As  filed  with the  Securities  and  Exchange  Commission  on June  ____ , 2000
                                                        Registration No. 33-____


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------
                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

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

                           FREQUENCY ELECTRONICS, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                                11-1986657
  (State or jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                            Identification Number)


                         55 Charles Lindbergh Boulevard
                            Mitchel Field, N.Y. 11553
                    (Address of principal executive offices)

                 Frequency Electronics, Inc. 401(k) Savings Plan
                              (Full title of plan)


                    Joseph P. Franklin, Chairman of the Board
                           Frequency Electronics, Inc.
                         55 Charles Lindbergh Boulevard
                            Mitchel Field, N.Y. 11553
                     (Name and address of agent for service)

                                 (516) 794-4500
          (Telephone number, including area code, of agent for service)

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


<PAGE>


                                   Copies to:
                             Charles A. Bilich, Esq.
                   Meltzer, Lippe, Goldstein & Schlissel, P.C.
                                190 Willis Avenue
                             Mineola, New York 11501
                                 (516) 747-0300
                               Fax (516) 747-0653

<TABLE>
<CAPTION>


                         CALCULATION OF REGISTRATION FEE

<S>                     <C>              <C>               <C>                  <C>

---------------------------------------------------------------------------------------------
                                         Proposed          Proposed
Title of                Amount           maximum           maximum              Amount of
securities              to be            offering price    aggregate            registration
to be registered(1)     registered(1)    per share(2)      offering price(2)    fee

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

Common Stock, $1.00     250,000          $27.125           $6,781,250           $1,356.25
par value per share,    -------          -------           ----------           --------

---------------------------------------------------------------------------------------------
</TABLE>


(1)  In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
     Registration  Statement also covers an indeterminate amount of interests to
     be offered or sold pursuant to the employee benefit plan described herein.

(2)  Estimated  solely  for the  purpose of  calculating  the  registration  fee
     pursuant  to Rule 457 under the  Securities  Act of 1933 and based upon the
     average  of the  high  and low  sales  price  of the  Common  Stock  of the
     Registrant on June 26, 2000 as reported on the American Stock Exchange.


2
<PAGE>


                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

     The following  documents  filed by the  Registrant  with the Commission are
incorporated herein by reference:

     (a)  The Registrant's  latest annual report filed pursuant to Section 13(a)
          or 15(d) of the  Securities  Exchange  Act of 1934,  as  amended  (the
          "Exchange Act");

     (b)  All other reports and definitive proxy or information statements filed
          pursuant to Section 13(a) or 15(d) of the Exchange Act since April 30,
          1999;

     (c)  The description of the Registrant's  Common Stock, par value $1.00 per
          share,  contained in the Registrant's  Registration  Statement on Form
          8-A,  filed under the Exchange Act on August 27, 1969,  including  any
          amendments   or  reports  filed  for  the  purpose  of  updating  such
          description.

     In addition, all documents subsequently filed by the Registrant or the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, on or after
the  date  of  this  Registration  Statement  and  prior  to  the  filing  of  a
post-effective amendment which indicates that all securities offered hereby have
been sold or which  deregisters all securities then remaining  unsold,  shall be
deemed to be incorporated  by reference  herein and to be a part hereof from the
date of the filing of such documents.

     Any statement contained herein or in a document,  all or a portion of which
is  incorporated  or deemed to be  incorporated  by reference  herein,  shall be
deemed to be modified or superseded for purposes of this Registration  Statement
to the extent that a  statement  contained  herein or in any other  subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such  statement.  Any statement so modified or superseded
shall not be deemed,  except as so modified or superseded,  to constitute a part
of this Registration Statement.

Item 4. Description of Securities.


3
<PAGE>


     Not applicable  because the class of securities to be offered is registered
under Section 12 of the Securities Exchange Act of 1934.

Item 5. Interests of Named Experts and Counsel.

     Not  applicable.  The  250,000  shares of Common  Stock  registered  hereby
constitute  "treasury  shares" and accordingly no opinion regarding the legality
of the issuance thereof is required.

Item 6. Indemnification of Directors and Officers.

     The Registrant's  Certificate of Incorporation provides for indemnification
to  the  fullest  extent  permitted  by  Section  145 of  the  Delaware  General
Corporation Law ("Section 145").  Pursuant thereto,  Registrant  indemnifies its
officers,  directors,  employees and agents to the fullest extent  permitted for
losses and expenses  incurred by them in  connection  with actions in which they
are involved by reason of their having been  directors,  officers,  employees or
agents of Registrant.  Section 145 permits a corporation to indemnify any person
who is or has been a director,  officer, employee or agent of the corporation or
who is or has been serving as a director,  officer, employee or agent of another
corporation,  organization  or  enterprise  at the  request of the  corporation,
against all liability and expenses  (including,  but not limited to,  attorney's
fees and  disbursements  and amounts paid in  settlement or in  satisfaction  of
judgments  or as fines or  penalties)  incurred or paid in  connection  with any
action,   suit  or   proceeding,   whether  civil,   criminal,   administrative,
investigative  or  otherwise,  in which  he/she may be involved by reason of the
fact that he/she  serves or is serving in these  capacities,  if he/she acted in
good faith and in a manner he/she reasonably believed to be in or not opposed to
the best interests of the  corporation  and, with respect to any criminal action
or proceeding, had no cause to believe his/her conduct was unlawful. In the case
of a claim, action, suit or proceeding made or brought by or in the right of the
corporation  to procure a recovery  or judgment  in its favor,  the  corporation
shall not indemnify  such person in respect of any claim,  issue or matter as to
which  such  person  has been  adjudged  to be  liable  to the  corporation  for
negligence  or  misconduct  in  the  performance  of  his  or  her  duty  to the
corporation,  except for such  expenses as the Court may allow.  Any such person
who has been wholly  successful  on the merits or otherwise  with respect to any
such claim,  action,  suit or proceeding or with respect to any claim,  issue or
matter  therein,  shall be  indemnified  as of right  against  all  expenses  in
connection therewith or resulting therefrom.


4
<PAGE>


     The Registrant's  By-Laws provide for  indemnification  of the Registrant's
officers and directors  against all  liabilities  (including  reasonable  costs,
expenses,  attorney's  fees,  obligations  for payment in  settlement  and final
judgment)  incurred  by or  imposed  upon them in the  preparation,  conduct  or
compromise of any actual or threatened  action,  suit,  or  proceeding,  whether
civil,  criminal or  administrative,  including  any appeals  therefrom  and any
collateral  proceedings  in which they shall be involved by reason of any action
or  omission  by  them  in  their  capacity  as a  director  or  officer  of the
Registrant,  or of any other  corporation  which  they  serve as a  director  or
officer  at the  request  of the  Registrant,  whether  or not such  person is a
director  or  officer  at the time such  liabilities  are  incurred  or any such
action,  suit or  proceeding  is commenced  against  them.  The  indemnification
provided  by the  By-Laws  does  not  extend,  however,  to  certain  situations
involving misconduct, willful misfeasance, bad faith or gross negligence.

     The  Registrant  maintains an insurance  policy  insuring its directors and
officers against  liability for certain acts and omissions while acting in their
official capacities.

Item 7. Exemption From Registration Claimed.

     Not applicable.

Item 8. Exhibits.

     4.1  Certificate of Incorporation of Registrant filed with the Secretary of
          State  of   Delaware  on  May  23,  1968  (filed  as  Exhibit  3.1  of
          Registrant's  registration  statement on Form S-1 (File No.  2-29609),
          and incorporated herein by reference).

     4.2  Amendment to Certificate of Incorporation of Registrant filed with the
          Secretary of State of Delaware on March 27, 1981 (filed as Exhibit 3.2
          of Registrant's registration statement on Form S-1 (File No. 2-71727),
          and incorporated herein by reference).

     4.3  Amendment to Certificate of Incorporation of Registrant filed with the
          Secretary  of State of  Delaware on October 26, 1984 (filed as Exhibit
          27 of  Registrant's  Form 10-K for the year ended  April 30,  1985 and
          incorporated herein by reference).

     4.4  Amendment to Certificate of Incorporation of Registrant filed with the
          Secretary of State of Delaware on October 22, 1986 (filed as


5
<PAGE>


          Exhibit 42 of Registrant's Form 10-K for the year ended April 30, 1987
          and incorporated herein by reference).

     4.5  Amended and Restated  Certificate of Incorporation of Registrant filed
          with the  Secretary of State of Delaware on October 26, 1987 (filed as
          Exhibit 45 of Registrant's Form 10-K for the year ended April 30, 1990
          and incorporated herein by reference).

     4.6  Amendment to Certificate of Incorporation of Registrant filed with the
          Secretary  of State of  Delaware on November 2, 1989 (filed as Exhibit
          59 of  Registrant's  Form 10-K for the year ended  April 30,  1990 and
          incorporated herein by reference).4.7  By-Laws of Registrant (filed as
          Exhibit  3.3 to  Registrant's  Form 10-K for the year ended  April 30,
          1981, and incorporated herein by reference).

     4.8  Registrant's  401(k) Savings Plan, as amended and restated on July 22,
          1999.

     4.9  First Amendment to Registrants  401(k) Savings Plan,  dated as of June
          12, 2000, to be effective as of January 1, 2000.

     23.1 Consent of PricewaterhouseCoopers LLP

     24.1 Power of Attorney

     The  Registrant  will submit in a timely manner the 401(k) Savings Plan, as
amended  effective  January 1,  2000,  to the  Internal  Revenue  Service  for a
determination  letter that the Plan remains  qualified  under Section 401 of the
Internal Revenue Code and will make all changes required by the Internal Revenue
Service in order to qualify the Plan.

Item 9. Undertakings.

     (a) The undersigned Registrant hereby undertakes:

          (1) To file, during any period in which it offers or sells securities,
          a post-effective amendment to this registration statement:

          (i) To include  any  prospectus  required  by Section  10(a)(3) of the
          Securities Act of 1933;


6
<PAGE>

          (ii) To reflect in the  prospectus  any facts or events  arising after
          the effective date of the  registration  statement (or the most recent
          post-affective  amendment  thereof)  which,  individually  or  in  the
          aggregate, represent a fundamental change in the information set forth
          in the registration statement;

          (iii) To include any material  information with respect to the plan of
          distribution not previously disclosed in the registration statement or
          any material change to such information in the registration statement;

     Provided,  However, that paragraphs A(1)(i) and A(1)(ii) above do not apply
     if the information required to be included in a post-effective amendment by
     those paragraph is contained in periodic reports filed by the Registrant or
     the Plan pursuant to Section 13 or Section 15(d) of the Securities Exchange
     Act of 1934  that  are  incorporated  by  reference  in  this  registration
     statement.

          (2) That,  for the  purpose of  determining  any  liability  under the
          Securities Act, each such post-effective  amendment shall be deemed to
          be a new  registration  statement  relating to the securities  offered
          therein,  and the  offering of such  securities  at that time shall be
          deemed to be the initial bona fide offering thereof;

          (3) To remove from registration by means of a post-effective amendment
          any of the  securities  being  registered  which remain  unsold at the
          termination of the offering.

     (b) The  undersigned  Registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
Registrant's  annual  report  pursuant to section  13(a) or section  15(d)of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers, and controlling persons of
the  Registrant,  the  Registrant  has been  advised  that in the opinion of the
Securities and Exchange Commission such indemnification is


7
<PAGE>


against  public  policy as expressed in the  Securities  Act and is,  therefore,
unenforceable.

In the event that a claim for  indemnification  against such liabilities  (other
than the  payments  by the issuer of  expenses  incurred  or paid by a director,
officer or  controlling  person of the issuer in the  successful  defense of any
action, suit or proceeding) is assented by such director, officer or controlling
person in connection with the securities being registered,  the Registrant will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such  indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.


8
<PAGE>


                                   SIGNATURES


Pursuant to the  requirements  of the  Securities  Act of 1933,  the  Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in Mitchel Field, county of Nassau, Town of Hempstead,  State of New
York, on the 29th day of June, 2000.

                                FREQUENCY ELECTRONICS, INC.

                                By:  /s/ Martin B. Bloch
                                     -------------------------------------------
                                     MARTIN B. BLOCH, President and
                                     Chief Executive Officer

                                By:  /s/ Alan L. Miller
                                     -------------------------------------------
                                     ALAN L. MILLER, Chief Financial
                                     Officer and Controller

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
registration  has been signed  below by the  following  persons on behalf of the
Company and in the capacities and as of the date indicated above.

                                              By: /s/ Joseph P. Franklin
                                                  ------------------------------
                                                  JOSEPH P. FRANKLIN, Chairman
                                                  of the Board and Director

                                              By: /s/ Martin B. Bloch
                                                  ------------------------------
                                                  MARTIN B. BLOCH, President,
                                                  Chief Executive Officer
                                                  and Director

                                              By: /s/ John C. Ho
                                                  ------------------------------
                                                  JOHN C. HO, Director

                                              By: /s/ Joel Girsky
                                                  ------------------------------
                                                  JOEL GIRSKY, Director

                                              By: /s/ Marvin Meirs
                                                  ------------------------------
                                                  MARVIN MEIRS, Director

                                              By: /s/ E. Donald Shapiro
                                                  ------------------------------
                                                  E. DONALD SHAPIRO, Director

                                              By: /s/ S. Robert Foley, Jr.
                                                  ------------------------------
                                                  S. ROBERT FOLEY, JR.,
                                                  Director


9
<PAGE>


                                  EXHIBIT INDEX


Exhibit Number               Description
--------------               -----------

         4.8                 Registrant's 401(k) Savings Plan, as amended and
                             restated on July 22, 1999

         4.9                 First Amendment to Registrant's 401(k) Savings
                             Plan, dated as of June 12, 2000,
                             to be effective as of January 1, 2000

         23.1                Consent of PricewaterhouseCoopers LLP

         24.1                Powers of Attorney


10
<PAGE>


                                   EXHIBIT 4.8

                           FREQUENCY ELECTRONICS, INC.

                               401(K) SAVINGS PLAN



<PAGE>


                                TABLE OF CONTENTS


ARTICLE 1...................................................................-2-
DEFINITIONS.................................................................-2-
         1.1      ACP or ACP TEST...........................................-2-
         1.2      ACTUAL DEFERRAL PERCENTAGE TEST...........................-2-
         1.3      ADP or ADP TEST...........................................-3-
         1.4      ADMINISTRATOR.............................................-3-
         1.5      ADOPTING EMPLOYER.........................................-3-
         1.6      AFFILIATED EMPLOYER.......................................-3-
         1.7      AGE.......................................................-3-
         1.8      ANNIVERSARY DATE..........................................-3-
         1.9      ANNUITY STARTING DATE.....................................-3-
         1.10     AVERAGE CONTRIBUTION PERCENTAGE TEST......................-3-
         1.11     BENEFICIARY...............................................-5-
         1.12     BREAK IN SERVICE..........................................-5-
         1.13     CODE......................................................-6-
         1.14     COMPENSATION..............................................-6-
         1.15     DISABILITY................................................-6-
         1.16     EARLY RETIREMENT AGE......................................-6-
         1.17     EARNED INCOME.............................................-6-
         1.18     ELECTIVE DEFERRAL.........................................-6-
         1.19     ELIGIBLE PARTICIPANT......................................-7-
         1.20     EMPLOYEE..................................................-7-
         1.21     EMPLOYER..................................................-7-
         1.22     FIDUCIARY.................................................-7-
         1.23     FISCAL YEAR...............................................-7-
         1.24     FORFEITURE................................................-8-
         1.25     HCE.......................................................-8-
         1.26     HIGHLY COMPENSATED EMPLOYEE...............................-8-
         1.27     HOUR OF SERVICE...........................................-8-
         1.28     KEY EMPLOYEE..............................................-8-
         1.29     LEASED EMPLOYEE...........................................-9-
         1.30     LIMITATION YEAR...........................................-9-
         1.31     MATCHING CONTRIBUTION.....................................-9-
         1.32     MATERNITY OR PATERNITY LEAVE..............................-9-
         1.33     NHCE......................................................-9-
         1.34     NON-ELECTIVE CONTRIBUTIONS................................-9-
         1.35     NON-HIGHLY COMPENSATED EMPLOYEE...........................-9-
         1.36     NON-KEY EMPLOYEE..........................................-9-
         1.37     NORMAL RETIREMENT AGE....................................-10-
         1.38     NORMAL RETIREMENT DATE...................................-10-
         1.39     OWNER-EMPLOYEE...........................................-10-
         1.40     PARTICIPANT..............................................-10-
         1.41     PARTICIPANT'S ACCOUNT....................................-10-
         1.42     PERMISSIVE AGGREGATION GROUP.............................-10-
         1.43     PLAN.....................................................-10-
         1.44     PLAN YEAR................................................-10-
         1.45     POLICY...................................................-10-
         1.46     QMAC.....................................................-10-
         1.47     QNEC.....................................................-10-
         1.48     QUALIFIED JOINT AND SURVIVOR ANNUITY.....................-10-
         1.49     QUALIFIED MATCHING CONTRIBUTION..........................-11-
         1.50     QUALIFIED NON-ELECTIVE CONTRIBUTIONS.....................-11-


12
<PAGE>


         1.51     QUALIFIED PRERETIREMENT SURVIVOR ANNUITY.................-11-
         1.52     REQUIRED AGGREGATION GROUP...............................-11-
         1.53     REQUIRED BEGINNING DATE..................................-11-
         1.54     SECTION 415 COMPENSATION.................................-12-
         1.55     SELF-EMPLOYED INDIVIDUAL.................................-12-
         1.56     SHAREHOLDER-EMPLOYEE.....................................-12-
         1.57     SUPER TOP HEAVY..........................................-12-
         1.58     TERMINATION OF EMPLOYMENT................................-12-
         1.59     TERMINATED PARTICIPANT...................................-12-
         1.60     TOP HEAVY................................................-12-
         1.61     TOP HEAVY MINIMUM ALLOCATION.............................-13-
         1.62     TOP HEAVY RATIO..........................................-13-
         1.63     TRUSTEE..................................................-14-
         1.64     TRUST FUND...............................................-14-
         1.65     VALUATION DATE...........................................-14-
         1.66     VESTED AGGREGATE ACCOUNT.................................-14-
         1.67     VESTED INTEREST..........................................-14-
         1.68     YEAR OF SERVICE..........................................-14-

ARTICLE 2..................................................................-16-
PLAN PARTICIPATION.........................................................-16-
         2.1      ELIGIBILITY REQUIREMENTS.................................-16-
         2.2      ENTRY DATE...............................................-17-
         2.3      WAIVER OF PARTICIPATION..................................-17-
         2.4      CESSATION OF PARTICIPATION...............................-17-
         2.5      RESTRICTIONS ON OWNER-EMPLOYEES..........................-17-

ARTICLE 3..................................................................-18-
CONTRIBUTIONS AND ALLOCATIONS..............................................-18-
         3.1      EMPLOYER CONTRIBUTIONS...................................-18-
         3.2      ALLOCATION OF EMPLOYER CONTRIBUTIONS.....................-19-
         3.3      ALLOCATION OF EARNINGS AND LOSSES........................-20-
         3.4      ALLOCATION OF FORFEITURES................................-20-
         3.5      TOP HEAVY MINIMUM ALLOCATION.............................-20-
         3.6      FAILSAFE ALLOCATION......................................-21-
         3.7      ROLLOVERS................................................-21-

ARTICLE 4..................................................................-23-
PLAN BENEFITS..............................................................-23-
         4.1      BENEFIT UPON NORMAL OR EARLY RETIREMENT..................-23-
         4.2      BENEFIT UPON LATE RETIREMENT.............................-23-
         4.3      BENEFIT UPON DEATH.......................................-23-
         4.4      BENEFIT UPON DISABILITY..................................-23-
         4.5      BENEFIT UPON TERMINATION.................................-23-
         4.6      DETERMINATION OF VESTED INTEREST.........................-23-

ARTICLE 5..................................................................-25-
DISTRIBUTION OF BENEFITS...................................................-25-
         5.1      BENEFIT UPON RETIREMENT..................................-25-
         5.2      BENEFIT UPON DEATH.......................................-25-
         5.3      DISABILITY BENEFITS......................................-26-
         5.4      BENEFIT UPON TERMINATION.................................-27-
         5.5      CASH-OUT OF BENEFITS.....................................-27-
         5.6      RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS..................-28-
         5.7      RESTORATION OF FORFEITED ACCOUNT BALANCE.................-28-
         5.8      SPOUSAL CONSENT REQUIREMENTS.............................-29-
         5.9      APPLICATION OF CODE SECTION 401(a)(9)....................-30-
         5.10     STATUTORY COMMENCEMENT OF BENEFITS.......................-31-
         5.11     DETERMINATION OF LIFE EXPECTANCIES.......................-31-


<PAGE>

         5.12     SEGREGATION OF BENEFIT BEFORE DISTRIBUTION...............-31-
         5.13     DISTRIBUTION IN EVENT OF LEGAL INCAPACITY................-31-
         5.14     DIRECT ROLLOVERS.........................................-31-
         5.15     DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS................-32-
         5.16     DISTRIBUTION OF EXCESS CONTRIBUTIONS.....................-33-
         5.17     DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS...........-34-
         5.18     FINANCIAL HARDSHIP DISTRIBUTIONS.........................-36-

ARTICLE 6..................................................................-38-
CODE SECTION 415 LIMITATIONS...............................................-38-
         6.1      MAXIMUM ANNUAL ADDITION..................................-38-
         6.2      ADJUSTMENTS TO MAXIMUM ANNUAL ADDITION...................-38-
         6.3      MULTIPLE PLANS AND MULTIPLE EMPLOYERS....................-39-
         6.4      MULTIPLE PLAN REDUCTION..................................-39-
         6.5      ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS................-41-

ARTICLE 7..................................................................-42-
DUTIES OF THE TRUSTEE......................................................-42-
         7.1      APPOINTMENT, RESIGNATION, REMOVAL AND SUCCESSION.........-42-
         7.2      INVESTMENT ALTERNATIVES OF THE TRUSTEE...................-42-
         7.3      VALUATION OF THE TRUST FUND..............................-44-
         7.4      COMPENSATION AND EXPENSES................................-44-
         7.5      PAYMENTS FROM THE TRUST FUND.............................-44-
         7.6      PAYMENT OF TAXES.........................................-45-
         7.7      ACCOUNTS, RECORDS AND REPORTS............................-45-
         7.8      EMPLOYMENT OF AGENTS AND COUNSEL.........................-45-
         7.9      DIVISION OF DUTIES AND INDEMNIFICATION...................-45-
         7.10     APPOINTMENT OF INVESTMENT MANAGER........................-47-
         7.11     ASSIGNMENT AND ALIENATION OF BENEFITS....................-47-
         7.12     EXCLUSIVE BENEFIT RULE...................................-47-
         7.13     PURCHASE OF INSURANCE....................................-47-
         7.14     LOANS TO PARTICIPANTS....................................-47-
         7.15     DIRECTED INVESTMENT ACCOUNTS.............................-49-

ARTICLE 8..................................................................-51-
DUTIES OF THE ADMINISTRATOR................................................-51-
         8.1      APPOINTMENT, RESIGNATION, REMOVAL AND SUCCESSION.........-51-
         8.2      POWERS AND DUTIES OF THE ADMINISTRATOR...................-51-
         8.3      EMPLOYMENT OF AGENTS AND COUNSEL.........................-51-
         8.4      COMPENSATION AND EXPENSES................................-51-
         8.5      CLAIMS PROCEDURES........................................-51-
         8.6      QUALIFIED DOMESTIC RELATIONS ORDERS......................-52-

ARTICLE 9..................................................................-54-
AMENDMENT, TERMINATION AND MERGER..........................................-54-
         9.1      AMENDMENT................................................-54-
         9.2      TERMINATION..............................................-54-
         9.3      MERGER OR CONSOLIDATION..................................-54-

ARTICLE 10.................................................................-55-
MISCELLANEOUS PROVISIONS...................................................-55-
         10.1     NO CONTRACT OF EMPLOYMENT................................-55-
         10.2     TITLE TO ASSETS..........................................-55-
         10.3     QUALIFIED MILITARY SERVICE...............................-55-
         10.4     FIDUCIARIES AND BONDING..................................-55-
         10.5     SEVERABILITY OF PROVISIONS...............................-55-


<PAGE>


         10.6     GENDER AND NUMBER........................................-55-
         10.7     HEADINGS AND SUBHEADINGS.................................-55-
         10.8     LEGAL ACTION.............................................-55-


<PAGE>


                           FREQUENCY ELECTRONICS, INC.
                               401(K) SAVINGS PLAN

     THIS  AGREEMENT  is made and  entered  into  this  day of ,  1999,  between
FREQUENCY  ELECTRONICS,  INC.  (hereafter called the Employer) and ROBERT KLOMP,
MARVIN P. MEIRS and MARKUS HECHLER (hereafter called the Trustee).

                              W I T N E S S E T H:

     WHEREAS,  the Employer originally  established a 401(k) profit sharing plan
and trust  (hereafter  called the Plan),  effective  January 1, 1985, to provide
retirement  and other  incidental  benefits  to  Employees  who are  eligible to
participate in the plan; and

     WHEREAS,  the Employer  believes that continued  contributions  to the Plan
will help to strengthen the bonds of loyalty and mutual  understanding that have
existed  between the Employer and its  employees,  thereby  making  possible the
continued growth of its business; and

     WHEREAS,  in  accordance  with the terms of the Plan,  the Employer has the
ability at any time, and from time to time, to amend the Plan;

     NOW, THEREFORE, effective January 1, 1999 (except for those sections of the
Plan that have an  alternative  effective  date),  the  Employer and the Trustee
hereby  amend and  restate  the Plan as  follows to comply  with all  applicable
statutes,  including the Employee Retirement Income Security Act of 1974 (ERISA)
and  the  Internal  Revenue  Code of  1986,  as  amended  by the  Uruguay  Round
Agreements  Act, the Small  Business Job  Protection  Act of 1996,  the Taxpayer
Relief Act of 1997, the Uniform Services Employment and Reemployment Rights Act,
and all applicable rulings and regulations issued thereunder:


                                                                               1
<PAGE>


                                   ARTICLE 1
                                  DEFINITIONS


1.1  ACP or ACP TEST: The term ACP means the Average Contribution  Percentage as
     defined  in  Section   1.10(e).   The  term  ACP  Test  means  the  Average
     Contribution Percentage Test.

1.2  ACTUAL DEFERRAL  PERCENTAGE TEST: The term Actual Deferral  Percentage Test
     means one of the following  tests for Elective  Deferrals:  (a) the ADP for
     Participants  who are HCEs in the  current  Plan Year will not  exceed  the
     prior  Plan  Year's ADP for  Participants  who were NHCEs in the prior Plan
     Year multiplied by 1.25; or (b) the ADP for  Participants  who are HCEs for
     the  current  Plan  Year will not  exceed  the prior  Plan  Year's  ADP for
     Participants  who were  NHCEs in the  prior  Plan Year  multiplied  by 2.0,
     provided  that the ADP for  Participants  who are HCEs in the current  Plan
     Year does not exceed the ADP for  Participants  who were NHCEs in the prior
     Plan Year by more than 2 percentage points.  However, the Administrator may
     elect to use 1997 Plan Year data in  determining  the ADP Test for the 1997
     Plan Year. The ADP Test will be determined as follows:

     (a)  Actual Deferral Percentage:  The term Actual Deferral Percentage (ADP)
          means,  for a specified  group of  Participants  for a Plan Year,  the
          average of the ratios  calculated  separately for each  Participant in
          such group of (1) the amount of Employer  contributions  actually paid
          on  behalf  of  such   Participant  for  the  Plan  Year  to  (2)  the
          Participant's  Compensation for such Plan Year. Employer contributions
          made  on  behalf  of any  Participant  will  include  a  Participant's
          Elective  Deferrals,  including Excess Elective Deferrals of HCEs, but
          excluding  Excess  Elective  Deferrals of NHCEs that arise solely from
          Elective  Deferrals made to this Plan or any other plans maintained by
          this Employer and Elective  Deferrals  used in the ACP Test if the ADP
          Test is satisfied  both with and without  exclusion of these  Elective
          Deferrals.  In computing  ADPs, an Employee who would be a Participant
          but for the failure to make  Elective  Deferrals  will be treated as a
          Participant on whose behalf no Elective Deferrals are made.

     (b)  Highly Compensated  Employees: A Participant is a HCE for a particular
          Plan  Year if he or she meets the  definition  of a HCE in effect  for
          that Plan Year. A Participant is a NHCE for a particular  Plan Year if
          he or she does not meet the  definition  of a HCE in  effect  for that
          Plan Year. The ADP for any  Participant who is a HCE for the Plan Year
          and who is eligible to have Elective Deferrals allocated to his or her
          accounts  under two or more  arrangements  described in Code ss.401(k)
          that are  maintained  by this  Employer  will be determined as if such
          Elective  Deferrals  were made  under a single  arrangement.  If a HCE
          participates  in two or more cash or deferred  arrangements  that have
          different Plan Years, all cash or deferred arrangements ending with or
          within the same calendar year will be treated as a single arrangement.
          Notwithstanding  the  foregoing,  certain  plans  will be  treated  as
          separate if mandatorily  disaggregated  under  regulations  under Code
          ss.401(k).

     (c)  Other Rules:  In determining  the ADP Test, (1) if this Plan satisfies
          the  requirements of Code ss ss.401(k),  401(a)(4),  or 410(b) only if
          aggregated with one or more other plans,


2
<PAGE>


          or if one or  more  other  plans  satisfy  such  requirements  only if
          aggregated  with this  Plan,  then this  section  will be  applied  by
          determining  the ADP of  Employees  as if all such plans were a single
          plan. Any adjustments to the Non-Highly  Compensated  Employee ADP for
          the prior Plan Year will be made in  accordance  with  Notice 98-1 and
          any superseding guidance.  Plans may be aggregated in order to satisfy
          Code  ss.401(k)  only if they have the same Plan Year and use the same
          ADP testing method;  (2) Elective  Deferrals,  QNECs and QMACs must be
          made  before  the  last  day of the  twelve-month  period  immediately
          following  the  Plan  Year  to  which  contributions  relate;  (3) the
          Employer will maintain records sufficient to demonstrate  satisfaction
          of the ADP Test and the  amount  of QNECs  and/or  QMACs  used in such
          test;  and (4) the  determination  and treatment of the ADP amounts of
          any  Participant  will  satisfy  such  other  requirements  as  may be
          prescribed by the Secretary of the Treasury.

1.3  ADP or ADP TEST:  The term ADP  means the  Actual  Deferral  Percentage  as
     defined in  Section  1.2(a).  The term ADP Test  means the Actual  Deferral
     Percentage Test.

1.4  ADMINISTRATOR:  The term  Administrator  means the Employer  unless another
     Administrator is appointed by the Employer.

1.5  ADOPTING  EMPLOYER:  The term Adopting  Employer means any business  entity
     which  adopts this Plan with the  consent of the  Employer.  An  Employee's
     transfer to or from any Employer or Adopting  Employer  will not affect his
     or her Participant's  Account balance,  total Years of Service and Years of
     Plan Participation. If the Adopting Employer is not an Affiliated Employer,
     the  Employees  of the Adopting  Employer  will be treated  separately  for
     purposes of allocating  contributions and Forfeitures and for testing under
     Code ss.401(a)(4),  ss.401(k),  ss.401(m),  ss.410 and, if the Employer and
     Adopting Employer do not share Employees,  ss.416. An Adopting Employer may
     terminate  participation  by delivering  written notice to the Trustee.  If
     Plan assets which have been  allocated to the Employees of the  terminating
     Adopting  Employer  are  not  transferred  within  a  reasonable  time to a
     successor  Trustee,  they  will  be  distributed  to the  Employees  of the
     terminating  Adopting  Employer  as if the Plan had been  terminated  under
     Section 9.2.

1.6  AFFILIATED  EMPLOYER:  The  term  Affiliated  Employer  means  any  of  the
     following  of which  the  Employer  is a part:  (1) a  controlled  group of
     corporations as defined in Code ss.414(b); (2) a trade or business (whether
     or not  incorporated)  under common control under Code  ss.414(c);  (3) any
     organization  (whether  or  not  incorporated)  which  is a  member  of  an
     affiliated  service  group under Code  ss.414(m);  and (4) any other entity
     required to be aggregated under Code ss.414(o).

1.7  AGE: The term Age means actual attained age.

1.8  ANNIVERSARY DATE: The term Anniversary Date means December 31st.

1.9  ANNUITY  STARTING DATE: The term Annuity  Starting Date means the first day
     of the first  period for which an amount is paid as an annuity,  or, in the
     case of a benefit not payable as an annuity,  the first day all events have
     occurred which entitle the  Participant  to such benefit.  The first day of
     the  first  period  for  which a  benefit  is to be  received  by reason of
     Disability  will be  treated  as the  Annuity  Starting  Date  only if such
     benefit is not an auxiliary benefit.


                                                                               3
<PAGE>


1.10 AVERAGE  CONTRIBUTION   PERCENTAGE  TEST:  The  term  Average  Contribution
     Percentage Test (or ACP Test) means one of the following tests for Matching
     Contributions and Employee contributions:  (a) the ACP for Participants who
     are HCEs in the current Plan Year will not exceed the prior Plan Year's ACP
     for  Participants who were NHCEs in the prior Plan Year multiplied by 1.25;
     or (b) the ACP for  Participants who are HCEs in the current Plan Year will
     not exceed the prior Plan Year's ACP for Participants who were NHCEs in the
     prior Plan Year multiplied by 2.0,  provided that the ACP for  Participants
     who  are  HCEs  in the  current  Plan  Year  does  not  exceed  the ACP for
     Participants  who were NHCEs in prior  Plan Year by more than 2  percentage
     points.  However, the Administrator may elect to use 1997 Plan Year data in
     determining  the ACP Test  for the 1997  Plan  Year.  The ACP Test  will be
     determined as follows:

     (a)  Multiple  Use:  If one or  more  HCEs  participate  in  both a cash or
          deferred  arrangement and in a plan subject to the ACP Test maintained
          by the  Employer,  and if the sum of the ADP  and  ACP of  those  HCEs
          subject to either or both tests exceeds the Aggregate Limit,  then the
          ACP  of  those  HCEs  who  also  participate  in a  cash  or  deferred
          arrangement will be reduced in the manner described in Section 5.17 of
          the Plan so that the limit is not  exceeded.  The amount by which each
          HCE's Contribution  Percentage Amount is reduced will be treated as an
          Excess Aggregate  Contribution as defined in Section 5.17. The ADP and
          the ACP of HCEs are determined after any corrections  required to meet
          the ADP  Test  and the ACP  Test  and  are  deemed  to be the  maximum
          permitted  under such tests for the Plan Year.  Multiple  use does not
          occur if either  the ADP or the ACP of the HCEs does not  exceed  1.25
          multiplied by the ADP and the ACP of the NHCEs.

     (b)  Highly Compensated  Employees: A Participant is a HCE for a particular
          Plan  Year if he or she meets the  definition  of a HCE in effect  for
          that Plan Year; and a Participant is a NHCE for a particular Plan Year
          if he or she does not meet the  definition of a HCE in effect for that
          Plan Year. The  Contribution  Percentage for any  Participant who is a
          HCE  and  who is  eligible  to have  Contribution  Percentage  Amounts
          allocated to his or her account  under two or more plans  described in
          Code ss.401(a),  or arrangements  described in Code ss.401(k) that are
          maintained by the Employer, will be determined as if the total of such
          Contribution  Percentage  Amounts  was made under each plan.  If a HCE
          participates  in two or more cash or deferred  arrangements  that have
          different plan years, all cash or deferred arrangements ending with or
          within the same calendar year will be treated as a single arrangement.
          Notwithstanding  the  foregoing,  certain  plans  will be  treated  as
          separate if mandatorily  disaggregated  under  regulations  under Code
          ss.401(m).


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<PAGE>


     (c)  Other Rules:  In determining  the ACP Test, (1) if this Plan satisfies
          the  requirements  of  Code  ss.401(m),   Code  ss.401(a)(4)  or  Code
          ss.410(b) only if aggregated  with one or more other plans,  or if one
          or more other plans satisfy such  requirements only if aggregated with
          this  Plan,  then this  section  will be applied  by  determining  the
          Contribution  Percentage  of  Employees  as if all such  plans  were a
          single plan. Any  adjustments to the Non-Highly  Compensated  Employee
          ACP for the prior  Plan Year will be made in  accordance  with  Notice
          98-1 and any superseding guidance. Plans may be aggregated in order to
          satisfy Code  ss.401(m)  only if they have the same Plan Year;  (2) in
          determining the Contribution  Percentage test, Employee  contributions
          are considered to have been made in the Plan Year in which contributed
          to the Plan, and Matching  Contributions  and QNECs will be considered
          made for a Plan Year if made no later than the end of the twelve-month
          period  beginning on the day after the close of the Plan Year; (3) the
          Employer will maintain records sufficient to demonstrate  satisfaction
          of the ACP Test and the  amount  of QNECs or QMACs,  or both,  used in
          such test; and (4) the determination and treatment of the Contribution
          Percentage of any Participant will satisfy such other  requirements as
          may be prescribed by the Secretary of the Treasury.

     (d)  Aggregate Limit: The term Aggregate Limit means the sum of (1) 125% of
          the greater of the ADP of Participants who are the NHCEs for the prior
          Plan Year or the ACP of  Participants  who are NHCEs  subject  to Code
          ss.401(m)  for the Plan Year  beginning  with or within the prior Plan
          Year of the CODA, and (2) the lesser of 200% or two plus the lesser of
          such ADP or ACP.  "Lesser" is  substituted  for  "greater"  in (1) and
          "greater" is substituted for "lesser" after "two plus the" in (2) if a
          larger Aggregate Limit would result.

     (e)  Definitions:  The  term  Average  Contribution  Percentage  means  the
          average of the Contribution Percentages of the "eligible" Participants
          in  a  group;  the  term  Contribution   Percentage  means  the  ratio
          (expressed  as  a  percentage)  of  the   Participant's   Contribution
          Percentage  Amounts  to the  Participant's  Compensation  for the Plan
          Year; and the term  Contribution  Percentage  Amounts means the sum of
          Employee  Contributions,  Matching  Contributions,  and  QMACs (to the
          extent not taken  into  account in the ADP Test) made on behalf of the
          Participant for the Plan Year.  Contribution  Percentage  Amounts will
          not  include  Matching  Contributions  that are  forfeited  either  to
          correct Excess Aggregate Contributions or because the contributions to
          which they  relate  are Excess  Deferrals,  Excess  Contributions,  or
          Excess Aggregate Contributions.

     (f)  "Eligible"  Participant:  For purposes of this Section,  an "eligible"
          Participant  is any  Employee  who is  eligible  to make  an  Employee
          Contribution,  or an Elective  Deferral  (if the  Employer  takes such
          contributions  into  account in the  calculation  of the  Contribution
          Percentage),   or  to  receive  a  Matching  Contribution   (including
          forfeitures)  or a QMAC. If an Employee  Contribution is required as a
          condition  of  Plan  participation,   any  Employee  who  would  be  a
          Participant if such Employee made such a contribution  will be treated
          as  an   "eligible"   Participant   on  behalf  of  whom  no  Employee
          Contributions   are  made.   An   Employee   Contribution   means  any
          contribution made to the Plan by or on behalf of a Participant that is
          included in the  Participant's  gross income in the year in which made
          and that is maintained  under a separate account to which earnings and
          losses are allocated.


                                                                               5
<PAGE>


1.11 BENEFICIARY:  The term  Beneficiary  means the recipient  designated by the
     Participant  to receive the Plan  benefits  payable upon the  Participant's
     death.  Subject to the  provisions of Section 5.8 regarding the rights of a
     Participant's  spouse,  each  Participant  may designate a Beneficiary on a
     form  supplied  by  the  Administrator,  and  may  change  or  revoke  that
     designation by filing written notice with the Administrator. In the absence
     of a designation,  the  Participant  will be deemed to have  designated the
     following Beneficiaries (if then living) in the following order: (1) his or
     her spouse, (2) his or her children; and (3) his or her estate.

