          the vesting schedule prior to such amendment.

     (c)  Forfeitures - The portion of a Participant's Account which is not
          -----------                                                      
          vested shall be forfeited on the earlier of the date on which the
          Participant receives a distribution of his vested benefits or the date
          on which such Participant incurs five consecutive Breaks-in-Service,
          but in no event shall such forfeiture occur earlier than the Valuation
          Date coincident with or next following the date on which the
          Participant terminated employment.

          If a Participant does not have a vested interest in his Account, he
          shall be deemed to have received an immediate distribution as of the
          Valuation Date coincident with or next following the date on which
          such Participant terminated employment.

                                       37
<PAGE>
 
     (d)  That portion of the Participant's Account which is not vested shall be
          allocated along with the Company's Regular Contribution as described
          in Section 3.03(d) of the Plan.


     (e)  Prior to the effective date of this Subsection, a Participant's vested
          interest in his Regular Contribution Account shall be determined on
          the basis of the provisions of the Plan before this restatement.

6.05 Reemployment and Repayment of Benefits
     --------------------------------------

     (a)  If a Participant receives a distribution and is reemployed by the
          Employer prior to incurring five consecutive Breaks-in-Service, the
          dollar amount which was subject to forfeiture in accordance with
          Subsection 6.04(c) of the Plan will be restored to the Participant's
          Account if the Participant repays the total amount previously
          distributed, if any, from Elective Deferral Contribution, Matching
          Contribution, Regular Contribution, Qualified Matching Contribution
          and Qualified Nonelective Contribution

          Accounts.  Such amounts must be repaid to the Trust Fund in a lump sum
          within five years from the date such Participant resumes his
          employment with the Employer.

          If a Participant is deemed to receive a distribution pursuant to
          Subsection 6.04(c) and is reemployed by the Employer prior to
          incurring five consecutive Breaks-in-Service, the dollar amount which
          was subject to forfeiture in accordance with such Subsection will be
          restored to the Participant's Account.  The funds required for the
          restoration of such Account may, as determined by the Committee, be
          paid by the Company or from forfeitures, Company Regular
          Contributions, or investment gains of the Trust Fund attributable to
          the Regular Contribution Accounts of all Participants.

          Such repaid amounts shall be credited to the Participant's Account as
          determined by the Committee, taking into account the applicable
          vesting schedules, amounts subject to special tax treatment and
          withdrawal rules.  Additional Accounts will be established, if
          required, to accommodate these objectives.  Amounts repaid and
          restored in accordance with this Subsection will not be treated as
          annual additions for purposes of Section 4.03 of the Plan.

     (b)  Notwithstanding the above, no restoration shall be made to a
          Participant's Account and no repayment will be permitted with respect
          to funds accumulated prior to reemployment in the case of

          (i)  any Participant who was fully vested,

                                       38
<PAGE>
 
          (ii)   any Participant who is reemployed after incurring five
                 consecutive Breaks-in-Service,

          (iii)  if applicable to this Plan, any Participant who incurred a one
                 year Break-in-Service prior to the Plan Year beginning after
                 December 31, 1984 and reemployment, or

          (iv)   if applicable to this Plan, any Participant who did not incur a
                 one year Break-in-Service prior to reemployment by the Plan
                 Year beginning after December 31, 1982 but failed to repay the
                 amount distributed within two years of reemployment.

                                       39
<PAGE>
 
                                  ARTICLE VII
                                  -----------
                                        
                           DISTRIBUTION OF BENEFITS
                           ------------------------

                                        
7.01      Claim Procedure For Benefits
          ----------------------------

          (a)   Any request for specific information with respect to benefits
                under the Plan must be made to the Committee in writing by a
                Participant or his Beneficiary. Oral communications will not be
                recognized as a formal request or claim for benefits.

          (b)   The Committee shall provide adequate notice in writing to any
                Participant or Beneficiary whose claim for benefits under the
                Plan has been denied, (i) setting forth the specific reasons for
                such denial; specific references to pertinent plan provisions; a
                description of any material and information which had been
                requested but not received by the Committee; and, (ii) advising
                such Participant or Beneficiary that any appeal of such
                determination must be in writing to the Committee, within such
                period of time designated by the Committee but, until changed,
                not more than 60 days after receipt of such notification, and
                must include a full description of the pertinent. issues and
                basis of claim.

          (c)   If the Participant or Beneficiary fails to appeal such action to
                the Committee in writing within the prescribed period of time,
                the Committee's determination shall be final.

          (d)   If an appeal is filed with the Committee, the Participant or
                Beneficiary shall submit such issues he feels are pertinent and
                the Committee shall re-examine all facts, make a final
                determination as to whether the denial of benefits is justified
                under the circumstances, and advise the Participant or
                Beneficiary in writing of its decision and the specific reasons
                on which such decision was based, within 60 days of receipt of
                such written request, unless special circumstances require a
                reasonable extension of such 60-day period.

7.02      Commencement of Benefits
          ------------------------

          The following provisions shall be applicable for determining when
          distribution of benefits shall be made. These provisions are intended
          to conform to the requirements of Section 401(a)(9) of the Code,
          including the minimum distribution incidental benefit under proposed
          Treasury Regulation Section 1.401(a)(9)-2, and shall be construed
          accordingly:

                                       40
<PAGE>
 
     (a)  Benefits Less than $3,500 - Unless otherwise provided in Subsection
          -------------------------                                          
          (c), in the event of termination of employment, benefits which total
          $3,500 or less will commence as soon as administratively feasible
          following the date on which such Participant's employment with the
          Employer terminates.

     (b)  Benefits More than $3,500
          -------------------------

          (i)  Unless otherwise provided in this Section, in the event of
               termination of employment, benefits which total more than $3,500
               will commence as soon as administratively feasible following the
               date on which such Participant's employment with the Employer
               terminates provided that, if the Participant has not attained his
               Normal Retirement Date, the Participant consents to such
               distribution within his Election Period.

          (ii) If a Participant does not consent to the distribution at the time
               specified above and fails to elect deferral in accordance with
               Subsection (d), benefits will commence as of the 60th day
               following the last day of the Plan Year during which the
               Participant's Normal Retirement Date occurs.

     (c)  Valuation Date of Distribution - The amount of any benefit payable
          ------------------------------                                    
          will be determined as of the Valuation Date preceding the date such
          benefit is processed, adjusted to reflect intervening contributions
          and withdrawals, if applicable, but not investment experience.

     (d)  Adverse Impact on Plan - If the amount of any payment under this
          ----------------------                                          
          Section would adversely affect the Trust Fund by forcing the premature
          liquidation of assets, such payment may be delayed until the timely
          and orderly liquidation of investments can be accomplished, but in no
          event later than the 60th day following the last day of the Plan Year
          during which occurs the latest of

          (i)    the date a Participant attains the earlier of his Normal
                 Retirement Date or age 65;

          (ii)   the tenth anniversary of the year during which the Participant
                 commenced participation in the Plan; or

          (iii)  the date the Participant terminates his employment.

          If the amount of any payment under this Section cannot be ascertained
          by the applicable commencement date, payment shall be made no later
          than 

                                       41
<PAGE>
 
60 days after the earliest date on which the amount of such payment can be
ascertained.


     (e) Participant Deferment of Distribution
         -------------------------------------

          (i)  Notwithstanding the above, no consent to a distribution prior to
               the date the Participant attained or would have attained his
               Normal Retirement Date shall be valid until after written
               notification of the right to defer is received by the
               Participant.  The Committee shall provide such written
               notification of the right to defer any benefit payable no less
               than 30 days nor more than 90 days before the Annuity Starting
               Date.

          (ii) A Participant who terminates employment may elect that benefit
               payments commence at a date later than specified in Subsection
               (b), above, by submitting a signed, written statement describing
               the benefit and the date on which the payment of such benefit
               shall commence, provided such date is not later than the April 1
               following the calendar year during which the Participant attains
               age 70 1/2 or such later date as may be promulgated by the
               Internal Revenue Service.

     (f)  Minimum Distribution Requirement - Distribution of benefits must
          --------------------------------                                
          commence not later than the April I following the calendar year in
          which the Participant attains age 70 1/2, or such later date as
          promulgated by the Internal Revenue Service, whether or not the
          Participant terminates employment in that year and whether or not the
          Participant applies for benefit payment.

         The foregoing shall not apply to a Participant

         (i)  who attains age 70 1/2 before January 1, 1988 unless such
              Participant was or becomes a 5% owner, within the meaning of
              Section 416(i)(1)(B)(i) of the Code, at any time during the Plan
              Year ending with or within the calendar year in which he attains
              age 66 1/2 or any subsequent Plan Year, or

         (ii) who had made a valid election under Section 242(b) of the Tax
              Equity and Fiscal Responsibility Act of 1982 (TEFRA) to commence
              his benefits at a later date.

    (g)  If the designated Beneficiary is,

         (i)  Spouse Beneficiary - If the designated Beneficiary is the
               ------------------                                       
               Participant's spouse, such spouse may elect that benefit payments
         
                                      42

<PAGE>
 
               commence at a date later than specified in Subsection (b) by
               submitting a signed written statement describing the benefit and
               the date on which the payment of such benefit shall commence,
               provided such date is not later than, the latest of (A) December
               31 of the calendar year in which the Participant dies, (B)
               December 31 of the calendar year during which the Participant
               would have attained age 70 1/2, or (C) such later date as may be
               promulgated by the Internal Revenue Service.

               If such spouse dies prior to the commencement of benefits, and if
               the distribution of any death benefit payable to the spouse's
               Beneficiary is made in a form that may extend beyond the December
               31 of the calendar year during which the fifth anniversary of
               such spouse's death occurs, such distribution must commence no
               later than the December 31 of the calendar year immediately
               following the date of such spouse's death or such later date as
               may be promulgated by the Internal Revenue Service.

          (ii) Non-Spouse Beneficiary - If the designated Beneficiary is other
               ----------------------                                         
               than the Participant's spouse, and the death benefit payable is
               made in a form that may extend beyond the December 31 of the
               calendar year during which the fifth anniversary of such
               Participant's death occurs, such distribution must commence no
               later than the December 31 of the calendar year immediately
               following the date of such Participant's death or such later date
               as may be promulgated by the Internal Revenue Service.

     (h)  If a Participant is in receipt of benefits from the Company's insured
          long-term disability program, if applicable, payment of the
          Participant's Elective Deferral Contribution, Matching Contribution,
          Regular Contribution, Qualified Matching Contribution and Qualified
          Nonelective Contribution Accounts shall be deferred to the first day
          of the month in which such Participant is no longer eligible to
          receive such benefits or, if earlier, the 60th day following the last
          day of the Plan Year during which the Participant's Normal Retirement
          Date occurs, provided the benefits payable under the long-term
          disability program would otherwise be reduced by the benefits payable
          under the Plan.

     (i)  Waiver of 30-day Notification Requirement
          -----------------------------------------

          If a distribution is one to which sections 401(a)(11) and 417 of the
          Code do not apply, such distribution may commence less than 30 days
          after the notice required under section 1.41l(a)-ll(c) of the Income
          Tax Regulations is given, provided that:

                                      43

<PAGE>
 
          (i)  the Committee clearly informs the Participant that the
               Participant has a right to a period of at least 30 days after
               receiving the notice to consider the decision of whether or not
               to elect a. distribution (and, if applicable, a particular
               distribution option), and

          (ii) the Participant, after receiving the notice, affirmatively elects
               a distribution.

7.03      Method and Form of Payment of Benefits
          --------------------------------------

          The following provisions shall be applicable for determining the
          method and form of payment of all benefits. These provisions are
          intended to conform to the requirements of Section 401(a)(9) of the
          Code, including the minimum distribution incidental benefit under
          proposed Treasury Regulation Section 1.401(a)(9)-2, and shall be
          construed accordingly:

          (a)  (i)  Subject to Section 7.02 of the Plan, all benefits will be
                    distributed in a lump sum.

               (ii) If a Participant or Beneficiary dies after Benefit payments
                    have commenced but prior to the receipt of his entire
                    Benefit, the remaining balance of the Benefit shall continue
                    to be paid at least as rapidly as the payments then in
                    effect to the designated Beneficiary of such recipient.

          (b)  Segregation of Deferred Amount - Notwithstanding the provisions
               ------------------------------
          of Article V, when distribution of benefits from the Trust Fund is to
          be deferred in accordance with Section 7.02, whether in whole or in
          part, the Committee may direct the Trustee to deposit the
          Participant's Account in an interest-bearing account. Thereafter, such
          Participant's Account shall be credited with the interest attributable
          to such account and the provisions of Article V shall not be
          applicable.

          (c)  Subject to Section 7.02 of the Plan, if a Participant's benefits
          are required to commence in accordance with Subsection 7.02(e), in
          lieu of an immediate lump sum distribution, the Participant may elect
          to have the minimum amount required to be distributed each year under
          Code Section 401(a)(9) with the remaining balance payable in a lump
          sum upon termination of employment. Such benefit shall be payable
          directly from the Trust Fund and shall reflect the Participant's
          elections regarding Beneficiary and recalculation of life expectancies
          in accordance with regulations under Code Section 401(a)(9).

          In the absence of an election by the Participant, the form of payment
          shall irrevocably be in either (1) the form of a lump sum or (2) the
          minimum amount required to be distributed each year under Code Section
          401(a)(9) 

                                       44
<PAGE>
 
            payable directly from the Trust Fund with the remaining balance
            payable in a lump sum upon such Participant's termination of
            employment and life expectancies shall not be recalculated, as
            elected by the Committee in a consistent manner.

      (d)   Any benefits payable under this Article may be paid in cash,
            securities, or such other assets of the Trust Fund as the Committee
            may direct.

      (e)   Discharge of Obligations - The distribution of a lump sum payment to
            ------------------------                                            
            the Participant or his Beneficiary will constitute the complete
            discharge of all obligations of the Plan.

7.04  Disposition of Unclaimed Benefits
      ---------------------------------

      In the event that any check or notice with respect to the payment of
      benefits under the Plan remains outstanding at the expiration of six
      months from the date of mailing of such check to the last known address of
      the payee, the Committee shall notify the Trustee to stop payment of all
      such outstanding checks and to suspend the issuance of any further checks,
      if any, to such payee. If, during the three-year period (or such other
      period as specified in the Trust Agreement) from the date of mailing of
      the first such check or of notice that a benefit is due under the Plan,
      the Committee cannot establish contact with the payee by taking such
      action as it deems appropriate and the payee does not make contact with
      the Committee, the remaining benefits may be allocated to Participants in
      the same manner as Matching Contributions in accordance with Section 3.03
      of the Plan. In the event the payee is located subsequent to the date the
      benefits were forfeited, the dollar amount of such benefits shall be
      restored from Company contributions in accordance with the provisions of
      Article VI.

7.05  Non-Assignability
      -----------------

      No benefit under the Plan shall be subject in any manner to anticipation,
      alienation, sale, transfer, assignment, pledge, encumbrance or charge, and
      any such action shall be void for all purposes of the Plan. No benefit
      shall in any manner be subject to the debts, contracts, liabilities,
      engagements or torts of any person, nor shall it be subject to attachments
      or other legal process for or against any person, except with respect to a
      Qualified Domestic Relations Order as defined in Section 414(p) of the
      Code and in such other instances and to such extent as may be required by
      law and except with respect to the debts of Participants to the Trust
      Fund.

7.06  Substitute Payee
      ----------------

      If a Participant or Beneficiary entitled to receive any benefits hereunder
      is in his minority or is, in the judgment of the Committee, legally,
      physically, or mentally 

                                       45
<PAGE>
 
      incapable of personally receiving and receipting any distribution, the
      Committee may instruct the Trustee to make distributions to his legally
      appointed guardian.

7.07  Satisfaction of Liability
      -------------------------

      After all benefits have been distributed in full to a Participant or to
      his Beneficiary, all liability to such Participant or to his Beneficiary
      shall cease.