1.12 BREAK IN  SERVICE:  The  term  Break  in  Service  means  for  purposes  of
     determining a Participant's  Vested  Interest,  a Plan Year during which an
     Employee does not complete more than 500 Hours of Service for reasons other
     than an  authorized  leave  of  absence,  which is any  period  in which an
     Employee ceases active employment because of illness,  military service, or
     any other reason  approved by the Employer.  If a Plan Year is less than 12
     months,  the 500  Hours  of  Service  requirement  will be  proportionately
     reduced.   For  purposes  of  determining  an  Employee's   eligibility  to
     participate  in this Plan,  the term Break in  Service  means the  12-month
     period  beginning  on the  date an  Employee  first  completes  and Hour of
     Service and each  anniversary  thereof  during  which an Employee  fails to
     complete  more  than  500  Hours  of  Service  for  reasons  other  than an
     authorized leave of absence as described above.

1.13 CODE:  The term Code means the Internal  Revenue Code of 1986,  as amended,
     and the  regulations  and rulings  promulgated  thereunder  by the Internal
     Revenue Service.

1.14 COMPENSATION:  The term Compensation means wages within the meaning of Code
     ss.3401(a) and all other payments of compensation that are actually paid or
     made available in gross income during the calendar year ending on or within
     the  Plan  Year  to an  Employee  by the  Employer  (in the  course  of the
     Employer's trade or business) for which the Employer is required to furnish
     the  Employee  a  written  statement  (Form  W-2)  under  Code  ss.6041(d),
     ss.6051(a)(3) and ss.6052.  Compensation must be determined  without regard
     to any rules under Code ss.3401(a) that limit the remuneration  included in
     wages  based on the nature or location of the  employment  or the  services
     performed   (such  as  the  exception  for   agricultural   labor  in  Code
     ss.3401(a)(2).   Compensation  will  also  include  amounts  not  currently
     includible  in  gross  income  by  reason  of  Code  ss.125,  ss.402(e)(3),
     ss.402(h), or ss.403(b).  Compensation used to determine Plan benefits will
     not exceed $160,000, as adjusted under Code ss.401(a)(17). A 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 is less
     than 12 months,  the adjusted  $160,000  limitation 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.  Compensation of
     an Owner-Employee or a Self-Employed Individual will equal Earned Income up
     to the adjusted $160,000 limitation.

1.15 DISABILITY:  The term  Disability  means a  physical  or  mental  condition
     arising  after an  Employee  has become a  Participant  which  totally  and
     permanently  prevents the Participant  from performing his or her specified
     duties for the Employer.  The determination as to whether a Participant has
     suffered  a  Disability  will  be  made  by a  physician  appointed  by the
     Administrator.  If a difference of opinion arises  between the  Participant
     and  the  Administrator  as to  whether  the  Participant  has  suffered  a
     Disability, it will be settled by a majority decision of


6
<PAGE>


     three  physicians,  one to be  appointed  by the  Administrator,  one to be
     appointed  by the  Participant,  and the third to be  appointed  by the two
     physicians first appointed herein. However,  notwithstanding the foregoing,
     the term  Disability  will not  include  any  disability  arising  from (1)
     chronic  or  excessive  use  of  intoxicants  or  other   substances;   (2)
     intentionally  self-inflicted  injury or  sickness;  (3) an unlawful act or
     enterprise  by  the   Participant;   or  (4)  military  service  where  the
     Participant  is  eligible  to  receive  a  government   sponsored  military
     disability pension.

1.16 EARLY  RETIREMENT  AGE:  Early  Retirement Age means any  Anniversary  Date
     coinciding with or following the date a Participant reaches Age 59 1/2.

1.17 EARNED  INCOME:  The  term  Earned  Income  means  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  allocable  thereto.
     Net earnings will be reduced by deductible contributions by the Employer to
     a qualified retirement plan. Net earnings will be determined with regard to
     the deduction  allowed to the Employer by Code  ss.164(f) for taxable years
     beginning after December 31, 1989.

1.18 ELECTIVE DEFERRAL: The term Elective Deferrals means Employer contributions
     made  to the  Plan  at the  election  of the  Participant  in  lieu of cash
     compensation,  and will  include  contributions  made  pursuant to a salary
     reduction  agreement or other  deferral  mechanism.  In any taxable year, a
     Participant's  Elective  Deferral is the sum of all Employer  contributions
     made on behalf of such  Participant  pursuant to an election to defer under
     any  qualified  cash or  deferred  arrangement  under Code  ss.401(k),  any
     simplified  employee  pension  cash  or  deferred  arrangement  under  Code
     ss.402(h)(1)(B), any eligible deferred compensation plan under Code ss.457,
     any plan under Code ss.501(c)(18),  and any Employer contributions made for
     the  purchase of an annuity  contract  under Code  ss.403(b)  pursuant to a
     salary  reduction  agreement.  Elective  Deferrals  will  not  include  any
     deferrals  properly  distributed as excess Annual  Additions  under Section
     6.5.

1.19 ELIGIBLE  PARTICIPANT:  The term Eligible  Participant  means a Participant
     eligible to receive an  allocation  of Employer  contributions  (other than
     Matching  Contributions)  allocable for a Plan Year. Any Participant who is
     an  Employee  on  the  last  day of  the  Plan  Year  will  be an  Eligible
     Participant  if he or she also  completes  at least  1,000 Hours of Service
     during the Plan Year. Any  Participant  who terminates  employment with the
     Employer  before  the last day of the Plan Year  will  only be an  Eligible
     Participant for that Plan Year in accordance with the following provisions:

     (a)  Retiring Participants:  A Participant who terminates employment before
          the last day of the Plan Year  because of  retirement  after Normal or
          Early Retirement Age will be an Eligible Participant regardless of the
          number of Hours of Service the Participant  completes during that Plan
          Year.

     (b)  Deceased Participants:  A Participant who terminates employment before
          the last day of the Plan Year because of death will not be an Eligible
          Participant for that Plan Year.


                                                                               7
<PAGE>


     (c)  Disabled Participants:  A Participant who terminates employment before
          the last day of the Plan Year  because  of  Disability  will not be an
          Eligible Participant for that Plan Year.

     (d)  Terminated Participants:  A Participant who terminates before the last
          day of the Plan  Year for  reasons  other  than  retirement,  death or
          Disability will not be an Eligible Participant for that Plan Year.

1.20 EMPLOYEE:  The term Employee means (1) any person  employed by the Employer
     as an  employee;  (2) except for  purposes of  determining  eligibility  to
     participate in this Plan, any employee of an Affiliated  Employer;  (3) any
     Self-Employed  Individual who derives Earned Income from the Employer;  (4)
     any  Owner-Employee;  and (5) any Leased  Employee  who is not covered by a
     plan described in Code  ss.414(n)(5)  provided Leased Employees  constitute
     more than 20% of the Employer's non-highly compensated workforce.

1.21 EMPLOYER:  The term  Employer  means  Frequency  Electronics,  Inc. (or any
     successor thereto that sponsors this Plan) and any Adopting Employer.

1.22 FIDUCIARY:  The  term  Fiduciary  means  any  individual  or  entity  which
     exercises any discretionary authority or control over the management of the
     Plan or over the disposition of the assets of the Plan;  renders investment
     advice for a fee or other  compensation  (direct or  indirect);  or has any
     discretionary authority or responsibility over Plan administration.

1.23 FISCAL  YEAR:  The term Fiscal Year means the  Employer's  accounting  year
     beginning May 1st and ending April 30th.

1.24 FORFEITURE:  The term Forfeiture  means the amount by which a Participant's
     Account  balance  exceeds  his or her Vested  Interest  upon the earlier to
     occur of (1) the date the Participant receives a distribution of his or her
     Vested Interest  pursuant to Sections 5.4, 5.5, or 5.6; or (2) the date the
     Participant  incurs 5 consecutive  Breaks in Service after  Termination  of
     Employment.  No Forfeitures will occur solely as a result of the withdrawal
     of a  Participant's  own  contributions  to the  Plan,  or a  Participant's
     transfer to an Affiliated  Employer or Adopting  Employer.  All Forfeitures
     will be allocated to the Forfeiture Account pending allocation  pursuant to
     Section 3.4.

1.25 HCE: The term HCE means a Highly Compensated Employee.


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<PAGE>


1.26 HIGHLY COMPENSATED EMPLOYEE:  The term Highly Compensated Employee (or HCE)
     means,  for Plan Years  beginning after December 31, 1996, any Employee (1)
     who during the Plan Year or the look-back year was a 5% owner as defined in
     Code  ss.416(i)(1);  or (2) who for the  look-back  year  had  Section  415
     Compensation in excess of $80,000 as adjusted under Code ss.415(d)  (except
     that the base year will be the calendar quarter ending September 30, 1996).
     The look-back  year will be the 12 month period  immediately  preceding the
     Plan Year for which the  determination is being made. The  determination of
     who is a highly  compensated  former  Employee  is based on the  rules  for
     determining HCE status as in effect for the Plan Year or the look-back year
     for which the  determination  is being made, in accordance  with  temporary
     regulation  ss.1.414(q)-1T,  A-4 and Notice  97-45.  In  determining  if an
     Employee is a Highly Compensated Employee for Plan Years beginning in 1997,
     amendments to Code  ss.414(q) are treated as having been in effect for Plan
     Years beginning in 1996.

1.27 HOUR OF SERVICE:  The term Hour of Service means (a) each hour for which an
     Employee is paid, or entitled to payment, for the performance of duties for
     the Employer or an Affiliated Employer. These hours will be credited to the
     Employee for the computation period in which the duties are performed;  and
     (b) each hour for which an Employee is paid, or entitled to payment, by the
     Employer  or an  Affiliated  Employer on account of a period of time during
     which no duties  are  performed  (irrespective  of whether  the  employment
     relationship has terminated) due to vacation,  holiday, illness, incapacity
     (including  disability),  layoff,  jury  duty,  military  duty or  leave of
     absence. No more than 501 hours will be credited under this Section for any
     single  continuous  period  (whether or not such period  occurs in a single
     computation  period).  Hours under this  paragraph  will be calculated  and
     credited  pursuant to ss.2530.200b-2 of the Department of Labor Regulations
     which  are  incorporated  herein by this  reference;  and (c) each hour for
     which back pay, irrespective of mitigation of damages, is either awarded or
     agreed to by the Employer or an  Affiliated  Employer.  The same hours will
     not be credited  both under section (a) or section (b) above and under this
     section  (c).  These hours will be credited for the  computation  period or
     periods  to  which  the  award  or  agreement   pertains  rather  than  the
     computation  period in which the award,  agreement  or payment is made.  In
     determining  whether a Break in Service for  participation  and vesting has
     occurred in a computation  period,  an individual on Maternity or Paternity
     Leave will receive  credit for up to 501 hours which would  otherwise  have
     been credited to such  individual  but for such absence,  or in any case in
     which such hours  cannot be  determined,  8 hours per day of such  absence.
     Hours  credited for  Maternity  of Paternity  Leave will be credited in the
     computation  period  in  which  the  absence  begins  if the  crediting  is
     necessary  to prevent a Break in Service  in that  period,  or in all other
     cases, in the following computation period.


                                                                               9
<PAGE>


1.28 KEY EMPLOYEE:  The term Key Employee means any Employee,  Former  Employee,
     deceased  Employee,  or  Beneficiary  who at any time  during the Plan Year
     containing the  Determination  Date for the Plan Year in question or any of
     the prior 4 Plan Years was (1) an officer of the Employer whose Section 415
     Compensation   exceeds   50%  of  the   amount   in   effect   under   Code
     ss.415(b)(1)(A),  except that no more than fifty  Employees (or, if lesser,
     the greater of three or 10% of the Employees)  will be treated as officers;
     (2) an owner (or was  considered  an owner under Code ss.318) of one of the
     ten largest  interests  in the  Employer  whose  Section  415  Compensation
     exceeds 100% of the dollar limitation in effect under Code ss.415(c)(1)(A),
     but if two Employees  own the same  interest in the Employer,  the Employee
     with the  greater  annual  Compensation  will be treated as owning a larger
     interest;   (3)  a  5%  owner  of  the   Employer   as   defined   in  Code
     ss.416(i)(1)(B)(i);  or (4) a 1% owner of the  Employer  as defined in Code
     ss.416(i)(1)(B)(ii)  whose  annual  Section 415  Compensation  is more than
     $150,000.  For  purposes of this  Section,  Section 415  Compensation  will
     include  amounts  contributed  by the  Employer  on behalf  of an  Employee
     pursuant to a salary  reduction  agreement  which are  excludible  from the
     Employee's  gross  income  under  Code  ss.125,  Code  ss.402(e)(3),   Code
     ss.402(h), or Code ss.403(b).

1.29 LEASED  EMPLOYEE:  The term  Leased  Employee  means any person  within the
     meaning of Code  ss.414(n)(2)  and Code ss.414(o) who is not an Employee of
     the Employer and who,  pursuant to an agreement  between the Employer and a
     leasing  organization,  has performed  services for the Employer or for the
     Employer  and  related  persons  as  determined  in  accordance  with  Code
     ss.414(n)(6)  on a  substantially  full time basis for a period of at least
     one year, and such services are performed  under the primary  direction and
     control of the  Employer.  Contributions  or benefits  provided to a Leased
     Employee by the leasing  organization  which are  attributable  to services
     performed for the Employer will be treated as provided by Employer.

1.30 LIMITATION YEAR: The term Limitation Year means the Plan Year.

1.31 MATCHING  CONTRIBUTION:  The term Matching  Contribution  means an Employer
     contribution made to this or any other defined  contribution plan on behalf
     of a Participant  on account of Voluntary  Employee  Contributions  made by
     such Participant, or on account of a Participant's Elective Deferral, under
     a Plan maintained by the Employer.

1.32 MATERNITY OR PATERNITY  LEAVE:  The term Maternity or Paternity Leave means
     that an Employee is absent from work because of the  Employee's  pregnancy;
     the  birth of the  Employee's  child;  the  placement  of a child  with the
     Employee in connection with the adoption of such child by the Employee;  or
     the  need to  care  for  such  child  for a  period  beginning  immediately
     following the child's birth or placement as set forth above.

1.33 NHCE: The term NHCE means a Non-Highly Compensated Employee.

1.34 NON-ELECTIVE  CONTRIBUTIONS:  The term  Non-Elective  Contribution  means a
     contribution  other than a Matching  Contribution  or a Qualified  Matching
     Contribution  (1) that is made by the  Employer,  (2) that is  allocated to
     Participants'  Accounts,  and (3) that  the  Participant  may not  elect to
     receive in cash until such contributions are distributed from the Plan.


10
<PAGE>


1.35 NON-HIGHLY  COMPENSATED EMPLOYEE:  The term Non-Highly Compensated Employee
     means any Employee who is not a Highly Compensated Employee.

1.36 NON-KEY EMPLOYEE: The term Non-Key Employee means any Employee who is not a
     Key Employee,  including  former Key Employees.  For purposes of making the
     allocations in Section 3.5,  Non-Key  Employee means a Non-Key Employee who
     either is a Participant  or would be a Participant  but for the reasons set
     forth in Section 3.5(a).

1.37 NORMAL  RETIREMENT  AGE:  The term Normal  Retirement  Age means the date a
     Participant reaches Age 65. There is no mandatory retirement age.

1.38 NORMAL   RETIREMENT  DATE:  The  term  Normal  Retirement  Date  means  the
     Anniversary Date occurring nearest Normal Retirement Age.

1.39 OWNER-EMPLOYEE:  The  term  Owner-Employee  means  (1)  in the  case  of an
     Employer  or  Affiliated  Employer  which  is an  unincorporated  trade  or
     business,  an individual  who owns the entire  interest in such Employer or
     Affiliated  Employer;  and (2) in the  case of an  Employer  or  Affiliated
     Employer  which is a  partnership,  an individual who owns more than 10% of
     either the  capital  interest or the profit  interest  in such  Employer of
     Affiliated Employer.

1.40 PARTICIPANT:  The  term  Participant  means  any  Employee  who has met the
     eligibility  and  participation  requirements  of  the  Plan.  However,  an
     individual who is no longer an Employee will not be deemed a Participant if
     his or her entire Plan  benefit  (1) is fully  guaranteed  by an  insurance
     company and is legally  enforceable  at the sole choice of such  individual
     against  such  insurance  company,  provided  that a contract,  policy,  or
     certificate  describing  the benefits to which such  individual is entitled
     under the Plan has been issued to such individual; or (2) is paid in a lump
     sum distribution which represents such individual's  entire interest in the
     Plan.

1.41 PARTICIPANT'S  ACCOUNT: The term Participant's Account means the account to
     which  is  credited  a  Participant's  share  of  Employer   contributions,
     Forfeitures which are not used to pay administrative  expenses or to reduce
     Employer  contributions,  and  earnings  and losses.  Each  account will be
     divided into the following Employer contribution sub-accounts: the Elective
     Deferral Account; the Matching Contribution Account; the Qualified Matching
     Contribution  Account;  the  Non-Elective  Contribution  Account;  and  the
     Qualified Non-Elective Contribution Account.

1.42 PERMISSIVE AGGREGATION GROUP: The term Permissive Aggregation Group means a
     Required  Aggregation Group plus any Employer plan(s) which when considered
     as a group with the Required  Aggregation  Group would  continue to satisfy
     Code ss.401(a)(4) and ss.410.

1.43 PLAN:  The term  Plan  means  this  401(k)  profit  sharing  plan and trust
     agreement,  which is named the Frequency  Electronics,  Inc. 401(k) Savings
     Plan.

1.44 PLAN YEAR:  The term Plan Year means the Plan's  accounting  year beginning
     January 1st and ending December 31st.

1.45 POLICY:  The term  Policy  means an  insurance  policy or annuity  contract
     purchased by the Plan.


                                                                              11
<PAGE>


1.46 QMAC: The term QMAC means a Qualified Matching Contribution.

1.47 QNEC: The term QNEC means a Qualified Non-Elective Contribution.

1.48 QUALIFIED JOINT AND SURVIVOR ANNUITY: The term Qualified Joint and Survivor
     Annuity means an immediate  annuity for the life of the Participant  with a
     survivor benefit for the life of the Participant's spouse which is not less
     than 50% nor more than 100% of the annuity  payable  during the joint lives
     of the  Participant and his spouse and which is the amount of benefit which
     can be purchased  with the  Participant's  Vested  Aggregate  Account.  The
     survivor  benefit will be 50% unless a higher  percentage is elected by the
     Participant.

1.49 QUALIFIED MATCHING  CONTRIBUTION:  The term Qualified Matching Contribution
     means  a  Matching  Contribution  that  (1) is  used  for  the  purpose  of
     satisfying the ADP Test or the ACP Test; (2) a Participant may not elect to
     receive it in cash until  distributed  from the Plan; and (3) is subject to
     the distribution and nonforfeitability  requirements of Code ss.401(k) when
     made to the Plan.

1.50 QUALIFIED  NON-ELECTIVE  CONTRIBUTIONS:  The  term  Qualified  Non-Elective
     Contribution means a contribution (other than a Matching  Contribution or a
     QMAC) made by the Employer and  allocated  to a  Participant's  Account and
     that  (1) is used for the  purpose  of  satisfying  the ADP Test or the ACP
     Test; (2) a Participant may not elect to receive in cash until  distributed
     from the Plan; and (3) is subject to the distribution and nonforfeitability
     requirements   of  Code  ss.401(k)   when  made  to  the  Plan.   Qualified
     Non-Elective  Contributions  may be considered in determining the Top Heavy
     Minimum Contribution under Section 3.5.

1.51 QUALIFIED  PRERETIREMENT SURVIVOR ANNUITY: The term Qualified Preretirement
     Survivor  Annuity  means a  survivor  annuity  for the  life of a  deceased
     Participant's  surviving  spouse  which is equal to the  amount of  benefit
     which  can  be  purchased  by  50% of  the  deceased  Participant's  Vested
     Aggregate  Account  determined  at the  date of  death.  In  determining  a
     Participant's  Vested Aggregate  Account for purposes of this Section,  any
     security  interest  held by the Plan because of a loan  outstanding  to the
     Participant will be taken into consideration.

1.52 REQUIRED  AGGREGATION GROUP: The term Required  Aggregation Group means (1)
     each qualified deferred compensation Plan of the Employer in which at least
     one Key  Employee  participates  or  participated  at any time  during  the
     determination  period (regardless of whether the plan has terminated);  and
     (2) any other qualified  deferred  compensation  plan of the Employer which
     enables a plan described in (1) to satisfy Code ss.401(a)(4) or ss.410.

1.53 REQUIRED  BEGINNING  DATE: The term Required  Beginning  Date means,  for a
     Participant who is not a 5% owner, April 1st of the calendar year following
     the later of the calendar year in which he or she reaches Age 70 1/2 or the
     calendar  year in which he or she actually  retires;  and for a Participant
     who is a 5% owner,  April 1st of the calendar  year  following the calendar
     year in which he or she reaches Age 70 1/2.


12
<PAGE>


     (a)  Definition Of 5% Owner:  A  Participant  will be treated as a 5% owner
          hereunder if such  Participant is a 5% owner as defined in Code ss.416
          at any time during the Plan Year  ending  with or within the  calendar
          year in which such owner reaches Age 70 1/2. Once  distributions  have
          begun to a 5% owner under this Section, they must continue even if the
          Participant ceases to be a 5% owner in a subsequent year.

     (b)  Pre-retirement Age 70 1/2 Distributions: The pre-retirement Age 70 1/2
          distribution  option is only  eliminated with respect to Employees who
          reach Age 70 1/2 in or after a  calendar  year that  begins  after the
          later of December 31, 1998, or the adoption date of this amended Plan.
          The pre-retirement Age 70 1/2 distribution  option is an optional form
          of benefit under which benefits  payable in a particular  distribution
          form  (including any  modifications  that may be elected after benefit
          commencement)  commence  at a time during the period that begins on or
          after  January 1st of the calendar  year in which an Employee  attains
          age 70 1/2 and ends April 1st of the  immediately  following  calendar
          year.

1.54 SECTION  415  COMPENSATION:  The  term  Section  415  Compensation  means a
     Participant's  Earned  Income,  wages,  salaries,   fees  for  professional
     services and other amounts received for personal services actually rendered
     in the  course  of  employment  with  the  Employer  maintaining  the  Plan
     (including, but not limited to, commissions paid salesmen, compensation for
     services  based  on a  percentage  of  profits,  commissions  on  insurance
     premiums,  tips and bonuses).  However,  Section 415 Compensation  does not
     include (a) Employer  contributions to a deferred  compensation  plan which
     are not includible in the  Employee's  gross income for the taxable year in
     which contributed,  or Employer  contributions  under a simplified employee
     pension  plan  to the  extent  such  contributions  are  deductible  by the
     Employee,  or any distributions from a plan of deferred  compensation;  (b)
     amounts  realized from a  non-qualified  stock option,  or when  restricted
     stock (or property) held by the Employee either becomes freely transferable
     or is no longer subject to a substantial  risk of  forfeiture;  (c) amounts
     realized from the sale,  exchange or other  disposition  of stock  acquired
     under a qualified stock option; and (d) other amounts which receive special
     tax benefits,  or contributions made by an Employer (whether or not under a
     salary reduction agreement) towards the purchase of an annuity described in
     Code ss.403(b)  (whether or not the amounts are  excludible  from the gross
     income of the Employee).  For Limitation Years beginning after December 31,
     1997, a Participant's  Section 415  Compensation  will include any elective
     deferrals  as  defined  in Code  ss.402(g)(3),  and any  amounts  which are
     contributed  or  deferred  by  the  Participant  at  the  election  of  the
     Participant  and  which  are not  includible  in the  gross  income  of the
     Participant by reason of Code ss.125 or Code ss.457.

1.55 SELF-EMPLOYED  INDIVIDUAL:  The term Self-Employed  Individual means anyone
     who owns an  interest  (other than  stock) in the  Employer  and has Earned
     Income for the Plan Year or who would  have had  Earned  Income but for the
     fact the Employer had no net profits for the Plan Year.

1.56 SHAREHOLDER-EMPLOYEE:  The term Shareholder-Employee  means, in the case of
     an Employer or  Affiliated  Employer  which is an electing  small  business
     corporation,  an individual  who is an employee or officer of such electing
     small business  corporation and owns, or is considered as owning within the
     meaning of Code  ss.318(a)(1),  on any day during the taxable  year of such
     corporation, more than 5% of the outstanding stock of the corporation.


<PAGE>


1.57 SUPER TOP HEAVY: The term Super Top Heavy means the Top Heavy Ratio exceeds
     90%.

1.58 TERMINATION OF EMPLOYMENT:  The term Termination of Employment means that a
     Participant has ceased to be an Employee for reasons other than retirement,
     death, or Disability.

1.59 TERMINATED PARTICIPANT: The term Terminated Participant means a Participant
     who has ceased to be an Employee for reasons other than  retirement,  death
     or Disability.

1.60 TOP  HEAVY:  The term Top Heavy  means for any Plan  Year  beginning  after
     December 31, 1983 (a) that the Top Heavy Ratio  exceeds 60% and the Plan is
     not part of a Required  Aggregation Group or Permissive  Aggregation Group;
     or (b) that the Plan is a part of a  Required  Aggregation  Group but not a
     Permissive  Aggregation Group and the Top Heavy Ratio for the group exceeds
     60%; or (c) that the Plan is a part of a Required  Aggregation  Group and a
     Permissive  Aggregation  Group and the Top Heavy  Ratio for the  Permissive
     Aggregation Group exceeds 60%.

1.61 TOP HEAVY MINIMUM  ALLOCATION:  The term Top Heavy Minimum Allocation means
     an amount equal to 3% of the Section 415 Compensation of a Non-Key Employee
     for the applicable  Plan Year. The term Top Heavy Extra Minimum  Allocation
     means an amount  equal to 4% of the Section 415  Compensation  of a Non-Key
     Employee for the applicable Plan Year.

1.62 TOP  HEAVY  RATIO:  In  determining  if this Plan is Top Heavy or Super Top
     Heavy,  the Top Heavy  Ratio  will be  determined  in  accordance  with the
     following provisions:

     (a)  Rule 1: If the Employer  maintains  one or more  defined  contribution
          plans (including SEPs) and has not maintained any defined benefit plan
          which during the 5-year  period ending on the  Determination  Date had
          accrued  benefits,  the Top Heavy Ratio for this Plan alone or for the
          Required or Permissive  Aggregation Group is a fraction, the numerator
          of which is the sum of the account balances of all Key Employees as of
          the  Determination  Date  (including  any part of any account  balance
          distributed  in the 5-year period ending on the  Determination  Date),
          and  the  denominator  of  which  is the sum of the  account  balances
          (including any part of any account  balance  distributed in the 5-year
          period ending on the Determination  Date) determined under Code ss.416
          and the regulations thereunder. Both the numerator and the denominator
          of the Top Heavy Ratio will be increased  to reflect any  contribution
          not actually made as of the  Determination  Date but which is required
          to be taken into account under Code Section ss.416 and the regulations
          thereunder.


14
<PAGE>


     (b)  Rule 2: If the Employer  maintains  one or more  defined  contribution
          plans  (including  SEPs) and maintains or has  maintained  one or more
          defined  benefit  plans which during the 5-year  period  ending on the
          Determination  Date has had any accrued benefits,  the Top Heavy Ratio
          for any Required or Permissive  Aggregation  Group is a fraction,  the
          numerator of which is the sum of account balances under the aggregated
          defined  contribution  plans  for  all  Key  Employees  determined  in
          accordance with paragraph (a) above,  and the present value of accrued
          benefits  under  the  aggregated  defined  benefit  plans  for all Key
          Employees as of the  Determination  Date, and the denominator of which
          is the  sum of the  account  balances  under  the  aggregated  defined
          contribution plans for all Participants, determined in accordance with
          paragraph  (a), and the present  value of accrued  benefits  under the
          aggregated  defined  benefit  plans  for  all  Participants  as of the
          Determination   Date,  all  determined   under  Code  ss.416  and  the
          regulations  thereunder.  The accrued benefits under a defined benefit
          plan in both the numerator and  denominator of the Top Heavy Ratio are
          increased for any distribution made in the 5-year period ending on the
          Determination Date.

     (c)  Rule 3: For purposes of  paragraphs  (a) and (b), the value of account
          balances and the present value of accrued  benefits will be determined
          as of the most recent  Valuation  Date that falls  within or ends with
          the  12-month  period  ending  on the  Determination  Date,  except as
          provided in Code ss.416 and the  regulations  thereunder for the first
          and second Plan Years of a defined benefit plan. The account  balances
          and accrued  benefits will be disregarded for a Participant (1) who is
          not a Key  Employee  but who was a Key Employee in a prior year or (2)
          who has not been  credited  with at least one Hour of Service with any
          Employer  maintaining  the Plan at any time  during the 5-year  period
          ending on the  Determination  Date.  The  calculation of the Top Heavy
          Ratio and the extent to which distributions,  rollovers, and transfers
          are taken into account will be made in accordance with Code ss.416 and
          the regulations  thereunder.  When aggregating plans, the value of the
          account   balances  and  accrued  benefits  will  be  calculated  with
          reference  to the  Determination  Date  that  falls  within  the  same
          calendar year. The accrued  benefit of a Participant  other than a Key
          Employee  will be  determined  under  (1)  the  method,  if any,  that
          uniformly applies for accrual purposes under all defined benefit plans
          maintained by the Employer, or (2) effective as of the first Plan Year
          beginning  after December 31, 1986, if there is no such method,  as if
          such benefit  accrued not more  rapidly than the slowest  accrual rate
          permitted   under  the  fractional   rule  of  Code   ss.411(b)(1)(C).
          Deductible  employee  contributions  will not be taken into account in
          determining the Top Heavy Ratio.

     (d)  Definition Of Determination  Date: In determining the Top Heavy Ratio,
          the term  Determination  Date means the last day of the preceding Plan
          Year except for the first Plan Year when the Determination  Date means
          the last day of such first Plan Year.

1.63 TRUSTEE:  The term Trustee  means the persons or entity named as trustee or
     trustees in this Plan and any successor to such Trustee or Trustees.

1.64 TRUST FUND: The term Trust Fund or Trust means the assets of the Plan.

1.65 VALUATION DATE:  Except as otherwise  provided in Section 1.62(c) regarding
     the Top Heavy Ratio,  the term  Valuation  Date means the date on which the
     Trustee determines the value of the


                                                                              15
<PAGE>


     Trust Fund,  which must occur at the end of each  business  day of the Plan
     Year except for Plan assets which are not normally valued on a daily basis.
     Any such  assets  will be valued at least  annually on the last day of each
     Plan Year, and on such other dates deemed necessary by the Administrator in
     a manner that does not discriminate in favor of HCEs.

1.66 VESTED  AGGREGATE  ACCOUNT:  The  term  Vested  Aggregate  Account  means a
     Participant's  Vested  Interest  in  the  aggregate  value  of  his  or her
     Participant's  Account and any accounts  attributable to the  Participant's
     own Plan contributions (including rollovers).

1.67 VESTED   INTEREST:   The  term  Vested   Interest  means  a   Participant's
     nonforfeitable percentage in any account maintained on his or her behalf by
     the Plan.  A  Participant's  Vested  Interest  in his or her  Participant's
     Account will be determined in accordance with Section 4.6 of the Plan.

1.68 YEAR OF  SERVICE:  The term Year of Service  means a  12-consecutive  month
     computation  period in which an Employee  completes  for the  Employer,  an
     Affiliated  Employer  or an Adopting  Employer  (a) at least 1,000 Hours of
     Service for eligibility  purposes under Section 2.1; and (b) at least 1,000
     Hours of Service for vesting  purposes under Section 4.6. A Year of Service
     will be determined in accordance with the following provisions:

     (a)  Eligibility Computation Period: For eligibility purposes under Section
          2.1, an Employee's  initial  12-consecutive  month computation  period
          will begin on the date an Employee first  completes an Hour of Service
          (hereafter called the Employment Commencement Date), and each 12-month
          computation  period  thereafter  will begin on the  anniversary of the
          Employee's  Employment  Commencement Date. If a Plan Year is less than
          12 months,  the 1,000 Hours of Service  requirement  set forth  herein
          will be proportionately reduced.

     (b)  Reemployment Before A Break In Service: For eligibility purposes, if a
          Participant  terminates  employment  and is reemployed by the Employer
          before incurring a Break in Service, such Participant will continue to
          participate  in the Plan and earn  credit  for Years of Service in the
          same manner as if the termination of employment had not occurred.


16
<PAGE>


     (c)  Reemployment After A Break In Service: For eligibility  purposes, if a
          Participant  who  does  not  have  a  Vested  Interest  in  his or her
          Participant's  Account terminates  employment but is reemployed by the
          Employer after a Break in Service  occurs,  such former  Participant's
          Years of Service  before  the Break in Service  will not be counted in
          computing  his or her Years of Service  if the  number of  consecutive
          Breaks  in  Service  equals  or  exceeds  the  greater  of five or the
          aggregate number of Years of Service. The aggregate number of Years of
          Service will not include any Years of Service  previously  disregarded
          hereunder  by  reason  of  prior  Breaks  in  Service.   If  a  former
          Participant's  Years of Service are disregarded  under this paragraph,
          he or she will be treated as a new Employee for eligibility  purposes.
          If a former  Participant's  Years of  Service  may not be  disregarded
          under this  paragraph,  then he or she will continue to participate in
          the  Plan,  or,  if  terminated,  will  participate  immediately  upon
          reemployment. If a Participant who has a Vested Interest in his or her
          Participant's  Account terminates  employment but is reemployed by the
          Employer after a Break in Service occurs, such former Participant will
          become a Participant in the Plan  immediately upon being reemployed by
          the Employer.

     (d)  Employees Under 2-Year Full And Immediate Vesting: If this Plan at any
          time (1)  provides  in Section 2.1 that an  Employee  must  complete 2
          Years of Service for eligibility purposes, and (2) provides in Section
          4.6 that an Employee  will have a 100%  Vested  Interest in his or her
          Participant's  Account upon becoming a Participant,  then the Years of
          Service of an Employee who incurs a Break in Service before satisfying
          such 2 Years of Service  eligibility  requirement  will not be counted
          for eligibility purposes.

     (e)  Vesting  Computation  Period:  In determining a  Participant's  Vested
          Interest in his or her  Participant's  Account  under Section 4.6, the
          12-consecutive  month  computation  period will be the Plan Year. If a
          former  Participant  is  reemployed  by the Employer  after a Break in
          Service occurs,  such former  Participant's  Vested Interest in his or
          her  Participant's  Account will be computed as follows:  (1) Years of
          Service prior to the Break in Service will not be counted for purposes
          of computing his or her  post-break  Vested  Interest until the former
          Participant  has  completed  a  Year  of  Service  from  the  date  of
          reemployment;  (2) Years of  Service  after a former  Participant  has
          incurred  5  consecutive  Breaks  in  Service  will not be taken  into
          account in determining the Vested Interest in his or her Participant's
          Account which accrued  before such 5 year period;  and (3) if a former
          Participant   does  not  have  a  Vested   Interest   in  his  or  her
          Participant's   Account,   Years  of  Service  before  any  period  of
          consecutive  Breaks in Service  will not be taken into  account if the
          number of  consecutive  Breaks in Service within such period equals or
          exceeds the greater of 5 or the  aggregate  number of Years of Service
          before such period.


                                                                              17
<PAGE>


                                    ARTICLE 2
                               PLAN PARTICIPATION


2.1  ELIGIBILITY REQUIREMENTS: Any Employee who is not in an ineligible class of
     Employees  will  be  eligible  to  become  a  Participant  in the  Plan  in
     accordance with the following provisions:

     (a0  Age And Service Requirement: Anyone who is a Participant on January 1,
          1999 will continue to  participate in the Plan. Any other Employee who
          is not a member of an ineligible  class of Employees  will be eligible
          to enter the Plan as a Participant,  when he or she reaches Age 21 and
          completes  6 months of service,  which an  Employee  will be deemed to
          have  completed  if he or she (1) is employed by the Employer 6 months
          after the date he or she is first entitled to be credited with an Hour
          of  Service;  and (2) has been  credited  with at least 83.33 Hours of
          Service per month.  However, in no event will an Employee who performs
          at least 1,000 Hours of Service in an eligibility  computation  period
          as  set  forth  in  Section  1.68(a)  fail  to  enter  the  Plan  as a
          Participant  on the earlier of the entry date set forth in Section 2.2
          which  follows the last day of said  computation  period,  or the date
          which is six months after the last day of said computation period.

     (b0  Ineligible  Classes  Of  Employees:  All  Employees  are  eligible  to
          participate in the Plan except for the following ineligible classes of
          Employees:  (1) Employees whose employment is governed by the terms of
          a collective bargaining agreement between Employee representatives and
          the  Employer in which  retirement  benefits  were the subject of good
          faith  bargaining,   unless  such  collective   bargaining   agreement
          expressly provides for the inclusion of such Employees as Participants
          in the Plan;  (2)  Employees  who are  non-resident  aliens who do not
          receive any earned income from the Employer which  constitutes  income
          from sources within the United States;  (3) Leased Employees;  and (4)
          Employees who are deemed by the Employer to be independent contractors
          on their  employment  commencement  date and on the  first day of each
          subsequent Plan Year.

     (c0  Participation  By  Ineligible  Employees:  If an Employee who is not a
          member  of the  eligible  class of  Employees  becomes a member of the
          eligible class, such Employee will participate in the Plan immediately
          if he or she has  satisfied  the minimum age and service  requirements
          and would have  previously  become a Participant  had he or she been a
          member of the eligible class.  The  participation of a Participant who
          becomes a member of an ineligible  class will be  suspended,  and such
          Participant   will  be   entitled   to  an   allocation   of  Employer
          contributions  and Forfeitures for the Plan Year only to the extent of
          Hours of  Service  completed  while a member of an  eligible  class of
          Employees.  Upon  returning  to an  eligible  class  of  Employees,  a
          suspended Participant will immediately  participate again in the Plan.
          The Vested  Interest of a Participant  who ceases to be a member of an
          eligible  class will continue to increase in  accordance  with Section
          4.6.


18
<PAGE>


     (d0  Participation By Former Participants:  A former Participant will again
          become a Participant  immediately  upon returning to the employ of the
          Employer as a member of an  eligible  class of  Employees  unless such
          former  Participant's Years of Service may be disregarded by reason of
          prior Breaks in Service as provided in Section 1.68(c).

2.2  ENTRY DATE: An Employee who has satisfied the  eligibility  requirements in
     Section 2.1 will enter the Plan as a Participant  on the January 1st, April
     1st,  July 1st, or October 1st which  coincides or next follows the date on
     which he or she satisfies such requirements.

2.3  WAIVER OF  PARTICIPATION:  A Participant  may, with the written  consent of
     both the Employer and the Participant's  spouse,  elect in writing to waive
     participation  in the Plan for any Plan Year.  A waiver  will be  permitted
     only if it does not adversely  affect the Plan's tax qualified  status.  An
     election to waive  participation in the Plan for a Plan Year will result in
     no allocation of Employer  contributions or Forfeitures for that Plan Year.
     If an  Employee  who has  waived  his or her right to become a  Participant
     subsequently  elects to become a Participant,  the period of waiver will be
     considered as Years of Service  under the Plan for purposes of  determining
     the Employee's  eligibility to participate,  for determining the Employee's
     Vested Interest in his or her  Participant's  Account,  and for determining
     eligibility for Normal or Early Retirement Age.

2.4  CESSATION OF  PARTICIPATION:  A Participant's  active  participation in the
     Plan will cease if the Participant  incurs a Break in Service or on account
     of the Participant's death or Disability, or on account of retirement on or
     after reaching  Normal or Early  Retirement Age. Upon the occurrence of any
     such event, the benefits of such  Participant,  if any, will be computed by
     the Administrator and distributed by the Trustee as hereinafter provided.

2.5  RESTRICTIONS ON  OWNER-EMPLOYEES:  If this Plan provides  contributions  or
     benefits  for  Employees  some or all of  whom  are  Owner-Employees,  such
     contributions  or benefits can only be provided  with respect to the Earned
     Income of such  Owner-Employee  which is derived from the trade or business
     with respect to which the Plan is established.