7.08  Direct Rollover Requirements
      ----------------------------

      (a)  This Section applies to distributions made on or after January 1,
           1993. Notwithstanding any provision of the Plan to the contrary that
           would otherwise limit a distributee's election under this Section, a
           distributes may elect, at the time and in the manner prescribed by
           the Committee, to have any portion of an eligible rollover
           distribution paid directly to an eligible retirement plan specified
           by the distributes in a direct rollover.

     (b)   Definitions
           -----------

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

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

           (iii) Distributee: A distributes includes an employee or former
                 employee. In addition, the employee's or former employee's
                 surviving spouse and the employee's or former employee's spouse

                                       46
<PAGE>
 
                 or former spouse who is the alternate payee under a qualified
                 domestic relations order, as defined in section 414(p) of the
                 Code, are distributees with regard to the interest of the
                 spouse or former spouse.

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

                                       47
<PAGE>
 
                                 ARTICLE VIII
                                 ------------

                          ADMINISTRATION OF THE PLAN
                          --------------------------


8.01   Assignment of Administrative Authority
       --------------------------------------

       The Board of Directors shall appoint a Committee to administer the Plan.
       The Committee may consist of directors, officers, Employees, or any other
       individuals, who, upon acceptance of such appointment, shall serve at the
       pleasure of the Board of Directors. Any member may resign by delivering
       his written resignation to the Board of Directors and to the Committee.
       Vacancies in the Committee arising from resignation, death or removal
       shall be filled by the Board of Directors. In the absence of an
       appointment of a Committee by the Board of Directors, the Company shall
       administer the Plan. The Board of Directors shall also appoint the
       Trustee and may appoint an investment manager.

8.02   Organization and Operation of the Committee
       -------------------------------------------

       (a)  The Committee shall act, in carrying out its duties and
            responsibilities, in the interest of the Participants and
            Beneficiaries with the care, skill, prudence, and diligence under
            the circumstances then prevailing that a prudent man, acting in a
            like capacity and familiar with such matters, would use in the
            conduct of an enterprise of like character and aims.

       (b)  The Committee shall act by a majority of its members unless
            unanimous consent is required by the Plan or by unanimous approval
            of its members if there are two or less members in office at the
            time. In the event of a Committee deadlock, the Committee shall
            determine the method for resolving such deadlock. If there are two
            or more Committee members, no member shall act upon any question
            pertaining solely to himself, and the other member or members shall
            make any determination required by the Plan in respect thereof.

       (c)  The Committee may authorize any one or more of its members to
            execute documents on behalf of the Committee and shall notify the
            Trustee in writing of such action and the name or names of the
            member or members so designated.

       (d)  The Committee may, by unanimous consent, delegate specific authority
            and responsibilities to one or more of its members. The member or
            members so designated shall be solely liable, jointly and severally,
            for their acts or omissions with respect to such delegated authority
            and responsibilities. Members not so designated, except as provided
            under
        

                                       48
<PAGE>
 
            Subsection 8.06(b) of the Plan, shall be relieved from liability for
            any act or omission resulting from such delegation.

       (e)  The Committee shall endeavor not to engage in any prohibited
            transactions, as specified in the Employee Retirement Income
            Security Act of 1974, or any successor act. However, any member of
            the Committee who is a Participant or Beneficiary shall not be
            precluded from receiving benefits payable under the Plan.

8.03 Authority and Responsibility
     ----------------------------

     The Committee and its delegates shall have full discretionary authority and
     responsibility for administration of the Plan.  Such authority and
     responsibility shall include, but shall not be limited to, the following
     areas.

     (a)  Appointment of qualified accountants, consultants, administrators,
          counsel or other persons it deems necessary or advisable, who shall
          serve the Committee as advisors only and shall not exercise any
          discretionary authority, responsibility or control with respect to the
          management or administration of the Plan.

          Any action of the Committee on the basis of advice, opinion, reports,
          etc. furnished by such qualified accountants, consultants,
          administrators and counsel shall be the sole responsibility of the
          Committee.

          Members of the Committee shall not be precluded- from serving the
          Committee in any other capacity, provided any compensation paid for
          such services is reasonable.

     (b)  Determination of eligibility to participate and all benefits, and
          resolution of all questions arising from the administration,
          interpretation and application of the Plan including the determination
          of the validity of any Qualified Domestic Relations Order in
          accordance with Section 8.09 of the Plan.

     (c)  Notification to the Trustee of all benefits payable under the Plan and
          the manner in which such benefits are to be paid.

     (d)  Adoption of forms and regulations for the administration of the Plan.

     (e)  Remedy of any inequity resulting from incorrect information received
          or communicated, or of administrative error.

     (f)  Assurance that its members, the Trustee and other persons who handle
          funds or other property of the Trust Fund are bonded as required by
          law.

                                       49
<PAGE>
 
     (g)  Settlement or compromise of any claims or debts arising from the
          operation of the Plan and the commencement of any legal actions or
          administrative proceeding.

     (h)  Direction to the Trustee as to specific investments which, under the
          terms of the Trust Agreement, may be made only upon written direction
          of the Committee or which are made in accordance with specific
          provisions of the Plan, such as annuity or group investment contracts,
          loans to Participants, or earmarked investments selected by
          Participants.

     (i)  Action as agent for the service of legal process.

     (j)  Communication- regarding the liquidity needs of the Plan so that
          investment discretion can be exercised to effect specific objectives.

8.04  Records and Reports
      -------------------

      (a)  The Committee shall keep a record of its proceedings and acts and
           shall keep books of account, records and other data necessary for the
           proper administration of the Plan.

      (b)  The Committee shall make its records available for examination by the
           Employer, or any Participant or Beneficiary during business hours at
           the principal place of business of the Company.  However, a
           Participant or Beneficiary may examine only records pertaining
           exclusively to himself and such other records specified by law.
 
      (c)  The Committee shall make available to any Participant or Beneficiary
           any material required by law without cost. The Committee may, upon
           written request by any Participant or Beneficiary, provide copies of
           such material as it deems appropriate and shall furnish copies of
           such material required by law. The Participant or Beneficiary may be
           required to pay the reasonable cost as determined by the Committee of
           preparing and furnishing such material or the cost as prescribed by
           law.

8.05  Required Information
      --------------------

      The Company and Participants or Beneficiaries entitled to benefits shall
      furnish forms, including but not limited to annuity applications, and any
      information or evidence, as requested by the Committee for the proper
      administration of the Plan.  Failure on the part of any Participant or
      Beneficiary to comply with such request within a reasonable period of time
      shall be sufficient grounds for delay in the payment of benefits until the
      information or evidence requested is received.

                                       50
<PAGE>
 
8.06  Fiduciary Liability
      -------------------

      (a)  A member of the Committee who breaches the responsibilities,
           obligations, or duties imposed by law shall be liable to the Plan for
           any losses resulting from such breach.

      (b)  A member of the Committee shall be liable for a breach of fiduciary
           responsibility by another Committee member or Trustee, with respect
           to the Plan or Trust Fund, under the following circumstances.

          (i)    The member knowingly participates in or undertakes to conceal
                 an act or omission of another member of the Committee or
                 Trustee, with knowledge that the act or omission is such a
                 breach.

          (ii)   If the member's failure to comply with Subsection 8.02(a) of
                 the Plan has enabled another member or Trustee to commit such a
                 breach.

          (iii)  The member has knowledge of such a breach by another member or
                 Trustee and does not make reasonable efforts under the
                 circumstances to remedy the breach.

8.07      Payment of Expenses
          -------------------

          Those members of the Committee who are full-time paid employees of the
          Company shall serve without compensation. The expenses of the
          Committee, including reasonable compensation as may be agreed upon in
          writing between the Company and the Committee for members of the
          Committee who are not full-time employees of the Company, shall be
          deemed administrative expenses payable in accordance with Article 111.

8.08      Indemnification
          ---------------

          The Company shall indemnify members of the Committee against personal
          financial loss resulting from liability incurred in the administration
          of the Plan, unless such liability and loss were caused by such
          individual's gross negligence or willful misconduct.

8.09      Qualified Domestic Relations Orders
          -----------------------------------

          (a)  Requirements
               ------------

               (i) A Qualified Domestic Relations Order (hereinafter referred to
               as "QDRO") is a Domestic Relations Order which creates or
               recognizes the existence of an alternate payee's right to, or
               assigns to an alternate payee the right to, receive all or a
               portion of the 

                                       51
<PAGE>
 
         benefits payable with respect to a Participant under the Plan, and
         which the Committee has determined meets the requirements of
         Subsections (a) (ii) and (iii) below.

         (ii) A Domestic Relations Order meets the requirements of a QDRO only
              if the Order clearly specifies

              (A)  the name and the last known mailing address (if any) of the
                   Participant and the name and mailing address of each
                   alternate payee covered by the Order;

              (B)  the amount or percentage of the Participant's benefits to be
                   paid by the Plan to each such alternate payee, or the manner
                   in which such amount or percentage is to be determined;

              (C)  the number of payments or period to which such Order applies;
                   and

              (D)  that the Order applies to this Plan.

         (iii) A Domestic Relations Order meets the requirements of a QDRO
               only if the Order

              (A)  does not require the Plan to provide any type or form of
                   benefits, or any option, not otherwise provided under the
                   Plan;

              (B)  does not require the Plan to provide increased benefits
                   (determined on the basis of actuarial value); and

              (C)  does not require the payment of benefits to an alternate
                   payee which are required to be paid to another alternate
                   payee under another Domestic Relations Order previously
                   determined to be a QDRO.

         (iv) In the case of any payment before a Participant has separated
              from service, a QDRO shall not be treated as failing to meet the
              requirements of Subsection (a)(iii)(A), above, solely because the
              order requires the payment of benefits to an alternate payee

              (A)  on or after the date on which the Participant attains (or
                   would have attained) the Earliest Retirement Age;

              (B)  as if the Participant had retired on the date such payment
                   is to begin under such order; and

                                       52
<PAGE>
 
              (C)  in any form in which such benefits may be paid under the
                   Plan to the Participant (other than in the form of a joint
                   and survivor annuity. with respect to the alternate payee
                   and his or her subsequent spouse).

         (v)  For purposes of Subsection (a)(iv), above, Earliest Retirement
              Age means the earlier of

              (A)  the date on which the Participant is entitled to a
                   distribution under the Plan; or

              (B)  the later of (1) the date the Participant attains age 50 or
                   (2) the earliest date on which the Participant could begin
                   receiving benefits under the Plan if such Participant
                   separated from service.

               Notwithstanding any provision of the Plan to the contrary, for
               purposes of Subsection (v)(A) above, a distribution to an
               alternate payee may be made prior to the date on which the
               Participant is entitled to a distribution under Section 7.02 of
               the Plan or Article XII, if applicable, if requested by the
               alternate payee to the extent such distribution is permitted
               under the QDRO.  Nothing in this provision shall permit the
               Participant to receive a distribution at a date otherwise not
               permitted under Section 7.02 of the Plan or Article XII, if
               applicable, nor shall it permit the alternate payee or receive a
               form of payment not permitted in Section 7.03 of the Plan.

     (b)  Procedures
          ----------

          Upon receipt of a Domestic Relations Order, the Committee shall take,
          or cause to be taken, the following actions:

          (i)  The Committee shall promptly notify the Participant, each
               alternate payee covered by the order and each representative for
               these parties of the receipt of the Domestic Relations Order.
               Such notice shall include a copy of the Order and these QDRO
               Procedures for determining whether such Order is a QDRO.

          (ii) Once a Domestic Relations Order has been received, the affected
               Participant will not be permitted to request a withdrawal or a
               loan from the Plan if the Plan provides for such withdrawal or
               loan; and no distributions will be made from the Plan to the
               Participant upon a subsequent termination until after the payment
               to the alternate payee has been determined, unless the Committee
               determines the order not to be a QDRO.

                                       53
<PAGE>
 
           (iii)  Within a reasonable period after receipt of a Domestic
                  Relations Order, the Committee shall determine whether it is a
                  QDRO and shall notify the parties indicated in Subsection
                  (b)(i), above, of such determination. Such notice shall
                  indicate whether the benefits payable to the alternate payee
                  in accordance with the QDRO are subject to a previously
                  existing QDRO.

           (iv)   Pending the Committee's determination of whether a Domestic
                  Relations Order is a QDRO, if payments are due to be paid to
                  the Participant, the Committee shall withhold payment and
                  separately account for the amounts otherwise payable to the
                  alternate payee during such period if the order is
                  subsequently determined to be a QDRO (hereinafter referred to
                  as the "segregated amounts"). If, within the 18-month period
                  beginning with the date the first payment would have been
                  required to be made under the Domestic Relations Order, the
                  Committee determines the order to be a QDRO, the Committee
                  shall pay the segregated amounts, including any interest
                  thereon, to the person or persons entitled thereto. If, within
                  such 18-month period, the Committee determines an order is not
                  a QDRO or the Committee fails to reach a decision, the
                  Committee shall pay the segregated amounts to the Participant.
                  If, after the 18-month period, the Committee subsequently
                  determines that the order is a QDRO, the Committee shall pay
                  benefits subsequent to such determination in accordance with
                  the order. If action is taken in accordance with this
                  Subsection (b), the Plan's obligation to the Participant and
                  each alternate payee shall be discharged to the extent of any
                  payment made pursuant to the QDRO.

           (v)    In determining the segregated amount in accordance with
                  Subsection (b)(iv), the Participant's vested interest shall be
                  prorated between the Participant and alternate payee and the
                  entire amount of any nonvested interest or any outstanding
                  Plan loans, if applicable, will be credited to the Participant
                  and not taken into consideration in making such determination.
                  Any future contributions or loan repayment, if applicable,
                  will be credited to the Participant and not the alternate
                  payee.

           (vi)   Upon a determination by the Committee that a Domestic
                  Relations Order is a QDRO, the Committee shall arrange for
                  benefits to be paid to the alternate payee in accordance with
                  such order and Sections 7.02 and 7.03 of the Plan as if the
                  Participant had terminated employment at such time.

                                       54
<PAGE>
 
           (vii)   If benefits are not immediately distributable to the
                   alternate payee, such amount shall be separately accounted
                   for until such time as the distribution is made. Any amount
                   subject to a QDRO will not be available to the Participant
                   under the Plan withdrawal provisions nor will it be available
                   as collateral for a Plan loan, if the Plan provides for
                   either Withdrawals or Loans.

           (viii)  The alternate payee shall be treated as a Beneficiary for all
                   purposes of the Plan. If the Plan provides for Participant
                   investment direction, the alternate payee will be eligible
                   for the same investment election option in accordance with
                   Article V as the Participant.

           (ix)    Any expense charges related to the administration of the QDRO
                   may be prorated between the Participant and the alternate
                   payee and may be automatically deducted by the Committee from
                   the amount payable.

           The foregoing provisions are effective for QDROs entered into on or
           after January 1, 1985, except that, in the case of a Domestic
           Relations Order entered into before January 1, 1985, the Committee
           (i) may treat such order as a QDRO even though such order fails to
           meet the requirements of Subsections (a)(ii) and (iii) above, and
           (ii) must treat such order as a QDRO if benefits were being paid
           pursuant to such order on January 1, 1985.
           

                                       55
<PAGE>
 
                                  ARTICLE IX
                                  ----------
                                        
                           AMENDMENT AND TERMINATION
                           -------------------------

                                        
9.01  Amendment
      ---------

      (a)  The Plan may be amended or otherwise modified by the Board of
           Directors, or the Committee to the extent authorized in accordance
           with Subsection (c), below. Copies of any such amendment or
           modification shall be sent to the governing body of each
           participating Company, if any. It shall be deemed each Company
           consented to such amendment or modification unless its governing body
           delivers written notice to the contrary to the Board of Directors,
           the Committee and the Trustee within 30 days of its receipt of such
           amendment or modification.