                                                                              19
<PAGE>


                                    ARTICLE 3
                          CONTRIBUTIONS AND ALLOCATIONS


3.1  EMPLOYER CONTRIBUTIONS: Each Plan Year, the Employer will contribute to the
     Plan such amount as it may in its sole discretion determine, subject to the
     following provisions:

     (a0  Elective Deferrals: Each Participant may enter into a salary reduction
          agreement  as set forth below  authorizing  the Employer to withhold a
          percentage of the Participant's Compensation. The amount withheld will
          be deemed an Elective  Deferral which the Employer will  contribute to
          the Plan on the  Participant's  behalf.  Each  Participant's  Elective
          Deferral for any Plan Year will be determined as follows:

          (1   Deferral  Percentage:  Each Participant may elect that from 1% to
               20% of  his  or  her  Compensation  be  withheld  as an  Elective
               Deferral,  but in no event may the dollar amount withheld be more
               than   $10,000  per   calendar   year  as  adjusted   under  Code
               ss.402(g)(5).   Elective  Deferrals  which  exceed  the  adjusted
               $10,000  limitation will be deemed Excess Elective  Deferrals and
               will be returned as set forth in Section 5.15. Elective Deferrals
               must satisfy one of the ADP Tests,  and Elective  Deferrals which
               do not  satisfy  one of the  ADP  Tests  will  be  deemed  Excess
               Contributions and will be returned as set forth in Section 5.16.

          (2   Withdrawal Of Elective Deferrals:  Elective Deferrals  (exclusive
               of the earnings  thereon) can only be withdrawn  upon the earlier
               to occur of (1) the date the Participant  incurs a Termination of
               Employment;  (2) the date the Participant  dies; (3) the date the
               Participant suffers a Disability; (4) the date an event described
               in Code  ss.401(k)(10)  occurs;  (5)  the  date  the  Participant
               retires;  or  (6)  the  date  the  Participant  qualifies  for  a
               financial hardship distribution under Section 5.18.  Distribution
               will be made in accordance with the provisions of Article 5.

          (3   Salary Reduction Agreement: A Participant may, in accordance with
               a written policy established by the  Administrator,  amend his or
               her salary  reduction  agreement to change the  percentage  being
               withheld.  The Participant may also at any time suspend or cancel
               his or her salary  reduction  agreement upon  reasonable  written
               notice  (not to exceed  30 days).  If a  Participant  cancels  or
               suspends his or her salary reduction  agreement,  the Participant
               will not be  permitted  to put a new salary  reduction  agreement
               into effect  until such time as set forth in the  written  policy
               established by the Administrator. If necessary to insure that the
               Plan  satisfies  the ADP Test,  the  Employer  may also  amend or
               terminate a Participant's  salary reduction  agreement on written
               notice to the Participant.

(b0  Matching  Contributions:  The  Employer  may  contribute  on behalf of each
     Participant  a  Matching  Contribution  to be  determined  each year by the
     Employer.  Matching  Contributions made for each Plan Year must satisfy the
     ACP Test. Matching


20
<PAGE>


     Contributions  which do not  satisfy  the ACP Test  will be  deemed  Excess
     Aggregate  Contributions and will be returned as set forth in Section 5.17.
     The  Employer  may  elect  to  treat  all  or  any  portion  of a  Matching
     Contribution as a Qualified  Matching  Contribution to the extent necessary
     to satisfy the ADP Test.

(c0  Non-Elective   Contributions:   The  Employer   may  make  a   Non-Elective
     Contribution in such amount as determined by the Employer, and the Employer
     will  convey  such  amount  to  the  Trustee  in  writing.  The  Employer's
     determination  of the  amount  of its  Non-Elective  Contribution  will  be
     binding on the Trustee,  the Administrator and all Participants and may not
     be reviewed in any manner.  However,  (1) no Non-Elective  Contribution may
     exceed the maximum amount  deductible  under Code ss.404;  (2) Non-Elective
     Contributions  will be  limited  as  required  by Code  ss.415;  and (3) no
     Non-Elective  Contribution  will be made for any  Participant who is not an
     Eligible Participant unless required by Section 3.5.

(d0  Qualified Non-Elective Contributions:  Subject to Notice 98-1, the Employer
     may, in lieu of distributing  Excess  Contributions as set forth in Section
     5.16 or Excess Aggregate  Contributions as set forth in Section 5.17, elect
     to treat all of any portion of a Non-Elective  Contribution  as a Qualified
     Non-Elective Contribution sufficient to satisfy the ADP Test and/or the ACP
     Test; or the Employer elect to make a Qualified  Non-elective  Contribution
     in an amount sufficient to satisfy the ADP Test and/or the ACP Test.

(e0  Contribution For Mistakenly Excluded Employees:  Notwithstanding  paragraph
     (c)  to the  contrary,  if an  Employee  should  have  been  included  as a
     Participant  but is mistakenly  excluded for any reason,  the Employer will
     make a Non-Elective  Contribution  equal to the sum of (1) the amount which
     would  have  been  contributed  for such  Employee,  and (2) the  amount of
     earnings  that  would  have  been  credited  to  the  excluded   Employee's
     Participant's  Account but for the fact that the  Employee  was  mistakenly
     excluded.  Such  contributions  will be made  regardless  of  whether  such
     amounts are ever deductible by the Employer.

(f0  Refund  Of  Contributions:  If the Plan  fails  to  initially  satisfy  the
     qualification  requirements of Code ss.401(a) and the Employer  declines to
     amend the Plan to satisfy such  requirements,  contributions  made prior to
     the date such  qualification  is denied must be  returned  to the  Employer
     within 1 year of the date of such denial,  but only if the  application for
     the  qualification  is made by the time  prescribed  by law for  filing the
     Employer's tax return for the taxable year in which the Plan is adopted, or
     by such later date as the  Secretary of the Treasury  may  prescribe.  If a
     contribution is attributable in whole or in part to a good faith mistake of
     fact, including a good faith mistake in determining its deductibility under
     Code ss.404,  then an amount may be returned to the  Employer  equal to the
     excess of the  amount  contributed  over the amount  which  would have been
     contributed had the mistake not occurred. Earnings attributable to any such
     excess  contribution will not be returned,  but losses  attributable to the
     excess contribution will reduce the amount so returned. Such amount will be
     returned  within  1 year  of the  date  the  contribution  was  made or the
     deduction disallowed, as the case may be.


                                                                              21
<PAGE>


3.2  ALLOCATION OF EMPLOYER CONTRIBUTIONS:  Each Eligible Participant's share of
     the  various  types of Employer  contributions  made under the Plan will be
     allocated  to his or her  Participant's  Account  in  accordance  with  the
     following provisions:

     (a0  Elective Deferrals:  Each Participant's Elective Deferrals contributed
          under Section 3.1(a) will be allocated to the  Participant's  Elective
          Deferral Account.

     (b0  Matching And Qualified Matching Contributions:  Matching Contributions
          will be allocated to an Eligible  Participant's  Matching Contribution
          Account; and any Matching  Contributions that are treated as Qualified
          Matching  Contributions will be allocated to an Eligible Participant's
          Qualified Matching  Contribution Account. Any Participant who makes an
          Elective  Deferral  during the Plan Year will receive an allocation of
          Matching  Contributions  for the Plan  Year  regardless  of any  other
          allocation rules to the contrary.

     (c0  Non-Elective   Contributions:   Non-Elective   Contributions  will  be
          allocated on the annual Valuation Date to each Eligible  Participant's
          Non-Elective  Contribution  Account in the ratio that the Compensation
          of each Eligible  Participant  bears to the total  Compensation of all
          Eligible Participants.

     (d0  Qualified   Non-Elective   Contributions:   QNECs,   and  Non-Elective
          Contributions  that are  treated as QNECs,  will be  allocated  to the
          Qualified   Non-Elective   Contribution   Account  of  each   Eligible
          Participant on a per capita basis.

3.3  ALLOCATION  OF EARNINGS AND LOSSES:  As of each  Valuation  Date,  accounts
     which have not been  distributed  since the prior  Valuation Date will have
     the net  income of the Trust Fund  earned  since the prior  Valuation  Date
     allocated  thereto as hereinafter set forth in this Section.  Net income is
     the  net  of  any  interest,   dividends,   unrealized   appreciation   and
     depreciation,  capital  gains and losses,  and  investment  expenses of the
     Trust Fund as determined on each Valuation Date.

     (a0  Non-Segregated Accounts:  Accounts which have not been segregated from
          the general  Trust Fund for  investment  purposes will have net income
          allocated  thereto in the ratio that the value of each  non-segregated
          account as of the preceding Valuation Date bears to the total value of
          all  non-segregated  accounts as of the preceding  Valuation Date. The
          Forfeiture  Account  will  share in the  allocation  made  under  this
          paragraph.

     (b0  Segregated  Accounts And Policy  Dividends:  Accounts  which have been
          segregated  from  the  general  Trust  Fund for  investment  purposes,
          including Directed Investment Accounts  established under Section 7.15
          of the Plan,  will only have the net income earned  thereon  allocated
          thereto.  Policy  dividends  or  credits  will  be  allocated  to  the
          Participant's Account for whose benefit the Policy is held.

3.4  ALLOCATION OF  FORFEITURES:  On each annual  Valuation Date, any portion of
     the  Forfeiture  Account  which  has not  been  used to pay  administrative
     expenses of the Plan will be


22
<PAGE>


     allocated  to each  Eligible  Participant's  Account in the ratio that each
     Eligible Participant's  Compensation bears to the total Compensation of all
     Eligible Participants.

3.5  TOP  HEAVY  MINIMUM  ALLOCATION:  In any Top  Heavy  Plan Year in which the
     Employer makes a contribution to the Plan, each eligible  Non-Key  Employee
     will  receive  the Top Heavy  Minimum  Allocation  in  accordance  with the
     following provisions:

     (a0  Who Must Receive Minimum  Allocation:  Except as otherwise provided in
          paragraph (b), the Top Heavy Minimum  Allocation will be made for each
          eligible  Non-Key Employee who is employed by the Employer on the last
          day of the Plan Year,  including  those who have  failed to complete a
          Year of Service and who have been excluded from becoming  Participants
          in the Plan  because  (1)  their  Compensation  is less  than a stated
          amount;  (2)  they  declined  to  make  mandatory   contributions  (if
          required)  to the Plan  during  the time  they were  considered  to be
          Participants; or (3) they failed to make an elective contribution to a
          Code ss.401(k) plan maintained by the Employer. However, the Top Heavy
          Minimum  Allocation will not be required for any Non-Key  Employee who
          also participates in an Employer sponsored money purchase pension plan
          or target  benefit  pension  plan which  provides a Top Heavy  Minimum
          Allocation  to such Non-Key  Employee and which is included  with this
          Plan in a Required Aggregation Group.

     (b0  Lesser Allocation Allowed: If the allocation made to the Participant's
          Account of each Key Employee  under Section 3.2 is less than 3% of his
          or her Section 415  Compensation,  and if this Plan is not required to
          be included in an Aggregation  Group to enable a defined  benefit plan
          to  meet  the  requirements  of  Code  ss.401(a)(4)  or  ss.410,   the
          Employer's  contribution  will be reallocated so the Top Heavy Minimum
          Allocation made to the Participant's  Account of each eligible Non-Key
          Employee  is  equal  to  the  largest  percentage   allocated  to  the
          Participant's Account of a Key Employee. Such percentage will be equal
          to the ratio of the sum of the Employer's contribution and Forfeitures
          allocated  on  such  Key  Employee's  behalf  divided  by  his  or her
          Compensation.

3.6  FAILSAFE  ALLOCATION:  For any Plan Year in which the Plan fails to benefit
     at least  70% of  Non-Highly  Compensated  Employees  who are  eligible  to
     participate in the Plan, or in which the Plan fails to benefit a percentage
     of Non-Highly  Compensated Employees who are eligible to participate in the
     Plan that is at least 70% of the percentage of Highly Compensated Employees
     who benefit under the Plan, an additional Employer contribution may be made
     and allocated  first to that group of Employees who were  Participants  but
     not  Eligible  Participants  for the  Plan  Year;  next to  that  group  of
     Employees who have not satisfied the  eligibility  requirements  of Section
     2.1(a) and are not members of an ineligible class of Employees as set forth
     in  Section  2.1(b);  and  then to that  group  of  Employees  who have not
     satisfied the eligibility requirements of Section 2.1(a) and are members of
     a  non-statutory  ineligible  class of  Employees  as set forth in  Section
     2.1(b). Within each group, individuals will be ranked by Compensation,  and
     the  individuals  receiving  an  allocation  will be those  with the lowest
     amount of Compensation during the Plan Year. Allocations will be made under
     this Section only to the extent necessary to insure that the Plan satisfies
     one of the ratio percentage tests set forth in Code  ss.ss.410(b)(1)(A)  or
     (B) as described above.


                                                                              23
<PAGE>


3.7  ROLLOVERS:  With the consent of the  Administrator,  any  Employee  who has
     become a  Participant  in the Plan may  transfer  amounts to this Plan from
     another  qualified  plan.  Such  transferred  amounts are hereafter  called
     Rollovers.  Rollovers will be allocated to a Rollover  Account in which the
     Employee  will  have a 100%  Vested  Interest.  Except  for the  portion  a
     Participant  self-directs  under Section 7.15, the Administrator may choose
     for investment purposes to either segregate Rollover Accounts into separate
     interest  bearing  accounts or to invest them as part of the general  Trust
     Fund, in which case such accounts will share in the  allocation of earnings
     and losses under Section 3.3(a).  Rollover Accounts will be administered as
     follows:

     (a0  Definition Of Rollover: The term Rollover means amounts transferred to
          this Plan (1) in a trustee to trustee transfer from another  qualified
          plan;  (2) from  another  qualified  plan as a lump  sum  distribution
          eligible for tax free rollover  treatment and which is  transferred by
          the  Participant  to this Plan  within 60 days  following  his receipt
          thereof; (3) from a conduit individual  retirement account if the only
          assets  therein were  previously  distributed  to the  Participant  by
          another  qualified plan as a lump sum distribution  which was eligible
          for a tax free rollover within 60 days of receipt thereof and earnings
          on said assets; or (4) from a conduit  individual  retirement  account
          meeting the  requirements of subparagraph  (3) and transferred to this
          Plan within 60 days of receipt thereof.

     (b0  Withdrawal Of  Rollovers:  An Employee may withdraw all or any portion
          of his or her  Rollover  Account  at  such  time  as the  Employee  is
          entitled to a distribution of his or her  Participant's  Account under
          the  provisions  of  Article  4.  Any  amount   withdrawn   cannot  be
          redeposited to the Rollover Account. However, amounts which constitute
          or are treated as constituting  elective  contributions  as defined in
          regulation ss.1.401(k)-1(g)(3) and which were transferred to this Plan
          in a trustee to trustee transfer from another  qualified plan may only
          be  withdrawn  in  accordance   with  the  limitations  set  forth  in
          regulation ss.1.401(k)-1(d).  All withdrawal requests must contain the
          Employee's address, social security number, birth date, and the amount
          of the withdrawal.  A Rollover withdrawal will not prevent an Employee
          from   accruing   any  future   benefit   attributable   to   Employer
          contributions.  An  Employee's  request to make a Rollover  withdrawal
          must satisfy the applicable spousal consent  requirements set forth in
          Section 5.8 of the Plan.


24
<PAGE>


                                    ARTICLE 4
                                  PLAN BENEFITS


4.1  BENEFIT UPON NORMAL OR EARLY RETIREMENT:  Every Participant who has reached
     Normal or Early  Retirement Age and retires will be entitled to receive his
     or her Vested  Aggregate  Account balance  determined as of the most recent
     Valuation  Date  coinciding  with  or  immediately  preceding  the  date of
     distribution. Distribution will made in accordance with Section 5.1.

4.2  BENEFIT UPON LATE RETIREMENT: A Participant who has reached Normal or Early
     Retirement  Age may elect to remain  employed  and retire at a later  date.
     Such  Participant  will continue to  participate in the Plan and his or her
     Participant's  Account will continue to receive allocations under Article 3
     until the Participant  actually retires, at which time the Participant will
     be entitled to his or her Vested Aggregate Account balance determined as of
     the most recent Valuation Date coinciding with or immediately preceding the
     date of distribution.  Distribution will be made in accordance with Section
     5.1.

4.3  BENEFIT UPON DEATH: Upon the death of a Participant prior to Termination of
     Employment,  or  upon  the  death  of a  Terminated  Participant  prior  to
     distribution of his or her Vested Aggregate Account, his or her Beneficiary
     will be entitled to the  Participant's  Vested  Aggregate  Account  balance
     determined  as of  the  most  recent  Valuation  Date  coinciding  with  or
     immediately  preceding the date of distribution.  If any Beneficiary who is
     living on the date of the  Participant's  death dies prior to receiving his
     or her the  entire  death  benefit,  the  remaining  portion  of such death
     benefit  will  be  paid  in a lump  sum  to the  estate  of  such  deceased
     Beneficiary. The Administrator's  determination that a Participant has died
     and that a particular person has a right to receive a death benefit will be
     final. Distribution will be made in accordance with Section 5.2.

4.4  BENEFIT UPON  DISABILITY:  If a Participant  suffers a Disability  prior to
     Termination  of  Employment,  or  if a  Terminated  Participant  suffers  a
     Disability prior to distribution of his or her Vested Aggregate Account, he
     or she will be  entitled  to his or her Vested  Aggregate  Account  balance
     determined  as of  the  most  recent  Valuation  Date  coinciding  with  or
     immediately  preceding the date of distribution.  Distribution will be made
     in accordance with Section 5.3.

4.5  BENEFIT  UPON  TERMINATION:  A  Participant  who  incurs a  Termination  of
     Employment will be entitled to his or her Vested Aggregate  Account balance
     as of the  most  recent  Valuation  Date  coinciding  with  or  immediately
     preceding  the  date  of   distribution.   Distribution   to  a  Terminated
     Participant  who does not die  prior to such  distribution  or who does not
     suffer a Disability prior to such  distribution  will be made in accordance
     with Section 5.4.

4.6  DETERMINATION OF VESTED INTEREST: A Participant's Vested Interest in his or
     her  Participant's  Account  will be  determined  in  accordance  with  the
     following provisions:


25
<PAGE>


     (a0  100% Vesting Upon Retirement,  Death Or Disability: A Participant will
          have a 100% Vested Interest in his Participant's Account upon reaching
          Normal or Early Retirement Age prior to Termination of Employment,  or
          upon death or Disability prior to that date.

     (b0  Vesting Prior To Retirement, Death Or Disability:  Except as otherwise
          provided in paragraph (a) above, a  Participant's  Vested  Interest in
          his  or  her  Participant's  Account  at  any  given  time,  including
          Termination  of Employment  prior to Normal or Early  Retirement  Age,
          death  or  Disability,  will be  determined  in  accordance  with  the
          following:  (1)  a  Participant's  Vested  Interest  in  all  Elective
          Deferrals, Qualified Matching Contributions and Qualified Non-Elective
          Contributions  that are allocated to his or her Participant's  Account
          will be 100% upon entry into the Plan and at all times thereafter; and
          (2) a Participant's Vested Interest in all Matching  Contributions and
          Non-Elective   Contributions   that  are   allocated  to  his  or  her
          Participant's Account will be determined by the vesting schedule which
          immediately  follows  this  paragraph  based on the number of Years of
          Service the Participant has completed on the date of determination.

                      Years Of Service             Vested Interest
                            2 . . . . . . . . . . . . .   20%
                            3 . . . . . . . . . . . . .   40%
                            4 . . . . . . . . . . . . .   60%
                            5 . . . . . . . . . . . . .   80%
                            6 . . . . . . . . . . . . .  100%

     (c0  Amendments  To Vesting  Schedule:  No Plan  amendment  may directly or
          indirectly  reduce a  Participant's  Vested  Interest.  If the  Plan's
          vesting schedule is amended, any Participant with at least three Years
          of Service may, by filing a written request with the  Administrator 60
          days after the latest of (1) the  amendment's  adoption  date, (2) the
          amendment's  effective date, or (3) the date the Participant  receives
          written notice of the amendment,  elect to have the Vested Interest in
          his or her  Participant's  Account computed by the vesting schedule in
          effect prior to the amendment. A Participant who fails to make such an
          election will have his or her Vested  Interest  computed under the new
          schedule.  However,  notwithstanding  the foregoing,  a  Participant's
          Vested Interest in his or her  Participant's  Account will not be less
          than it was as of the  later  of  January  1,  1999 or the  date  this
          amended Plan is actually adopted by the Employer.


26
<PAGE>


                                    ARTICLE 5
                            DISTRIBUTION OF BENEFITS


5.1  BENEFIT UPON  RETIREMENT:  Unless a cash-out  occurs under Section 5.5, the
     retirement  benefit a Participant  is entitled to receive under Section 4.1
     or 4.2 will be distributed as follows:

     (a0  Form Of  Distribution:  Any  Employee who became a  Participant  on or
          after January 1, 1998, shall receive their  retirement  benefit in one
          lump-sum in cash or property.

     (b0  Optional Forms Of Distribution:  Any Employee who became a Participant
          prior to  January  1,  1998,  may elect to have his or her  retirement
          benefit  distributed (1) as a Qualified Joint and Survivor  Annuity if
          the  Participant  is married on the Annuity  Starting Date and has not
          died before such date. If the  Participant is unmarried on the Annuity
          Starting  Date and has not died  before such date,  the  Participant's
          retirement  benefit  will be  distributed  as a life  annuity;  (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period certain that does not extend beyond the Participant's  life, or
          beyond the lives of the Participant  and a designated  Beneficiary (or
          beyond the life  expectancy of the  Participant  or the joint and last
          survivor  expectancy of the Participant and a designated  Beneficiary,
          in which  event  the lump sum  value of the  benefit  will  either  be
          segregated  and  separately  invested  by the  Trustee,  or it will be
          invested  in  a  nontransferable  annuity  providing  for  installment
          payments; or (3) in one lump sum in cash or property.

     (c0  Time Of  Distribution:  Distribution  will be made under this  Section
          within a reasonable  time after the  Participant's  actual  retirement
          date, or within a reasonable  time after a Participant who elects late
          retirement requests payment, but distribution must begin no later than
          the Participant's Required Beginning Date.

5.2  BENEFIT UPON DEATH:  Unless a cash-out  occurs under Section 5.5, the death
     benefit a deceased  Participant's  Beneficiary is entitled to receive under
     Section 4.3 will be distributed as follows:


                                                                              27
<PAGE>


     (a0  Non-Spouse Beneficiary:  Any death benefit a non-spouse Beneficiary is
          entitled  to receive  will be  distributed  in one lump sum in cash or
          property.  A  non-spouse  Beneficiary  of  a  Employee  who  became  a
          Participant  prior to  January  1,  1998,  may elect to have any death
          benefit such Beneficiary is entitled to receive  distributed by one of
          the following methods unless a different method has been chosen by the
          Participant:  (1) in one  lump  sum in  cash  or  property;  or (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period certain that does not extend beyond the life of the Beneficiary
          (or beyond the life expectancy of the Beneficiary), in which event the
          lump sum value of the benefit will either be segregated and separately
          invested by the Trustee,  or it will be invested in a  nontransferable
          annuity providing for installment payments.  Distribution will be made
          within a  reasonable  time  after  the death of the  Participant;  but
          distribution  of a lump  sum  must  be made  by  December  31st of the
          calendar year which  contains the 5th  anniversary  of the date of the
          Participant's death, or installments must begin no later than December
          31st of the calendar year  immediately  following the calendar year in
          which the Participant died.

     (b0  Surviving Spouse:  Notwithstanding  any other Beneficiary  designation
          made by a Participant,  if a Participant is married on the date of his
          or her death,  the  deceased  Participant's  surviving  spouse will be
          entitled to receive 100% of the deceased  Participant's  death benefit
          unless the surviving  spouse has waived that right in accordance  with
          Section 5.8. The death benefit will be  distributed in one lump sum in
          cash or property.

          For any  Employee who became a  Participant  prior to January 1, 1998,
          who is  married  on the date of his or her death and dies  before  the
          Annuity Starting Date, the Participant's surviving spouse may elect to
          receive  a  minimum  death  benefit  to be  distributed  by one of the
          following  methods  unless a  different  method has been chosen by the
          Participant: (1) as a Qualified Preretirement Survivor Annuity; (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period  certain that does not extend  beyond the life of the surviving
          spouse or beyond the life expectancy of the surviving spouse, in which
          event the lump sum value of the benefit will either be segregated  and
          separately  invested  by the  Trustee,  or it  will be  invested  in a
          nontransferable  annuity providing for installment payments; or (3) in
          one lump sum in cash or property.

     (c0  Time Of Distribution To A Surviving  Spouse:  The surviving spouse may
          (1) elect to have any  death  benefit  to which he or she is  entitled
          distributed   within  a  reasonable   time  after  the  death  of  the
          Participant;  or (2) elect to defer distribution of the death benefit,
          but  distribution  may not be  deferred  beyond  December  31st of the
          calendar  year in which the deceased  Participant  would have attained
          Age 70 1/2.


28
<PAGE>


     (d0  Death Of Surviving Spouse Before Distribution Begins: If the surviving
          spouse dies before distribution begins, then distribution will be made
          as if the surviving spouse were the Participant.  Distribution will be
          considered as having  commenced  when the deceased  Participant  would
          have  reached  Age 70 1/2  even  if  payments  have  been  made to the
          surviving  spouse before that date.  However,  if  distribution to the
          surviving spouse commences in the form of an irrevocable  annuity over
          a period permitted under paragraph (b) before the deceased Participant
          would have  reached Age 70 1/2,  distribution  will be  considered  as
          having begun on the actual annuity commencement date.

     (e0  Participants In Pay Status: If a Participant who has started receiving
          distribution  of his or her retirement  benefit dies before the entire
          benefit  has been  distributed,  the  balance of the  benefit  will be
          distributed  to the  Participant's  Beneficiary at least as rapidly as
          under  the  method  of  distribution  being  used  on the  date of the
          Participant's death.

5.3  DISABILITY  BENEFITS:  Unless a cash-out  occurs  under  Section  5.5,  the
     Disability  benefit a Participant  is entitled to receive under Section 4.4
     will be distributed as follows:

     (a0  Form Of  Distribution:  Any  Employee who became a  Participant  on or
          after January 1, 1998, shall receive his or her Disability  benefit in
          one lump-sum in cash or property.

     (b0  Optional Forms Of Distribution:  Any Employee who became a Participant
          on or after January 1, 1998,  may elect to have his or her  Disability
          benefit  distributed (1) as a Qualified Joint and Survivor  Annuity if
          the  Participant  is married on the Annuity  Starting Date and has not
          died before such date. If the  Participant is unmarried on the Annuity
          Starting  Date and has not died  before such date,  the  Participant's
          Disability  benefit  will be  distributed  as a life  annuity;  (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period certain that does not extend beyond the Participant's  life, or
          beyond the lives of the Participant  and a designated  Beneficiary (or
          beyond the life  expectancy of the  Participant  or the joint and last
          survivor expectancy of the Participant and a designated  Beneficiary),
          in which  event  the lump sum  value of the  benefit  will  either  be
          segregated  and  separately  invested  by the  Trustee,  or it will be
          invested  in  a  nontransferable  annuity  providing  for  installment
          payments; or (3) in one lump sum in cash or property.

     (c)  Time Of  Distribution:  Distribution  will be made under this  Section
          within a  reasonable  time  after  the date on which  the  Participant
          suffers the Disability,  but distribution must begin no later than the
          Participant's Required Beginning Date.

5.4  BENEFIT UPON  TERMINATION:  Unless a cash-out occurs under Section 5.5 or a
     prior  distribution  has been made under  Section 5.2 or Section  5.3,  the
     benefit a Terminated  Participant  is entitled to receive under Section 4.5
     will be distributed as follows:

     (a)  Form  Of  Distribution:   Any  Terminated  Participant  who  became  a
          Participant  on or after January 1, 1998,  shall receive their benefit
          in one lump-sum in cash or property.


                                                                              29
<PAGE>


     (b)  Optional Forms Of Distribution:  Any Terminated Participant who became
          a Participant  prior to January 1, 1998,  may elect to have his or her
          benefit  distributed (1) as a Qualified Joint and Survivor  Annuity if
          the  Participant  is married on the Annuity  Starting Date and has not
          died before such date. If the  Participant is unmarried on the Annuity
          Starting  Date and has not died  before such date,  the  Participant's
          Disability  benefit  will be  distributed  as a life  annuity;  (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period certain that does not extend beyond the Participant's  life, or
          beyond the lives of the Participant  and a designated  Beneficiary (or
          beyond the life  expectancy of the  Participant  or the joint and last
          survivor expectancy of the Participant and a designated  Beneficiary),
          in which  event  the lump sum  value of the  benefit  will  either  be
          segregated  and  separately  invested  by the  Trustee,  or it will be
          invested  in  a  nontransferable  annuity  providing  for  installment
          payments; or (3) in one lump sum in cash or property.

     (c)  Time Of  Distribution:  Distribution  will be made under this  Section
          within a reasonable time after a Terminated Participant reaches Normal
          or Early Retirement Age, but distribution must begin no later than the
          Required Beginning Date.

5.5  CASH-OUT OF BENEFITS: If the lump sum value of a Participant's benefit does
     not exceed $5,000,  the  Administrator may distribute the benefit in a lump
     sum  without  a  Participant's  consent  as  soon  as  practicable  after a
     Participant becomes eligible for a distribution  thereof,  but distribution
     must  occur  no  later  than  the  date  the  benefit  would  otherwise  be
     distributable  under the terms of the Plan. That portion of a Participant's
     Account which is not a Vested Interest will be treated as a Forfeiture, and
     if such Vested Interest is zero on the date of distribution,  a Participant
     will be deemed to have received a distribution of such Vested Interest.

5.6  RESTRICTIONS  ON  IMMEDIATE  DISTRIBUTIONS:  If the  lump  sum  value  of a
     Participant's  benefit  exceeds  (or at the time of any prior  distribution
     exceeded) $5,000, and the benefit is immediately distributable, the benefit
     may  only  be  distributed   with  the  consent  of  a  Participant  and  a
     Participant's  spouse in accordance  with this  Section.  That portion of a
     Participant's  Account which is not a Vested  Interest will be treated as a
     Forfeiture.

     (a)  Definition Of Immediately  Distributable:  A Participant's  benefit is
          immediately  distributable  if  any  part  of  the  benefit  could  be
          distributed to the Participant (or the Participant's surviving spouse)
          before the Participant reaches (or would have reached if not deceased)
          the later of his or her Normal Retirement Age or Age 62.

     (b)  Consent   Requirements:   The  consent  of  the  Participant  and  the
          Participant's   spouse  (or  where  either  the   Participant  or  the
          Participant's  spouse has died,  the  survivor) to any benefit that is
          immediately  distributable  must be  obtained  in  writing  within the
          90-day period ending on the Annuity Starting Date.  However,  (1) only
          the Participant  need consent to the distribution of a Qualified Joint
          and Survivor  Annuity while the benefit is immediately  distributable;
          and (2) neither the Participant nor the  Participant's  spouse will be
          required  to  consent  to a  distribution  that  is  required  by Code
          ss.401(a)(9) or ss.415.  If this Plan upon  termination does not offer
          an  annuity  option  (purchased  from a  commercial  provider)  and if
          neither the Employer nor an Affiliated Employer maintains


30
<PAGE>


          another  defined  contribution  plan  other  than  an  employee  stock
          ownership   plan  (ESOP)  as  defined  in  Code   ss.4975(e)(7),   the
          Participant's  benefit will,  without the  Participant's  consent,  be
          distributed  to the  Participant.  If the  Employer  or an  Affiliated
          Employer does maintain another defined contribution plan other than an
          ESOP,  the  Participant's  benefit  will,  without  the  Participant's
          consent,  be transferred to the other plan if the Participant does not
          consent to an immediate distribution under the terms of this Section.

     (c)  Notification   Requirements:   The   Administrator   must  notify  the
          Participant  and the  Participant's  spouse  of the right to defer any
          distribution until the benefit is no longer immediately distributable.
          Notification  will  include  a  general  explanation  of the  material
          features  and  relative  values  of  the  optional  forms  of  benefit
          available  under the Plan in a manner  that would  satisfy  the notice
          requirements of Code  ss.417(a)(3);  and will be provided no less than
          30 days or more  than 90 days  prior  to the  Annuity  Starting  Date.
          Distribution  of the  benefit  may begin less than 30 days  before the
          Annuity  Starting Date if (1) the  Administrator  clearly  informs the
          Participant  that the  Participant has a right to a period of at least
          30 days after  receiving  the  required  notification  to consider the
          decision of whether to waive the Qualified Joint and Survivor  Annuity
          and to consent to another form of distribution; (2) the Participant is
          permitted  to revoke an  affirmative  distribution  election  at least
          until the Annuity  Starting Date,  or, if later,  at any time prior to
          the  expiration  of the 7 day  period  that  begins  the day after the
          explanation of the Qualified Joint and Survivor Annuity is provided to
          the Participant;  (3) the Annuity Starting Date is after the date that
          the  explanation  of the  Qualified  Joint  and  Survivor  Annuity  is
          provided  to the  Participant  (but the Annuity  Starting  Date may be
          before the date that any affirmative  distribution  elections are made
          by the Participant and before the date).

5.7  RESTORATION OF FORFEITED ACCOUNT BALANCE: If a Participant with a partially
     Vested Interest in his or her Participant's  Account terminates  employment
     with  the  Employer  and  receives  (or  is  deemed  to  have  received)  a
     distribution of such Vested Interest,  and such Participant is subsequently
     reemployed by the Employer, then such Participant's Account balance will be
     restored  to the  amount  on the date of  distribution  if the  Participant
     repays  to  the  Plan  the  full  amount  of  the  distribution  which  was
     attributable to Employer  contributions before the earlier of 5 years after
     the first date on which the Participant is  subsequently  reemployed by the
     Employer or the date on which the Participant  incurs 5 consecutive  Breaks
     in Service  following  the date of  distribution.  If a  Participant  whose
     Vested  Interest in his or her  Participant's  Account is zero is deemed to
     have received a distribution  of such Vested  Interest from the Plan before
     the date on which the Participant  incurs 5 consecutive  Breaks in Service,
     upon reemployment  with the Employer,  such  Participant's  Account balance
     which is  attributable  to Employer  contributions  will be restored to the
     amount on the date of the deemed distribution.

5.8  SPOUSAL  CONSENT  REQUIREMENTS:  A married  Participant's  election  not to
     receive a Qualified Joint and Survivor  Annuity (QJSA) under Section 5.1 or
     a Qualified  Preretirement Survivor Annuity (QPSA) under Section 5.2, or an
     unmarried  Participant's  election  not to  receive  a life  annuity  under
     Section 5.1, must be made in accordance with the following provisions:


                                                                              31
<PAGE>


     (a)  Election Not To Receive A QJSA: A married  Participant's  election not
          to receive a Qualified  Joint and  Survivor  Annuity,  or an unmarried
          Participant's  election  not to  receive  a life  annuity,  must be in
          writing  and must be made  during  the  90-day  period  ending  on the
          Annuity  Starting Date.  Such election may be revoked in writing and a
          new  election  made at any time and any  number  of times  during  the
          election period.

     (b)  Election Not To Receive A QPSA: A married  Participant's  election not
          to  receive a  Qualified  Preretirement  Survivor  Annuity  must be in
          writing and must be made during an election  period  beginning  on the
          first day of the Plan Year in which the Participant reaches Age 35 and
          ending on the date of his or her death. The election may be revoked in
          writing  and a new  election  made at any time and any number of times
          during the election period. A Terminated Participant's election period
          concerning his or her Vested Aggregate  Account before his termination
          will not begin later than such date.

     (c)  Special  Pre-Age  35  QPSA  Election:  A  Participant  who has not yet
          reached  Age 35 as of the end of any  current  Plan  Year  may  make a
          special  election  not to receive a Qualified  Preretirement  Survivor
          Annuity  for the period  beginning  on the date of such  election  and
          ending on the first  day of the Plan  Year in which  such  Participant
          reaches Age 35. This election will not be valid unless the Participant
          receives the same written  explanation of the Qualified  Preretirement
          Survivor  Annuity as  described  in  paragraph  (d)  below.  Qualified
          Preretirement   Survivor   Annuity   coverage  will  be  automatically
          reinstated  as of  the  first  day of  the  Plan  Year  in  which  the
          Participant  reaches  Age 35. Any new  election  on or after such date
          will be subject to the full requirements of this Section 5.8.

     (d)  Required  Written  Explanation Of QJSA Or QPSA: In connection  with an
          election not to receive a Qualified  Joint and Survivor  Annuity,  the
          Administrator  will,  no less  than 30 days  and no more  than 90 days
          prior to the Annuity  Starting Date,  provide the  Participant  with a
          written explanation of the terms and conditions of the Qualified Joint
          and Survivor Annuity;  the Participant's right to make (and the effect
          of) an election to waive the Qualified Joint and Survivor Annuity; the
          rights of the Participant's  spouse;  and the right of the Participant
          to revoke such election (and the effect  thereof).  In connection with
          an election not to receive a Qualified Preretirement Survivor Annuity,
          the Administrator  will provide each Participant within the Applicable
          Period as defined in paragraph (e) with a written  explanation  of the
          Qualified  Preretirement  Survivor  Annuity  in such terms and in such
          manner as would be comparable to the written explanation applicable to
          a Qualified Joint and Survivor Annuity as set forth in this paragraph.


32
<PAGE>


     (e)  Applicable   Period:  The  Applicable  Period  for  a  Participant  is
          whichever of the following periods ends last: (1) the period beginning
          with the first day of the Plan Year in which the  Participant  attains
          Age 32 and ending with the close of the Plan Year  preceding  the Plan
          Year in which the Participant  attains Age 35; (2) a reasonable period
          after the individual  becomes a Participant;  (3) a reasonable  period
          ending after Code ss.401(a)(11) ceases to apply to the Participant; or
          (4) a reasonable period ending after Code ss.417(a)(5) ceases to apply
          with respect to the  Participant.  For purposes of this  paragraph,  a
          reasonable  period means the end of the two year period  beginning one
          year prior to the date the  applicable  event  occurs,  and ending one
          year after that date.

     (f)  Participants Who Terminate Before Age 35: In the case of a Participant
          who  separates  from  service  before  the  Plan  Year  in  which  the
          Participant  reaches Age 35, the notice  required under  paragraph (d)
          will be provided  within the two year period  beginning one year prior
          to separation  from service and ending one year after  separation from
          service. If such Participant thereafter returns to employment with the
          Employer,   the  Applicable   Period  for  such  Participant  will  be
          redetermined.

     (g)  Elections Must Have Spousal Consent:  A Participant's  election not to
          receive a  Qualified  Joint and  Survivor  Annuity or a  Participant's
          election  not to receive a Qualified  Preretirement  Survivor  Annuity
          will not be effective (1) unless the Participant's  spouse consents in
          writing to the election; (2) unless the election designates a specific
          Beneficiary  (or form of  benefit)  which may not be  changed  without
          spousal  consent  (or the  consent  of the  spouse  expressly  permits
          designations  by the  Participant  without any  requirement of further
          spousal consent); and (3) unless the spouse's consent acknowledges the
          effect of the  election and is  witnessed  by the  Administrator  or a
          notary public.

     (h)  Additional Requirements For Spousal Consent: Notwithstanding paragraph
          (g), a spouse's  consent will not be required if there is no spouse or
          if the spouse cannot be located,  or if there are other  circumstances
          (as set forth in the Code)  present  which  preclude the  necessity of
          such  spouse's  consent.  Any  consent by a  Participant's  spouse (or
          establishment  that consent cannot be obtained) will be effective only
          with respect to such spouse.  A consent that permits  designations  by
          the  Participant  without any  requirement  of further  consent by the
          spouse must acknowledge that the spouse has the right to limit consent
          to a  specific  Beneficiary,  and a  specific  form of  benefit  where
          applicable,  and that the  spouse  voluntarily  elects  to  relinquish
          either or both of such rights. A revocation of a prior election may be
          made by a Participant  without the spouse's consent at any time before
          the commencement of benefits.  No consent obtained under paragraph (g)
          will be valid unless the  Participant  has received notice as provided
          in paragraph (d).