      (b)  No amendment or modification shall

           (i)    permit any part of the Trust Fund, other than such part as is
                  required to pay taxes, administrative expenses and expenses
                  incurred in effectuating such changes, to be used for or
                  diverted to purposes other than the exclusive benefit of the
                  Participants or Beneficiaries and/or persons entitled to
                  benefits under the Plan or permit any portion of the Trust
                  Fund to revert to or become the property of the Company;

           (ii)   have the effect of reducing the Account of any Participant as
                  of the date of such amendment or deprive any Participant or
                  Beneficiary of a benefit accrued and payable; or
                  
           (iii)  eliminate any option which constitutes a valuable right
                  available to a Participant with respect to benefits previously
                  accrued to the extent the Participant satisfied, either before
                  or after the amendment, the conditions for the form of payment
                  except as otherwise permitted by applicable law and
                  regulations.

      (c)  The Committee may amend or modify the Plan in order to bring the Plan
           into compliance with applicable law or regulations, provided said
           amendment or modification does not have a material effect on the
           estimated cost of maintaining the Plan and does not create a new
           class of benefits or entitlements.

                                       56
<PAGE>
 
 9.02 Termination
      -----------

      While the Plan and Trust Fund are intended to be permanent, they may be
      terminated at the discretion of the Board of Directors. Written
      notification of such action shall be given to each Company, the Trustee
      and the Committee. Thereafter, no further contributions shall be made to
      the Trust Fund.

9.03  Vesting Upon Termination
      ------------------------

      Upon the complete discontinuance of Company contributions or the
      termination or partial termination of the Plan and Trust Fund, the Account
      of each affected Participant shall become fully vested and shall not be
      reduced except

      (a)  for adjustments resulting from a valuation in accordance with Article
           V, which valuation shall also reflect the expenses incurred for
           administration of the Plan and/or Trust Fund after such
           discontinuance or termination date, and all expenses incurred in
           effectuating the complete discontinuance of Company contributions or
           termination or partial termination of the Plan and Trust Fund, such
           as the fees and retainers of the Plan's Trustee, accountant,
           custodian, administrator, consultant, counsel and other specialists
           if such expenses are not paid by the Company;

      (b)  for distributions of benefits by the Trustee to the Participant in
           accordance with the Plan and at the written direction of the
           Committee; and

      (c)  as provided in Section 14.01.

9.04  Distribution of Benefits After Termination
      ------------------------------------------

      As soon as administratively feasible, the Trustee, as authorized and
      directed by the Committee, shall, provided there is no successor defined
      contribution plan within the meaning of Section 401(k)(10)(A)(i) of the
      Code, distribute each Account, after adjustment in accordance with
      Subsection 9.03(a) of the Plan, in a manner consistent with the provisions
      of Article VII.

                                       57
<PAGE>
 
                                   ARTICLE X
                                   ---------

                            PARTICIPATING COMPANIES
                            -----------------------


10.01  Adoption by Other Entities
       --------------------------

       Any corporation or other business entity may, by resolution of its own
       governing body, and with the approval of the Board of Directors, adopt
       the Plan and thereby become a Company. Notwithstanding the adoption of
       the Plan by other entities, the Plan will be administered as a single
       plan and all Plan assets will be available to pay benefits to all
       Participants under the Plan.

10.02  Alternative Provisions
       ----------------------

       No Company may adopt alternative provisions as to itself or its
       Employees.

       Upon request of the governing body of a Company, the Board of Directors
       may amend the Plan with respect to the Employees of such Company provided
       that any change will only apply if any inequity resulting from such
       changed Plan provisions is not found to be discriminatory on behalf of
       Highly Compensated Employees.

10.03  Right to Withdraw (Plan Spinoff)
       --------------------------------

       Each Company having adopted the Plan shall have the right as of the last
       day of any month to withdraw from the Plan and/or Trust Agreement by
       delivering to the Board of Directors, the Committee and the Trustee
       written notification from its own governing body of such action and
       setting forth the date as of which the withdrawal shall be effective. The
       date specified in such written notice shall be deemed a Valuation Date.

10.04  Procedure Upon Withdrawal
       -------------------------

      (a)   If a Company withdraws from the Plan and Trust Agreement as the
            result of its adoption of a different plan, the Trustee shall
            segregate the portion of the Trust Fund attributable to the Accounts
            of Participants employed solely by such Company.

            As soon as administratively feasible the Trustee shall transfer the
            segregated assets to the insurance carrier or fiduciary designated
            by the Company as the agency through which the benefits of such
            successor plan are to be disbursed.

                                       58
<PAGE>
 
      (b)   If a Company withdraws from the Plan and Trust Agreement as the
            result of its adoption of a resolution to terminate its
            participation in the Plan and to distribute assets to its Employees
            who are Participants, the Trustee shall segregate the portion of the
            Trust Fund attributable to the Accounts of the Participants who are
            employed solely by such Company, and the termination provisions of
            Sections 9.03 and 9.04 of the Plan shall apply with respect to such
            segregated assets.

                                       59
<PAGE>
 
                                  ARTICLE XI
                                  ----------

                             TOP-HEAVY PROVISIONS
                             --------------------


11.01  Definition of Top-Heavy and Super Top-Heavy
       -------------------------------------------

     (a)  The Plan will be Top-Heavy for a Plan Year if, as of the final
          Valuation Date of the preceding Plan Year (or the final Valuation
          Date of the current Plan Year, if such year is the first Plan Year),
          hereinafter referred to as the Determination Date,

           (i)  the aggregate value of the Accounts of all Participants who are
                Key Employees (as defined in Section 11.02 of the Plan) exceeds
                60% of the aggregate value of such Accounts of all Participants
                and the Plan cannot be aggregated with any other plans which
                would result in the formation of a non-Top-Heavy aggregation
                group of plans; or

           (ii) the Plan is required to be part of an aggregation group of plans
                and the aggregation group is Top-Heavy.  The group will be
                deemed Top-Heavy if the aggregate value of all defined
                contribution plan accounts and the value of all defined benefit
                plan accrued benefits attributable to Key Employees exceeds 60%
                of such values attributable to all members of the aggregated
                plans.  Such benefit values and accounts shall be aggregated
                using the Determination Dates of the individual plans which fall
                within the same calendar year.

          For purposes of this Section, aggregation group means all plans,
          including terminated plans, maintained by the Employer if maintained
          within the last five years ending on the Determination Date, in which
          a Key Employee is a participant or which enables any plan in which a
          Key Employee is a participant to meet the requirements of Section
          401(a)(4) or Section 410 of the Code, as well as all other plans
          maintained by the Employer, provided that inclusion of such other
          plans in the aggregation group would not prevent the group of plans
          from continuing to meet the requirements of such applicable Sections
          of the Code.

     (b)  The Plan will be Super Top-Heavy for a Plan Year if the aggregate
          value of all defined contribution plan accounts and the value of all
          defined benefit plan accrued benefits attributable to all Participants
          who are Key Employees exceeds 90% of such values attributable to all
          Participants in lieu of 60% as stated in Subsection (a), above.

                                       60
<PAGE>
 
     (c)  For purposes of determining the aggregate value of the benefit values
          and accounts under this Section, distributions, other than rollovers
          or direct transfers to another qualified plan maintained by the
          Employer or rollovers or direct transfers not initiated by the
          Participant, made during the five-year period ending on the
          Determination Date of the plan from which such distributions were
          made, shall be included to the extent such distributions are not
          otherwise reflected in the value of any accrued benefit under a
          defined benefit plan as determined with respect to such plan's
          Determination Date.  Such aggregate value shall not include any (i)
          assets rolled over or transferred at the initiation of the Participant
          directly from a qualified plan maintained by a business entity other
          than an Employer to the Plan, after December 31, 1983, (ii) amounts
          attributable to former Key Employees, (iii) amounts attributable to
          Participants not employed during such five-year period, or (iv)
          amounts attributable to deductible employee contributions under former
          Section 219(e)(2) of the Code.

          A Participant's accounts under any defined contribution plan as of any
          Determination Date, other than the Determination Date which falls
          within the first Plan Year, shall not include any Employer
          contributions due and not yet paid as of the Determination Date, if
          the plan under which the account is maintained is not subject to
          Section 412 of the Code.