5.9  APPLICATION OF CODE SECTION  401(a)(9):  All  distributions  made under the
     terms of the  Plan  will be  determined  and  made in  accordance  with the
     regulations   issued  under  Code   ss.401(a)(9),   including  the  minimum
     distribution incidental benefit requirement of regulation ss.1.401(a)(9)-2,
     and any  provisions  in this Plan  which  reflect  Code  ss.401(a)(9)  will
     override any  distribution  options which are  inconsistent  with such Code
     section and regulations.


                                                                              33
<PAGE>


5.10 STATUTORY  COMMENCEMENT  OF  BENEFITS:  Unless  the  Participant  otherwise
     elects,  distribution of a  Participant's  benefit must begin no later than
     the 60th day  after  the  latest of the close of the Plan Year in which the
     Participant (1) reaches the earlier of Age 65 or Normal Retirement Age; (2)
     reaches the 10th  anniversary  of the year the  Participant  commenced Plan
     participation;  or (3) terminates service with the Employer.  However,  the
     failure  of a  Participant  and the  Participant's  spouse to  consent to a
     distribution  while a  benefit  is  immediately  distributable  within  the
     meaning of  Section  5.6 above  will be deemed to be an  election  to defer
     commencement of payment of any benefit  sufficient to satisfy this Section.
     In addition, if this Plan provides for early retirement,  a Participant who
     satisfied the service requirement for early retirement prior to Termination
     of  Employment  will be  entitled  to receive  his or her Vested  Aggregate
     Account balance, if any, upon satisfaction of the age requirement for early
     retirement.

5.11 DETERMINATION  OF LIFE  EXPECTANCIES:  If a Participant's  Vested Aggregate
     Account is  distributed  through  other than the  purchase of an  immediate
     annuity,  the  applicable  calendar  year  will be the  First  Distribution
     Calendar  Year  and,  if  life  expectancy  is  being  recalculated,   each
     succeeding  calendar year. If annuity payments commence before the Required
     Beginning  Date,  the  applicable  calendar  year is the year such payments
     commence.  If distribution is in the form of an immediate annuity purchased
     after the Participant's  death with the Participant's  remaining  interest,
     the  applicable  calendar  year is the year of  purchase.  For  purposes of
     Section 5.2,  payments will be  calculated  by use of the return  multiples
     specified in regulation  ss.1.72-9.  Life expectancy of a surviving  spouse
     may be  recalculated  annually,  but in the case of any other  Beneficiary,
     life  expectancy will be calculated at the time payment first commences and
     payments  for any  12-consecutive  month  period will be based on such life
     expectancy  minus  the  number  of  whole  years  that  have  passed  since
     distribution  commenced.  The  First  Distribution  Calendar  Year is,  for
     distributions  beginning before the Participant's  death, the calendar year
     immediately  preceding  the  calendar  year  containing  the  Participant's
     Required  Beginning Date. For distributions  beginning after the death of a
     Participant,  the First Distribution  Calendar Year is the calendar year in
     which distributions are required to begin under Section 5.2.

5.12 SEGREGATION  OF  BENEFIT  BEFORE  DISTRIBUTION:  As of the  Valuation  Date
     coinciding  with  or  next  following  the  date a  Participant  terminates
     employment with the Employer for any reason, the Administrator  will, until
     a distribution is made to the Participant or the Participant's  Beneficiary
     in accordance  with Sections 5.1, 5.2, 5.3, 5.4 or 5.5,  direct the Trustee
     in  a  uniform   nondiscriminatory   manner  to  either   (1)   invest  the
     Participant's  Vested  Aggregate  Account  balance  determined  as of  such
     Valuation Date in a separate  interest  bearing  account;  or (2) leave the
     Participant's Vested Aggregate Account balance as part of the general Trust
     Fund,  in which case such account will share in the  allocation of earnings
     and losses under Section 3.3(a).


34
<PAGE>


5.13 DISTRIBUTION  IN EVENT OF  LEGAL  INCAPACITY:  If any  person  entitled  to
     benefits  (the  "Payee")  suffers  from a  Disability  or is  under a legal
     incapacity,  payments may be made in one or more of the  following  ways as
     directed  by  the  Administrator:  (a) to the  Payee  directly;  (b) to the
     guardian or legal  representative of the Payee's person or estate; (c) to a
     relative of the Payee,  to be expended for the Payee's  benefit;  or (d) to
     the  custodian  of the Payee  under any Uniform  Gifts to Minors  Act.  The
     Administrator's determination of minority or incapacity will be final.

5.14 DIRECT  ROLLOVERS:  A  distributee  may  elect  to have any  portion  of an
     eligible rollover distribution paid directly to an eligible retirement plan
     specified by the  distributee in a direct  rollover,  which is a payment by
     the Plan to the eligible retirement plan specified by the distributee.

     (a)  Eligible Rollover  Distribution:  An eligible rollover distribution is
          any distribution of all or any portion of the balance to the credit of
          the distributee,  except that an eligible  rollover  distribution does
          not include any distribution  that is one of a series of substantially
          equal periodic  payments (not less  frequently than annually) made for
          the life (or life  expectancy)  of the  distributee  or for the  joint
          lives  (or  joint  life  expectancies)  of  the  distributee  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 Code ss.401(a)(9);  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).

     (b)  Eligible Retirement Plan: An eligible retirement plan is an individual
          retirement   account  described  in  Code  ss.408(a),   an  individual
          retirement  annuity  described  in Code  ss.408(b),  an  annuity  plan
          described in Code  ss.403(a),  or a qualified  trust described in Code
          ss.401(a),   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.

     (c)  Definition Of Distributee: For purposes of this Section, a distributee
          includes an Employee or former Employee. In addition, an Employee's or
          former  Employee's  Surviving  Spouse  and  an  Employee's  or  former
          Employee's  spouse or former Spouse who is the alternate payee under a
          qualified domestic  relations order as defined in Code ss.414(p),  are
          distributees  with  regard  to the  interest  of the  Spouse or former
          Spouse.

5.15 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS:  Excess Elective Deferrals, plus
     any income and minus any loss  allocable  thereto,  will be  distributed no
     later than April 15th to any  Participant to whose account Excess  Elective
     Deferrals  were  allocated  for the  preceding  year and who claims  Excess
     Elective  Deferrals for such taxable year.  Distribution of Excess Elective
     Deferrals will made in accordance with the following provisions:


35
<PAGE>


     (a)  Assignment Of Excess Elective  Deferrals:  A Participant may assign to
          this Plan any Excess Elective  Deferrals made during a taxable year of
          the Participant by notifying the Administrator on or before April 15th
          of the amount of the Excess  Elective  Deferrals to be assigned to the
          Plan. A Participant will be deemed to notify the  Administrator of any
          Excess Elective Deferrals that arise by taking into account only those
          Elective  Deferrals  made to this  Plan  and any  other  plans  of the
          Employer.

     (b)  Definition  Of Excess  Elective  Deferrals:  The term Excess  Elective
          Deferrals   means   Elective   Deferrals  that  are  includible  in  a
          Participant's  gross  income  under Code  ss.402(g) to the extent such
          Participant's  Elective Deferrals for a taxable year exceed the dollar
          limitation under such Code Section.  Excess Elective Deferrals will be
          treated as Annual Additions under Section 6.1 of the Plan, unless such
          amounts are  distributed  no later than the first April 15th following
          the close of the Participant's taxable year. Excess Elective Deferrals
          that  are   distributed   after  April  15th  are  includible  in  the
          Participant's  gross income in the taxable year in which  deferred and
          the taxable year in which distributed.

     (c)  Determination  Of Income Or Loss:  Excess  Elective  Deferrals will be
          adjusted  for any  income  or loss up to the end of the  Participant's
          taxable  year and,  at the  discretion  of the  Administrator,  may be
          adjusted for income or loss up to the date of distribution. The period
          between  the end of the  Participant's  taxable  year  and the date of
          distribution  will be referred  to as the gap  period,  and any income
          earned   therein  will  be  allocated   at  the   discretion   of  the
          Administrator  applied  consistently  to all  Participants  and to all
          corrective  distributions  for the  taxable  year.  The income or loss
          allocable to a  Participant's  Excess  Elective  Deferrals will be the
          amount  determined  by  either  the  method  in  subparagraph  (1)  or
          subparagraph  (2)  plus,  if  applicable  the  amount   determined  in
          subparagraph (3):

          (1)  The amount determined by multiplying the income or loss allocable
               to his  Elective  Deferrals  for the  taxable  year  (and the gap
               period)  by  a   fraction,   the   numerator   of  which  is  the
               Participant's  Excess  Elective  Deferrals  for the  year and the
               denominator  of which is (A) the  Participant's  Account  balance
               attributable  to Elective  Deferrals  as of the  beginning of the
               Participant's  taxable year plus any Elective Deferrals allocated
               to the Participant's Account during such taxable year and the gap
               period,  if  applicable,  or (B) solely  with  respect to taxable
               years beginning before January 1, 1992, the Participant's Account
               balance  attributable to Elective  Deferrals as of the end of the
               Participant's  taxable year, reduced by any gain and increased by
               any loss allocable thereto during the taxable year; or

          (2)  The amount  determined  by any  reasonable  method of  allocating
               income or loss to Excess Elective  Deferrals for the taxable year
               and for the gap  period  provided  the  method  used is the  same
               method  used by this  Plan for  allocating  income  or  losses to
               Participant's Accounts; and


36
<PAGE>


          (3)  10% of the amount  determined  under (1) multiplied by the number
               of whole months between the end of the Participant's taxable year
               and the distribution date,  counting the month of distribution if
               it occurs after the 15th of such month.

5.16 DISTRIBUTION OF EXCESS CONTRIBUTIONS: Excess Contributions, plus any income
     and minus any loss allocable thereto, will be distributed no later than the
     last day of each Plan Year to  Participants  to whose  accounts such Excess
     Contributions  were  allocated for the preceding  Plan Year.  The amount of
     Excess  Contributions to be distributed  under this Section will be reduced
     by the amount of any Excess Elective  Deferrals  previously  distributed to
     the  Participant  under  Section  5.15 for the  Participant's  taxable year
     ending with or within the Plan Year.  Distribution of Excess  Contributions
     will be made in accordance with the following provisions:

     (a)  Allocation To Highly Compensated Employees:  Excess Contributions will
          be  allocated  to the  HCEs  with  the  largest  amounts  of  Employer
          contributions  taken into account in calculating  the ADP Test for the
          year in which the Excess Contributions  arose,  beginning with the HCE
          with the largest amount of such Employer  contributions and continuing
          in  descending  order  until all the  Excess  Contributions  have been
          allocated.  For  purposes  of the  preceding  sentence,  the  "largest
          amount" is determined after distribution of any Excess  Contributions.
          If excess  amounts are  distributed  more than 2 1/2 months  after the
          last day of the Plan Year in which they  arose,  a 10% excise tax will
          be imposed on the Employer.  Excess  Contributions  will be treated as
          Annual Additions under Section 6.1.

     (b)  Definition  Of Excess  Contributions:  The term  Excess  Contributions
          means with  respect  to any Plan Year the excess of (a) the  aggregate
          amount of  Employer  contributions  actually  taken  into  account  in
          computing  the ADP Test of  Participants  who are  HCEs for such  Plan
          Year, over (b) the maximum amount of such  contributions  permitted by
          the ADP Test (determined by reducing  contributions  made on behalf of
          Participants  who are HCEs in order of their ADPs,  beginning with the
          highest of such percentages).

     (c)  Determination Of Income Or Loss: Excess Contributions will be adjusted
          for any  income  or loss up to the end of the Plan  Year  and,  at the
          discretion of the Administrator, may be adjusted for income or loss up
          to the date of  distribution.  The period,  if any, between the end of
          the Plan Year and the date of distribution  will be referred to as gap
          period,  and  any  income  earned  therein  will be  allocated  at the
          Administrator's  discretion  applied  consistently to all Participants
          and to all corrective distributions made for the Plan Year. The income
          or loss allocable to each Participant's  Excess  Contributions will be
          the amount  determined  by either the  method in  subparagraph  (1) or
          subparagraph  (2) plus, if  applicable,  the amount  determined  under
          subparagraph (3), as follows:


                                                                              37
<PAGE>


          (1)  The amount determined by multiplying the income or loss allocable
               to his or her Elective Deferrals (and if applicable, QNECs and/or
               QMACs) for the Plan Year (and the gap period, if applicable) by a
               fraction,  the  numerator  of which is the  Participant's  Excess
               Contributions  for the year and the  denominator  of which is (A)
               the  Participant's   Account  balance  attributable  to  Elective
               Deferrals (and if applicable, QNECs and/or QMAC that are included
               in the ADP  test) as of the  beginning  of the Plan Year plus any
               Elective  Deferrals (and if  applicable,  QNECs and/or QMACs that
               are included in the ADP test) allocated to the Participant during
               such Plan Year and the gap period,  if applicable,  or (B) solely
               with respect to Plan Years beginning  before January 1, 1992, the
               Participant's  Account balance attributable to Elective Deferrals
               (and if  applicable,  QNECs and/or QMACs that are included in the
               ADP Test) as of the end of the Plan Year  reduced by any gain and
               increased by any loss allocable thereto during the Plan Year; or

          (2)  The amount  determined  by any  reasonable  method of  allocating
               income or loss to the  Participant's  Elective  Deferrals (and if
               applicable, QNECs and/or QMACS) for the Plan Year and for the gap
               period  provided  the  method  used is the same  method  used for
               allocating income or losses to Participants' Accounts; and

          (3)  10% of the amount  determined  under (1) multiplied by the number
               of  whole  months  between  the  end of the  Plan  Year  and  the
               distribution  date,  counting  the  month of  distribution  if it
               occurs after the 15th of such month.

     (d)  Accounting  For Excess  Contributions:  Excess  Contributions  will be
          distributed from the Participant's  Elective Deferral  sub-account and
          QMAC sub-account in proportion to the Participant's Elective Deferrals
          and QMACs  (to the  extent  used in the ADP  Test) for the Plan  Year.
          Excess  Contributions  will be distributed from the Participant's QNEC
          sub-account  only to the extent the  Excess  Contributions  exceed the
          balance in the Participant's  Elective  Deferral  sub-account and QMAC
          sub-account.

5.17 DISTRIBUTION   OF  EXCESS   AGGREGATE   CONTRIBUTIONS:   Excess   Aggregate
     Contributions,  plus any income and minus any loss allocable thereto,  will
     be forfeited, if forfeitable,  or if not forfeitable,  distributed no later
     than the last day of each Plan Year to  Participants to whose Accounts such
     contributions  were allocated for the preceding Plan Year.  Distribution of
     Excess  Aggregate  Contributions  will  be  made  in  accordance  with  the
     following provisions:


38
<PAGE>


     (a)  Allocation  To  Highly   Compensated   Employees:   Excess   Aggregate
          Contributions   will  be  allocated  to  the  HCEs  with  the  largest
          Contribution  Percentage Amounts taken into account in calculating the
          ACP Test for the year in which the excess  arose,  beginning  with the
          HCE with the largest amount of such  Contribution  Percentage  Amounts
          and  continuing  in  descending  order until all the Excess  Aggregate
          Contributions  have been  allocated.  For  purposes  of the  preceding
          sentence, the "largest amount" is determined after distribution of any
          Excess Aggregate Contributions.  If Excess Aggregate Contributions are
          distributed  more than 2 1/2months after the last day of the Plan Year
          in which they arose,  a 10% excise tax will be imposed on the Employer
          with respect to those amounts.  Excess Aggregate Contributions will be
          treated as Annual Additions under Section 6.1.

     (b)  Forfeitures Of Excess Aggregate  Contributions:  Forfeitures of Excess
          Aggregate   Contributions   will  be   allocated   (after   all  other
          Forfeitures)  to  the  Matching   Contribution   sub-account  of  each
          Participant  who is a NHCE who made  Elective  Deferrals  or Voluntary
          Employee  Contributions  in the ratio  which  each such  Participant's
          Compensation for the Plan Year bears to the total  Compensation of all
          such Participants for such Plan Year.

     (c)  Excess Aggregate Contribution:  The term Excess Aggregate Contribution
          means,  with respect to any Plan Year, the excess of (1) the aggregate
          Contribution  Percentage  Amounts  taken into account in computing the
          numerator of the  Contribution  Percentage  actually made on behalf of
          Participants  who are HCEs for such Plan  Year,  over (2) the  maximum
          Contribution  Percentage Amounts permitted by the ACP Test (determined
          by reducing  contributions made on behalf of Participants who are HCEs
          in order of their  Contribution  Percentage Amounts beginning with the
          highest of such  percentages).  Such  determination will be made after
          first  determining  Excess  Elective  Deferrals  and then  determining
          Excess  Contributions.   The  terms  Actual  Contribution  Percentage,
          Contribution Percentage and Contribution Percentage Amount are defined
          in Section 1.10 of the Plan.

     (d)  Determination  Of  Income:  Excess  Aggregate  Contributions  will  be
          adjusted for any income or loss up to the end of the Plan Year and, at
          the  discretion  of the  Administrator,  may be adjusted for income or
          loss up to the date of distribution. The period between the end of the
          Plan Year and the date of distribution  will be referred to as the gap
          period,  and any income earned during the gap period will be allocated
          at the discretion of the  Administrator  applied  consistently  to all
          Participants  and to all corrective  distributions  for the Plan Year.
          The  income or loss  allocable  to a  Participant's  Excess  Aggregate
          Contributions  will be the amount  determined  by either the method in
          subparagraph (1) or subparagraph  (2) plus, if applicable,  the amount
          determined under subparagraph (3):


                                                                              39
<PAGE>


          (1)  The amount determined by multiplying the income or loss allocable
               to his Voluntary Employee  Contributions,  Matching Contributions
               (if  not  used  in the  ADP  Test),  QNECs  and,  to  the  extent
               applicable,  Elective  Deferrals  for the Plan  Year (and the gap
               period,  if applicable) by a fraction,  the numerator of which is
               such  Participant's  Excess Aggregate  Contributions for the year
               and the  denominator  of which is (A) the  Participant's  Account
               balance(s)  attributable to Contribution Percentage Amounts as of
               the  beginning  of the Plan  Year,  plus any  additional  amounts
               attributable to Contribution  Percentage Amounts allocated to the
               Participant  during  such  Plan  Year  and  the  gap  period,  if
               applicable,  or (B) solely with  respect to Plan Years  beginning
               before  January  1,  1992,  the  Participant's   Account  balance
               attributable to Contribution  Percentage Amounts as of the end of
               the Plan  Year,  reduced  by any gain and  increased  by any loss
               allocable thereto during the Plan Year; or

          (2)  The amount  determined  by any  reasonable  method of  allocating
               income  or loss  to the  Participant's  Voluntary  Contributions,
               Matching  Contributions  and  QNECs for the Plan Year and for the
               gap period,  if applicable,  provided the method used is the same
               one  used  for  allocating  income  or  losses  to  Participants'
               Accounts; and

          (3)  10% of the amount  determined  under (1) multiplied by the number
               of  whole  months  between  the  end of the  Plan  Year  and  the
               distribution  date,  counting  the  month of  distribution  if it
               occurs after the 15th of such month.

     (e)  Accounting  For  Excess  Aggregate  Contributions:   Excess  Aggregate
          Contributions will be forfeited if forfeitable, or will be distributed
          on  a  pro-rata  basis  from  the  Participant's   Voluntary  Employee
          Contribution  Account,  Matching  Contribution  sub-account  and  QMAC
          sub-account,   and  if  applicable,   from  the   Participant's   QNEC
          sub-account or the Elective Deferral sub-account, or both.

5.18 FINANCIAL HARDSHIP DISTRIBUTIONS: A Participant who has attained age 59 1/2
     may  request  in  writing  to the  Administrator  that  up to  100%  of the
     Participant's  Elective  Deferral Account  (including any earnings credited
     thereto as of the end of the last Plan Year ending  before July 1, 1989) as
     of the Valuation  Date  immediately  preceding  such request be distributed
     because of the Participant's  financial hardship,  subject to the following
     provisions:

     (a)  Amount And Form Of  Distribution:  The  maximum  amount  distributable
          cannot exceed the amount  required to relieve the financial  hardship,
          including amounts necessary to pay any federal,  state or local income
          taxes  or  penalties   reasonably   anticipated  to  result  from  the
          distribution.  A hardship distribution will only be made in a lump sum
          provided  the   Participant's   spouse,   if  any,   consents  to  the
          distribution in accordance with Section 5.8.


40
<PAGE>


     (b)  Definition  Of  Financial   Hardship:   Financial  hardship  means  an
          immediate  and  heavy  financial  need  that  the  Participant   lacks
          available  resources  to  satisfy.  For  purposes  of this  Plan,  the
          following financial needs will be considered  immediate and heavy: (1)
          payment of medical  expenses within the meaning of Code ss.213(d) that
          are incurred by the Participant,  his spouse or his children;  (2) the
          purchase  (excluding  mortgage payments) of a principal  residence for
          the Participant;  (3) payment of tuition and related  educational fees
          for  the  next  12  months  of   post-secondary   education   for  the
          Participant,  the Participant's spouse or the Participant's  children;
          (4) the need to prevent the  eviction of the  Participant  from his or
          her  principal  residence  or  foreclosure  on  the  mortgage  of  the
          Participant's principal residence; (5) payment of funeral expenses for
          a member of the  Participant's  family; or (6) any other immediate and
          heavy financial need as determined by the  Administrator  in a uniform
          nondiscriminatory manner.

     (c)  Participant's Written Representations: Except as otherwise provided in
          paragraph (d), a hardship  distribution can only be made to the extent
          a  Participant's  financial  hardship  cannot be satisfied  from other
          resources  reasonably  available to the Participant,  as determined by
          the   Administrator   on  the   basis  of  all   relevant   facts  and
          circumstances.  However, the Administrator may treat a distribution as
          necessary to satisfy a financial hardship if the Administrator, in the
          absence  of  actual  knowledge  to  the  contrary,   relies  upon  the
          Participant's  written  representation  that  the  financial  hardship
          cannot be  relieved  (1)  through  reimbursement  or  compensation  by
          insurance  or  otherwise;  (2) by  liquidation  of  the  Participant's
          assets,  to the  extent  such  liquidation  would not  itself  cause a
          financial  hardship;  (3) by cessation of the  Participant's  Elective
          Deferrals or Voluntary  Employee  Contributions to the Plan; or (4) by
          other distributions or nontaxable (at the time of the loan) loans from
          any other  Employer-maintained plans or from any other employer, or by
          borrowing from commercial sources on reasonable commercial terms.

     (d)  Safe  Harbor  Deemed  Distributions:  If a  Participant  elects not to
          comply  with the  written  representation  requirements  set  forth in
          paragraph  (c)  with  respect  to a  distribution  made for one of the
          reasons set forth in paragraphs (b)(1), (2), (3) or (4), then any such
          distribution  will be deemed to be  necessary  to satisfy a  financial
          hardship if the Participant has obtained all distributions (other than
          financial  hardship  distributions) and all nontaxable loans currently
          available under all plans maintained by the Employer.  Furthermore, by
          electing not to comply with the  requirements  of  paragraph  (c), the
          Participant  cannot make Elective  Deferrals  and  Voluntary  Employee
          Contributions  to  this  Plan  or any  other  plan  maintained  by the
          Employer  for at  least  12  months  after  receipt  of  the  hardship
          distribution;  and  for the  Participant's  taxable  year  immediately
          following  the  taxable  year  of  the  hardship   distribution,   the
          Participant  cannot make Elective  Deferrals to this Plan or any other
          plan  maintained  by the  Employer in excess of the  applicable  limit
          under Code  ss.402(g)(5)  for such taxable  year,  minus the amount of
          such  Participant's  Elective  Deferrals  made for the taxable year in
          which the financial hardship distribution was made.


                                                                              41
<PAGE>


     (e)  Restriction  On  Certain  Transferred   Assets:   Notwithstanding  any
          provision in this Section to the  contrary,  no hardship  distribution
          can be made under this Section  with respect to benefits  attributable
          to assets (including  post-transfer  earnings thereon) and liabilities
          that are  transferred,  within the meaning of Code  ss.414(l),  from a
          money  purchase  pension plan  qualified  under Code ss.401(a) to this
          Plan  (other  than  any  portion  of  those  assets  and   liabilities
          attributable to Voluntary Employee Contributions).


42
<PAGE>


                                    ARTICLE 6
                          CODE SECTION 415 LIMITATIONS


6.1  MAXIMUM  ANNUAL  ADDITION:  The  maximum  Annual  Addition  (as  defined in
     paragraph (c) below) made to a Participant's  various  accounts  maintained
     under the Plan for any Limitation  Year  beginning  after December 31, 1986
     will not exceed the  lesser of the Dollar  Limitation  set forth in Section
     6.1(a) or the  Compensation  Limitation  set forth in  Section  6.1(b),  as
     follows:

     (a)  Dollar  Limitation:  The Dollar  Limitation  is  $30,000,  as annually
          adjusted  by  the  Secretary  of  the  Treasury  in  accordance   with
          Code ss.415(d).

     (b)  Compensation  Limitation:  The  Compensation  Limitation  is an amount
          equal to 25% of the  Participant's  Section 415  Compensation  for the
          Limitation  Year.  However,  this  limitation  will  not  apply to any
          contribution  made for  medical  benefits  within the  meaning of Code
          ss.401(h) or Code ss.419A(f)(2) after separation from service which is
          otherwise  treated as an Annual  Addition under Code  ss.415(l)(1)  or
          Code ss.419A(d)(2).

     (c)  Annual  Additions:  The term  Annual  Additions  means  the sum of the
          following  amounts  credited  to  a  Participant's   Account  for  the
          Limitation   Year:   (1)   Employer   contributions;    (2)   Employee
          contributions; (3) Forfeitures; (4) amounts allocated, after March 31,
          1984,  to  an  individual   medical   account,   as  defined  in  Code
          ss.415(l)(2), which is part of a pension or annuity plan maintained by
          the  Employer;  and (5) amounts  derived  from  contributions  paid or
          accrued  after  December 31, 1985,  in taxable years ending after such
          date,  which are  attributable to  post-retirement  medical  benefits,
          allocated to the  separate  account of a key  employee,  as defined in
          Code  ss.419A(d)(3),   under  a  welfare  fund,  as  defined  in  Code
          ss.419(e), maintained by the Employer.  Notwithstanding the foregoing,
          a Participant's  Annual Additions do not include his or her rollovers,
          loan  repayments,  repayments  of prior  Plan  distributions  or prior
          distributions   of  mandatory   contributions,   direct  transfers  of
          contributions from another plan to this Plan, deductible contributions
          to  a  simplified  employee  pension  plan,  or  voluntary  deductible
          contributions.

6.2  ADJUSTMENTS  TO MAXIMUM  ANNUAL  ADDITION:  In applying the  limitation  on
     Annual  Additions set forth in Section 6.1, the following  adjustments must
     be made:

     (a)  Short  Limitation  Year: In a Limitation  Year of less than 12 months,
          the Defined  Contribution  Dollar Limitation in Section 6.1(a) will be
          adjusted by  multiplying  it by the ratio that the number of months in
          the short Limitation Year bears to 12.

     (b)  Plans With Different Anniversary Dates: If a Participant  participates
          in multiple defined contribution plans sponsored by the Employer which
          have different  Anniversary Dates, the maximum Annual Addition in this
          Plan for the Limitation  Year will be reduced by the Annual  Additions
          credited  to  the   Participant's   accounts  in  the  other   defined
          contribution plans for such Limitation Year.


                                                                              43
<PAGE>


     (c)  Plans With The Same Anniversary Date: If a Participant participates in
          multiple  defined  contribution  plans sponsored by the Employer which
          have the same  Anniversary  Date, then (1) if only one of the plans is
          subject to Code ss.412, Annual Additions will first be credited to the
          Participant's  accounts  in the plan  subject;  and (2) if none of the
          plans are


44
<PAGE>


          subject to Code ss.412, the maximum Annual Addition in this Plan for a
          given Limitation Year will equal the product of (A) the maximum Annual
          Addition for such  Limitation  Year minus any other  Annual  Additions
          previously  credited to the Participant's  account,  multiplied by the
          ratio  that  the  Annual  Additions  which  would  be  credited  to  a
          Participant's  accounts hereunder without regard to the limitations in
          Section 6.1 bears to the Annual  Additions for all plans  described in
          this paragraph.

6.3  MULTIPLE PLANS AND MULTIPLE  EMPLOYERS:  All defined benefit plans (whether
     terminated or not) of the Employer  will be treated as one defined  benefit
     plan, and all defined contribution plans (whether terminated or not) of the
     Employer will be treated as one defined contribution plan. In addition, all
     Affiliated Employers will be considered a single employer.

6.4  MULTIPLE PLAN REDUCTION:  For Plan Years beginning  before January 1, 2000,
     if  an  Employee   is,  or  has  been,  a   Participant   in  one  or  more
     Employer-sponsored   defined   benefit   plans   and   in   one   or   more
     Employer-sponsored  defined  contribution  plans,  the  sum of the  defined
     benefit plan  fraction and the defined  contribution  plan fraction for any
     Limitation  Year may not exceed  1.0,  determined  in  accordance  with the
     following:

     (a)  Defined Benefit  Fraction:  The Defined Benefit Fraction is a fraction
          which has as its numerator the Participant's Projected Annual Benefits
          determined as of the close of the Limitation Year and which has as its
          denominator  the  lesser  of 125%  of the  dollar  limitation  for the
          Limitation Year determined under Code ss.415(b) and ss.415(d), or 140%
          of  the   amount   which  may  be  taken  into   account   under  Code
          ss.415(b)(1)(B)   for  such  Limitation  Year.   Notwithstanding   the
          foregoing,  with  respect  to anyone who was a  Participant  as of the
          first day of the first  Limitation  Year beginning  after December 31,
          1986, in one or more defined benefit plans  maintained by the Employer
          which were in existence on May 6, 1986, the denominator of the defined
          benefit  fraction  will not be less than 125% of the  Current  Accrued
          Benefit.

     (b)  Definitions:  As used in paragraph (a) above,  (1) the term  Projected
          Annual  Benefits  means the annual  benefits  payable to a Participant
          under all defined  benefit  plans  (whether  terminated or not) of the
          Employer as determined under  regulationss.1.415-7(b)(3);  and (2) the
          term Current  Accrued  Benefit means a  Participant's  accrued benefit
          under a defined  benefit plan,  determined as if the  Participant  had
          separated  from  service as of the close of the last  Limitation  Year
          beginning  before January 1, 1987, when expressed as an annual benefit
          within  the   meaning  of  Code   ss.415(b)(2).   In   determining   a
          Participant's   Current  Accrued  Benefit,   the  Administrator   will
          disregard  any changes in the terms and  conditions  of the Plan after
          May 5, 1986, and any cost of living adjustment  occurring after May 5,
          1986. The Current Accrued Benefit will only be used as set forth above
          if the  defined  benefit  plans  individually  and  in  the  aggregate
          satisfied the  requirements  of Code ss.415 for all  Limitation  Years
          beginning before January 1, 1987.

     (c)  Defined Contribution  Fraction: The Defined Contribution Fraction is a
          fraction the numerator of which is the sum of the Annual  Additions to
          the  Participant's  Account under all the defined  contribution  plans
          (whether terminated or not) maintained by the Employer for the current
          Limitation Year and all prior  Limitation  Years (including the Annual
          Additions    attributable   to   the   Participant's    non-deductible
          contributions to all


                                                                              45
<PAGE>


          Employer maintained defined benefit plans,  whether terminated or not,
          and the Annual Additions


46
<PAGE>


          attributable  to  all  welfare  benefit  funds,  as  defined  in  Code
          ss.419(e),  and  individual  medical  accounts,  as  defined  in  Code
          ss.415(l)(2) maintained by the Employer), and the denominator of which
          is the sum of the maximum aggregate amounts for the current Limitation
          Year and all prior  Limitation  Years the Employee was employed by the
          Employer  (regardless  of  whether  a  defined  contribution  plan was
          maintained by the Employer).  The maximum permissible aggregate amount
          in any  Limitation  Year  is the  lesser  of (1)  125%  of the  dollar
          limitation in effect in Code  ss.415(c)(1)(A) for such Limitation Year
          determined  without  regard  to Code  ss.415(c)(6)  and  adjusted  per
          regulation  ss.1.415-7(d)(1)  and  Notice  83-10,  or  (2)  35% of the
          Participant's Section 415 Compensation.

     (d)  Transition Rule For  Denominator:  For defined  contribution  plans in
          effect on or before July 1, 1982, the  Administrator may elect for any
          Limitation  Year ending after  December 31, 1982 that the  denominator
          will be the product of the  denominator for the Limitation Year ending
          in 1982 determined  under the law in effect for such Limitation  Year,
          multiplied by the Transition  Fraction,  which is a fraction which has
          as its numerator the lesser of $51,875 or 1.4 multiplied by 25% of the
          Participant's  Section  415  Compensation  for the Plan Year ending in
          1981, and which has as its denominator the lesser of $41,500 or 25% of
          the Participant's Section 415 Compensation for the Plan Year ending in
          1981. In any Top Heavy  Limitation  Year,  $41,500 will be substituted
          for $51,875 in determining  the Transition  Fraction  unless the Extra
          Minimum  Allocation  is being  provided in Section 3.5. In a Super Top
          Heavy Plan Year, $41,500 will always be substituted for $51,875.

     (e)  Adjustment Of Fraction: If an Employee was a Participant as of the end
          of the first day of the first Limitation Year beginning after December
          31, 1986 in one or more defined  contribution  plans maintained by the
          Employer  which were in existence on May 6, 1986, the numerator of the
          defined  contribution  fraction  will be  adjusted  if the sum of such
          defined  contribution  fraction and the defined benefit fraction would
          otherwise  exceed  1.0  under  the  terms  of  this  Plan.  Under  the
          adjustment, an amount equal to the product of the excess of the sum of
          the defined  benefit  fraction and the defined  contribution  fraction
          over 1.0  multiplied by the  denominator  of the defined  contribution
          fraction  will be  permanently  subtracted  from the  numerator of the
          defined contribution fraction. The adjustment will be calculated using
          the  fractions  as they  would be  computed  as of the end of the last
          Limitation  Year beginning  before January 1, 1987,  disregarding  any
          changes  in the terms  and  conditions  of the Plan made  after May 5,
          1986,  but using the Code ss.415  limitation  applicable  to the first
          Limitation Year beginning on or after January 1, 1987.

     (f)  Top Heavy  Adjustments  To Multiple  Plan  Fraction:  In any Top Heavy
          Limitation  Year,  100% will be substituted  for 125% in paragraph (a)
          and paragraph (c) above unless (1) a 7.5% allocation is being provided
          to Non-Key  Employees  in Section  3.5,  or (2) a Non-Key  Employee is
          being provided with a retirement  benefit under a defined benefit plan
          that  is  equal  to 3% of his  or  her  average  monthly  Section  415
          Compensation.  However,  in any Super Top Heavy  Limitation Year, 100%
          will be substituted  for 125% in any event.  If the 100% limitation is
          exceeded for any  Participant  in any  Limitation  Year,  then (1) the
          Participant's  accrued benefit in the defined benefit plan will not be
          increased; (2) no Annual Additions may be credited to


                                                                              47
<PAGE>


          the  Participant's  accounts under this Plan; and (3) the  Participant
          may not make any  contributions,  whether  voluntary or mandatory,  to
          this Plan or any other Employer sponsored qualified plan.


48
<PAGE>


6.5  ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS:  If an allocation of Forfeitures
     or an error in calculating a Participant's  Compensation  causes the Annual
     Additions allocated to such Participant's Account to exceed the maximum set
     forth in Section  6.1,  such  Participant's  Account  will be  adjusted  as
     follows in order to reduce such excess:

     (a)  Return  Of  Elective   Deferrals  And  Employee   Contributions:   The
          Administrator  will  return any  Elective  Deferrals  and/or  Employee
          contributions  (whether such Employee  contributions  are voluntary or
          mandatory),  and  will  distribute  the  gains  attributable  to those
          Elective Deferrals and/or Employee  contributions,  to the extent that
          such  return or  distribution  would  reduce the excess  amount in the
          Participant's Account.

     (b)  Reallocation  In The Current Year:  After the return of  contributions
          and the  distribution  of gains  specified in paragraph  (a) have been
          made,  and prior to the creation of a Section 415 Suspense  Account as
          set forth in paragraph (c) below,  any excess will be  reallocated  in
          accordance  with  Section  3.2 to all  Participants  who  have not yet
          attained   their  maximum   Annual   Addition.   If   necessary,   the
          Administrator will repeat the reallocation until all Participants have
          reached their maximum Annual Addition.

     (c)  Remaining Excess: If an excess amount still remains in a Participant's
          Account,  then (1) if the  Participant  is employed by the Employer at
          the end of the Limitation Year, the Administrator will hold the excess
          in the Section  415  Suspense  Account  and use it to reduce  Employer
          contributions  (including any allocation of Forfeitures)  for the next
          Limitation Year (and each succeeding Limitation Year if necessary) for
          the  Participant;  and (2) if the  Participant  is not employed by the
          Employer  at the  end of a  Limitation  Year,  the  excess  may not be
          distributed  to the  Participant  but will be held  unallocated in the
          Section  415  Suspense  Account  and  will be used  to  reduce  future
          Employer  contributions  (including the allocation of Forfeitures) for
          all  remaining  Participants  in the  next  Limitation  Year  and each
          succeeding Limitation Year if necessary.

     (d)  Earnings, Losses And Reallocation: If the Section 415 Suspense Account
          is in existence at any time during a Limitation  Year pursuant to this
          Section, it will not share in the allocation of the earnings or losses
          of the Trust Fund. If the Section 415 Suspense Account is in existence
          at any time during a particular  Limitation  Year, all amounts in such
          account must be allocated and  reallocated to  Participants'  Accounts
          before any Employer contributions or any Employee contributions may be
          made to the Plan for  that  Limitation  Year.  Excess  amounts  in the
          Section 415 Suspense Account may not be distributed to Participants or
          former Participants.


                                                                              49
<PAGE>


                                    ARTICLE 7
                              DUTIES OF THE TRUSTEE


7.1  APPOINTMENT,  RESIGNATION,  REMOVAL AND SUCCESSION: This Plan will have one
     or more  individual  Trustees,  a  corporate  Trustee,  or any  combination
     thereof, appointed as follows:

     (a)  Appointment Of Trustee: Each Trustee will be appointed by the Employer
          and will  serve  until  its  successor  has been  named or until  such
          Trustee's resignation,  death, incapacity,  or removal, in which event
          the  Employer  will name a successor  Trustee.  The term  Trustee will
          include the original and any successor Trustees.

     (b)  Resignation Of Trustee:  A Trustee may resign at any time by giving 30
          days written notice in advance to the Employer,  unless such notice is
          waived by the  Employer.  The  Employer may remove a Trustee by giving
          such  Trustee 30 days written  notice in advance.  Such removal may be
          with or without cause.

     (c)  Successor Trustee: Each successor Trustee will succeed to the title to
          the Trust by accepting his  appointment  in writing and by filing such
          written  acceptance  with the former  Trustee  and the  Employer.  The
          former  Trustee,  upon  receipt of such  acceptance,  will execute all
          documents  and perform  all acts  necessary  to vest the Trust  Fund's
          title of record in any successor Trustee. No successor Trustee will be
          personally  liable for any act or  failure  to act of any  predecessor
          Trustee.

     (d)  Merger Of Corporate Trustee: If any corporate Trustee, before or after
          qualification,  changes its name,  consolidates or merges with another
          corporation, or otherwise reorganizes, any resulting corporation which
          succeeds  to the  fiduciary  business  of such  Trustee  will become a
          Trustee hereunder in lieu of such corporate Trustee.

7.2  INVESTMENT  ALTERNATIVES  OF THE TRUSTEE:  The Trustees  will  implement an
     investment  program based on the Employer's  investment  objectives and the
     Employee  Retirement  Income  Security  Act of 1974.  In addition to powers
     given by law, the Trustee may:

     (a)  Property:  Invest  the Trust Fund in any form of  property,  including
          common and preferred  stocks,  exchange  covered call options,  bonds,
          money market instruments, mutual funds, savings accounts, certificates
          of deposit,  Treasury bills,  insurance policies and contracts,  or in
          any other property,  real or personal,  foreign or domestic,  having a
          ready market including  securities issued by an institutional  Trustee
          and/or affiliate of the institutional  Trustee. The Trustee may invest
          on margin. An institutional  Trustee may invest in its own deposits if
          they bear a reasonable interest rate. The Trustee may retain,  manage,
          operate,  repair, improve and mortgage or lease for any period on such
          terms as it deems proper any real estate or personal  property held by
          the  Trustee,  including  the power to demolish  any building or other
          improvements  in whole or part.  The  Trustee may erect  buildings  or
          other improvements, make leases that


50
<PAGE>


          extend beyond the term of this Trust,  and foreclose,  extend,  renew,
          assign,  release or partially release and discharge mortgages or other
          liens.

     (b)  Pooled Funds: The Trustee may transfer any assets of the Trust Fund to
          a  collective  trust  established  to permit  the  pooling of funds of
          separate  pension and  profit-sharing  trusts  provided  the  Internal
          Revenue Service has ruled such collective  trust to be qualified under
          Code  ss.401(a)  and exempt under Code  ss.501(a)  (or the  applicable
          corresponding  provision  of any  other  Revenue  Act) or to any other
          common,  collective,  or  commingled  trust fund which has been or may
          hereafter  be  established   and  maintained  by  the  Trustee  and/or
          affiliates of an institutional  Trustee. Such commingling of assets of
          the  Fund  with  assets  of other  qualified  trusts  is  specifically
          authorized,  and to the extent of the  investment of the Trust Fund in
          such a  group  or  collective  trust,  the  terms  of  the  instrument
          establishing  the group or  collective  trust will be a part hereof as
          though set forth herein.

     (c)  Employer  Stock:  The  Trustee may invest the Trust Fund in the common
          stock, debt obligations,  or any other security issued by the Employer
          or by an  affiliate of the Employer  within the  limitations  provided
          under  Sections  406,  407,  and  408  of  ERISA  provided  that  such
          investment  does not  constitute a prohibited  transaction  under Code
          Section  4975.  Any such  investment  will only be made  upon  written
          direction  of the  Employer  who will be  solely  responsible  for the
          propriety of such investment.

     (d)  Cash  Reserves:  The  Trustee  may retain in cash as much of the Trust
          Fund as the Trustee may deem advisable to satisfy the liquidity  needs
          of the Plan and to  deposit  any cash held in the Trust Fund in a bank
          account without liability for the highest rate of interest  available.
          If a bank is acting as Trustee,  such  Trustee is  specifically  given
          authority to invest in deposits of such Trustee.  The Trustee may also
          hold  cash  un-invested  at any time and from time to time and in such
          amount or to such extent as the Trustee deems prudent, and the Trustee
          will not be liable for any losses  which may be incurred as the result
          of the failure to invest same, except to the extent provided herein or
          in ERISA.

     (e)  Reorganizations   Etc:   The   Trustee  may  join  in  or  oppose  the
          reorganization,  recapitalization,  consolidation,  sale or  merger of
          corporations or properties, upon such terms as the Trustee deems wise.

     (f)  Registration  of  Securities:  The Trustee may cause any securities or
          other  property to be  registered  in the Trustee's own name or in the
          name  of  the  Trustee's  nominee  or  nominees,   and  may  hold  any
          investments in bearer form, but the records of the Trustee will at all
          times show all such investments as part of the Trust Fund.

     (g)  Proxies:  The Trustee may vote proxies and if appropriate pass them on
          to any  investment  manager which may have directed the  investment in
          the equity giving rise to the proxy.

     (h)  Ownership  Rights:  The Trustee may exercise all ownership rights with
          respect to any assets held in the Trust Fund.


                                                                              51
<PAGE>


     (i)  Other Investments:  The Trustee may accept and retain for such time as
          the Trustee deems advisable any securities or other property  received
          or  acquired as Trustee,  whether or not such  securities  or property
          would normally be purchased as investments hereunder.

     (j)  Key Man Insurance: The Trustee, with the consent of the Administrator,
          may purchase  insurance  Policies on the life of any Participant whose
          employment is deemed to be key to the  Employer's  financial  success.
          Such key man Policies  will be deemed to be an investment of the Trust
          Fund and will be payable to the Trust Fund as the beneficiary thereof.
          The  Trustee  may  exercise  any and all  rights  granted  under  such
          Policies.

     (k)  Loans To The Trust: The Trustee may borrow or raise money for purposes
          of the Plan in such amounts,  and upon such terms and  conditions,  as
          the Trustee deems advisable;  and for any sum so borrowed, the Trustee
          may issue a promissory  note as Trustee,  and secure  repayment of the
          loan by pledging all, or any part, of the Trust Fund as collateral. No
          person  lending  money  to the  Trustee  will be  bound  to see to the
          application  of the money  lent or to  inquire  into the  validity  or
          propriety of any borrowing.

     (l)  Agreements  With  Banks:  The  Trustee  may  with the  consent  of the
          Employer  and  upon  such  terms  as they  in  their  discretion  deem
          necessary,  enter  into  an  agreement  with a bank or  trust  company
          providing for (a) the deposit of all or part of the funds and property
          of the Trust with such bank or trust company,  (b) the  appointment of
          such bank or trust  company as the agent or  custodian of the Trustees
          for  investment  purposes,  with  such  discretion  in  investing  and
          reinvesting  the funds of the Trust as the Trustees  deem it necessary
          or desirable to delegate.

     (m)  Litigation:  The Trustee may begin, maintain, or defend any litigation
          necessary in connection with the  administration  of the Plan,  except
          that the  Trustee  will not be  obliged  or  required  to do so unless
          indemnified to its satisfaction.

     (n)  Claims,  Debts or Damages:  The Trustee  may  settle,  compromise,  or
          submit to arbitration any claims, debts, or damages due or owing to or
          from the Plan.

     (o)  Miscellaneous:  The Trustee may do all such acts and exercise all such
          rights,  although not specifically  mentioned  herein,  as the Trustee
          deems  necessary  to carry out the  purposes of the Plan.  The Trustee
          will  not  be  restricted  to  securities  or  other  property  of the
          character   expressly   authorized   by   applicable   law  for  trust
          investments, subject to the requirement that the Trustee discharge his
          duties  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 similar  character and with similar aims by diversifying
          the investments to minimize the risks of large losses unless under the
          circumstances it is clearly prudent not to do so.


52
<PAGE>


7.3  VALUATION  OF THE TRUST FUND:  On each  Valuation  Date,  the Trustee  will
     determine  the net  worth  of the  Trust  Fund.  The  value  of  marketable
     investments  will be  determined  using the most recent  price  quoted on a
     national  securities  exchange  or  over-the-counter  market.  The value of
     non-marketable   investments   will  be  determined   periodically   by  an
     independent third-party appraiser as required by law, and the Trustees will
     have no responsibility for the valuation of such assets.

7.4  COMPENSATION AND EXPENSES: The Trustee,  either from the Trust Fund or from
     the Employer,  will be reimbursed  for all of its expenses and will be paid
     reasonable compensation as agreed upon from time to time with the Employer;
     but no person who receives full-time pay from the Employer will receive any
     fees for services to the Plan as Trustee or in any other capacity. Expenses
     will be paid by each  Adopting  Employer  in the ratio  that each  Adopting
     Employer's   Participants'   Accounts   bears  to  the  total  of  all  the
     Participants' Accounts maintained by this Plan.

7.5  PAYMENTS FROM THE TRUST FUND:  The Trustee will pay Plan benefits and other
     payments as the Administrator directs, and except as provided by ERISA, the
     Trustee will not be  responsible  for the propriety of such  payments.  Any
     payment made to a Participant,  or a Participant's legal  representative or
     Beneficiary in accordance with the terms of the Plan will, to the extent of
     such payment,  be in full  satisfaction  of all claims arising  against the
     Trust, the Trustee,  the Employer,  and the  Administrator.  Any payment or
     distribution made from the Trust is contingent on the recipient executing a
     receipt and release acceptable to the Trustee, Administrator, or Employer.

7.6  PAYMENT  OF  TAXES:  The  Trustee  will pay all  taxes of the  Trust  Fund,
     including property, income, transfer and other taxes which may be levied or
     assessed  upon or in respect of the Trust  Fund or any money,  property  or
     securities  forming a part of the Trust Fund. The Trustee may withhold from
     distributions to any payee such sum as the Trustee may reasonably  estimate
     as necessary to cover  federal and state taxes for which the Trustee may be
     liable,  which  are,  or  may  be,  assessed  with  regard  to  the  amount
     distributable to such payee.  Prior to making any payment,  the Trustee may
     require such releases or other  documents from any lawful taxing  authority
     and may require such indemnity from any payee or distributee as the Trustee
     deems necessary.

7.7  ACCOUNTS,  RECORDS AND  REPORTS:  The Trustee  will keep  accurate  records
     reflecting its  administration of the Trust Fund and will make such records
     available to the  Employer for review and audit.  Within 90 days after each
     Plan Year, and within 90 days after its removal or resignation, the Trustee
     will file with the  Employer an  accounting  of its  administration  of the
     Trust Fund during such year or from the end of the  preceding  Plan Year to
     the  date of  removal  or  resignation.  Such  accounting  will  include  a
     statement  of cash  receipts and  disbursements  since the date of its last
     accounting  and will contain an asset list showing the fair market value of
     investments  held  in the  Trust  Fund as of the  end of the  Plan  Year as
     determined  under Section 7.3. The Employer will review the  accounting and
     will  notify  the  Trustee  in the event of its  disapproval  of the report
     within 90 days,  providing  the Trustee with a written  description  of the
     items in question.  The Trustees  will have 60 days to provide the Employer
     with a written explanation of the items in question.  If the Employer again
     disapproves of the report,  the Trustee will file its accounting in a court
     of competent jurisdiction for audit and adjudication.


                                                                              53
<PAGE>


7.8  EMPLOYMENT  OF AGENTS AND  COUNSEL:  The Trustee  may employ  such  agents,
     counsel,  consultants,  or service  companies as it deems necessary and may
     pay their  reasonable  expenses and  compensation.  The Trustee will not be
     liable  for any  action  taken or  omitted  by the  Trustee  in good  faith
     pursuant  to the advice of such  agents and  counsel.  Any agent,  counsel,
     consultant,   service  company  and/or  its  successors  will  exercise  no
     discretionary  authority  over  investments  or the  disposition  of  Trust
     assets,  and their services and duties will be ministerial only and will be
     to provide  the Plan with those  things  required by law or by the terms of
     the  Plan  without  in  any  way  exercising  any  fiduciary  authority  or
     responsibility  under the Plan.  The duties of a third party  administrator
     will be to safe-keep the  individual  records for all  Participants  and to
     prepare all  required  actuarial  services and  disclosure  forms under the
     supervision  of the  Administrator  and any  Fiduciaries of the Plan. It is
     expressly  stated that the third party  administrator's  services  are only
     ministerial in nature and that under no circumstances will such third party
     administrator  exercise any  discretionary  authority  whatsoever over Plan
     Participants, Plan investments, or Plan benefits.

7.9  DIVISION  OF DUTIES AND  INDEMNIFICATION:  The  division  of duties and the
     indemnification  of the  Trustees  of this  Plan  will be  governed  by the
     following provisions:

     (a)  No Guarantee  Against  Loss:  The Trustees will have the authority and
          discretion  to manage and control  the Fund to the extent  provided in
          this  instrument,  but do not guarantee the Fund in any manner against
          investment  loss or  depreciation  in asset value,  or  guarantee  the
          adequacy of the Fund to meet and discharge all or any  liabilities  of
          the Plan. Furthermore, the Trustees will not be liable for the making,
          retention or sale of any  investment  or  reinvestment  made by it, as
          herein provided,  or for any loss to or diminution of the Fund, or for
          any other loss or damage  which may result from the  discharge  of its
          duties  hereunder,  except to the extent it is  judicially  determined
          that the Trustees  have failed to exercise the care,  skill,  prudence
          and diligence under the  circumstances  then prevailing that a prudent
          person  acting in a like capacity and familiar with such matters would
          use in the conduct of an enterprise of a like character and like aims.

     (b)  Representations  Of The  Employer:  The  Employer  warrants  that  all
          directions issued to the Trustees by it or the Plan Administrator will
          be in  accordance  with the terms of the Plan and not  contrary to the
          provisions of the Employee  Retirement Income Security Act of 1974 and
          the regulations issued thereunder.

     (c)  Directions  By Others:  The Trustees  will not be  answerable  for any
          action taken pursuant to any direction, consent, certificate, or other
          paper or document on the belief that the same is genuine and signed by
          the proper person.  All  directions by the Employer,  a Participant or
          the Plan Administrator will be in writing. The Plan Administrator will
          deliver to the Trustees  certificates  evidencing  the  individual  or
          individuals authorized to act as the Administrator and will deliver to
          the Trustees specimens of their signatures.

     (d)  Duties And Obligations Limited By The Plan: The duties and obligations
          of the Trustees will be limited to those expressly  imposed upon it by
          this Plan or subsequently


54
<PAGE>


          agreed upon by the parties.  Responsibility for administrative  duties
          required under the Plan or applicable  law not expressly  imposed upon
          or agreed to by the  Trustees,  will rest solely with the Employer and
          with the Administrator.

     (e)  Indemnification  Of Trustees:  The Trustees  will be  indemnified  and
          saved  harmless by the Employer from and against any and all liability
          to  which  the  Trustees  may be  subjected,  including  all  expenses
          reasonably  incurred in its defense,  for any action or failure to act
          resulting from compliance with the  instructions of the Employer,  the
          employees or agents of the Employer,  the Administrator,  or any other
          Fiduciary to the Plan, and for any liability  arising from the actions
          or  non-actions  of any  predecessor  Trustees or  Fiduciary  or other
          Fiduciaries of the Plan.

     (f)  Trustees Not  Responsible  For  Application Of Payments:  The Trustees
          will not be responsible in any way for the application of any payments
          it is  directed  to make or for the  adequacy  of the Fund to meet and
          discharge any and all liabilities under the Plan.

     (g)  Multiple  Trustees:  If more than one Trustee is  appointed,  all acts
          and/or  transactions  taken on  behalf  of the Trust can only be taken
          with the consent of a majority  of the  Trustees  unless the  Trustees
          have agreed by a majority of their number that a particular act and/or
          transaction can be taken or approved by a single Trustee.

     (h)  Limitation Of Liability:  No Trustee will be liable for the act of any
          other  Trustee or Fiduciary  unless the Trustee has  knowledge of such
          act.

     (i)  Trustees  As  Participants  Or  Beneficiaries:  Trustees  will  not be
          prevented from receiving any benefits to which they may be entitled as
          Participants or Beneficiaries in the Plan, so long as the benefits are
          computed and paid on a basis which is consistent with the terms of the
          Plan as applied to all other Participants and Beneficiaries.

     (j)  No Self-Dealing: The Trustees will not (1) deal with the assets of the
          Trust  Fund in their own  interest  or for their own  account;  (2) in
          their  individual  or in any other  capacity,  act in any  transaction
          involving  the Trust Fund on behalf of a party (or  represent a party)
          whose  interests  are  adverse to the  interests  of the Plan,  or its
          Participants or  Beneficiaries;  or (3) receive any  consideration for
          their own personal  accounts  from any party  dealing with the Plan in
          connection with a transaction involving assets of the Trust Fund.

7.10 APPOINTMENT  OF INVESTMENT  MANAGER:  The Trustee may appoint an Investment
     Manager to manage and control the  investment  of all or any portion of the
     Trust Fund. Each Investment Manager will be either be an investment advisor
     registered under the Investment  Advisors Act of 1940; a bank as defined in
     that Act; or an insurance company  qualified to manage,  acquire or dispose
     of any  asset of the  Trust  under  the laws of more  than  one  state.  An
     Investment  Manager will  acknowledge  in writing that it is a Fiduciary of
     the Plan.  The Trustee  will enter into an  agreement  with the  Investment
     Manager  specifying the duties and  compensation of the Investment  Manager
     and  further  specifying  any other  terms and  conditions  under which the
     Investment Manager will be retained. The Trustee will not be liable for any
     act or  omission  of an  Investment  Manager,  and will not be  liable  for
     following  the advice of an  Investment  Manager with respect to any duties
     delegated by the Trustee to the Investment  Manager.  The Trustee will have
     the power to determine the portion of the Plan's assets to be


                                                                              55
<PAGE>


     invested by a designated  Investment  Manager and to  establish  investment
     objectives and guidelines for the Investment Manager to follow.

7.11 ASSIGNMENT AND ALIENATION OF BENEFITS: Except as may otherwise be permitted
     under Code  ss.401(a)(13)(C),  or as may  otherwise  be  permitted  under a
     Qualified  Domestic  Relations  Order as provided in Section 8.6, or as may
     otherwise  be   permitted   under   Section  7.14   relating  to  loans  to
     Participants,  no right or claim to, or interest  in, any part of the Trust
     Fund,  or any  payment  therefrom,  will be  assignable,  transferable,  or
     subject   to   sale,   mortgage,   pledge,   hypothecation,    commutation,
     anticipation,  garnishment, attachment, execution, or levy of any kind, and
     the Trustees  will not  recognize  any attempt to assign,  transfer,  sell,
     mortgage, pledge,  hypothecate,  commute, or anticipate the same, except to
     the extent required by law.

7.12 EXCLUSIVE  BENEFIT  RULE:  All  contributions  made by the  Employer  or an
     Affiliated  Employer  to the  Trust  Fund  will be used  for the  exclusive
     benefit of the Participants who are Employees of the Employer or Affiliated
     Employer and for their  Beneficiaries and will not be used for nor diverted
     to any other  purpose  except the payment of the costs of  maintaining  the
     Plan.  All  contributions  made  by an  Adopting  Employer  who  is  not an
     Affiliated  Employer  will  be  used  for  the  exclusive  benefit  of  the
     Participants  who are  Employees  of the  Adopting  Employer  and for their
     Beneficiaries  and will not be used for nor  diverted to any other  purpose
     except  the  payment  of the  Adopting  Employers'  proportionate  costs of
     maintaining the Plan pursuant to Section 7.4.

7.13 PURCHASE OF INSURANCE:  The purchase of insurance Policies on the life of a
     Participant,  other than key man  insurance  under Section  7.2(j),  is not
     currently permitted in this Plan.

7.14 LOANS TO  PARTICIPANTS:  The Employer,  in  accordance  with a written loan
     procedure established by the Employer, may permit loans to be made from the
     Trust Fund to Participants and Beneficiaries on a non-discriminatory basis.
     If made available, a Participant or Beneficiary may make application to the
     Administrator requesting a loan. The Administrator will have the sole right
     to approve or disapprove the  application  provided that loans will be made
     available to all Participants on a reasonably  equivalent  basis. All loans
     must be evidenced  by a legally  enforceable  agreement  (which may include
     more than one  document)  set forth in writing or in such other form as may
     be  approved  by the  Internal  Revenue  Service,  and  the  terms  of such
     agreement  must specify the amount and term of the loan,  and the repayment
     schedule.  Loans will not be made available to Highly Compensated Employees
     in an amount greater than the amount made available to other Employees, and
     no  loan  will  be  made to a  Participant  who is an  Owner-Employee  or a
     Shareholder-Employee  except  to the  extent  such  loan  is  treated  as a
     prohibited  transaction under Code ss.4975.  Subject to the loan procedure,
     loans will be made in accordance with the following:

     (a)  Minimum Loan And Maximum Loan: No loan will be less than $500 or, when
          added  to  the   outstanding   balance  of  all  other  loans  to  the
          Participant,  will  exceed  the lesser of (1)  $50,000  reduced by the
          excess, if any, of the Participant's  highest  outstanding  balance of
          loans during the 1-year  period  ending on the day before the loan was
          made, over the Participant's  outstanding  balance of loans on the day
          the  loan  was  made;  or (2)  one-half  of the  Participant's  Vested
          Aggregate Account.


56
<PAGE>


     (b)  Aggregation Of Loans: For purposes of the limitations in paragraph (a)
          above,  all  loans  from all  plans  of the  Employer  and  Affiliated
          Employers will be  aggregated.  An assignment or pledge of any portion
          of the  Participant's  Vested Aggregate  Account balance,  and a loan,
          pledge, or assignment with respect to any insurance contract purchased
          under the Plan, will be treated as a loan under this Section.

     (c)  Loans Must Bear Reasonable  Interest:  Any loan granted hereunder must
          bear  interest  at a rate  reasonable  at  the  time  of  application,
          considering  the  purpose  of the loan and the rate  being  charged by
          representative  commercial banks in the local area for a similar loan,
          unless the Administrator sets forth a different method for determining
          loan  interest  rates in its loan  procedures  such as using the prime
          rate or some other rate based on the prime  rate.  The loan  agreement
          will also provide for the payment of  principal  and interest not less
          than  quarterly.  The interest earned by the Trust on any loan granted
          hereunder will be credited  directly to the  individual  Participant's
          Account.

     (d)  Loans Must Be Secured: If a Participant's loan application is approved
          by the  Administrator,  such Participant will be required to execute a
          note,  a loan  agreement  and  an  assignment  of  his  or her  Vested
          Aggregate  Account as collateral  for the loan. The  Participant  must
          obtain the  consent of his or her  spouse,  if any,  within the 90 day
          period before the  Participant's  Vested Aggregate  Account is used as
          security  for the  loan.  A new  consent  is  required  if the  Vested
          Aggregate Account is used for any renegotiation, extension, renewal or
          other  revision  of the loan,  including  any  increase  in the amount
          thereof.  The consent must be written,  must acknowledge the effect of
          the  loan,   and  must  be  witnessed  by  a  notary   public  or  the
          Administrator. Such consent will thereafter be binding with respect to
          the consenting Spouse or any subsequent Spouse.

     (e)  Terms Of Repayment:  The term of a loan will not exceed 5 years except
          in the  case  of a loan  for  the  purpose  of  acquiring  any  house,
          apartment, condominium, or mobile home (not used on a transient basis)
          which  is  used  or is to be  used  within  a  reasonable  time as the
          principal  residence  of the  Participant.  The term of a loan will be
          determined by the Administrator  considering the maturity dates quoted
          by  representative  commercial  banks in the local  area for a similar
          loan.  Notwithstanding  the  foregoing,  however,  loans made prior to
          January 1, 1987 which are used to acquire,  construct,  reconstruct or
          substantially   rehabilitate   any  dwelling  unit  which,   within  a
          reasonable  period of time is to be used  (determined  at the time the
          loan is made) as a principal  residence of the Participant or a member
          of his or her family  within  the  meaning  of Code  ss.267(c)(4)  may
          provide for periodic  repayment over a reasonable  period of time that
          may exceed 5 years. Additionally,  loans made prior to January 1, 1987
          may provide for periodic  payments which are made less frequently than
          quarterly and which do not necessarily  result in level  amortization.
          The  Administrator  may  allow a grace  period  for the  making of any
          required installment payment, but any such period cannot extend beyond
          the last day of the calendar quarter following the calendar quarter in
          which the required installment was due.


                                                                              57
<PAGE>


     (f)  Suspension Of Installment  Payments:  Loan installment payments may be
          suspended  for a  period  not  longer  than  one  year  in  which  the
          Participant is on a leave of absence,  either without pay or at a rate
          of pay (after income and employment tax withholding) that is less than
          the amount of the installment payments required under the terms of the
          loan.  However,  even if  payments  are  suspended  due to a leave  of
          absence,  the loan must still be repaid by the latest  date  permitted
          under the  original  terms of the loan and the  payments due after the
          leave ends (or,  if  earlier,  after the first year of the leave) must
          not be less than those required under the original terms of the loan.

     (g)  Repayment Of Loan Before Distribution Of Benefit: If a Participant has
          received a loan from the Plan and the Participant or the Participant's
          Beneficiary  is entitled  to a payment  from the Trust Fund before the
          loan is  repaid  in  full,  the  Trustee  will  offset  at the time of
          distribution the unpaid loan balance (including accrued interest) from
          the total amount otherwise due to the Participant or Beneficiary. If a
          valid  spousal  consent has been  obtained  pursuant to paragraph  (d)
          above,  then  notwithstanding  any other  provision of this Plan,  the
          portion  of the  Participant's  Vested  Aggregate  Account  used  as a
          security interest for a loan will be taken into account in determining
          the  amount of the  Vested  Aggregate  Account  payable at the time of
          death  or  distribution,  but  only  if the  reduction  is  used  as a
          repayment of the loan. If less than 100% of the  Participant's  Vested
          Aggregate  Account   (determined   without  regard  to  the  preceding
          sentence) is payable to the Participant's  surviving spouse, then such
          Vested Aggregate Account will be adjusted by first reducing the Vested
          Aggregate  Account by the amount of the security  used as repayment of
          the loan, and then  determining  the benefit  payable to the surviving
          spouse.

     (h)  Immediate Repayment:  A Participant's loan will become immediately due
          and payable if the Participant fails to make principal and/or interest
          payments for two  successive  calendar  quarters.  In such event,  the
          Administrator  will reduce the Participant's  Vested Aggregate Account
          by the  remaining  principal  and  interest  of  the  loan,  and  such
          reduction will constitute a distributable  event (to the extent of the
          reduction)  under  the Plan.  If the  Participant's  Vested  Aggregate
          Account  is less than the  amount  due,  the  Administrator  will take
          whatever  steps are  necessary  to collect  the  balance  due from the
          Participant.

7.15 DIRECTED INVESTMENT ACCOUNTS:  If agreed to by the Trustees and approved by
     the  Employer,  Participants  will  be  given  the  option  to  direct  the
     investment  of all or a portion  of their  Participant's  Account  (and any
     Rollover  Contributions  and  Voluntary  Employee   Contributions)  into  a
     directed,  or segregated  investment selected by the Participant;  or among
     alternative  investment funds established as part of the overall Fund. Such
     alternative  investment  funds  will  be  under  the  full  control  of the
     management  of the  Trustees.  Alternatively,  if  investments  outside the
     Trustees' control are allowed, Participants may not direct that investments
     be made in collectibles,  other than U.S. Government gold and silver coins.
     In this connection,  a Participant's  right to direct the investment of his
     or her own Rollover Contributions and Voluntary Employee Contributions will
     apply only to the selection of the desired fund.  The following  rules will
     apply  to  the  administration  of  such  funds  and  to  the  handling  of
     Participants' investment directions:


58
<PAGE>


     (a)  Investment  Form:  Eligible  Participants  will complete an investment
          designation   form  stating  the  percentage  to  be  invested  in  or
          transferred to or from the available  funds. A Participant  may change
          his or her investment election by filing a new investment  designation
          form with the Employer or the Employer's designee. Such change will be
          effective  no later  than the first day of the next  Election  Period.
          Election Periods will be established at the discretion of the Employer
          but in any  event  will  occur no less  frequently  than once in every
          12-month period or, at the discretion of the Employer and the Trustee,
          once in every 3-month or 6-month period or at such other more frequent
          time which is uniformly  available as  determined  by the Employer and
          the Trustee.

     (b)  Transfers  Between Funds:  A Participant  may elect to transfer all or
          part of his or her  account  balance in one or more of the  investment
          funds from one investment fund to another investment fund by filing an
          investment  designation  form with the Employer or with the Employer's
          designee within a reasonable  administrative  period prior to the next
          Election  Period.  The funds will be transferred by the Trustee or the
          Employer's  designee as soon as practicable  prior to, or by the start
          of, the new Election  Period.  Telephone  transfers  will be permitted
          under uniform procedures approved by the Trustee.

     (c)  Administrator  Responsibility:  The  Plan  Administrator  or the  Plan
          Administrator's   designee  will  be  responsible  when   transmitting
          Employer and Employee  contributions  to show the dollar  amount to be
          credited to each investment fund for each Participant.

     (d)  No  Administrator  Liability:  Except as  otherwise  provided  herein,
          neither the Trustee, nor the Employer,  nor any Plan fiduciary will be
          liable to the  Participant  or his or her  Beneficiaries  for any loss
          resulting from action taken at the direction of the Participant.

     (e)  Adoption  Of   Procedures:   All  investment   designations   by  Plan
          Participants  are to be made in accordance with such procedures as the
          Employer  may  adopt.  At the  discretion  of  the  Employer  and  the
          Trustees,  such  procedures  will permit  sufficient  selection  among
          investment  alternatives  to satisfy the  provisions of DOL regulation
          ss.2550.404(c)-1.


                                                                              59
<PAGE>


                                    ARTICLE 8
                           DUTIES OF THE ADMINISTRATOR


8.1  APPOINTMENT,   RESIGNATION,  REMOVAL  AND  SUCCESSION:  Each  Administrator
     appointed by the Employer will continue  until his death,  resignation,  or
     removal by the Employer, and any Administrator may resign by giving 30 days
     written notice to the Employer.  If an Administrator  dies,  resigns, or is
     removed by the  Employer,  his  successor  will be appointed as promptly as
     possible, and such appointment will become effective upon its acceptance in
     writing by such  successor.  Pending the  appointment and acceptance of any
     successor  Administrator,  any then acting or remaining  Administrator will
     have full power to act.

8.2  POWERS  AND  DUTIES OF THE  ADMINISTRATOR:  The  powers  and  duties of the
     Administrator will include (a) appointing the Plan's attorney,  accountant,
     actuary,  or any other party needed to administer  the Plan;  (b) directing
     the  Trustees   with  respect  to  payments   from  the  Trust  Fund;   (c)
     communicating  with Employees  regarding their  participation  and benefits
     under the Plan, including the administration of all claims procedures;  (d)
     filing  any  returns  and  reports  with  the  Internal   Revenue  Service,
     Department of Labor, or any other  governmental  agency;  (e) reviewing and
     approving  any  financial  reports,  investment  reviews,  or other reports
     prepared by any party under (a) above;  (f)  establishing  a funding policy
     and investment  objectives consistent with the purposes of the Plan and the
     Employee  Retirement  Income  Security Act of 1974;  and (g) construing and
     resolving  any  question  of  Plan   interpretation.   The  Administrator's
     interpretation of Plan provisions, including eligibility and benefits under
     the  Plan,  is  final,  and  unless  it can be  shown to be  arbitrary  and
     capricious  will not be subject to "de novo" review.  If there is more than
     one    Administrator,    the    Administrators    may   delegate   specific
     responsibilities  among  themselves,  including  the  authority  to execute
     documents  unless the Employer  revokes such  delegation.  The Employer and
     Trustee   will  be   notified  in  writing  of  any  such   delegation   of
     responsibilities,  and the Trustee  thereafter  may rely upon any documents
     executed by the appropriate Administrator.

8.3  EMPLOYMENT  OF AGENTS AND  COUNSEL:  The  Administrator  may  appoint  such
     actuaries, accountants, custodians, counsel, agents, consultants, and other
     persons deemed necessary or desirable in connection with the administration
     and  operation of the Plan.  The actions of any such third  parties will be
     subject to the  limitations  described  in Section 7.8 of the Plan;  and no
     such third parties will be given any authority or discretion concerning the
     management  and  operation  of the Plan  that  would  cause  them to become
     Fiduciaries of the Plan.

8.4  COMPENSATION AND EXPENSES:  The Administrator may receive such compensation
     as agreed upon between the Employer and the  Administrator,  provided  that
     any person who already  receives  full-time  pay from the  Employer may not
     receive any fees for services to the Plan as  Administrator or in any other
     capacity.  In  addition,  the  Employer  will pay all  reasonable  expenses
     incurred by the  Administrator  in the performance of its duties under this
     Plan.  If the  Employer  fails  to pay  such  expenses,  the  Trustee  will
     reimburse the Administrator out of the Trust Fund. Expenses will be paid by
     each Adopting Employer in the ratio that each


60
<PAGE>


     Adopting  Employer's  Participants'  Accounts bears to the total of all the
     Participants' Accounts maintained by this Plan.

8.5  CLAIMS  PROCEDURES:  Upon retirement,  death,  Disability or Termination of
     Employment,  the Participant or representative of such Participant may make
     application to the Administrator requesting payment of benefits due and the
     manner of payment, in accordance with the following:

     (a)  Automatic  Payment If No Application  Is Made: If no  application  for
          benefits is made and no cash-out of benefits occurs under Section 5.5,
          the  Administrator  will  automatically  pay  a  Participant's  Vested
          Aggregate  Account  balance in the form that does not require  spousal
          consent no later than the time prescribed in Section 5.10.

     (b)  Denial  Of  Claim:  If  an  application  for  benefits  is  made,  the
          Administrator  will  accept,  reject,  or modify such request and will
          notify the  Participant  in writing  setting forth the response of the
          Administrator  and  in  the  case  of a  denial  or  modification  the
          Administrator  will (1) state the  specific  reason or reasons for the
          denial, (2) provide specific reference to pertinent Plan provisions on
          which the denial is based, (3) provide a description of any additional
          material  or  information   necessary  for  the   Participant  or  his
          representative  to perfect  the claim and an  explanation  of why such
          material or information is necessary, and (4) explain the Plan's claim
          review procedure as contained herein.

     (c)  Review  Procedure:  In the event the request is rejected or  modified,
          the  Participant  or his  representative  may within 60 days following
          receipt by the  Participant  or  representative  of such  rejection or
          modification,  submit  a  written  request  for  review  by  the  Plan
          Administrator of its initial  decision.  Within 60 days following such
          request  for  review,  the Plan  Administrator  will  render its final
          decision  in  writing to the  Participant  or  representative  stating
          specific   reasons  for  such   decision.   If  the   Participant   or
          representative  is not satisfied with the Plan  Administrator's  final
          decision, the Participant or representative can institute an action in
          a federal court of competent jurisdiction;  for this purpose,  process
          would be served on the Plan Administrator.

8.6  QUALIFIED  DOMESTIC RELATIONS ORDERS: A Qualified Domestic Relations Order,
     or QDRO, is a signed domestic relations order issued by a State Court which
     creates,  recognizes  or  assigns  to an  alternate  payee(s)  the right to
     receive all or part of a Participant's Plan benefit.  An alternate payee is
     a Spouse,  former Spouse, child, or other dependent of a Participant who is
     treated  as a  Beneficiary  under  the Plan as a result  of the  QDRO.  The
     Administrator  will determine if a domestic  relations order is a Qualified
     Domestic Relations Order as follows:

     (a)  Administrator's  Determination:  Promptly  upon  receipt of a domestic
          relations order, the Administrator will notify the Participant and any
          alternate  payee(s)  named  in the  order  of such  receipt,  and will
          include a copy of this  Section 8.6.  Within a  reasonable  time after
          receipt of the order,  not to exceed 60 days, the  Administrator  will
          make a  determination  as to  whether  or not the  order  is a QDRO as
          defined in Code ss.414(p) and will promptly notify the Participant and
          any alternate payee(s) in writing of the determination.


                                                                              61
<PAGE>


     (b)  Specific Requirements Of QDRO: In order for a domestic relations order
          to be a QDRO, it must specifically state all of the following: (1) the
          name and last known mailing address (if any) of the Participant and of
          each alternate payee covered by the order.  However,  if the QDRO does
          not specify the current  mailing address of the alternate  payee,  but
          the Administrator has independent  knowledge of that address, the QDRO
          will  still be  valid;  (2) the  dollar  amount or  percentage  of the
          Participant's  benefit to be paid by the Plan to each alternate payee,
          or the manner in which the amount or  percentage  will be  determined;
          (3) the number of payments or period for which the order applies;  and
          (4) the  specific  plan (by  name) to which  the  order  applies.  The
          domestic relations order will not be deemed a


62
<PAGE>


          QDRO if it  requires  the Plan to provide any type or form of benefit,
          or any option  not  already  provided  for in the Plan,  or  increased
          benefits,  or benefits in excess of the Participant's Vested Interest,
          or payment of benefits to an alternate  payee which are required to be
          paid to another alternate payee under another QDRO.

     (c)  Disputed  Orders:  If there is a question as whether or not a domestic
          relations order is a QDRO,  there will be a delay in any payout to any
          payee including the Participant, until the status is resolved. In such
          event,  the  Administrator  will  segregate the amount that would have
          been payable to the alternate  payee(s) if the order had been deemed a
          QDRO.  If the order is not  determined  to be a QDRO, or the status is
          not  resolved  (for  example,  it has been  sent back to the Court for
          clarification  or  modification)  within 18 months  beginning with the
          date the first  payment  would have to be made  under the  order,  the
          Administrator  will pay the  segregated  amounts plus  interest to the
          person(s)  who would have been entitled to the benefits had there been
          no order. If a determination  as to the Qualified  status of the order
          is made after the 18-month period, then the order will only be applied
          on a prospective  basis.  If the order is determined to be a QDRO, the
          Participant  and alternate  payee(s)  will again be notified  promptly
          after  such  determination.  Once an  order  is  deemed  a  QDRO,  the
          Administrator  will pay to the alternate  payee(s) all the amounts due
          under the QDRO,  including  segregated amounts plus interest which may
          have accrued during a dispute as to the order's qualification.

     (d)  Payment Prior To Termination Of Employment: A QDRO may provide for the
          payment  of  benefits  to an  alternative  payee  prior  to the time a
          Participant has terminated  employment.  Further,  such payment can be
          made even if the affected Participant has not yet reached the Earliest
          Retirement  Age. For  purposes of this  paragraph,  the term  Earliest
          Retirement  Age  means  the  earlier  of (1)  the  date on  which  the
          Participant is entitled to a distribution  under this Plan, or (2) the
          later of (i) the  date the  Participant  attains  age 50,  or (ii) the
          earliest date on which the  Participant  could receive  benefits under
          this Plan if the Participant terminated employment with the Employer.

     (e)  Effect  Of  QDRO On  Survivor  Annuity  Requirements:  Notwithstanding
          Section 5.1 and 5.2 to the contrary,  a  Participant's  benefits which
          are payable from the Plan in the form of either a Qualified  Joint and
          Survivor  Annuity or a Qualified  Preretirement  Survivor Annuity need
          not be paid in such form if such payment is inconsistent  with, or has
          been modified by, the terms of a Qualified Domestic Relations Order.


                                                                              63
<PAGE>


                                    ARTICLE 9
                        AMENDMENT, TERMINATION AND MERGER


9.1  AMENDMENT: The Employer, by action of its board of directors, will have the
     right to amend  the Plan at any  time if the  amendment  complies  with the
     following requirements:

     (a)  General  Requirements:  Amendments  must be in writing  and cannot (1)
          increase the responsibilities of the Trustee or Administrator  without
          written  consent;  (2) deprive any  Participant or Beneficiary of Plan
          benefits to which he or she is  entitled;  (3)  decrease the amount of
          any  Participant's  Account  balance  except as  permitted  under Code
          ss.412(c)(8);  (4) permit any part of the Trust Fund to be used for or
          diverted  to  purposes  other  than  the  exclusive   benefit  of  the
          Participants  or their  Beneficiaries  except as required to pay taxes
          and  administration  expenses,  or cause or permit any  portion of the
          Trust Fund to revert to or become the property of the Employer; or (5)
          eliminate or reduce a retirement-type  subsidy, or an early retirement
          benefit,  or an  optional  form of benefit  with  respect to  benefits
          attributable  to  service  before  the  amendment.  In the  case  of a
          retirement-type  subsidy,  this provision will apply only with respect
          to a Participant  who satisfies the  pre-amendment  conditions for the
          subsidy either before or after the amendment.