          Accrued benefit values under defined benefit plans aggregated with
          this Plan shall be determined, subject to the rules set forth in
          Section 416(g)(4)(F)(ii) of the Code, as of the dates of the most
          recent valuations preceding or coincident with such defined benefit
          plans' Determination Dates, in accordance with the interest and
          mortality rate assumptions specified in such defined benefit plans for
          this purpose or, if not specified, shall be determined using an
          interest rate of 5% and mortality rates in accordance with Group
          Annuity Mortality Table for 1951 (Projection 'C' to 1970, set back
          five years for females).  Such accrued benefit values shall be
          determined under the method of accrual used for all plans of the
          Employer or, if such method is not identical, as if such benefit
          accrued under the fractional rule as described in Section 41 1
          (b)(1)(C) of the Code.

11.02  Definition of Key Employee
       --------------------------

      An Employee or a former Employee will be considered to be a Key Employee
      for a Plan Year if, at any time during the Plan Year or the preceding four
      Plan Years, he is an officer of the Employer earning more than 50% of the
      maximum dollar limitation under Section 415(b)(1)(A) of the Code; one of
      the 10 employees owning the largest interests (minimum 1/2%) in the
      Employer earning more than the maximum dollar limitation under Section
      415(c)(1)(A) of the Code; a 5% owner; or a 1% owner whose compensation
      exceeds $150,000.  This definition of Key Employee shall be governed by
      Section 416 of the Code 

                                       61
<PAGE>
 
      and Regulations thereunder. For purposes of this definition, but only to
      the extent required by law, a Key Employee's Beneficiary shall be treated
      as a Key Employee, and ownership percentages shall be determined without
      regard to aggregation of entities under common control within the meaning
      of Sections 414(b), (c) and (m) of the Code. In no event shall more than
      50 employees (or, if less, the greater of three employees or 10 percent of
      the employees) be deemed officers for purposes of this definition.

11.03  Allocation of Contributions and Forfeitures
       -------------------------------------------

     (a)  To the extent that the allocations provided under Article III of the
          Plan satisfies the minimum percentage specified in Subsection (b)
          below, the allocation procedures under said Article III of the Plan
          shall govern in lieu of those provided for in this Article.

     (b)  Unless otherwise provided, in this Section, for any Plan Year in which
          the Plan is determined to be Top-Heavy the Company contribution shall
          be allocated to non Key Employee Participants in the employ of the
          Company on the last business day of that Plan Year and to those other
          Participants eligible to share in accordance with Article III of the
          Plan in proportion to their Compensation up to 3%, provided that the
          amount allocated to any such non Key Employee in the employ of the
          Company on the last business day of the Plan Year shall not be less
          than an amount which, in combination with all other such amounts
          allocated to him under all other defined contribution plans maintained
          by the Employer, is equal to the lesser of

           (i)  3% of the Participant's Compensation or

           (ii) the highest percentage of Compensation (net of amounts
                contributed under a qualified salary reduction or similar
                arrangement) at which contributions (including Employer Matching
                Contributions and forfeitures) are allocated for the Plan Year
                under the Plan and under any other defined contribution plan
                required to be aggregated with the Plan on behalf of any Key
                Employee, times the Participant's Compensation.

    (c)  To the extent the amount to be allocated exceeds the amount above, the
         remaining balance shall be allocated to those Participants eligible to
         share in accordance with Article III of the Plan, in proportion to
         Compensation (excluding any amount paid by the Employer which is not
         paid by the Company) in excess of up to 3% of such Compensation.

    (d)  If any Participant is also covered by a defined benefit plan or plans
         maintained by the Employer, then for each year the Plan is determined
         to be Top-Heavy, 5% will be substituted in lieu of the 3% minimum

                                       62
<PAGE>
 
         allocation under Subsection (b)(i) and Subsection (c) for such
         Participant and Subsection (b)(ii) shall not be applicable, unless the
         Participant receives the Top-Heavy defined benefit minimum under the
         defined benefit plan or plans in accordance with Section 416(c)(1) of
         the Code, notwithstanding any offset attributable to defined
         contribution account balances, in which event no minimum contribution
         will be required under the Plan.

    (e)  For purposes of this section, only benefits derived from Employer
         contributions under the Plan, or any other defined contribution plan or
         plans are to be taken into account to determine whether the minimum
         Employer contribution or benefit has been satisfied, excluding matching
         contributions and any contributions attributable to a salary reduction
         or similar arrangement, but including contributions as defined in
         Treasury Regulation 1.401(k)-1(g)(7). Such salary reduction
         contributions will be taken into account to determine the Employer
         contribution made on behalf of any Key Employee under subsection
         11.03(b)(ii), but not to determine whether the minimum Employer
         contribution or benefit has been satisfied.

    (f)  For purposes of this Section only, Participant shall also include any
         Participant who did not meet the 1,000 Hours of Employment requirement,
         if applicable, necessary to share in the Company's Regular
         contributions.

    (g)  An Eligible Employee who has not met the 1,000 Hours of Employment
         requirement, if applicable, for eligibility in accordance with Article
         11 of the Plan, shall not be considered a Participant for purposes of
         this Section.

    (h)  An employee of a business entity which has not adopted the Plan shall
         not be considered a Participant for purposes of this Section unless
         also employed by the Company.

    (i)  An Eligible Employee who becomes a Participant by virtue of the
         acceptance of a rollover contribution or a transfer of assets in
         accordance with Article III of the Plan but who is not otherwise
         eligible in accordance with Section 2.01, shall not be entitled to
         share in any Company contribution allocated in accordance with this
         Article.

11.04  Minimum Vesting
       ---------------

       (a)  The following vesting schedule shall be substituted for the vesting
            schedule under Subsection 6.04(a) as of the first day of the first
            Plan Year the Plan is determined to be Top-Heavy for persons not
            under the jurisdiction of a collective bargaining unit.
 

                                       63
<PAGE>
 
11.05  Adjustments to Vesting Schedule
       -------------------------------

       Since the vesting provision in Article VI complies with Internal Revenue
       Code Section 416, the vesting provision in Article VI shall remain the
       same in any Top-Heavy Plan Year.

11.06  Limitation of Allocations
       -------------------------

       For any Plan Year in which the Plan is determined to be Top-Heavy or
       Super Top-Heavy, the reference to "1.25" in Subsection 4.03(c)(ii)(B)(1)
       will be changed to read "1.0".

                                       64
<PAGE>
 
                                  ARTICLE XII
                                  -----------

                     WITHDRAWAL OF FUNDS DURING EMPLOYMENT
                     -------------------------------------


12.01  Withdrawals from Elective Deferral Contribution Account
       -------------------------------------------------------

       (a)   Subject to the General Withdrawal Rules below, a Participant may
             withdraw up to 100% of his Elective Deferral Contribution Account
             provided (i) he has attained age 59 1/2  or (ii) such withdrawal
             meets the Financial Hardship Rules below.

       (b)   Effective for Plan Years beginning after December 31, 1988, the
             amount of any Financial Hardship Withdrawal shall be limited to the
             sum of the Participant's Elective Deferral Contributions plus the
             income credited on such Contributions as of the last Valuation Date
             in 1988.

12.02  Withdrawals from Matching Contribution, Additional Matching Contribution
       ------------------------------------------------------------------------
       and Rollover Accounts
       ---------------------

       Subject to the General Withdrawal Rules below, a Participant may withdraw
       up to 100% of the vested portion of his Matching Contribution, Additional
       Matching, and/or Rollover Accounts provided (i) he has attained age 
       59 1/2 or (ii) such withdrawal meets the Financial Hardship Rules below. 

12.03  Withdrawals from Regular Contribution Account
       ---------------------------------------------

       Subject to the General Withdrawal Rules below, a Participant may elect to
       withdraw up to 100% of his Regular Contribution Account provided he has
       attained age 59 1/2.

12.04  Withdrawals from Qualified Matching Contribution and Qualified
       --------------------------------------------------------------
       Nonelective Contribution Accounts
       ---------------------------------

       Subject to the General Withdrawal Rules below, a Participant may withdraw
       up to 100% of his Qualified Matching Contribution and/or Qualified
       Nonelective Contribution Accounts provided (i)  he has attained age 
       59 1/2 or (ii) such withdrawal meets the Financial Hardship Rules below.