     (b)  Certain Corrective Amendments:  For purposes of satisfying the minimum
          coverage requirements of Code ss.410(b),  the nondiscriminatory amount
          requirement    of    regulation    ss.1.401(a)(4)-1(b)(2),    or   the
          nondiscriminatory    plan   amendment    requirement   of   regulation
          ss.1.401(a)(4)-1(b)(4),   a  corrective  amendment  may  retroactively
          increase allocations for Employees who benefited under the Plan during
          the Plan Year being corrected,  or may grant  allocations to Employees
          who did not  benefit  under  the  Plan  during  the  Plan  Year  being
          corrected.  In  addition,  to satisfy  the  nondiscriminatory  current
          availability   requirement  of  regulation   ss.1.401(a)(4)-4(b)   for
          benefits,  rights  or  features,  a  corrective  amendment  may make a
          benefit,  right  or  feature  available  to  Employees  to whom it was
          previously  not  available.  A corrective  amendment will not be taken
          into account prior to the date of its adoption unless it satisfies the
          applicable  requirements  of  regulation   ss.1.401(a)(4)-11(g)(3)(ii)
          through  (vii),  including  the  requirement  that,  in  order  to  be
          effective for the preceding Plan Year,  such amendment must be adopted
          by the 15th day of the 10th  month  after the  close of the  preceding
          Plan Year.

9.2  TERMINATION:  The Employer at any time can  terminate the Plan and Trust in
     whole or in part by filing written  notice  thereof with the  Administrator
     and Trustee or by completely discontinuing  contributions to the Plan. Upon
     termination  of the Plan, the Trustee will continue to administer the Trust
     until  distribution has been made to the Participants,  which  distribution
     must occur as soon as  administratively  feasible after the  termination of
     the Plan,  and must be made in accordance  with the provisions of Article 5
     of the Plan. Upon termination of the Plan (whether partial or complete), or
     upon  a  complete   discontinuance   of  contributions  to  the  Plan,  any
     Participant  who is  affected by such  termination  will have a 100% Vested
     Interest in his Participant's Account.


64
<PAGE>


9.3  MERGER  OR  CONSOLIDATION:  This  Plan  and  Trust  may  not be  merged  or
     consolidated  with, nor may any of its assets or liabilities be transferred
     to, any other plan,  unless the benefits payable to each Participant if the
     Plan was  terminated  immediately  after such  action  would be equal to or
     greater  than the  benefits  to which  such  Participant  would  have  been
     entitled if this Plan had been terminated immediately before such action.


                                                                              65
<PAGE>


                                   ARTICLE 10
                            MISCELLANEOUS PROVISIONS


10.1 NO CONTRACT OF EMPLOYMENT: Except as otherwise provided by law, neither the
     establishment  of this Plan, any modification  hereto,  the creation of any
     fund or account,  nor the payment of any  benefits,  will be  construed  as
     giving  any  Participant  or other  person  any legal or  equitable  rights
     against the  Employer,  any officer or Employee  thereof,  or the  Trustee,
     except as herein provided.  Further,  under no circumstances will the terms
     of employment of any Participant be modified or otherwise  affected by this
     Plan.

10.2 TITLE TO ASSETS:  No Participant or Beneficiary  will have any right to, or
     any interest in, any assets of the Trust upon  separation from service with
     the  Employer,   Affiliated  Employer,  or  Adopting  Employer,  except  as
     otherwise provided by the terms of the Plan.

10.3 QUALIFIED MILITARY SERVICE:  Notwithstanding  any provision of this Plan to
     the  contrary,  effective  December 12, 1994,  contributions,  benefits and
     service credit with respect to qualified  military service will be provided
     in accordance with Code ss.414(u).

10.4 FIDUCIARIES AND BONDING:  The Fiduciaries of this Plan will have only those
     powers and duties which are specifically given to the Fiduciaries under the
     terms of this Plan.  In addition,  every  Fiduciary  other than a bank,  an
     insurance  company,  or a Fiduciary of an Employer  which has no common-law
     employees,  will be bonded in an amount  not less than 10% of the amount of
     funds under such  Fiduciary's  supervision,  but such bond will not be less
     than $1,000 or more than $500,000.  The bond will provide protection to the
     Plan against any loss for acts of fraud or dishonesty by a Fiduciary acting
     alone or in concert with  others.  The cost of such bond will be an expense
     of either the Employer or the Trust, at the election of the Employer.

10.5 SEVERABILITY  OF  PROVISIONS:  If any Plan  provision  is held  invalid  or
     unenforceable,  such  invalidity  or  unenforceability  will not affect any
     other  provision of this Plan, and this Plan will be construed and enforced
     as if such provision had not been included.

10.6 GENDER AND NUMBER:  Words used in the masculine gender will be construed as
     though  they  were  also  used  in the  feminine  or  neuter  gender  where
     applicable, and words used in the singular form will be construed as though
     they were also used in the plural form where applicable.

10.7 HEADINGS  AND  SUBHEADINGS:  Headings  and  subheadings  are  inserted  for
     convenience of reference.  They constitute no part of this Plan and are not
     to be considered in its construction.

10.8 LEGAL ACTION: In any claim,  suit or proceeding  concerning the Plan and/or
     Trust which is brought against the Trustee or the Administrator,  this Plan
     and Trust will be construed and enforced according to the laws of the state
     in which the Employer  maintains  its principal  place of business,  to the
     extent  that is not  preempted  by the  provisions  of ERISA.  Furthermore,
     unless  otherwise  prohibited by law,  either the Employer or the Trust, in
     the sole discretion of


66
<PAGE>


     the Employer,  will reimburse the Trustee and/or the  Administrator for all
     costs,  attorneys fees and other expenses  associated  with any such claim,
     suit or proceeding.


                                                                              67
<PAGE>


     IN WITNESS WHEREOF,  this Plan and Trust have been executed by the Employer
and the  Trustees  on the  day,  month  and  year  set  forth  on page 1 of this
Agreement.


                                                     FREQUENCY ELECTRONICS, INC.


                                                     By: _______________________




                                                     TRUSTEES


                                                     ___________________________
                                                     Robert Klomp


                                                     ___________________________
                                                     Marvin P. Meirs


                                                     ___________________________
                                                     Markus Hechler


68
<PAGE>


                                   EXHIBIT 4.9

                                 FIRST AMENDMENT


     WHEREAS,  FREQUENCY  ELECTRONICS,  INC., a Delaware corporation,  adopted a
certain 401(k)  Sharing Plan,  effective  January 1, 1985,  which was thereafter
amended and restated, and which it is now deemed desirable to further amend said
Plan.

     NOW,  THEREFORE,  it is  agreed  by the  undersigned  that the said Plan is
hereby amended in the following manner:

     1. Section 1.19 ("ELIGIBLE  PARTICIPANT")  shall be amended by deleting the
entire Section and replacing it with the following:

1.19 ELIGIBLE  PARTICIPANT:  The term Eligible  Participant  means a Participant
     eligible to receive an allocation of Employer contributions allocable for a
     Plan  Year.  Any  Participant  who  is an  Employee  will  be  an  Eligible
     Participant.

     2.   Paragraph   (b)   ("Matching   Contributions")   and   Paragraph   (c)
("Non-Elective  Contributions") of Section 3.1 ("EMPLOYER  CONTRIBUTIONS") shall
be amended  by  deleting  the  entire  Paragraphs  and  replacing  them with the
following:

     (b)  Matching  Contributions:  The  Employer may  contribute  in cash or in
          Employer Stock on behalf of each  Participant a Matching  Contribution
          to be  determined  each year by the Employer.  Matching  Contributions
          made  for  each  Plan  Year  must  satisfy  the  ACP  Test.   Matching
          Contributions  which do not satisfy the ACP Test will be deemed Excess
          Aggregate  Contributions  and will be returned as set forth in Section
          5.17. The Employer may elect to treat all or any portion of a Matching
          Contribution  as a  Qualified  Matching  Contribution  to  the  extent
          necessary to satisfy the ACP Test.

     (c)  Non-Elective  Contributions:  The  Employer  may  make a  Non-Elective
          Contribution  in cash or in  Employer  Stock  in  such  an  amount  as
          determined by the  Employer,  and the Employer will convey such amount
          to the Trustee in writing. The Employer's  determination of the amount
          of its Non-Elective  Contribution will be binding on the Trustee,  the
          Administrator  and all  Participants  and may not be  reviewed  in any
          manner.  However,  (1) no  Non-Elective  Contribution  may  exceed the
          maximum  amount   deductible  under  Code  ss.404;   (2)  Non-Elective
          Contributions  will be limited as required by Code ss.415;  and (3) no
          Non-Elective  Contribution will be made for any Participant who is not
          an Eligible Participant unless required by Section 3.5.


<PAGE>


     3. Paragraph (c) ("Non-Elective Contributions") of Section 3.2 ("ALLOCATION
OF EMPLOYER  CONTRIBUTIONS")  shall be amended by deleting the entire  Paragraph
and replacing it with the following:

     (c)  Non-Elective   Contributions:   Non-Elective   Contributions  will  be
          allocated on the annual  Valuation Date to the Eligible  Participant's
          Non-Elective  Contribution  Account of each Eligible  Participant on a
          per capita basis.


     4.  Section  4.2  ("BENEFIT  UPON LATE  RETIREMENT")  shall be  amended  by
deleting the entire Section and replacing it with the following:

4.2  BENEFIT UPON LATE RETIREMENT: A Participant who has reached Normal or Early
     Retirement  Age may elect to remain  employed  and retire at a later  date.
     Such  Participant  will continue to  participate in the Plan and his or her
     Participant's  Account will continue to receive allocations under Article 3
     until the  Participant  actually  retires.  A  Participant  who elects late
     retirement may at any time (1) choose to have  distributed  prior to actual
     retirement  all or  part of his or her  Vested  Aggregate  Account  balance
     determined  as of  the  most  recent  Valuation  Date  coinciding  with  or
     immediately preceding the date of distribution;  or (2) choose to have such
     Vested  Aggregate   Account  balance   transferred  to  another   qualified
     retirement plan  maintained by the Employer.  Upon actual  retirement,  the
     Participant will be entitled to his or her  undistributed  Vested Aggregate
     Account balance  determined as of the most recent Valuation Date coinciding
     with or immediately  preceding the date of distribution.  Distribution will
     be made in accordance with Section 5.1.

     5. Article 5  ("DISTRIBUTION  OF BENEFITS")  shall be amended by adding the
following new Section:

5.19 PRE-RETIREMENT DISTRIBUTIONS:  A Participant who has reached Age 59 1/2 may
     request in writing  that the  Administrator  distribute  all or part of the
     Participant's  Elective Deferral Account within 60 days of such request. In
     addition,  a Participant may request in writing to the  Administrator  that
     within  60 days  of such  request  up to 100% of the  Participant's  Vested
     Interest  in his or her  Non-Elective  Contribution  Account  and  Matching
     Contribution Account be distributed, subject to the following provisions:

     (a)  Eligibility   Requirements:   On  the   date  of   distribution,   the
          Non-Elective    Contributions   and   Matching   Contributions   being
          distributed must have accumulated in the Participant's  Account for at
          least  two  consecutive  Plan  Years,  or the  Participant  must  have
          completed at least 5 Years of Plan  Participation.  In addition to the
          foregoing,  the Participant must have reached Age 59 1/2 and must have
          a 100% Vested Interest in his or her Participant's Account.


70
<PAGE>


     (b)  Amount And Form Of  Distribution:  The maximum amount of  Non-Elective
          Contributions  and  Matching  Contributions  distributable  under this
          Section  is  the   Participant's   Vested   Interest  in  his  or  her
          Non-Elective Contribution Account and Matching Contribution Account as
          of the Valuation Date which coincides with or immediately precedes the
          date of  distribution.  Distribution  will  only be made in a lump sum
          payment provided the  Participant's  spouse,  if any,  consents to the
          distribution in accordance with the provisions of Section 5.8.

     (c)  Restriction  On  Certain  Transferred   Assets:   Notwithstanding  any
          provision  in  this  Section  to  the  contrary,   no   pre-retirement
          distribution  can be made under this  Section with respect to benefits
          attributable to assets (including  post-transfer earnings thereon) and
          liabilities  that  are   transferred,   within  the  meaning  of  Code
          ss.414(l),  from a money purchase  pension plan  qualified  under Code
          ss.401(a)  to this Plan (other  than any  portion of those  assets and
          liabilities attributable to Voluntary Employee Contributions).

     6.   The first Paragraph of Section 7.14 ("LOANS TO PARTICIPANTS") shall be
          amended by deleting  the entire  Paragraph  and  replacing it with the
          following:

7.14 LOANS TO  PARTICIPANTS:  The Employer,  in  accordance  with a written loan
     procedure established by the Employer, may permit loans to be made from the
     Trust Fund to Participants and Beneficiaries on a non-discriminatory basis,
     however  Participants and Beneficiaries shall not have the option to borrow
     from any  portion of their  Participant's  Accounts  invested  in  Employer
     Stock. If made available, a Participant or Beneficiary may make application
     to the  Administrator  requesting a loan. The  Administrator  will have the
     sole right to approve or  disapprove  the  application  provided that loans
     will be made  available  to all  Participants  on a  reasonably  equivalent
     basis.  All loans  must be  evidenced  by a legally  enforceable  agreement
     (which may include more than one  document) set forth in writing or in such
     other form as may be  approved by the  Internal  Revenue  Service,  and the
     terms of such  agreement  must specify the amount and term of the loan, and
     the  repayment  schedule.  Loans  will  not be  made  available  to  Highly
     Compensated  Employees in an amount  greater than the amount made available
     to other  Employees,  and no loan will be made to a  Participant  who is an
     Owner-Employee or a Shareholder-Employee  except to the extent such loan is
     treated as a prohibited transaction under Code ss.4975. Subject to the loan
     procedure, loans will be made in accordance with the following:

     7. The first  Paragraph of Section 7.15  ("DIRECTED  INVESTMENT  ACCOUNTS")
shall be amended by deleting  the entire  Paragraph  and  replacing  it with the
following:


<PAGE>


7.15 DIRECTED INVESTMENT ACCOUNTS:  If agreed to by the Trustees and approved by
     the  Employer,  Participants  will  be  given  the  option  to  direct  the
     investment  of all or a portion  of their  Participant's  Account  (and any
     Rollover  Contributions  and  Voluntary  Employee   Contributions)  into  a
     directed,  or segregated  investment selected by the Participant;  or among
     alternative  investment  funds  established  as part of the  overall  Fund,
     however  Participants shall not have the option to direct the investment of
     any portion of their  Participant's  Accounts  invested in Employer  Stock.
     Such  alternative  investment  funds will be under the full  control of the
     management  of the  Trustees.  Alternatively,  if  investments  outside the
     Trustees' control are allowed, Participants may not direct that investments
     be made in collectibles,  other than U.S. Government gold and silver coins.
     In this connection,  a Participant's  right to direct the investment of his
     or her own Rollover Contributions and Voluntary Employee Contributions will
     apply only to the selection of the desired fund.  The following  rules will
     apply  to  the  administration  of  such  funds  and  to  the  handling  of
     Participants' investment directions:

     8. In all  other  respects,  except  as  hereinbefore  modified,  the  said
Retirement  Plan is hereby  ratified and confirmed,  the within  amendment to be
effective as of January 1, 2000.

     IN WITNESS WHEREOF, FREQUENCY ELECTRONICS, INC., has caused this instrument
to be duly executed as of the 12th day of June, 2000.

                                                     FREQUENCY ELECTRONICS, INC.



                                                     By_________________________
                                                             President


72
[{"type": "S-8", "sequence": "1", "filename": "0001.txt", "description": "FORM S-8", "secsgml_size_bytes": 266252}]
{"company-data": {"conformed-name": "FREQUENCY ELECTRONICS INC", "cik": "0000039020", "assigned-sic": "3825", "irs-number": "111986657", "state-of-incorporation": "DE", "fiscal-year-end": "0430"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-40506", "film-number": "665712"}, "business-address": {"street1": "55 CHARLES LINDBERGH BLVD", "city": "MITCHEL FIELD", "state": "NY", "zip": "11553", "phone": "5167944500"}, "mail-address": {"street1": "55 CHARLES LINDBERGH BOULEVARD", "city": "MITCHELL FIELD", "state": "NY", "zip": "11553"}}
As  filed  with the  Securities  and  Exchange  Commission  on June  ____ , 2000
                                                        Registration No. 33-____

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------
                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

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

                           FREQUENCY ELECTRONICS, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                                11-1986657
  (State or jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                            Identification Number)

                         55 Charles Lindbergh Boulevard
                            Mitchel Field, N.Y. 11553
                    (Address of principal executive offices)

                 Frequency Electronics, Inc. 401(k) Savings Plan
                              (Full title of plan)

                    Joseph P. Franklin, Chairman of the Board
                           Frequency Electronics, Inc.
                         55 Charles Lindbergh Boulevard
                            Mitchel Field, N.Y. 11553
                     (Name and address of agent for service)

                                 (516) 794-4500
          (Telephone number, including area code, of agent for service)

                                  -------------
Copies to:
                             Charles A. Bilich, Esq.
                   Meltzer, Lippe, Goldstein & Schlissel, P.C.
                                190 Willis Avenue
                             Mineola, New York 11501
                                 (516) 747-0300
                               Fax (516) 747-0653
CALCULATION OF REGISTRATION FEE
---------------------------------------------------------------------------------------------
                                         Proposed          Proposed
Title of                Amount           maximum           maximum              Amount of
securities              to be            offering price    aggregate            registration
to be registered(1)     registered(1)    per share(2)      offering price(2)    fee

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

Common Stock, $1.00     250,000          $27.125           $6,781,250           $1,356.25
par value per share,    -------          -------           ----------           --------

---------------------------------------------------------------------------------------------
(1)  In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
     Registration  Statement also covers an indeterminate amount of interests to
     be offered or sold pursuant to the employee benefit plan described herein.

(2)  Estimated  solely  for the  purpose of  calculating  the  registration  fee
     pursuant  to Rule 457 under the  Securities  Act of 1933 and based upon the
     average  of the  high  and low  sales  price  of the  Common  Stock  of the
     Registrant on June 26, 2000 as reported on the American Stock Exchange.

2
PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

     The following  documents  filed by the  Registrant  with the Commission are
incorporated herein by reference:

     (a)  The Registrant's  latest annual report filed pursuant to Section 13(a)
          or 15(d) of the  Securities  Exchange  Act of 1934,  as  amended  (the
          "Exchange Act");

     (b)  All other reports and definitive proxy or information statements filed
          pursuant to Section 13(a) or 15(d) of the Exchange Act since April 30,
          1999;

     (c)  The description of the Registrant's  Common Stock, par value $1.00 per
          share,  contained in the Registrant's  Registration  Statement on Form
          8-A,  filed under the Exchange Act on August 27, 1969,  including  any
          amendments   or  reports  filed  for  the  purpose  of  updating  such
          description.

     In addition, all documents subsequently filed by the Registrant or the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, on or after
the  date  of  this  Registration  Statement  and  prior  to  the  filing  of  a
post-effective amendment which indicates that all securities offered hereby have
been sold or which  deregisters all securities then remaining  unsold,  shall be
deemed to be incorporated  by reference  herein and to be a part hereof from the
date of the filing of such documents.

     Any statement contained herein or in a document,  all or a portion of which
is  incorporated  or deemed to be  incorporated  by reference  herein,  shall be
deemed to be modified or superseded for purposes of this Registration  Statement
to the extent that a  statement  contained  herein or in any other  subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such  statement.  Any statement so modified or superseded
shall not be deemed,  except as so modified or superseded,  to constitute a part
of this Registration Statement.

Item 4. Description of Securities.

3
Not applicable  because the class of securities to be offered is registered
under Section 12 of the Securities Exchange Act of 1934.

Item 5. Interests of Named Experts and Counsel.

     Not  applicable.  The  250,000  shares of Common  Stock  registered  hereby
constitute  "treasury  shares" and accordingly no opinion regarding the legality
of the issuance thereof is required.

Item 6. Indemnification of Directors and Officers.

     The Registrant's  Certificate of Incorporation provides for indemnification
to  the  fullest  extent  permitted  by  Section  145 of  the  Delaware  General
Corporation Law ("Section 145").  Pursuant thereto,  Registrant  indemnifies its
officers,  directors,  employees and agents to the fullest extent  permitted for
losses and expenses  incurred by them in  connection  with actions in which they
are involved by reason of their having been  directors,  officers,  employees or
agents of Registrant.  Section 145 permits a corporation to indemnify any person
who is or has been a director,  officer, employee or agent of the corporation or
who is or has been serving as a director,  officer, employee or agent of another
corporation,  organization  or  enterprise  at the  request of the  corporation,
against all liability and expenses  (including,  but not limited to,  attorney's
fees and  disbursements  and amounts paid in  settlement or in  satisfaction  of
judgments  or as fines or  penalties)  incurred or paid in  connection  with any
action,   suit  or   proceeding,   whether  civil,   criminal,   administrative,
investigative  or  otherwise,  in which  he/she may be involved by reason of the
fact that he/she  serves or is serving in these  capacities,  if he/she acted in
good faith and in a manner he/she reasonably believed to be in or not opposed to
the best interests of the  corporation  and, with respect to any criminal action
or proceeding, had no cause to believe his/her conduct was unlawful. In the case
of a claim, action, suit or proceeding made or brought by or in the right of the
corporation  to procure a recovery  or judgment  in its favor,  the  corporation
shall not indemnify  such person in respect of any claim,  issue or matter as to
which  such  person  has been  adjudged  to be  liable  to the  corporation  for
negligence  or  misconduct  in  the  performance  of  his  or  her  duty  to the
corporation,  except for such  expenses as the Court may allow.  Any such person
who has been wholly  successful  on the merits or otherwise  with respect to any
such claim,  action,  suit or proceeding or with respect to any claim,  issue or
matter  therein,  shall be  indemnified  as of right  against  all  expenses  in
connection therewith or resulting therefrom.

4
The Registrant's  By-Laws provide for  indemnification  of the Registrant's
officers and directors  against all  liabilities  (including  reasonable  costs,
expenses,  attorney's  fees,  obligations  for payment in  settlement  and final
judgment)  incurred  by or  imposed  upon them in the  preparation,  conduct  or
compromise of any actual or threatened  action,  suit,  or  proceeding,  whether
civil,  criminal or  administrative,  including  any appeals  therefrom  and any
collateral  proceedings  in which they shall be involved by reason of any action
or  omission  by  them  in  their  capacity  as a  director  or  officer  of the
Registrant,  or of any other  corporation  which  they  serve as a  director  or
officer  at the  request  of the  Registrant,  whether  or not such  person is a
director  or  officer  at the time such  liabilities  are  incurred  or any such
action,  suit or  proceeding  is commenced  against  them.  The  indemnification
provided  by the  By-Laws  does  not  extend,  however,  to  certain  situations
involving misconduct, willful misfeasance, bad faith or gross negligence.

     The  Registrant  maintains an insurance  policy  insuring its directors and
officers against  liability for certain acts and omissions while acting in their
official capacities.

Item 7. Exemption From Registration Claimed.

     Not applicable.

Item 8. Exhibits.

     4.1  Certificate of Incorporation of Registrant filed with the Secretary of
          State  of   Delaware  on  May  23,  1968  (filed  as  Exhibit  3.1  of
          Registrant's  registration  statement on Form S-1 (File No.  2-29609),
          and incorporated herein by reference).

     4.2  Amendment to Certificate of Incorporation of Registrant filed with the
          Secretary of State of Delaware on March 27, 1981 (filed as Exhibit 3.2
          of Registrant's registration statement on Form S-1 (File No. 2-71727),
          and incorporated herein by reference).

     4.3  Amendment to Certificate of Incorporation of Registrant filed with the
          Secretary  of State of  Delaware on October 26, 1984 (filed as Exhibit
          27 of  Registrant's  Form 10-K for the year ended  April 30,  1985 and
          incorporated herein by reference).

     4.4  Amendment to Certificate of Incorporation of Registrant filed with the
          Secretary of State of Delaware on October 22, 1986 (filed as

5
Exhibit 42 of Registrant's Form 10-K for the year ended April 30, 1987
          and incorporated herein by reference).

     4.5  Amended and Restated  Certificate of Incorporation of Registrant filed
          with the  Secretary of State of Delaware on October 26, 1987 (filed as
          Exhibit 45 of Registrant's Form 10-K for the year ended April 30, 1990
          and incorporated herein by reference).

     4.6  Amendment to Certificate of Incorporation of Registrant filed with the
          Secretary  of State of  Delaware on November 2, 1989 (filed as Exhibit
          59 of  Registrant's  Form 10-K for the year ended  April 30,  1990 and
          incorporated herein by reference).4.7  By-Laws of Registrant (filed as
          Exhibit  3.3 to  Registrant's  Form 10-K for the year ended  April 30,
          1981, and incorporated herein by reference).

     4.8  Registrant's  401(k) Savings Plan, as amended and restated on July 22,
          1999.

     4.9  First Amendment to Registrants  401(k) Savings Plan,  dated as of June
          12, 2000, to be effective as of January 1, 2000.

     23.1 Consent of PricewaterhouseCoopers LLP

     24.1 Power of Attorney

     The  Registrant  will submit in a timely manner the 401(k) Savings Plan, as
amended  effective  January 1,  2000,  to the  Internal  Revenue  Service  for a
determination  letter that the Plan remains  qualified  under Section 401 of the
Internal Revenue Code and will make all changes required by the Internal Revenue
Service in order to qualify the Plan.

Item 9. Undertakings.

     (a) The undersigned Registrant hereby undertakes:

          (1) To file, during any period in which it offers or sells securities,
          a post-effective amendment to this registration statement:

          (i) To include  any  prospectus  required  by Section  10(a)(3) of the
          Securities Act of 1933;

6
(ii) To reflect in the  prospectus  any facts or events  arising after
          the effective date of the  registration  statement (or the most recent
          post-affective  amendment  thereof)  which,  individually  or  in  the
          aggregate, represent a fundamental change in the information set forth
          in the registration statement;

          (iii) To include any material  information with respect to the plan of
          distribution not previously disclosed in the registration statement or
          any material change to such information in the registration statement;

     Provided,  However, that paragraphs A(1)(i) and A(1)(ii) above do not apply
     if the information required to be included in a post-effective amendment by
     those paragraph is contained in periodic reports filed by the Registrant or
     the Plan pursuant to Section 13 or Section 15(d) of the Securities Exchange
     Act of 1934  that  are  incorporated  by  reference  in  this  registration
     statement.

          (2) That,  for the  purpose of  determining  any  liability  under the
          Securities Act, each such post-effective  amendment shall be deemed to
          be a new  registration  statement  relating to the securities  offered
          therein,  and the  offering of such  securities  at that time shall be
          deemed to be the initial bona fide offering thereof;

          (3) To remove from registration by means of a post-effective amendment
          any of the  securities  being  registered  which remain  unsold at the
          termination of the offering.

     (b) The  undersigned  Registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
Registrant's  annual  report  pursuant to section  13(a) or section  15(d)of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers, and controlling persons of
the  Registrant,  the  Registrant  has been  advised  that in the opinion of the
Securities and Exchange Commission such indemnification is

7
against  public  policy as expressed in the  Securities  Act and is,  therefore,
unenforceable.

In the event that a claim for  indemnification  against such liabilities  (other
than the  payments  by the issuer of  expenses  incurred  or paid by a director,
officer or  controlling  person of the issuer in the  successful  defense of any
action, suit or proceeding) is assented by such director, officer or controlling
person in connection with the securities being registered,  the Registrant will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such  indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

8
SIGNATURES

Pursuant to the  requirements  of the  Securities  Act of 1933,  the  Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in Mitchel Field, county of Nassau, Town of Hempstead,  State of New
York, on the 29th day of June, 2000.

                                FREQUENCY ELECTRONICS, INC.

                                By:  /s/ Martin B. Bloch
                                     -------------------------------------------
                                     MARTIN B. BLOCH, President and
                                     Chief Executive Officer

                                By:  /s/ Alan L. Miller
                                     -------------------------------------------
                                     ALAN L. MILLER, Chief Financial
                                     Officer and Controller

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
registration  has been signed  below by the  following  persons on behalf of the
Company and in the capacities and as of the date indicated above.

                                              By: /s/ Joseph P. Franklin
                                                  ------------------------------
                                                  JOSEPH P. FRANKLIN, Chairman
                                                  of the Board and Director

                                              By: /s/ Martin B. Bloch
                                                  ------------------------------
                                                  MARTIN B. BLOCH, President,
                                                  Chief Executive Officer
                                                  and Director

                                              By: /s/ John C. Ho
                                                  ------------------------------
                                                  JOHN C. HO, Director

                                              By: /s/ Joel Girsky
                                                  ------------------------------
                                                  JOEL GIRSKY, Director

                                              By: /s/ Marvin Meirs
                                                  ------------------------------
                                                  MARVIN MEIRS, Director

                                              By: /s/ E. Donald Shapiro
                                                  ------------------------------
                                                  E. DONALD SHAPIRO, Director

                                              By: /s/ S. Robert Foley, Jr.
                                                  ------------------------------
                                                  S. ROBERT FOLEY, JR.,
                                                  Director

9
EXHIBIT INDEX

Exhibit Number               Description
--------------               -----------

         4.8                 Registrant's 401(k) Savings Plan, as amended and
                             restated on July 22, 1999

         4.9                 First Amendment to Registrant's 401(k) Savings
                             Plan, dated as of June 12, 2000,
                             to be effective as of January 1, 2000

         23.1                Consent of PricewaterhouseCoopers LLP

         24.1                Powers of Attorney

10
EXHIBIT 4.8

                           FREQUENCY ELECTRONICS, INC.

                               401(K) SAVINGS PLAN
TABLE OF CONTENTS

ARTICLE 1...................................................................-2-
DEFINITIONS.................................................................-2-
         1.1      ACP or ACP TEST...........................................-2-
         1.2      ACTUAL DEFERRAL PERCENTAGE TEST...........................-2-
         1.3      ADP or ADP TEST...........................................-3-
         1.4      ADMINISTRATOR.............................................-3-
         1.5      ADOPTING EMPLOYER.........................................-3-
         1.6      AFFILIATED EMPLOYER.......................................-3-
         1.7      AGE.......................................................-3-
         1.8      ANNIVERSARY DATE..........................................-3-
         1.9      ANNUITY STARTING DATE.....................................-3-
         1.10     AVERAGE CONTRIBUTION PERCENTAGE TEST......................-3-
         1.11     BENEFICIARY...............................................-5-
         1.12     BREAK IN SERVICE..........................................-5-
         1.13     CODE......................................................-6-
         1.14     COMPENSATION..............................................-6-
         1.15     DISABILITY................................................-6-
         1.16     EARLY RETIREMENT AGE......................................-6-
         1.17     EARNED INCOME.............................................-6-
         1.18     ELECTIVE DEFERRAL.........................................-6-
         1.19     ELIGIBLE PARTICIPANT......................................-7-
         1.20     EMPLOYEE..................................................-7-
         1.21     EMPLOYER..................................................-7-
         1.22     FIDUCIARY.................................................-7-
         1.23     FISCAL YEAR...............................................-7-
         1.24     FORFEITURE................................................-8-
         1.25     HCE.......................................................-8-
         1.26     HIGHLY COMPENSATED EMPLOYEE...............................-8-
         1.27     HOUR OF SERVICE...........................................-8-
         1.28     KEY EMPLOYEE..............................................-8-
         1.29     LEASED EMPLOYEE...........................................-9-
         1.30     LIMITATION YEAR...........................................-9-
         1.31     MATCHING CONTRIBUTION.....................................-9-
         1.32     MATERNITY OR PATERNITY LEAVE..............................-9-
         1.33     NHCE......................................................-9-
         1.34     NON-ELECTIVE CONTRIBUTIONS................................-9-
         1.35     NON-HIGHLY COMPENSATED EMPLOYEE...........................-9-
         1.36     NON-KEY EMPLOYEE..........................................-9-
         1.37     NORMAL RETIREMENT AGE....................................-10-
         1.38     NORMAL RETIREMENT DATE...................................-10-
         1.39     OWNER-EMPLOYEE...........................................-10-
         1.40     PARTICIPANT..............................................-10-
         1.41     PARTICIPANT'S ACCOUNT....................................-10-
         1.42     PERMISSIVE AGGREGATION GROUP.............................-10-
         1.43     PLAN.....................................................-10-
         1.44     PLAN YEAR................................................-10-
         1.45     POLICY...................................................-10-
         1.46     QMAC.....................................................-10-
         1.47     QNEC.....................................................-10-
         1.48     QUALIFIED JOINT AND SURVIVOR ANNUITY.....................-10-
         1.49     QUALIFIED MATCHING CONTRIBUTION..........................-11-
         1.50     QUALIFIED NON-ELECTIVE CONTRIBUTIONS.....................-11-

12
1.51     QUALIFIED PRERETIREMENT SURVIVOR ANNUITY.................-11-
         1.52     REQUIRED AGGREGATION GROUP...............................-11-
         1.53     REQUIRED BEGINNING DATE..................................-11-
         1.54     SECTION 415 COMPENSATION.................................-12-
         1.55     SELF-EMPLOYED INDIVIDUAL.................................-12-
         1.56     SHAREHOLDER-EMPLOYEE.....................................-12-
         1.57     SUPER TOP HEAVY..........................................-12-
         1.58     TERMINATION OF EMPLOYMENT................................-12-
         1.59     TERMINATED PARTICIPANT...................................-12-
         1.60     TOP HEAVY................................................-12-
         1.61     TOP HEAVY MINIMUM ALLOCATION.............................-13-
         1.62     TOP HEAVY RATIO..........................................-13-
         1.63     TRUSTEE..................................................-14-
         1.64     TRUST FUND...............................................-14-
         1.65     VALUATION DATE...........................................-14-
         1.66     VESTED AGGREGATE ACCOUNT.................................-14-
         1.67     VESTED INTEREST..........................................-14-
         1.68     YEAR OF SERVICE..........................................-14-

ARTICLE 2..................................................................-16-
PLAN PARTICIPATION.........................................................-16-
         2.1      ELIGIBILITY REQUIREMENTS.................................-16-
         2.2      ENTRY DATE...............................................-17-
         2.3      WAIVER OF PARTICIPATION..................................-17-
         2.4      CESSATION OF PARTICIPATION...............................-17-
         2.5      RESTRICTIONS ON OWNER-EMPLOYEES..........................-17-

ARTICLE 3..................................................................-18-
CONTRIBUTIONS AND ALLOCATIONS..............................................-18-
         3.1      EMPLOYER CONTRIBUTIONS...................................-18-
         3.2      ALLOCATION OF EMPLOYER CONTRIBUTIONS.....................-19-
         3.3      ALLOCATION OF EARNINGS AND LOSSES........................-20-
         3.4      ALLOCATION OF FORFEITURES................................-20-
         3.5      TOP HEAVY MINIMUM ALLOCATION.............................-20-
         3.6      FAILSAFE ALLOCATION......................................-21-
         3.7      ROLLOVERS................................................-21-

ARTICLE 4..................................................................-23-
PLAN BENEFITS..............................................................-23-
         4.1      BENEFIT UPON NORMAL OR EARLY RETIREMENT..................-23-
         4.2      BENEFIT UPON LATE RETIREMENT.............................-23-
         4.3      BENEFIT UPON DEATH.......................................-23-
         4.4      BENEFIT UPON DISABILITY..................................-23-
         4.5      BENEFIT UPON TERMINATION.................................-23-
         4.6      DETERMINATION OF VESTED INTEREST.........................-23-

ARTICLE 5..................................................................-25-
DISTRIBUTION OF BENEFITS...................................................-25-
         5.1      BENEFIT UPON RETIREMENT..................................-25-
         5.2      BENEFIT UPON DEATH.......................................-25-
         5.3      DISABILITY BENEFITS......................................-26-
         5.4      BENEFIT UPON TERMINATION.................................-27-
         5.5      CASH-OUT OF BENEFITS.....................................-27-
         5.6      RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS..................-28-
         5.7      RESTORATION OF FORFEITED ACCOUNT BALANCE.................-28-
         5.8      SPOUSAL CONSENT REQUIREMENTS.............................-29-
         5.9      APPLICATION OF CODE SECTION 401(a)(9)....................-30-
         5.10     STATUTORY COMMENCEMENT OF BENEFITS.......................-31-
         5.11     DETERMINATION OF LIFE EXPECTANCIES.......................-31-
5.12     SEGREGATION OF BENEFIT BEFORE DISTRIBUTION...............-31-
         5.13     DISTRIBUTION IN EVENT OF LEGAL INCAPACITY................-31-
         5.14     DIRECT ROLLOVERS.........................................-31-
         5.15     DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS................-32-
         5.16     DISTRIBUTION OF EXCESS CONTRIBUTIONS.....................-33-
         5.17     DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS...........-34-
         5.18     FINANCIAL HARDSHIP DISTRIBUTIONS.........................-36-

ARTICLE 6..................................................................-38-
CODE SECTION 415 LIMITATIONS...............................................-38-
         6.1      MAXIMUM ANNUAL ADDITION..................................-38-
         6.2      ADJUSTMENTS TO MAXIMUM ANNUAL ADDITION...................-38-
         6.3      MULTIPLE PLANS AND MULTIPLE EMPLOYERS....................-39-
         6.4      MULTIPLE PLAN REDUCTION..................................-39-
         6.5      ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS................-41-

ARTICLE 7..................................................................-42-
DUTIES OF THE TRUSTEE......................................................-42-
         7.1      APPOINTMENT, RESIGNATION, REMOVAL AND SUCCESSION.........-42-
         7.2      INVESTMENT ALTERNATIVES OF THE TRUSTEE...................-42-
         7.3      VALUATION OF THE TRUST FUND..............................-44-
         7.4      COMPENSATION AND EXPENSES................................-44-
         7.5      PAYMENTS FROM THE TRUST FUND.............................-44-
         7.6      PAYMENT OF TAXES.........................................-45-
         7.7      ACCOUNTS, RECORDS AND REPORTS............................-45-
         7.8      EMPLOYMENT OF AGENTS AND COUNSEL.........................-45-
         7.9      DIVISION OF DUTIES AND INDEMNIFICATION...................-45-
         7.10     APPOINTMENT OF INVESTMENT MANAGER........................-47-
         7.11     ASSIGNMENT AND ALIENATION OF BENEFITS....................-47-
         7.12     EXCLUSIVE BENEFIT RULE...................................-47-
         7.13     PURCHASE OF INSURANCE....................................-47-
         7.14     LOANS TO PARTICIPANTS....................................-47-
         7.15     DIRECTED INVESTMENT ACCOUNTS.............................-49-

ARTICLE 8..................................................................-51-
DUTIES OF THE ADMINISTRATOR................................................-51-
         8.1      APPOINTMENT, RESIGNATION, REMOVAL AND SUCCESSION.........-51-
         8.2      POWERS AND DUTIES OF THE ADMINISTRATOR...................-51-
         8.3      EMPLOYMENT OF AGENTS AND COUNSEL.........................-51-
         8.4      COMPENSATION AND EXPENSES................................-51-
         8.5      CLAIMS PROCEDURES........................................-51-
         8.6      QUALIFIED DOMESTIC RELATIONS ORDERS......................-52-

ARTICLE 9..................................................................-54-
AMENDMENT, TERMINATION AND MERGER..........................................-54-
         9.1      AMENDMENT................................................-54-
         9.2      TERMINATION..............................................-54-
         9.3      MERGER OR CONSOLIDATION..................................-54-

ARTICLE 10.................................................................-55-
MISCELLANEOUS PROVISIONS...................................................-55-
         10.1     NO CONTRACT OF EMPLOYMENT................................-55-
         10.2     TITLE TO ASSETS..........................................-55-
         10.3     QUALIFIED MILITARY SERVICE...............................-55-
         10.4     FIDUCIARIES AND BONDING..................................-55-
         10.5     SEVERABILITY OF PROVISIONS...............................-55-
10.6     GENDER AND NUMBER........................................-55-
         10.7     HEADINGS AND SUBHEADINGS.................................-55-
         10.8     LEGAL ACTION.............................................-55-
FREQUENCY ELECTRONICS, INC.
                               401(K) SAVINGS PLAN

     THIS  AGREEMENT  is made and  entered  into  this  day of ,  1999,  between
FREQUENCY  ELECTRONICS,  INC.  (hereafter called the Employer) and ROBERT KLOMP,
MARVIN P. MEIRS and MARKUS HECHLER (hereafter called the Trustee).

                              W I T N E S S E T H:

     WHEREAS,  the Employer originally  established a 401(k) profit sharing plan
and trust  (hereafter  called the Plan),  effective  January 1, 1985, to provide
retirement  and other  incidental  benefits  to  Employees  who are  eligible to
participate in the plan; and

     WHEREAS,  the Employer  believes that continued  contributions  to the Plan
will help to strengthen the bonds of loyalty and mutual  understanding that have
existed  between the Employer and its  employees,  thereby  making  possible the
continued growth of its business; and

     WHEREAS,  in  accordance  with the terms of the Plan,  the Employer has the
ability at any time, and from time to time, to amend the Plan;

     NOW, THEREFORE, effective January 1, 1999 (except for those sections of the
Plan that have an  alternative  effective  date),  the  Employer and the Trustee
hereby  amend and  restate  the Plan as  follows to comply  with all  applicable
statutes,  including the Employee Retirement Income Security Act of 1974 (ERISA)
and  the  Internal  Revenue  Code of  1986,  as  amended  by the  Uruguay  Round
Agreements  Act, the Small  Business Job  Protection  Act of 1996,  the Taxpayer
Relief Act of 1997, the Uniform Services Employment and Reemployment Rights Act,
and all applicable rulings and regulations issued thereunder:

                                                                               1
ARTICLE 1
                                  DEFINITIONS

1.1  ACP or ACP TEST: The term ACP means the Average Contribution  Percentage as
     defined  in  Section   1.10(e).   The  term  ACP  Test  means  the  Average
     Contribution Percentage Test.

1.2  ACTUAL DEFERRAL  PERCENTAGE TEST: The term Actual Deferral  Percentage Test
     means one of the following  tests for Elective  Deferrals:  (a) the ADP for
     Participants  who are HCEs in the  current  Plan Year will not  exceed  the
     prior  Plan  Year's ADP for  Participants  who were NHCEs in the prior Plan
     Year multiplied by 1.25; or (b) the ADP for  Participants  who are HCEs for
     the  current  Plan  Year will not  exceed  the prior  Plan  Year's  ADP for
     Participants  who were  NHCEs in the  prior  Plan Year  multiplied  by 2.0,
     provided  that the ADP for  Participants  who are HCEs in the current  Plan
     Year does not exceed the ADP for  Participants  who were NHCEs in the prior
     Plan Year by more than 2 percentage points.  However, the Administrator may
     elect to use 1997 Plan Year data in  determining  the ADP Test for the 1997
     Plan Year. The ADP Test will be determined as follows:

     (a)  Actual Deferral Percentage:  The term Actual Deferral Percentage (ADP)
          means,  for a specified  group of  Participants  for a Plan Year,  the
          average of the ratios  calculated  separately for each  Participant in
          such group of (1) the amount of Employer  contributions  actually paid
          on  behalf  of  such   Participant  for  the  Plan  Year  to  (2)  the
          Participant's  Compensation for such Plan Year. Employer contributions
          made  on  behalf  of any  Participant  will  include  a  Participant's
          Elective  Deferrals,  including Excess Elective Deferrals of HCEs, but
          excluding  Excess  Elective  Deferrals of NHCEs that arise solely from
          Elective  Deferrals made to this Plan or any other plans maintained by
          this Employer and Elective  Deferrals  used in the ACP Test if the ADP
          Test is satisfied  both with and without  exclusion of these  Elective
          Deferrals.  In computing  ADPs, an Employee who would be a Participant
          but for the failure to make  Elective  Deferrals  will be treated as a
          Participant on whose behalf no Elective Deferrals are made.

     (b)  Highly Compensated  Employees: A Participant is a HCE for a particular
          Plan  Year if he or she meets the  definition  of a HCE in effect  for
          that Plan Year. A Participant is a NHCE for a particular  Plan Year if
          he or she does not meet the  definition  of a HCE in  effect  for that
          Plan Year. The ADP for any  Participant who is a HCE for the Plan Year
          and who is eligible to have Elective Deferrals allocated to his or her
          accounts  under two or more  arrangements  described in Code ss.401(k)
          that are  maintained  by this  Employer  will be determined as if such
          Elective  Deferrals  were made  under a single  arrangement.  If a HCE
          participates  in two or more cash or deferred  arrangements  that have
          different Plan Years, all cash or deferred arrangements ending with or
          within the same calendar year will be treated as a single arrangement.
          Notwithstanding  the  foregoing,  certain  plans  will be  treated  as
          separate if mandatorily  disaggregated  under  regulations  under Code
          ss.401(k).

     (c)  Other Rules:  In determining  the ADP Test, (1) if this Plan satisfies
          the  requirements of Code ss ss.401(k),  401(a)(4),  or 410(b) only if
          aggregated with one or more other plans,

2
or if one or  more  other  plans  satisfy  such  requirements  only if
          aggregated  with this  Plan,  then this  section  will be  applied  by
          determining  the ADP of  Employees  as if all such plans were a single
          plan. Any adjustments to the Non-Highly  Compensated  Employee ADP for
          the prior Plan Year will be made in  accordance  with  Notice 98-1 and
          any superseding guidance.  Plans may be aggregated in order to satisfy
          Code  ss.401(k)  only if they have the same Plan Year and use the same
          ADP testing method;  (2) Elective  Deferrals,  QNECs and QMACs must be
          made  before  the  last  day of the  twelve-month  period  immediately
          following  the  Plan  Year  to  which  contributions  relate;  (3) the
          Employer will maintain records sufficient to demonstrate  satisfaction
          of the ADP Test and the  amount  of QNECs  and/or  QMACs  used in such
          test;  and (4) the  determination  and treatment of the ADP amounts of
          any  Participant  will  satisfy  such  other  requirements  as  may be
          prescribed by the Secretary of the Treasury.

1.3  ADP or ADP TEST:  The term ADP  means the  Actual  Deferral  Percentage  as
     defined in  Section  1.2(a).  The term ADP Test  means the Actual  Deferral
     Percentage Test.

1.4  ADMINISTRATOR:  The term  Administrator  means the Employer  unless another
     Administrator is appointed by the Employer.

1.5  ADOPTING  EMPLOYER:  The term Adopting  Employer means any business  entity
     which  adopts this Plan with the  consent of the  Employer.  An  Employee's
     transfer to or from any Employer or Adopting  Employer  will not affect his
     or her Participant's  Account balance,  total Years of Service and Years of
     Plan Participation. If the Adopting Employer is not an Affiliated Employer,
     the  Employees  of the Adopting  Employer  will be treated  separately  for
     purposes of allocating  contributions and Forfeitures and for testing under
     Code ss.401(a)(4),  ss.401(k),  ss.401(m),  ss.410 and, if the Employer and
     Adopting Employer do not share Employees,  ss.416. An Adopting Employer may
     terminate  participation  by delivering  written notice to the Trustee.  If
     Plan assets which have been  allocated to the Employees of the  terminating
     Adopting  Employer  are  not  transferred  within  a  reasonable  time to a
     successor  Trustee,  they  will  be  distributed  to the  Employees  of the
     terminating  Adopting  Employer  as if the Plan had been  terminated  under
     Section 9.2.

1.6  AFFILIATED  EMPLOYER:  The  term  Affiliated  Employer  means  any  of  the
     following  of which  the  Employer  is a part:  (1) a  controlled  group of
     corporations as defined in Code ss.414(b); (2) a trade or business (whether
     or not  incorporated)  under common control under Code  ss.414(c);  (3) any
     organization  (whether  or  not  incorporated)  which  is a  member  of  an
     affiliated  service  group under Code  ss.414(m);  and (4) any other entity
     required to be aggregated under Code ss.414(o).

1.7  AGE: The term Age means actual attained age.

1.8  ANNIVERSARY DATE: The term Anniversary Date means December 31st.

1.9  ANNUITY  STARTING DATE: The term Annuity  Starting Date means the first day
     of the first  period for which an amount is paid as an annuity,  or, in the
     case of a benefit not payable as an annuity,  the first day all events have
     occurred which entitle the  Participant  to such benefit.  The first day of
     the  first  period  for  which a  benefit  is to be  received  by reason of
     Disability  will be  treated  as the  Annuity  Starting  Date  only if such
     benefit is not an auxiliary benefit.

                                                                               3
1.10 AVERAGE  CONTRIBUTION   PERCENTAGE  TEST:  The  term  Average  Contribution
     Percentage Test (or ACP Test) means one of the following tests for Matching
     Contributions and Employee contributions:  (a) the ACP for Participants who
     are HCEs in the current Plan Year will not exceed the prior Plan Year's ACP
     for  Participants who were NHCEs in the prior Plan Year multiplied by 1.25;
     or (b) the ACP for  Participants who are HCEs in the current Plan Year will
     not exceed the prior Plan Year's ACP for Participants who were NHCEs in the
     prior Plan Year multiplied by 2.0,  provided that the ACP for  Participants
     who  are  HCEs  in the  current  Plan  Year  does  not  exceed  the ACP for
     Participants  who were NHCEs in prior  Plan Year by more than 2  percentage
     points.  However, the Administrator may elect to use 1997 Plan Year data in
     determining  the ACP Test  for the 1997  Plan  Year.  The ACP Test  will be
     determined as follows:

     (a)  Multiple  Use:  If one or  more  HCEs  participate  in  both a cash or
          deferred  arrangement and in a plan subject to the ACP Test maintained
          by the  Employer,  and if the sum of the ADP  and  ACP of  those  HCEs
          subject to either or both tests exceeds the Aggregate Limit,  then the
          ACP  of  those  HCEs  who  also  participate  in a  cash  or  deferred
          arrangement will be reduced in the manner described in Section 5.17 of
          the Plan so that the limit is not  exceeded.  The amount by which each
          HCE's Contribution  Percentage Amount is reduced will be treated as an
          Excess Aggregate  Contribution as defined in Section 5.17. The ADP and
          the ACP of HCEs are determined after any corrections  required to meet
          the ADP  Test  and the ACP  Test  and  are  deemed  to be the  maximum
          permitted  under such tests for the Plan Year.  Multiple  use does not
          occur if either  the ADP or the ACP of the HCEs does not  exceed  1.25
          multiplied by the ADP and the ACP of the NHCEs.

     (b)  Highly Compensated  Employees: A Participant is a HCE for a particular
          Plan  Year if he or she meets the  definition  of a HCE in effect  for
          that Plan Year; and a Participant is a NHCE for a particular Plan Year
          if he or she does not meet the  definition of a HCE in effect for that
          Plan Year. The  Contribution  Percentage for any  Participant who is a
          HCE  and  who is  eligible  to have  Contribution  Percentage  Amounts
          allocated to his or her account  under two or more plans  described in
          Code ss.401(a),  or arrangements  described in Code ss.401(k) that are
          maintained by the Employer, will be determined as if the total of such
          Contribution  Percentage  Amounts  was made under each plan.  If a HCE
          participates  in two or more cash or deferred  arrangements  that have
          different plan years, all cash or deferred arrangements ending with or
          within the same calendar year will be treated as a single arrangement.
          Notwithstanding  the  foregoing,  certain  plans  will be  treated  as
          separate if mandatorily  disaggregated  under  regulations  under Code
          ss.401(m).

4
(c)  Other Rules:  In determining  the ACP Test, (1) if this Plan satisfies
          the  requirements  of  Code  ss.401(m),   Code  ss.401(a)(4)  or  Code
          ss.410(b) only if aggregated  with one or more other plans,  or if one
          or more other plans satisfy such  requirements only if aggregated with
          this  Plan,  then this  section  will be applied  by  determining  the
          Contribution  Percentage  of  Employees  as if all such  plans  were a
          single plan. Any  adjustments to the Non-Highly  Compensated  Employee
          ACP for the prior  Plan Year will be made in  accordance  with  Notice
          98-1 and any superseding guidance. Plans may be aggregated in order to
          satisfy Code  ss.401(m)  only if they have the same Plan Year;  (2) in
          determining the Contribution  Percentage test, Employee  contributions
          are considered to have been made in the Plan Year in which contributed
          to the Plan, and Matching  Contributions  and QNECs will be considered
          made for a Plan Year if made no later than the end of the twelve-month
          period  beginning on the day after the close of the Plan Year; (3) the
          Employer will maintain records sufficient to demonstrate  satisfaction
          of the ACP Test and the  amount  of QNECs or QMACs,  or both,  used in
          such test; and (4) the determination and treatment of the Contribution
          Percentage of any Participant will satisfy such other  requirements as
          may be prescribed by the Secretary of the Treasury.

     (d)  Aggregate Limit: The term Aggregate Limit means the sum of (1) 125% of
          the greater of the ADP of Participants who are the NHCEs for the prior
          Plan Year or the ACP of  Participants  who are NHCEs  subject  to Code
          ss.401(m)  for the Plan Year  beginning  with or within the prior Plan
          Year of the CODA, and (2) the lesser of 200% or two plus the lesser of
          such ADP or ACP.  "Lesser" is  substituted  for  "greater"  in (1) and
          "greater" is substituted for "lesser" after "two plus the" in (2) if a
          larger Aggregate Limit would result.

     (e)  Definitions:  The  term  Average  Contribution  Percentage  means  the
          average of the Contribution Percentages of the "eligible" Participants
          in  a  group;  the  term  Contribution   Percentage  means  the  ratio
          (expressed  as  a  percentage)  of  the   Participant's   Contribution
          Percentage  Amounts  to the  Participant's  Compensation  for the Plan
          Year; and the term  Contribution  Percentage  Amounts means the sum of
          Employee  Contributions,  Matching  Contributions,  and  QMACs (to the
          extent not taken  into  account in the ADP Test) made on behalf of the
          Participant for the Plan Year.  Contribution  Percentage  Amounts will
          not  include  Matching  Contributions  that are  forfeited  either  to
          correct Excess Aggregate Contributions or because the contributions to
          which they  relate  are Excess  Deferrals,  Excess  Contributions,  or
          Excess Aggregate Contributions.

     (f)  "Eligible"  Participant:  For purposes of this Section,  an "eligible"
          Participant  is any  Employee  who is  eligible  to make  an  Employee
          Contribution,  or an Elective  Deferral  (if the  Employer  takes such
          contributions  into  account in the  calculation  of the  Contribution
          Percentage),   or  to  receive  a  Matching  Contribution   (including
          forfeitures)  or a QMAC. If an Employee  Contribution is required as a
          condition  of  Plan  participation,   any  Employee  who  would  be  a
          Participant if such Employee made such a contribution  will be treated
          as  an   "eligible"   Participant   on  behalf  of  whom  no  Employee
          Contributions   are  made.   An   Employee   Contribution   means  any
          contribution made to the Plan by or on behalf of a Participant that is
          included in the  Participant's  gross income in the year in which made
          and that is maintained  under a separate account to which earnings and
          losses are allocated.

                                                                               5
1.11 BENEFICIARY:  The term  Beneficiary  means the recipient  designated by the
     Participant  to receive the Plan  benefits  payable upon the  Participant's
     death.  Subject to the  provisions of Section 5.8 regarding the rights of a
     Participant's  spouse,  each  Participant  may designate a Beneficiary on a
     form  supplied  by  the  Administrator,  and  may  change  or  revoke  that
     designation by filing written notice with the Administrator. In the absence
     of a designation,  the  Participant  will be deemed to have  designated the
     following Beneficiaries (if then living) in the following order: (1) his or
     her spouse, (2) his or her children; and (3) his or her estate.

1.12 BREAK IN  SERVICE:  The  term  Break  in  Service  means  for  purposes  of
     determining a Participant's  Vested  Interest,  a Plan Year during which an
     Employee does not complete more than 500 Hours of Service for reasons other
     than an  authorized  leave  of  absence,  which is any  period  in which an
     Employee ceases active employment because of illness,  military service, or
     any other reason  approved by the Employer.  If a Plan Year is less than 12
     months,  the 500  Hours  of  Service  requirement  will be  proportionately
     reduced.   For  purposes  of  determining  an  Employee's   eligibility  to
     participate  in this Plan,  the term Break in  Service  means the  12-month
     period  beginning  on the  date an  Employee  first  completes  and Hour of
     Service and each  anniversary  thereof  during  which an Employee  fails to
     complete  more  than  500  Hours  of  Service  for  reasons  other  than an
     authorized leave of absence as described above.

1.13 CODE:  The term Code means the Internal  Revenue Code of 1986,  as amended,
     and the  regulations  and rulings  promulgated  thereunder  by the Internal
     Revenue Service.

1.14 COMPENSATION:  The term Compensation means wages within the meaning of Code
     ss.3401(a) and all other payments of compensation that are actually paid or
     made available in gross income during the calendar year ending on or within
     the  Plan  Year  to an  Employee  by the  Employer  (in the  course  of the
     Employer's trade or business) for which the Employer is required to furnish
     the  Employee  a  written  statement  (Form  W-2)  under  Code  ss.6041(d),
     ss.6051(a)(3) and ss.6052.  Compensation must be determined  without regard
     to any rules under Code ss.3401(a) that limit the remuneration  included in
     wages  based on the nature or location of the  employment  or the  services
     performed   (such  as  the  exception  for   agricultural   labor  in  Code
     ss.3401(a)(2).   Compensation  will  also  include  amounts  not  currently
     includible  in  gross  income  by  reason  of  Code  ss.125,  ss.402(e)(3),
     ss.402(h), or ss.403(b).  Compensation used to determine Plan benefits will
     not exceed $160,000, as adjusted under Code ss.401(a)(17). A 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 is less
     than 12 months,  the adjusted  $160,000  limitation 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.  Compensation of
     an Owner-Employee or a Self-Employed Individual will equal Earned Income up
     to the adjusted $160,000 limitation.

1.15 DISABILITY:  The term  Disability  means a  physical  or  mental  condition
     arising  after an  Employee  has become a  Participant  which  totally  and
     permanently  prevents the Participant  from performing his or her specified
     duties for the Employer.  The determination as to whether a Participant has
     suffered  a  Disability  will  be  made  by a  physician  appointed  by the
     Administrator.  If a difference of opinion arises  between the  Participant
     and  the  Administrator  as to  whether  the  Participant  has  suffered  a
     Disability, it will be settled by a majority decision of

6
three  physicians,  one to be  appointed  by the  Administrator,  one to be
     appointed  by the  Participant,  and the third to be  appointed  by the two
     physicians first appointed herein. However,  notwithstanding the foregoing,
     the term  Disability  will not  include  any  disability  arising  from (1)
     chronic  or  excessive  use  of  intoxicants  or  other   substances;   (2)
     intentionally  self-inflicted  injury or  sickness;  (3) an unlawful act or
     enterprise  by  the   Participant;   or  (4)  military  service  where  the
     Participant  is  eligible  to  receive  a  government   sponsored  military
     disability pension.

1.16 EARLY  RETIREMENT  AGE:  Early  Retirement Age means any  Anniversary  Date
     coinciding with or following the date a Participant reaches Age 59 1/2.

1.17 EARNED  INCOME:  The  term  Earned  Income  means  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  allocable  thereto.
     Net earnings will be reduced by deductible contributions by the Employer to
     a qualified retirement plan. Net earnings will be determined with regard to
     the deduction  allowed to the Employer by Code  ss.164(f) for taxable years
     beginning after December 31, 1989.

1.18 ELECTIVE DEFERRAL: The term Elective Deferrals means Employer contributions
     made  to the  Plan  at the  election  of the  Participant  in  lieu of cash
     compensation,  and will  include  contributions  made  pursuant to a salary
     reduction  agreement or other  deferral  mechanism.  In any taxable year, a
     Participant's  Elective  Deferral is the sum of all Employer  contributions
     made on behalf of such  Participant  pursuant to an election to defer under
     any  qualified  cash or  deferred  arrangement  under Code  ss.401(k),  any
     simplified  employee  pension  cash  or  deferred  arrangement  under  Code
     ss.402(h)(1)(B), any eligible deferred compensation plan under Code ss.457,
     any plan under Code ss.501(c)(18),  and any Employer contributions made for
     the  purchase of an annuity  contract  under Code  ss.403(b)  pursuant to a
     salary  reduction  agreement.  Elective  Deferrals  will  not  include  any
     deferrals  properly  distributed as excess Annual  Additions  under Section
     6.5.

1.19 ELIGIBLE  PARTICIPANT:  The term Eligible  Participant  means a Participant
     eligible to receive an  allocation  of Employer  contributions  (other than
     Matching  Contributions)  allocable for a Plan Year. Any Participant who is
     an  Employee  on  the  last  day of  the  Plan  Year  will  be an  Eligible
     Participant  if he or she also  completes  at least  1,000 Hours of Service
     during the Plan Year. Any  Participant  who terminates  employment with the
     Employer  before  the last day of the Plan Year  will  only be an  Eligible
     Participant for that Plan Year in accordance with the following provisions:

     (a)  Retiring Participants:  A Participant who terminates employment before
          the last day of the Plan Year  because of  retirement  after Normal or
          Early Retirement Age will be an Eligible Participant regardless of the
          number of Hours of Service the Participant  completes during that Plan
          Year.

     (b)  Deceased Participants:  A Participant who terminates employment before
          the last day of the Plan Year because of death will not be an Eligible
          Participant for that Plan Year.

                                                                               7
(c)  Disabled Participants:  A Participant who terminates employment before
          the last day of the Plan Year  because  of  Disability  will not be an
          Eligible Participant for that Plan Year.

     (d)  Terminated Participants:  A Participant who terminates before the last
          day of the Plan  Year for  reasons  other  than  retirement,  death or
          Disability will not be an Eligible Participant for that Plan Year.

1.20 EMPLOYEE:  The term Employee means (1) any person  employed by the Employer
     as an  employee;  (2) except for  purposes of  determining  eligibility  to
     participate in this Plan, any employee of an Affiliated  Employer;  (3) any
     Self-Employed  Individual who derives Earned Income from the Employer;  (4)
     any  Owner-Employee;  and (5) any Leased  Employee  who is not covered by a
     plan described in Code  ss.414(n)(5)  provided Leased Employees  constitute
     more than 20% of the Employer's non-highly compensated workforce.

1.21 EMPLOYER:  The term  Employer  means  Frequency  Electronics,  Inc. (or any
     successor thereto that sponsors this Plan) and any Adopting Employer.

1.22 FIDUCIARY:  The  term  Fiduciary  means  any  individual  or  entity  which
     exercises any discretionary authority or control over the management of the
     Plan or over the disposition of the assets of the Plan;  renders investment
     advice for a fee or other  compensation  (direct or  indirect);  or has any
     discretionary authority or responsibility over Plan administration.

1.23 FISCAL  YEAR:  The term Fiscal Year means the  Employer's  accounting  year
     beginning May 1st and ending April 30th.

1.24 FORFEITURE:  The term Forfeiture  means the amount by which a Participant's
     Account  balance  exceeds  his or her Vested  Interest  upon the earlier to
     occur of (1) the date the Participant receives a distribution of his or her
     Vested Interest  pursuant to Sections 5.4, 5.5, or 5.6; or (2) the date the
     Participant  incurs 5 consecutive  Breaks in Service after  Termination  of
     Employment.  No Forfeitures will occur solely as a result of the withdrawal
     of a  Participant's  own  contributions  to the  Plan,  or a  Participant's
     transfer to an Affiliated  Employer or Adopting  Employer.  All Forfeitures
     will be allocated to the Forfeiture Account pending allocation  pursuant to
     Section 3.4.

1.25 HCE: The term HCE means a Highly Compensated Employee.

8
1.26 HIGHLY COMPENSATED EMPLOYEE:  The term Highly Compensated Employee (or HCE)
     means,  for Plan Years  beginning after December 31, 1996, any Employee (1)
     who during the Plan Year or the look-back year was a 5% owner as defined in
     Code  ss.416(i)(1);  or (2) who for the  look-back  year  had  Section  415
     Compensation in excess of $80,000 as adjusted under Code ss.415(d)  (except
     that the base year will be the calendar quarter ending September 30, 1996).
     The look-back  year will be the 12 month period  immediately  preceding the
     Plan Year for which the  determination is being made. The  determination of
     who is a highly  compensated  former  Employee  is based on the  rules  for
     determining HCE status as in effect for the Plan Year or the look-back year
     for which the  determination  is being made, in accordance  with  temporary
     regulation  ss.1.414(q)-1T,  A-4 and Notice  97-45.  In  determining  if an
     Employee is a Highly Compensated Employee for Plan Years beginning in 1997,
     amendments to Code  ss.414(q) are treated as having been in effect for Plan
     Years beginning in 1996.

1.27 HOUR OF SERVICE:  The term Hour of Service means (a) each hour for which an
     Employee is paid, or entitled to payment, for the performance of duties for
     the Employer or an Affiliated Employer. These hours will be credited to the
     Employee for the computation period in which the duties are performed;  and
     (b) each hour for which an Employee is paid, or entitled to payment, by the
     Employer  or an  Affiliated  Employer on account of a period of time during
     which no duties  are  performed  (irrespective  of whether  the  employment
     relationship has terminated) due to vacation,  holiday, illness, incapacity
     (including  disability),  layoff,  jury  duty,  military  duty or  leave of
     absence. No more than 501 hours will be credited under this Section for any
     single  continuous  period  (whether or not such period  occurs in a single
     computation  period).  Hours under this  paragraph  will be calculated  and
     credited  pursuant to ss.2530.200b-2 of the Department of Labor Regulations
     which  are  incorporated  herein by this  reference;  and (c) each hour for
     which back pay, irrespective of mitigation of damages, is either awarded or
     agreed to by the Employer or an  Affiliated  Employer.  The same hours will
     not be credited  both under section (a) or section (b) above and under this
     section  (c).  These hours will be credited for the  computation  period or
     periods  to  which  the  award  or  agreement   pertains  rather  than  the
     computation  period in which the award,  agreement  or payment is made.  In
     determining  whether a Break in Service for  participation  and vesting has
     occurred in a computation  period,  an individual on Maternity or Paternity
     Leave will receive  credit for up to 501 hours which would  otherwise  have
     been credited to such  individual  but for such absence,  or in any case in
     which such hours  cannot be  determined,  8 hours per day of such  absence.
     Hours  credited for  Maternity  of Paternity  Leave will be credited in the
     computation  period  in  which  the  absence  begins  if the  crediting  is
     necessary  to prevent a Break in Service  in that  period,  or in all other
     cases, in the following computation period.

                                                                               9
1.28 KEY EMPLOYEE:  The term Key Employee means any Employee,  Former  Employee,
     deceased  Employee,  or  Beneficiary  who at any time  during the Plan Year
     containing the  Determination  Date for the Plan Year in question or any of
     the prior 4 Plan Years was (1) an officer of the Employer whose Section 415
     Compensation   exceeds   50%  of  the   amount   in   effect   under   Code
     ss.415(b)(1)(A),  except that no more than fifty  Employees (or, if lesser,
     the greater of three or 10% of the Employees)  will be treated as officers;
     (2) an owner (or was  considered  an owner under Code ss.318) of one of the
     ten largest  interests  in the  Employer  whose  Section  415  Compensation
     exceeds 100% of the dollar limitation in effect under Code ss.415(c)(1)(A),
     but if two Employees  own the same  interest in the Employer,  the Employee
     with the  greater  annual  Compensation  will be treated as owning a larger
     interest;   (3)  a  5%  owner  of  the   Employer   as   defined   in  Code
     ss.416(i)(1)(B)(i);  or (4) a 1% owner of the  Employer  as defined in Code
     ss.416(i)(1)(B)(ii)  whose  annual  Section 415  Compensation  is more than
     $150,000.  For  purposes of this  Section,  Section 415  Compensation  will
     include  amounts  contributed  by the  Employer  on behalf  of an  Employee
     pursuant to a salary  reduction  agreement  which are  excludible  from the
     Employee's  gross  income  under  Code  ss.125,  Code  ss.402(e)(3),   Code
     ss.402(h), or Code ss.403(b).

1.29 LEASED  EMPLOYEE:  The term  Leased  Employee  means any person  within the
     meaning of Code  ss.414(n)(2)  and Code ss.414(o) who is not an Employee of
     the Employer and who,  pursuant to an agreement  between the Employer and a
     leasing  organization,  has performed  services for the Employer or for the
     Employer  and  related  persons  as  determined  in  accordance  with  Code
     ss.414(n)(6)  on a  substantially  full time basis for a period of at least
     one year, and such services are performed  under the primary  direction and
     control of the  Employer.  Contributions  or benefits  provided to a Leased
     Employee by the leasing  organization  which are  attributable  to services
     performed for the Employer will be treated as provided by Employer.

1.30 LIMITATION YEAR: The term Limitation Year means the Plan Year.

1.31 MATCHING  CONTRIBUTION:  The term Matching  Contribution  means an Employer
     contribution made to this or any other defined  contribution plan on behalf
     of a Participant  on account of Voluntary  Employee  Contributions  made by
     such Participant, or on account of a Participant's Elective Deferral, under
     a Plan maintained by the Employer.

1.32 MATERNITY OR PATERNITY  LEAVE:  The term Maternity or Paternity Leave means
     that an Employee is absent from work because of the  Employee's  pregnancy;
     the  birth of the  Employee's  child;  the  placement  of a child  with the
     Employee in connection with the adoption of such child by the Employee;  or
     the  need to  care  for  such  child  for a  period  beginning  immediately
     following the child's birth or placement as set forth above.

1.33 NHCE: The term NHCE means a Non-Highly Compensated Employee.

1.34 NON-ELECTIVE  CONTRIBUTIONS:  The term  Non-Elective  Contribution  means a
     contribution  other than a Matching  Contribution  or a Qualified  Matching
     Contribution  (1) that is made by the  Employer,  (2) that is  allocated to
     Participants'  Accounts,  and (3) that  the  Participant  may not  elect to
     receive in cash until such contributions are distributed from the Plan.

10
1.35 NON-HIGHLY  COMPENSATED EMPLOYEE:  The term Non-Highly Compensated Employee
     means any Employee who is not a Highly Compensated Employee.

1.36 NON-KEY EMPLOYEE: The term Non-Key Employee means any Employee who is not a
     Key Employee,  including  former Key Employees.  For purposes of making the
     allocations in Section 3.5,  Non-Key  Employee means a Non-Key Employee who
     either is a Participant  or would be a Participant  but for the reasons set
     forth in Section 3.5(a).

1.37 NORMAL  RETIREMENT  AGE:  The term Normal  Retirement  Age means the date a
     Participant reaches Age 65. There is no mandatory retirement age.

1.38 NORMAL   RETIREMENT  DATE:  The  term  Normal  Retirement  Date  means  the
     Anniversary Date occurring nearest Normal Retirement Age.

1.39 OWNER-EMPLOYEE:  The  term  Owner-Employee  means  (1)  in the  case  of an
     Employer  or  Affiliated  Employer  which  is an  unincorporated  trade  or
     business,  an individual  who owns the entire  interest in such Employer or
     Affiliated  Employer;  and (2) in the  case of an  Employer  or  Affiliated
     Employer  which is a  partnership,  an individual who owns more than 10% of
     either the  capital  interest or the profit  interest  in such  Employer of
     Affiliated Employer.

1.40 PARTICIPANT:  The  term  Participant  means  any  Employee  who has met the
     eligibility  and  participation  requirements  of  the  Plan.  However,  an
     individual who is no longer an Employee will not be deemed a Participant if
     his or her entire Plan  benefit  (1) is fully  guaranteed  by an  insurance
     company and is legally  enforceable  at the sole choice of such  individual
     against  such  insurance  company,  provided  that a contract,  policy,  or
     certificate  describing  the benefits to which such  individual is entitled
     under the Plan has been issued to such individual; or (2) is paid in a lump
     sum distribution which represents such individual's  entire interest in the
     Plan.

1.41 PARTICIPANT'S  ACCOUNT: The term Participant's Account means the account to
     which  is  credited  a  Participant's  share  of  Employer   contributions,
     Forfeitures which are not used to pay administrative  expenses or to reduce
     Employer  contributions,  and  earnings  and losses.  Each  account will be
     divided into the following Employer contribution sub-accounts: the Elective
     Deferral Account; the Matching Contribution Account; the Qualified Matching
     Contribution  Account;  the  Non-Elective  Contribution  Account;  and  the
     Qualified Non-Elective Contribution Account.

1.42 PERMISSIVE AGGREGATION GROUP: The term Permissive Aggregation Group means a
     Required  Aggregation Group plus any Employer plan(s) which when considered
     as a group with the Required  Aggregation  Group would  continue to satisfy
     Code ss.401(a)(4) and ss.410.

1.43 PLAN:  The term  Plan  means  this  401(k)  profit  sharing  plan and trust
     agreement,  which is named the Frequency  Electronics,  Inc. 401(k) Savings
     Plan.

1.44 PLAN YEAR:  The term Plan Year means the Plan's  accounting  year beginning
     January 1st and ending December 31st.

1.45 POLICY:  The term  Policy  means an  insurance  policy or annuity  contract
     purchased by the Plan.

                                                                              11
1.46 QMAC: The term QMAC means a Qualified Matching Contribution.

1.47 QNEC: The term QNEC means a Qualified Non-Elective Contribution.

1.48 QUALIFIED JOINT AND SURVIVOR ANNUITY: The term Qualified Joint and Survivor
     Annuity means an immediate  annuity for the life of the Participant  with a
     survivor benefit for the life of the Participant's spouse which is not less
     than 50% nor more than 100% of the annuity  payable  during the joint lives
     of the  Participant and his spouse and which is the amount of benefit which
     can be purchased  with the  Participant's  Vested  Aggregate  Account.  The
     survivor  benefit will be 50% unless a higher  percentage is elected by the
     Participant.

1.49 QUALIFIED MATCHING  CONTRIBUTION:  The term Qualified Matching Contribution
     means  a  Matching  Contribution  that  (1) is  used  for  the  purpose  of
     satisfying the ADP Test or the ACP Test; (2) a Participant may not elect to
     receive it in cash until  distributed  from the Plan; and (3) is subject to
     the distribution and nonforfeitability  requirements of Code ss.401(k) when
     made to the Plan.

1.50 QUALIFIED  NON-ELECTIVE  CONTRIBUTIONS:  The  term  Qualified  Non-Elective
     Contribution means a contribution (other than a Matching  Contribution or a
     QMAC) made by the Employer and  allocated  to a  Participant's  Account and
     that  (1) is used for the  purpose  of  satisfying  the ADP Test or the ACP
     Test; (2) a Participant may not elect to receive in cash until  distributed
     from the Plan; and (3) is subject to the distribution and nonforfeitability
     requirements   of  Code  ss.401(k)   when  made  to  the  Plan.   Qualified
     Non-Elective  Contributions  may be considered in determining the Top Heavy
     Minimum Contribution under Section 3.5.

1.51 QUALIFIED  PRERETIREMENT SURVIVOR ANNUITY: The term Qualified Preretirement
     Survivor  Annuity  means a  survivor  annuity  for the  life of a  deceased
     Participant's  surviving  spouse  which is equal to the  amount of  benefit
     which  can  be  purchased  by  50% of  the  deceased  Participant's  Vested
     Aggregate  Account  determined  at the  date of  death.  In  determining  a
     Participant's  Vested Aggregate  Account for purposes of this Section,  any
     security  interest  held by the Plan because of a loan  outstanding  to the
     Participant will be taken into consideration.

1.52 REQUIRED  AGGREGATION GROUP: The term Required  Aggregation Group means (1)
     each qualified deferred compensation Plan of the Employer in which at least
     one Key  Employee  participates  or  participated  at any time  during  the
     determination  period (regardless of whether the plan has terminated);  and
     (2) any other qualified  deferred  compensation  plan of the Employer which
     enables a plan described in (1) to satisfy Code ss.401(a)(4) or ss.410.

1.53 REQUIRED  BEGINNING  DATE: The term Required  Beginning  Date means,  for a
     Participant who is not a 5% owner, April 1st of the calendar year following
     the later of the calendar year in which he or she reaches Age 70 1/2 or the
     calendar  year in which he or she actually  retires;  and for a Participant
     who is a 5% owner,  April 1st of the calendar  year  following the calendar
     year in which he or she reaches Age 70 1/2.

12
(a)  Definition Of 5% Owner:  A  Participant  will be treated as a 5% owner
          hereunder if such  Participant is a 5% owner as defined in Code ss.416
          at any time during the Plan Year  ending  with or within the  calendar
          year in which such owner reaches Age 70 1/2. Once  distributions  have
          begun to a 5% owner under this Section, they must continue even if the
          Participant ceases to be a 5% owner in a subsequent year.

     (b)  Pre-retirement Age 70 1/2 Distributions: The pre-retirement Age 70 1/2
          distribution  option is only  eliminated with respect to Employees who
          reach Age 70 1/2 in or after a  calendar  year that  begins  after the
          later of December 31, 1998, or the adoption date of this amended Plan.
          The pre-retirement Age 70 1/2 distribution  option is an optional form
          of benefit under which benefits  payable in a particular  distribution
          form  (including any  modifications  that may be elected after benefit
          commencement)  commence  at a time during the period that begins on or
          after  January 1st of the calendar  year in which an Employee  attains
          age 70 1/2 and ends April 1st of the  immediately  following  calendar
          year.

1.54 SECTION  415  COMPENSATION:  The  term  Section  415  Compensation  means a
     Participant's  Earned  Income,  wages,  salaries,   fees  for  professional
     services and other amounts received for personal services actually rendered
     in the  course  of  employment  with  the  Employer  maintaining  the  Plan
     (including, but not limited to, commissions paid salesmen, compensation for
     services  based  on a  percentage  of  profits,  commissions  on  insurance
     premiums,  tips and bonuses).  However,  Section 415 Compensation  does not
     include (a) Employer  contributions to a deferred  compensation  plan which
     are not includible in the  Employee's  gross income for the taxable year in
     which contributed,  or Employer  contributions  under a simplified employee
     pension  plan  to the  extent  such  contributions  are  deductible  by the
     Employee,  or any distributions from a plan of deferred  compensation;  (b)
     amounts  realized from a  non-qualified  stock option,  or when  restricted
     stock (or property) held by the Employee either becomes freely transferable
     or is no longer subject to a substantial  risk of  forfeiture;  (c) amounts
     realized from the sale,  exchange or other  disposition  of stock  acquired
     under a qualified stock option; and (d) other amounts which receive special
     tax benefits,  or contributions made by an Employer (whether or not under a
     salary reduction agreement) towards the purchase of an annuity described in
     Code ss.403(b)  (whether or not the amounts are  excludible  from the gross
     income of the Employee).  For Limitation Years beginning after December 31,
     1997, a Participant's  Section 415  Compensation  will include any elective
     deferrals  as  defined  in Code  ss.402(g)(3),  and any  amounts  which are
     contributed  or  deferred  by  the  Participant  at  the  election  of  the
     Participant  and  which  are not  includible  in the  gross  income  of the
     Participant by reason of Code ss.125 or Code ss.457.

1.55 SELF-EMPLOYED  INDIVIDUAL:  The term Self-Employed  Individual means anyone
     who owns an  interest  (other than  stock) in the  Employer  and has Earned
     Income for the Plan Year or who would  have had  Earned  Income but for the
     fact the Employer had no net profits for the Plan Year.

1.56 SHAREHOLDER-EMPLOYEE:  The term Shareholder-Employee  means, in the case of
     an Employer or  Affiliated  Employer  which is an electing  small  business
     corporation,  an individual  who is an employee or officer of such electing
     small business  corporation and owns, or is considered as owning within the
     meaning of Code  ss.318(a)(1),  on any day during the taxable  year of such
     corporation, more than 5% of the outstanding stock of the corporation.
1.57 SUPER TOP HEAVY: The term Super Top Heavy means the Top Heavy Ratio exceeds
     90%.

1.58 TERMINATION OF EMPLOYMENT:  The term Termination of Employment means that a
     Participant has ceased to be an Employee for reasons other than retirement,
     death, or Disability.