                                       65
<PAGE>
 
12.05  Financial Hardship Rules
       ------------------------

       (a)  For purposes of this Article, a Financial Hardship withdrawal may be
            made only if it is on account of an immediate and heavy financial
            need of the Participant and is necessary to satisfy such financial
            need, including income taxes and penalties, if applicable.

       (b)  The following needs shall be recognized as immediate and heavy
            financial needs:

            (i)    medical expenses, as described in Section 213(d) of the Code,
                   previously incur-red by the Participant, the Participant's
                   spouse or the Participant's dependents, or funds necessary
                   for these persons to obtain medical care described in Section
                   213(d) of the Code,

            (ii)   purchase of a principal residence for the Participant,

            (iii)  tuition payments and related educational fees for the next 12
                   months of post-secondary education for the Participant or the
                   Participant's spouse, children or other dependents,

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

            (v)    any other financial need as may be promulgated by the
                   Internal Revenue Service, and

            (vi)   any other financial stress the satisfaction of which is
                   necessary for the safety, well-being, livelihood or health of
                   the Participant or his immediate family.

       (c)  The following requirements will be applicable:

            (i)   The Participant must have obtained all other distributions and
                  loans available under all plans maintained by the Employer.

            (ii)  Elective Deferral Contributions and any other Employee
                  contributions under all plans maintained by the Employer will
                  be suspended for 12 months following the receipt of the
                  Financial Hardship withdrawal. The Participant's Elective
                  Deferral Contributions under Section 3.01 will be resumed
                  following the Participant's election for resumption.

            (iii) The limitation of Section 4.01 which is imposed on a
                  Participant's Elective Deferral Contributions for the calendar
                  year immediately 

                                       66
<PAGE>
 
                  following the calendar year of the Financial Hardship
                  withdrawal will be reduced by the amount of such contributions
                  and/or deferrals for the calendar year of such withdrawal.

       (d)  A Financial Hardship withdrawal from a Participant's Elective
            Deferral Contribution Account will be available only after the total
            amount available from all other Accounts has been withdrawn. The
            amount of such Financial Hardship withdrawal may not exceed the
            amount required to meet the specified need plus any amounts
            necessary to pay any federal, state or local income taxes or
            penalties reasonably anticipated to result from the withdrawal.

12.06  General Withdrawal Rules
       ------------------------

       Any withdrawal shall be subject to the following requirements:

       (a) Only one withdrawal will be permitted during any Plan Year.

       (b) A written request for a withdrawal must be submitted to the Committee
           at least 30 days prior to the requested date of withdrawal.

       (c) If a loan is outstanding at the time a withdrawal is requested, such
           withdrawal shall be permitted only to the extent that the remaining
           vested Account balance under the Plan will be at least 100% of the
           outstanding loan balance as of the date of the withdrawal.

                                       67
<PAGE>
 
                                 ARTICLE XIII
                                 ------------

                                     LOANS
                                     -----


13.01  Amount of Loans and Terms of Repayment
       --------------------------------------

       The Committee shall promulgate any additional specific rules and
       regulations governing all aspects of this Article as it deems necessary.
       The following general rules shall serve as the basis for any specific
       rules and regulations:

      (a)  Application for Loan - Upon written application on forms provided by
           --------------------                                                
           the Committee, the Committee may grant a loan to a Participant,
           except shareholders or owner employees as referred to in Section
           4975(d) of the Code.

      (b)  Minimum Loan - The minimum amount-of any loan shall be $1,000.
           ------------                                                  

      (c)  Maximum Loan - In no event shall a loan exceed the lesser of
           ------------                                                

            (i)  $50,000, reduced by the highest outstanding loan balance during
                 the one-year period ending on the day before the date on which
                 any new loan is to be granted, or

            (ii) 50% of the amount to which the Participant is vested under this
                 Plan on the date the loan is granted.

      (d)   Each loan granted to a Participant must be repaid in full before any
            subsequent loan is granted to such Participant.

      (e)   All loans issued under this Article shall be considered investments
            of the Account of the Participant to whom the loan is granted and
            shall be charged to the investment funds as designated by the
            Participant.

            Interest shall be charged thereon at a rate equal to the prime
            lending rate, as stated in The Wall Street Journal as of the date
            the loan is granted, plus 1%.

      (f)   Each loan shall be secured by the assignment of not more than 50% of
            the Participant's vested Account balance under this Plan on the date
            the loan is granted, a promissory note executed by the Participant
            and such additional collateral as the Committee shall require to
            assure repayment of the loan and all interest payable thereon.

                                       68
<PAGE>
 
     (g)    Repayment - Each loan shall be repaid by the Participant either
            ---------                                                      
            through payroll deductions or in such other manner as the Committee
            shall determine, provided such payment schedule does not permit
            payment less frequently than quarterly. All payment schedules shall
            be calculated to amortize principal and interest in level payments
            over the period of the loan as agreed to by the Committee and the
            Participant not to exceed five years from the date of such loan.
            Notwithstanding the foregoing, in the event a loan is approved for
            the purchase of a principal residence, the five-year repayment
            requirement will not be applicable.

            Principal and interest payments shall be credited to the Account of
            the Participant to whom the loan is granted and shall be invested in
            accordance with the Participant's current investment election.

      (h)   Default - If a Participant should fail to make a payment when due,
            -------                                                           
            the entire unpaid balance of the loan shall be in default and the
            Committee shall take any one or more of the following steps, as it
            deems necessary, to secure repayment of such loan:

           (i)    Deduct the amount of the outstanding indebtedness from the
                  Participant's Account, to the extent permitted and available
                  under law and in accordance with the terms of the Plan.  Such
                  deduction will not occur until a distributable event occurs
                  under the terms of the Plan.

           (ii)   Instruct the Trustee to sell any property held as collateral
                  for such loan.

           (iii)  Take such other steps as may be required.

     (i)    Spouse Consent - Each loan will require that within the 90-day
            --------------
            period before the granting of the loan, the Participant and, if
            married, his spouse, consent to such loan in writing, and
            acknowledge the reduction in the Participant's Account in the event
            the loan is in default.

     (j)    Any Participant who is a "party in interest" as defined in ERISA
            Section 3(14) and who ceases to be an active Eligible Employee may
            be eligible to borrow from the Plan under terms and conditions
            reflecting valid differences between active Participants and other
            Participants which would be considered in a normal commercial
            setting, such as the unavailability of payroll deductions for
            repayment. In no event will loans be unreasonably withheld from any
            eligible applicant.

                                       69
<PAGE>
 
                                  ARTICLE XIV
                                  -----------

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


14.01  Exclusiveness of Benefits
       -------------------------

       The Plan has been created for the exclusive benefit of the Participants
       and their Beneficiaries. No part of the Trust Fund shall ever revert to
       the Company nor shall such Trust Fund ever be used other than for the
       exclusive benefit of the Participants and their Beneficiaries, except as
       provided in Sections 3.10 and 9.03, if applicable, and Subsection
       4.03(d) of the Plan provided, however, that contributions made by the
       Company by mistake of fact or which are not deductible under Section 404
       of the Code, may be returned to the Company within one year of the
       mistaken payment of the contribution or the date of disallowance of the
       deduction, as the case may be. All contributions made by the Company
       shall be conditional upon their deductibility under Section 404 of the
       Code. No person shall have any interest in or right to any part of the
       Trust Fund, or any equitable right under the Trust Agreement, except to
       the extent expressly provided in the Plan or Trust Agreement.


14.02  Limitation of Rights
       --------------------

       Neither the establishment of the Plan, nor any modification thereof, nor
       the creation of any fund, trust or account, nor the purchase of any
       policy, nor the payment of any benefits shall be construed as giving any
       Participant, Beneficiary, or any other person whomsoever, any legal or
       equitable right against the Company, the Committee, or the Trustee,
       unless such right shall be specifically provided for in the Plan or
       conferred by affirmative action of the Committee or the Company in
       accordance with the terms and provisions of the Plan; or as giving any
       Participant or any other employee of the Company the right to be retained
       in the service of the Company and all Participants and other employees
       shall remain subject to discharge to the same extent as if the Plan had
       never been adopted.

14.03  Limitation of Liability and Legal Actions
       -----------------------------------------

       In any action or proceeding involving the Trust Fund, or any part
       thereof, or the administration thereof, the Company, the Committee, and
       the Trustee shall be the only necessary parties. Any final judgment
       entered in any such action or 

                                       70
<PAGE>
 
       proceeding, which is not appealed or appealable, shall be binding and
       conclusive on the parties thereto, and all persons having or claiming to
       have an interest in the Trust Fund or under the Plan.

14.04  Construction of Agreement
       -------------------------

       The Plan shall be construed according to the laws of the State in which
       the Company named under Article I has its principal place of business,
       and all provisions hereof shall be administered according to, and its
       validity shall be determined under, the laws of such State except where
       pre-emptied by Federal law.

14.05  Title to Assets
       ---------------

       No Participant, Beneficiary or any other person shall have any legal or
       equitable right or interest in the funds set aside by the Company, or
       otherwise received or held under the Plan, or in any assets of the Trust
       Fund, except as expressly provided in the Plan, and no Participant,
       Beneficiary or any other person shall be deemed to possess a right to any
       assets except as herein provided.

14.06  Severability
       ------------

       Should any provision of the Plan or any regulations adopted thereunder be
       deemed or held to be unlawful or invalid for any reason, such fact shall
       not adversely affect the other provisions or regulations unless such
       invalidity shall render impossible or impractical the functioning of the
       Plan and, in such case, the appropriate parties shall immediately adopt a
       new provision or regulation to take the place of the one held illegal or
       invalid.

14.07  Titles and Headings
       -------------------

       The titles and headings of the Sections in this instrument are for
       convenience of reference only and, in the event of any conflict, the text
       rather than such titles or headings shall control.

14.08  Counterparts as Original
       ------------------------

       The Plan has been prepared in counterparts, each of which so prepared
       shall be construed an original.

14.09  Merger of Plans
       ---------------

       Upon the merger or consolidation of any other plan with this Plan or the
       transfer of assets or liabilities from this Plan to any other plan, all
       participants of this Plan shall be entitled to a benefit immediately
       after the merger, consolidation or transfer (if the merged, consolidated
       or transferee plan had then been terminated) at least equal to the
       benefit they would have been entitled to immediately prior to such
       merger, consolidation or transfer (if the Plan had then terminated).

                                       71
<PAGE>
 
        at least equal to the benefit they would have b een entitled to
        immediately prior to such merger, consolidation or tansfer (if Plan had
        then terminated).


14.10   Special Rules with Respect to Owner-Employees
        ---------------------------------------------

        If this Plan provides contributions or benefits for one or more Owner-
        Employees who control both the business for which this Plan is
        established and one or more other trades or businesses, this Plan and
        the plan established for other trades or businesses must, when looked at
        as a single plan, satisfy Sections 401(a) and (d) of the Code for the
        employees of this Plan and all other trades and businesses.

        If the Plan provides contributions or benefits for one or more Owner-
        Employees who control one or more other trades or businesses, the
        employees of the other trades or businesses must be included in a plan
        which satisfies Sections 401(a) and (d) of the Code and which provides
        contributions and benefits not less favorable than provided for Owner-
        Employees under this Plan.

        If an individual is covered as an Owner-Employee under the plans of two
        or more trades or businesses which are not controlled and the individual
        controls a trade or business, then the contributions or benefits of the
        employees under the plan of the trades or businesses which are
        controlled must be as favorable as those provided for him under the most
        favorable plan of the trade or business which is not controlled.

        For purposes of the preceding paragraphs, an Owner-Employee, or two or
        more Owner-Employees, will be considered to control a trade or business
        if the Owner-Employee, or two or more Owner-Employees together:

        (a)  own the entire interest in an unincorporated trade or business, or

        (b)  in the case of a partnership, own more than 50 percent of either
             the capital interest or the profits interest in the partnership.

                                       72
<PAGE>
 
      For purposes of the preceding sentence, an Owner-Employee, or two or more
      Owner-Employees, shall be treated as owning any interest in a partnership
      which is owned, directly or indirectly, by a partnership which such Owner-
      Employee or such two or more Owner-Employees, are considered to control
      within the meaning of the preceding sentence.

      TO RECORD the adoption of this Plan, the Employer has caused its
      authorized officer to affix its corporate name and seal hereto
      this_____day of________________, 1995.



      Attest:                       ASTROPOWER, INC.


      _________________________     By:____________________(SEAL)
              Secretary                      President

                                       73
<PAGE>
 
                                   AMENDMENT
                                    TO THE
                     ASTROPOWER, INC. 401(k) SAVINGS PLAN

The AstroPower, Inc. 401(k) Savings Plan the ("Plan"), be and it is hereby
amended effective as of January 1, 1998 as set forth hereafter:

1.   A new Section 1.30 is added to the Plan as follows:

     1.30 "Company Stock"

     Common stock issued by the Employer which is readily tradable on a national
     or generally recognized securities market.

2.   Subsection 3.03(a) is amended by deleting the first paragraph and 
     substituting the following in its place:

     3.03 (a) Matching Contributions -- Such amount as the Company shall
              ---------------------- 
     determine for each Plan Year and as evidenced by a Company Resolution. The
     Matching Contribution amount shall be equal to a designated percentage rate
     of each Participant's Elective Deferral Contributions with respect to
     Elective Deferral Contributions which are not required to be restricted
     under Sections 3.02, 4.01 or 4.02. Such Matching Contributions may be made
     in the form of cash or Company Stock or any combination thereof, as
     determined by the Employer in its sole discretion, and shall be allocated
     to Participants who are in the employ of the Company on the last business
     day of such Plan Year. No Matching Contribution will be provided in excess
     of the limitations under Subsections 4.02(b) and (c) of the Plan.

3.   Subsection 3.03(b) is amended by deleting the first paragraph and 
     substituting the following in its place:

     3.03 (b) Additional Matching Contributions -- For any Plan Year, the
              ---------------------------------
     Company may contribute Additional Matching Contributions as it shall
     determine. Additional Matching Contributions may be contributed in the form
     of cash or Company Stock or any combination thereof, as determined by the
     Employer in its sole discretion, and shall be allocated to Participants who
     are in the employ of the Company on the last business day of such Plan
     Year, in the same proportion that the Elective Deferral Contributions of
     each Participant for such Plan Year bear to the aggregate Elective Deferral
     Contributions of all Participants for such Plan Year.

4.   Subsection 5.02(c) is deleted in its entirety and the following is 
     substituted in its place:

     (c) In the absence of an investment direction from any Participant, the
     Committee shall retain complete discretion with respect to the investment
     of such Participant's Account, except that the Committee shall not invest
     any Participant's Account in Company Stock except as otherwise required
     under Subsections 3.03(a) or (b) hereof.

5.   A new Subsection 5.02(f) is added as follows:

     5.02 (f) Any Company Stock that is contributed to the Plan as a Matching
     Contribution or as an Additional Matching Contribution shall remain in the
     form of Company Stock until the Participant directs the Trustee otherwise
     in accordance with this Section 5.02.

6.   Section 5.04 is amended by adding a new subsection (c) as follows:

     (c) Company Stock shall be valued at its trading price as of the close of
     the trading day on the date such shares are acquired or liquidated by the
     Trustee.

7.   Subsection 7.03(d) is deleted and the following is substituted in its 
     place:
 
     7.03(d) Any benefits payable under this Article may be made in cash,
     securities, or such other assets of the Trust as the Committee may direct,
     except that Company Stock may not be distributed to any Participant or
     Beneficiary.

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed this 
30th day of October, 1998.


                                         ASTROPOWER, INC.
 
                                         By: /s/ Thomas J. Stiner
                                            ----------------------
                                            Vice President

        ATTEST

/s/ Robert B. Hall
---------------------
Assistant Secretary