1.59 TERMINATED PARTICIPANT: The term Terminated Participant means a Participant
     who has ceased to be an Employee for reasons other than  retirement,  death
     or Disability.

1.60 TOP  HEAVY:  The term Top Heavy  means for any Plan  Year  beginning  after
     December 31, 1983 (a) that the Top Heavy Ratio  exceeds 60% and the Plan is
     not part of a Required  Aggregation Group or Permissive  Aggregation Group;
     or (b) that the Plan is a part of a  Required  Aggregation  Group but not a
     Permissive  Aggregation Group and the Top Heavy Ratio for the group exceeds
     60%; or (c) that the Plan is a part of a Required  Aggregation  Group and a
     Permissive  Aggregation  Group and the Top Heavy  Ratio for the  Permissive
     Aggregation Group exceeds 60%.

1.61 TOP HEAVY MINIMUM  ALLOCATION:  The term Top Heavy Minimum Allocation means
     an amount equal to 3% of the Section 415 Compensation of a Non-Key Employee
     for the applicable  Plan Year. The term Top Heavy Extra Minimum  Allocation
     means an amount  equal to 4% of the Section 415  Compensation  of a Non-Key
     Employee for the applicable Plan Year.

1.62 TOP  HEAVY  RATIO:  In  determining  if this Plan is Top Heavy or Super Top
     Heavy,  the Top Heavy  Ratio  will be  determined  in  accordance  with the
     following provisions:

     (a)  Rule 1: If the Employer  maintains  one or more  defined  contribution
          plans (including SEPs) and has not maintained any defined benefit plan
          which during the 5-year  period ending on the  Determination  Date had
          accrued  benefits,  the Top Heavy Ratio for this Plan alone or for the
          Required or Permissive  Aggregation Group is a fraction, the numerator
          of which is the sum of the account balances of all Key Employees as of
          the  Determination  Date  (including  any part of any account  balance
          distributed  in the 5-year period ending on the  Determination  Date),
          and  the  denominator  of  which  is the sum of the  account  balances
          (including any part of any account  balance  distributed in the 5-year
          period ending on the Determination  Date) determined under Code ss.416
          and the regulations thereunder. Both the numerator and the denominator
          of the Top Heavy Ratio will be increased  to reflect any  contribution
          not actually made as of the  Determination  Date but which is required
          to be taken into account under Code Section ss.416 and the regulations
          thereunder.

14
(b)  Rule 2: If the Employer  maintains  one or more  defined  contribution
          plans  (including  SEPs) and maintains or has  maintained  one or more
          defined  benefit  plans which during the 5-year  period  ending on the
          Determination  Date has had any accrued benefits,  the Top Heavy Ratio
          for any Required or Permissive  Aggregation  Group is a fraction,  the
          numerator of which is the sum of account balances under the aggregated
          defined  contribution  plans  for  all  Key  Employees  determined  in
          accordance with paragraph (a) above,  and the present value of accrued
          benefits  under  the  aggregated  defined  benefit  plans  for all Key
          Employees as of the  Determination  Date, and the denominator of which
          is the  sum of the  account  balances  under  the  aggregated  defined
          contribution plans for all Participants, determined in accordance with
          paragraph  (a), and the present  value of accrued  benefits  under the
          aggregated  defined  benefit  plans  for  all  Participants  as of the
          Determination   Date,  all  determined   under  Code  ss.416  and  the
          regulations  thereunder.  The accrued benefits under a defined benefit
          plan in both the numerator and  denominator of the Top Heavy Ratio are
          increased for any distribution made in the 5-year period ending on the
          Determination Date.

     (c)  Rule 3: For purposes of  paragraphs  (a) and (b), the value of account
          balances and the present value of accrued  benefits will be determined
          as of the most recent  Valuation  Date that falls  within or ends with
          the  12-month  period  ending  on the  Determination  Date,  except as
          provided in Code ss.416 and the  regulations  thereunder for the first
          and second Plan Years of a defined benefit plan. The account  balances
          and accrued  benefits will be disregarded for a Participant (1) who is
          not a Key  Employee  but who was a Key Employee in a prior year or (2)
          who has not been  credited  with at least one Hour of Service with any
          Employer  maintaining  the Plan at any time  during the 5-year  period
          ending on the  Determination  Date.  The  calculation of the Top Heavy
          Ratio and the extent to which distributions,  rollovers, and transfers
          are taken into account will be made in accordance with Code ss.416 and
          the regulations  thereunder.  When aggregating plans, the value of the
          account   balances  and  accrued  benefits  will  be  calculated  with
          reference  to the  Determination  Date  that  falls  within  the  same
          calendar year. The accrued  benefit of a Participant  other than a Key
          Employee  will be  determined  under  (1)  the  method,  if any,  that
          uniformly applies for accrual purposes under all defined benefit plans
          maintained by the Employer, or (2) effective as of the first Plan Year
          beginning  after December 31, 1986, if there is no such method,  as if
          such benefit  accrued not more  rapidly than the slowest  accrual rate
          permitted   under  the  fractional   rule  of  Code   ss.411(b)(1)(C).
          Deductible  employee  contributions  will not be taken into account in
          determining the Top Heavy Ratio.

     (d)  Definition Of Determination  Date: In determining the Top Heavy Ratio,
          the term  Determination  Date means the last day of the preceding Plan
          Year except for the first Plan Year when the Determination  Date means
          the last day of such first Plan Year.

1.63 TRUSTEE:  The term Trustee  means the persons or entity named as trustee or
     trustees in this Plan and any successor to such Trustee or Trustees.

1.64 TRUST FUND: The term Trust Fund or Trust means the assets of the Plan.

1.65 VALUATION DATE:  Except as otherwise  provided in Section 1.62(c) regarding
     the Top Heavy Ratio,  the term  Valuation  Date means the date on which the
     Trustee determines the value of the

                                                                              15
Trust Fund,  which must occur at the end of each  business  day of the Plan
     Year except for Plan assets which are not normally valued on a daily basis.
     Any such  assets  will be valued at least  annually on the last day of each
     Plan Year, and on such other dates deemed necessary by the Administrator in
     a manner that does not discriminate in favor of HCEs.

1.66 VESTED  AGGREGATE  ACCOUNT:  The  term  Vested  Aggregate  Account  means a
     Participant's  Vested  Interest  in  the  aggregate  value  of  his  or her
     Participant's  Account and any accounts  attributable to the  Participant's
     own Plan contributions (including rollovers).

1.67 VESTED   INTEREST:   The  term  Vested   Interest  means  a   Participant's
     nonforfeitable percentage in any account maintained on his or her behalf by
     the Plan.  A  Participant's  Vested  Interest  in his or her  Participant's
     Account will be determined in accordance with Section 4.6 of the Plan.

1.68 YEAR OF  SERVICE:  The term Year of Service  means a  12-consecutive  month
     computation  period in which an Employee  completes  for the  Employer,  an
     Affiliated  Employer  or an Adopting  Employer  (a) at least 1,000 Hours of
     Service for eligibility  purposes under Section 2.1; and (b) at least 1,000
     Hours of Service for vesting  purposes under Section 4.6. A Year of Service
     will be determined in accordance with the following provisions:

     (a)  Eligibility Computation Period: For eligibility purposes under Section
          2.1, an Employee's  initial  12-consecutive  month computation  period
          will begin on the date an Employee first  completes an Hour of Service
          (hereafter called the Employment Commencement Date), and each 12-month
          computation  period  thereafter  will begin on the  anniversary of the
          Employee's  Employment  Commencement Date. If a Plan Year is less than
          12 months,  the 1,000 Hours of Service  requirement  set forth  herein
          will be proportionately reduced.

     (b)  Reemployment Before A Break In Service: For eligibility purposes, if a
          Participant  terminates  employment  and is reemployed by the Employer
          before incurring a Break in Service, such Participant will continue to
          participate  in the Plan and earn  credit  for Years of Service in the
          same manner as if the termination of employment had not occurred.

16
(c)  Reemployment After A Break In Service: For eligibility  purposes, if a
          Participant  who  does  not  have  a  Vested  Interest  in  his or her
          Participant's  Account terminates  employment but is reemployed by the
          Employer after a Break in Service  occurs,  such former  Participant's
          Years of Service  before  the Break in Service  will not be counted in
          computing  his or her Years of Service  if the  number of  consecutive
          Breaks  in  Service  equals  or  exceeds  the  greater  of five or the
          aggregate number of Years of Service. The aggregate number of Years of
          Service will not include any Years of Service  previously  disregarded
          hereunder  by  reason  of  prior  Breaks  in  Service.   If  a  former
          Participant's  Years of Service are disregarded  under this paragraph,
          he or she will be treated as a new Employee for eligibility  purposes.
          If a former  Participant's  Years of  Service  may not be  disregarded
          under this  paragraph,  then he or she will continue to participate in
          the  Plan,  or,  if  terminated,  will  participate  immediately  upon
          reemployment. If a Participant who has a Vested Interest in his or her
          Participant's  Account terminates  employment but is reemployed by the
          Employer after a Break in Service occurs, such former Participant will
          become a Participant in the Plan  immediately upon being reemployed by
          the Employer.

     (d)  Employees Under 2-Year Full And Immediate Vesting: If this Plan at any
          time (1)  provides  in Section 2.1 that an  Employee  must  complete 2
          Years of Service for eligibility purposes, and (2) provides in Section
          4.6 that an Employee  will have a 100%  Vested  Interest in his or her
          Participant's  Account upon becoming a Participant,  then the Years of
          Service of an Employee who incurs a Break in Service before satisfying
          such 2 Years of Service  eligibility  requirement  will not be counted
          for eligibility purposes.

     (e)  Vesting  Computation  Period:  In determining a  Participant's  Vested
          Interest in his or her  Participant's  Account  under Section 4.6, the
          12-consecutive  month  computation  period will be the Plan Year. If a
          former  Participant  is  reemployed  by the Employer  after a Break in
          Service occurs,  such former  Participant's  Vested Interest in his or
          her  Participant's  Account will be computed as follows:  (1) Years of
          Service prior to the Break in Service will not be counted for purposes
          of computing his or her  post-break  Vested  Interest until the former
          Participant  has  completed  a  Year  of  Service  from  the  date  of
          reemployment;  (2) Years of  Service  after a former  Participant  has
          incurred  5  consecutive  Breaks  in  Service  will not be taken  into
          account in determining the Vested Interest in his or her Participant's
          Account which accrued  before such 5 year period;  and (3) if a former
          Participant   does  not  have  a  Vested   Interest   in  his  or  her
          Participant's   Account,   Years  of  Service  before  any  period  of
          consecutive  Breaks in Service  will not be taken into  account if the
          number of  consecutive  Breaks in Service within such period equals or
          exceeds the greater of 5 or the  aggregate  number of Years of Service
          before such period.

                                                                              17
ARTICLE 2
                               PLAN PARTICIPATION

2.1  ELIGIBILITY REQUIREMENTS: Any Employee who is not in an ineligible class of
     Employees  will  be  eligible  to  become  a  Participant  in the  Plan  in
     accordance with the following provisions:

     (a0  Age And Service Requirement: Anyone who is a Participant on January 1,
          1999 will continue to  participate in the Plan. Any other Employee who
          is not a member of an ineligible  class of Employees  will be eligible
          to enter the Plan as a Participant,  when he or she reaches Age 21 and
          completes  6 months of service,  which an  Employee  will be deemed to
          have  completed  if he or she (1) is employed by the Employer 6 months
          after the date he or she is first entitled to be credited with an Hour
          of  Service;  and (2) has been  credited  with at least 83.33 Hours of
          Service per month.  However, in no event will an Employee who performs
          at least 1,000 Hours of Service in an eligibility  computation  period
          as  set  forth  in  Section  1.68(a)  fail  to  enter  the  Plan  as a
          Participant  on the earlier of the entry date set forth in Section 2.2
          which  follows the last day of said  computation  period,  or the date
          which is six months after the last day of said computation period.

     (b0  Ineligible  Classes  Of  Employees:  All  Employees  are  eligible  to
          participate in the Plan except for the following ineligible classes of
          Employees:  (1) Employees whose employment is governed by the terms of
          a collective bargaining agreement between Employee representatives and
          the  Employer in which  retirement  benefits  were the subject of good
          faith  bargaining,   unless  such  collective   bargaining   agreement
          expressly provides for the inclusion of such Employees as Participants
          in the Plan;  (2)  Employees  who are  non-resident  aliens who do not
          receive any earned income from the Employer which  constitutes  income
          from sources within the United States;  (3) Leased Employees;  and (4)
          Employees who are deemed by the Employer to be independent contractors
          on their  employment  commencement  date and on the  first day of each
          subsequent Plan Year.

     (c0  Participation  By  Ineligible  Employees:  If an Employee who is not a
          member  of the  eligible  class of  Employees  becomes a member of the
          eligible class, such Employee will participate in the Plan immediately
          if he or she has  satisfied  the minimum age and service  requirements
          and would have  previously  become a Participant  had he or she been a
          member of the eligible class.  The  participation of a Participant who
          becomes a member of an ineligible  class will be  suspended,  and such
          Participant   will  be   entitled   to  an   allocation   of  Employer
          contributions  and Forfeitures for the Plan Year only to the extent of
          Hours of  Service  completed  while a member of an  eligible  class of
          Employees.  Upon  returning  to an  eligible  class  of  Employees,  a
          suspended Participant will immediately  participate again in the Plan.
          The Vested  Interest of a Participant  who ceases to be a member of an
          eligible  class will continue to increase in  accordance  with Section
          4.6.

18
(d0  Participation By Former Participants:  A former Participant will again
          become a Participant  immediately  upon returning to the employ of the
          Employer as a member of an  eligible  class of  Employees  unless such
          former  Participant's Years of Service may be disregarded by reason of
          prior Breaks in Service as provided in Section 1.68(c).

2.2  ENTRY DATE: An Employee who has satisfied the  eligibility  requirements in
     Section 2.1 will enter the Plan as a Participant  on the January 1st, April
     1st,  July 1st, or October 1st which  coincides or next follows the date on
     which he or she satisfies such requirements.

2.3  WAIVER OF  PARTICIPATION:  A Participant  may, with the written  consent of
     both the Employer and the Participant's  spouse,  elect in writing to waive
     participation  in the Plan for any Plan Year.  A waiver  will be  permitted
     only if it does not adversely  affect the Plan's tax qualified  status.  An
     election to waive  participation in the Plan for a Plan Year will result in
     no allocation of Employer  contributions or Forfeitures for that Plan Year.
     If an  Employee  who has  waived  his or her right to become a  Participant
     subsequently  elects to become a Participant,  the period of waiver will be
     considered as Years of Service  under the Plan for purposes of  determining
     the Employee's  eligibility to participate,  for determining the Employee's
     Vested Interest in his or her  Participant's  Account,  and for determining
     eligibility for Normal or Early Retirement Age.

2.4  CESSATION OF  PARTICIPATION:  A Participant's  active  participation in the
     Plan will cease if the Participant  incurs a Break in Service or on account
     of the Participant's death or Disability, or on account of retirement on or
     after reaching  Normal or Early  Retirement Age. Upon the occurrence of any
     such event, the benefits of such  Participant,  if any, will be computed by
     the Administrator and distributed by the Trustee as hereinafter provided.

2.5  RESTRICTIONS ON  OWNER-EMPLOYEES:  If this Plan provides  contributions  or
     benefits  for  Employees  some or all of  whom  are  Owner-Employees,  such
     contributions  or benefits can only be provided  with respect to the Earned
     Income of such  Owner-Employee  which is derived from the trade or business
     with respect to which the Plan is established.

                                                                              19
ARTICLE 3
                          CONTRIBUTIONS AND ALLOCATIONS

3.1  EMPLOYER CONTRIBUTIONS: Each Plan Year, the Employer will contribute to the
     Plan such amount as it may in its sole discretion determine, subject to the
     following provisions:

     (a0  Elective Deferrals: Each Participant may enter into a salary reduction
          agreement  as set forth below  authorizing  the Employer to withhold a
          percentage of the Participant's Compensation. The amount withheld will
          be deemed an Elective  Deferral which the Employer will  contribute to
          the Plan on the  Participant's  behalf.  Each  Participant's  Elective
          Deferral for any Plan Year will be determined as follows:

          (1   Deferral  Percentage:  Each Participant may elect that from 1% to
               20% of  his  or  her  Compensation  be  withheld  as an  Elective
               Deferral,  but in no event may the dollar amount withheld be more
               than   $10,000  per   calendar   year  as  adjusted   under  Code
               ss.402(g)(5).   Elective  Deferrals  which  exceed  the  adjusted
               $10,000  limitation will be deemed Excess Elective  Deferrals and
               will be returned as set forth in Section 5.15. Elective Deferrals
               must satisfy one of the ADP Tests,  and Elective  Deferrals which
               do not  satisfy  one of the  ADP  Tests  will  be  deemed  Excess
               Contributions and will be returned as set forth in Section 5.16.

          (2   Withdrawal Of Elective Deferrals:  Elective Deferrals  (exclusive
               of the earnings  thereon) can only be withdrawn  upon the earlier
               to occur of (1) the date the Participant  incurs a Termination of
               Employment;  (2) the date the Participant  dies; (3) the date the
               Participant suffers a Disability; (4) the date an event described
               in Code  ss.401(k)(10)  occurs;  (5)  the  date  the  Participant
               retires;  or  (6)  the  date  the  Participant  qualifies  for  a
               financial hardship distribution under Section 5.18.  Distribution
               will be made in accordance with the provisions of Article 5.

          (3   Salary Reduction Agreement: A Participant may, in accordance with
               a written policy established by the  Administrator,  amend his or
               her salary  reduction  agreement to change the  percentage  being
               withheld.  The Participant may also at any time suspend or cancel
               his or her salary  reduction  agreement upon  reasonable  written
               notice  (not to exceed  30 days).  If a  Participant  cancels  or
               suspends his or her salary reduction  agreement,  the Participant
               will not be  permitted  to put a new salary  reduction  agreement
               into effect  until such time as set forth in the  written  policy
               established by the Administrator. If necessary to insure that the
               Plan  satisfies  the ADP Test,  the  Employer  may also  amend or
               terminate a Participant's  salary reduction  agreement on written
               notice to the Participant.

(b0  Matching  Contributions:  The  Employer  may  contribute  on behalf of each
     Participant  a  Matching  Contribution  to be  determined  each year by the
     Employer.  Matching  Contributions made for each Plan Year must satisfy the
     ACP Test. Matching

20
Contributions  which do not  satisfy  the ACP Test  will be  deemed  Excess
     Aggregate  Contributions and will be returned as set forth in Section 5.17.
     The  Employer  may  elect  to  treat  all  or  any  portion  of a  Matching
     Contribution as a Qualified  Matching  Contribution to the extent necessary
     to satisfy the ADP Test.

(c0  Non-Elective   Contributions:   The  Employer   may  make  a   Non-Elective
     Contribution in such amount as determined by the Employer, and the Employer
     will  convey  such  amount  to  the  Trustee  in  writing.  The  Employer's
     determination  of the  amount  of its  Non-Elective  Contribution  will  be
     binding on the Trustee,  the Administrator and all Participants and may not
     be reviewed in any manner.  However,  (1) no Non-Elective  Contribution may
     exceed the maximum amount  deductible  under Code ss.404;  (2) Non-Elective
     Contributions  will be  limited  as  required  by Code  ss.415;  and (3) no
     Non-Elective  Contribution  will be made for any  Participant who is not an
     Eligible Participant unless required by Section 3.5.

(d0  Qualified Non-Elective Contributions:  Subject to Notice 98-1, the Employer
     may, in lieu of distributing  Excess  Contributions as set forth in Section
     5.16 or Excess Aggregate  Contributions as set forth in Section 5.17, elect
     to treat all of any portion of a Non-Elective  Contribution  as a Qualified
     Non-Elective Contribution sufficient to satisfy the ADP Test and/or the ACP
     Test; or the Employer elect to make a Qualified  Non-elective  Contribution
     in an amount sufficient to satisfy the ADP Test and/or the ACP Test.

(e0  Contribution For Mistakenly Excluded Employees:  Notwithstanding  paragraph
     (c)  to the  contrary,  if an  Employee  should  have  been  included  as a
     Participant  but is mistakenly  excluded for any reason,  the Employer will
     make a Non-Elective  Contribution  equal to the sum of (1) the amount which
     would  have  been  contributed  for such  Employee,  and (2) the  amount of
     earnings  that  would  have  been  credited  to  the  excluded   Employee's
     Participant's  Account but for the fact that the  Employee  was  mistakenly
     excluded.  Such  contributions  will be made  regardless  of  whether  such
     amounts are ever deductible by the Employer.

(f0  Refund  Of  Contributions:  If the Plan  fails  to  initially  satisfy  the
     qualification  requirements of Code ss.401(a) and the Employer  declines to
     amend the Plan to satisfy such  requirements,  contributions  made prior to
     the date such  qualification  is denied must be  returned  to the  Employer
     within 1 year of the date of such denial,  but only if the  application for
     the  qualification  is made by the time  prescribed  by law for  filing the
     Employer's tax return for the taxable year in which the Plan is adopted, or
     by such later date as the  Secretary of the Treasury  may  prescribe.  If a
     contribution is attributable in whole or in part to a good faith mistake of
     fact, including a good faith mistake in determining its deductibility under
     Code ss.404,  then an amount may be returned to the  Employer  equal to the
     excess of the  amount  contributed  over the amount  which  would have been
     contributed had the mistake not occurred. Earnings attributable to any such
     excess  contribution will not be returned,  but losses  attributable to the
     excess contribution will reduce the amount so returned. Such amount will be
     returned  within  1 year  of the  date  the  contribution  was  made or the
     deduction disallowed, as the case may be.

                                                                              21
3.2  ALLOCATION OF EMPLOYER CONTRIBUTIONS:  Each Eligible Participant's share of
     the  various  types of Employer  contributions  made under the Plan will be
     allocated  to his or her  Participant's  Account  in  accordance  with  the
     following provisions:

     (a0  Elective Deferrals:  Each Participant's Elective Deferrals contributed
          under Section 3.1(a) will be allocated to the  Participant's  Elective
          Deferral Account.

     (b0  Matching And Qualified Matching Contributions:  Matching Contributions
          will be allocated to an Eligible  Participant's  Matching Contribution
          Account; and any Matching  Contributions that are treated as Qualified
          Matching  Contributions will be allocated to an Eligible Participant's
          Qualified Matching  Contribution Account. Any Participant who makes an
          Elective  Deferral  during the Plan Year will receive an allocation of
          Matching  Contributions  for the Plan  Year  regardless  of any  other
          allocation rules to the contrary.

     (c0  Non-Elective   Contributions:   Non-Elective   Contributions  will  be
          allocated on the annual Valuation Date to each Eligible  Participant's
          Non-Elective  Contribution  Account in the ratio that the Compensation
          of each Eligible  Participant  bears to the total  Compensation of all
          Eligible Participants.

     (d0  Qualified   Non-Elective   Contributions:   QNECs,   and  Non-Elective
          Contributions  that are  treated as QNECs,  will be  allocated  to the
          Qualified   Non-Elective   Contribution   Account  of  each   Eligible
          Participant on a per capita basis.

3.3  ALLOCATION  OF EARNINGS AND LOSSES:  As of each  Valuation  Date,  accounts
     which have not been  distributed  since the prior  Valuation Date will have
     the net  income of the Trust Fund  earned  since the prior  Valuation  Date
     allocated  thereto as hereinafter set forth in this Section.  Net income is
     the  net  of  any  interest,   dividends,   unrealized   appreciation   and
     depreciation,  capital  gains and losses,  and  investment  expenses of the
     Trust Fund as determined on each Valuation Date.

     (a0  Non-Segregated Accounts:  Accounts which have not been segregated from
          the general  Trust Fund for  investment  purposes will have net income
          allocated  thereto in the ratio that the value of each  non-segregated
          account as of the preceding Valuation Date bears to the total value of
          all  non-segregated  accounts as of the preceding  Valuation Date. The
          Forfeiture  Account  will  share in the  allocation  made  under  this
          paragraph.

     (b0  Segregated  Accounts And Policy  Dividends:  Accounts  which have been
          segregated  from  the  general  Trust  Fund for  investment  purposes,
          including Directed Investment Accounts  established under Section 7.15
          of the Plan,  will only have the net income earned  thereon  allocated
          thereto.  Policy  dividends  or  credits  will  be  allocated  to  the
          Participant's Account for whose benefit the Policy is held.

3.4  ALLOCATION OF  FORFEITURES:  On each annual  Valuation Date, any portion of
     the  Forfeiture  Account  which  has not  been  used to pay  administrative
     expenses of the Plan will be

22
allocated  to each  Eligible  Participant's  Account in the ratio that each
     Eligible Participant's  Compensation bears to the total Compensation of all
     Eligible Participants.

3.5  TOP  HEAVY  MINIMUM  ALLOCATION:  In any Top  Heavy  Plan Year in which the
     Employer makes a contribution to the Plan, each eligible  Non-Key  Employee
     will  receive  the Top Heavy  Minimum  Allocation  in  accordance  with the
     following provisions:

     (a0  Who Must Receive Minimum  Allocation:  Except as otherwise provided in
          paragraph (b), the Top Heavy Minimum  Allocation will be made for each
          eligible  Non-Key Employee who is employed by the Employer on the last
          day of the Plan Year,  including  those who have  failed to complete a
          Year of Service and who have been excluded from becoming  Participants
          in the Plan  because  (1)  their  Compensation  is less  than a stated
          amount;  (2)  they  declined  to  make  mandatory   contributions  (if
          required)  to the Plan  during  the time  they were  considered  to be
          Participants; or (3) they failed to make an elective contribution to a
          Code ss.401(k) plan maintained by the Employer. However, the Top Heavy
          Minimum  Allocation will not be required for any Non-Key  Employee who
          also participates in an Employer sponsored money purchase pension plan
          or target  benefit  pension  plan which  provides a Top Heavy  Minimum
          Allocation  to such Non-Key  Employee and which is included  with this
          Plan in a Required Aggregation Group.

     (b0  Lesser Allocation Allowed: If the allocation made to the Participant's
          Account of each Key Employee  under Section 3.2 is less than 3% of his
          or her Section 415  Compensation,  and if this Plan is not required to
          be included in an Aggregation  Group to enable a defined  benefit plan
          to  meet  the  requirements  of  Code  ss.401(a)(4)  or  ss.410,   the
          Employer's  contribution  will be reallocated so the Top Heavy Minimum
          Allocation made to the Participant's  Account of each eligible Non-Key
          Employee  is  equal  to  the  largest  percentage   allocated  to  the
          Participant's Account of a Key Employee. Such percentage will be equal
          to the ratio of the sum of the Employer's contribution and Forfeitures
          allocated  on  such  Key  Employee's  behalf  divided  by  his  or her
          Compensation.

3.6  FAILSAFE  ALLOCATION:  For any Plan Year in which the Plan fails to benefit
     at least  70% of  Non-Highly  Compensated  Employees  who are  eligible  to
     participate in the Plan, or in which the Plan fails to benefit a percentage
     of Non-Highly  Compensated Employees who are eligible to participate in the
     Plan that is at least 70% of the percentage of Highly Compensated Employees
     who benefit under the Plan, an additional Employer contribution may be made
     and allocated  first to that group of Employees who were  Participants  but
     not  Eligible  Participants  for the  Plan  Year;  next to  that  group  of
     Employees who have not satisfied the  eligibility  requirements  of Section
     2.1(a) and are not members of an ineligible class of Employees as set forth
     in  Section  2.1(b);  and  then to that  group  of  Employees  who have not
     satisfied the eligibility requirements of Section 2.1(a) and are members of
     a  non-statutory  ineligible  class of  Employees  as set forth in  Section
     2.1(b). Within each group, individuals will be ranked by Compensation,  and
     the  individuals  receiving  an  allocation  will be those  with the lowest
     amount of Compensation during the Plan Year. Allocations will be made under
     this Section only to the extent necessary to insure that the Plan satisfies
     one of the ratio percentage tests set forth in Code  ss.ss.410(b)(1)(A)  or
     (B) as described above.

                                                                              23
3.7  ROLLOVERS:  With the consent of the  Administrator,  any  Employee  who has
     become a  Participant  in the Plan may  transfer  amounts to this Plan from
     another  qualified  plan.  Such  transferred  amounts are hereafter  called
     Rollovers.  Rollovers will be allocated to a Rollover  Account in which the
     Employee  will  have a 100%  Vested  Interest.  Except  for the  portion  a
     Participant  self-directs  under Section 7.15, the Administrator may choose
     for investment purposes to either segregate Rollover Accounts into separate
     interest  bearing  accounts or to invest them as part of the general  Trust
     Fund, in which case such accounts will share in the  allocation of earnings
     and losses under Section 3.3(a).  Rollover Accounts will be administered as
     follows:

     (a0  Definition Of Rollover: The term Rollover means amounts transferred to
          this Plan (1) in a trustee to trustee transfer from another  qualified
          plan;  (2) from  another  qualified  plan as a lump  sum  distribution
          eligible for tax free rollover  treatment and which is  transferred by
          the  Participant  to this Plan  within 60 days  following  his receipt
          thereof; (3) from a conduit individual  retirement account if the only
          assets  therein were  previously  distributed  to the  Participant  by
          another  qualified plan as a lump sum distribution  which was eligible
          for a tax free rollover within 60 days of receipt thereof and earnings
          on said assets; or (4) from a conduit  individual  retirement  account
          meeting the  requirements of subparagraph  (3) and transferred to this
          Plan within 60 days of receipt thereof.

     (b0  Withdrawal Of  Rollovers:  An Employee may withdraw all or any portion
          of his or her  Rollover  Account  at  such  time  as the  Employee  is
          entitled to a distribution of his or her  Participant's  Account under
          the  provisions  of  Article  4.  Any  amount   withdrawn   cannot  be
          redeposited to the Rollover Account. However, amounts which constitute
          or are treated as constituting  elective  contributions  as defined in
          regulation ss.1.401(k)-1(g)(3) and which were transferred to this Plan
          in a trustee to trustee transfer from another  qualified plan may only
          be  withdrawn  in  accordance   with  the  limitations  set  forth  in
          regulation ss.1.401(k)-1(d).  All withdrawal requests must contain the
          Employee's address, social security number, birth date, and the amount
          of the withdrawal.  A Rollover withdrawal will not prevent an Employee
          from   accruing   any  future   benefit   attributable   to   Employer
          contributions.  An  Employee's  request to make a Rollover  withdrawal
          must satisfy the applicable spousal consent  requirements set forth in
          Section 5.8 of the Plan.

24
ARTICLE 4
                                  PLAN BENEFITS

4.1  BENEFIT UPON NORMAL OR EARLY RETIREMENT:  Every Participant who has reached
     Normal or Early  Retirement Age and retires will be entitled to receive his
     or her Vested  Aggregate  Account balance  determined as of the most recent
     Valuation  Date  coinciding  with  or  immediately  preceding  the  date of
     distribution. Distribution will made in accordance with Section 5.1.

4.2  BENEFIT UPON LATE RETIREMENT: A Participant who has reached Normal or Early
     Retirement  Age may elect to remain  employed  and retire at a later  date.
     Such  Participant  will continue to  participate in the Plan and his or her
     Participant's  Account will continue to receive allocations under Article 3
     until the Participant  actually retires, at which time the Participant will
     be entitled to his or her Vested Aggregate Account balance determined as of
     the most recent Valuation Date coinciding with or immediately preceding the
     date of distribution.  Distribution will be made in accordance with Section
     5.1.

4.3  BENEFIT UPON DEATH: Upon the death of a Participant prior to Termination of
     Employment,  or  upon  the  death  of a  Terminated  Participant  prior  to
     distribution of his or her Vested Aggregate Account, his or her Beneficiary
     will be entitled to the  Participant's  Vested  Aggregate  Account  balance
     determined  as of  the  most  recent  Valuation  Date  coinciding  with  or
     immediately  preceding the date of distribution.  If any Beneficiary who is
     living on the date of the  Participant's  death dies prior to receiving his
     or her the  entire  death  benefit,  the  remaining  portion  of such death
     benefit  will  be  paid  in a lump  sum  to the  estate  of  such  deceased
     Beneficiary. The Administrator's  determination that a Participant has died
     and that a particular person has a right to receive a death benefit will be
     final. Distribution will be made in accordance with Section 5.2.

4.4  BENEFIT UPON  DISABILITY:  If a Participant  suffers a Disability  prior to
     Termination  of  Employment,  or  if a  Terminated  Participant  suffers  a
     Disability prior to distribution of his or her Vested Aggregate Account, he
     or she will be  entitled  to his or her Vested  Aggregate  Account  balance
     determined  as of  the  most  recent  Valuation  Date  coinciding  with  or
     immediately  preceding the date of distribution.  Distribution will be made
     in accordance with Section 5.3.

4.5  BENEFIT  UPON  TERMINATION:  A  Participant  who  incurs a  Termination  of
     Employment will be entitled to his or her Vested Aggregate  Account balance
     as of the  most  recent  Valuation  Date  coinciding  with  or  immediately
     preceding  the  date  of   distribution.   Distribution   to  a  Terminated
     Participant  who does not die  prior to such  distribution  or who does not
     suffer a Disability prior to such  distribution  will be made in accordance
     with Section 5.4.

4.6  DETERMINATION OF VESTED INTEREST: A Participant's Vested Interest in his or
     her  Participant's  Account  will be  determined  in  accordance  with  the
     following provisions:

25
(a0  100% Vesting Upon Retirement,  Death Or Disability: A Participant will
          have a 100% Vested Interest in his Participant's Account upon reaching
          Normal or Early Retirement Age prior to Termination of Employment,  or
          upon death or Disability prior to that date.

     (b0  Vesting Prior To Retirement, Death Or Disability:  Except as otherwise
          provided in paragraph (a) above, a  Participant's  Vested  Interest in
          his  or  her  Participant's  Account  at  any  given  time,  including
          Termination  of Employment  prior to Normal or Early  Retirement  Age,
          death  or  Disability,  will be  determined  in  accordance  with  the
          following:  (1)  a  Participant's  Vested  Interest  in  all  Elective
          Deferrals, Qualified Matching Contributions and Qualified Non-Elective
          Contributions  that are allocated to his or her Participant's  Account
          will be 100% upon entry into the Plan and at all times thereafter; and
          (2) a Participant's Vested Interest in all Matching  Contributions and
          Non-Elective   Contributions   that  are   allocated  to  his  or  her
          Participant's Account will be determined by the vesting schedule which
          immediately  follows  this  paragraph  based on the number of Years of
          Service the Participant has completed on the date of determination.

                      Years Of Service             Vested Interest
                            2 . . . . . . . . . . . . .   20%
                            3 . . . . . . . . . . . . .   40%
                            4 . . . . . . . . . . . . .   60%
                            5 . . . . . . . . . . . . .   80%
                            6 . . . . . . . . . . . . .  100%

     (c0  Amendments  To Vesting  Schedule:  No Plan  amendment  may directly or
          indirectly  reduce a  Participant's  Vested  Interest.  If the  Plan's
          vesting schedule is amended, any Participant with at least three Years
          of Service may, by filing a written request with the  Administrator 60
          days after the latest of (1) the  amendment's  adoption  date, (2) the
          amendment's  effective date, or (3) the date the Participant  receives
          written notice of the amendment,  elect to have the Vested Interest in
          his or her  Participant's  Account computed by the vesting schedule in
          effect prior to the amendment. A Participant who fails to make such an
          election will have his or her Vested  Interest  computed under the new
          schedule.  However,  notwithstanding  the foregoing,  a  Participant's
          Vested Interest in his or her  Participant's  Account will not be less
          than it was as of the  later  of  January  1,  1999 or the  date  this
          amended Plan is actually adopted by the Employer.

26
ARTICLE 5
                            DISTRIBUTION OF BENEFITS

5.1  BENEFIT UPON  RETIREMENT:  Unless a cash-out  occurs under Section 5.5, the
     retirement  benefit a Participant  is entitled to receive under Section 4.1
     or 4.2 will be distributed as follows:

     (a0  Form Of  Distribution:  Any  Employee who became a  Participant  on or
          after January 1, 1998, shall receive their  retirement  benefit in one
          lump-sum in cash or property.

     (b0  Optional Forms Of Distribution:  Any Employee who became a Participant
          prior to  January  1,  1998,  may elect to have his or her  retirement
          benefit  distributed (1) as a Qualified Joint and Survivor  Annuity if
          the  Participant  is married on the Annuity  Starting Date and has not
          died before such date. If the  Participant is unmarried on the Annuity
          Starting  Date and has not died  before such date,  the  Participant's
          retirement  benefit  will be  distributed  as a life  annuity;  (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period certain that does not extend beyond the Participant's  life, or
          beyond the lives of the Participant  and a designated  Beneficiary (or
          beyond the life  expectancy of the  Participant  or the joint and last
          survivor  expectancy of the Participant and a designated  Beneficiary,
          in which  event  the lump sum  value of the  benefit  will  either  be
          segregated  and  separately  invested  by the  Trustee,  or it will be
          invested  in  a  nontransferable  annuity  providing  for  installment
          payments; or (3) in one lump sum in cash or property.

     (c0  Time Of  Distribution:  Distribution  will be made under this  Section
          within a reasonable  time after the  Participant's  actual  retirement
          date, or within a reasonable  time after a Participant who elects late
          retirement requests payment, but distribution must begin no later than
          the Participant's Required Beginning Date.

5.2  BENEFIT UPON DEATH:  Unless a cash-out  occurs under Section 5.5, the death
     benefit a deceased  Participant's  Beneficiary is entitled to receive under
     Section 4.3 will be distributed as follows:

                                                                              27
(a0  Non-Spouse Beneficiary:  Any death benefit a non-spouse Beneficiary is
          entitled  to receive  will be  distributed  in one lump sum in cash or
          property.  A  non-spouse  Beneficiary  of  a  Employee  who  became  a
          Participant  prior to  January  1,  1998,  may elect to have any death
          benefit such Beneficiary is entitled to receive  distributed by one of
          the following methods unless a different method has been chosen by the
          Participant:  (1) in one  lump  sum in  cash  or  property;  or (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period certain that does not extend beyond the life of the Beneficiary
          (or beyond the life expectancy of the Beneficiary), in which event the
          lump sum value of the benefit will either be segregated and separately
          invested by the Trustee,  or it will be invested in a  nontransferable
          annuity providing for installment payments.  Distribution will be made
          within a  reasonable  time  after  the death of the  Participant;  but
          distribution  of a lump  sum  must  be made  by  December  31st of the
          calendar year which  contains the 5th  anniversary  of the date of the
          Participant's death, or installments must begin no later than December
          31st of the calendar year  immediately  following the calendar year in
          which the Participant died.

     (b0  Surviving Spouse:  Notwithstanding  any other Beneficiary  designation
          made by a Participant,  if a Participant is married on the date of his
          or her death,  the  deceased  Participant's  surviving  spouse will be
          entitled to receive 100% of the deceased  Participant's  death benefit
          unless the surviving  spouse has waived that right in accordance  with
          Section 5.8. The death benefit will be  distributed in one lump sum in
          cash or property.

          For any  Employee who became a  Participant  prior to January 1, 1998,
          who is  married  on the date of his or her death and dies  before  the
          Annuity Starting Date, the Participant's surviving spouse may elect to
          receive  a  minimum  death  benefit  to be  distributed  by one of the
          following  methods  unless a  different  method has been chosen by the
          Participant: (1) as a Qualified Preretirement Survivor Annuity; (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period  certain that does not extend  beyond the life of the surviving
          spouse or beyond the life expectancy of the surviving spouse, in which
          event the lump sum value of the benefit will either be segregated  and
          separately  invested  by the  Trustee,  or it  will be  invested  in a
          nontransferable  annuity providing for installment payments; or (3) in
          one lump sum in cash or property.

     (c0  Time Of Distribution To A Surviving  Spouse:  The surviving spouse may
          (1) elect to have any  death  benefit  to which he or she is  entitled
          distributed   within  a  reasonable   time  after  the  death  of  the
          Participant;  or (2) elect to defer distribution of the death benefit,
          but  distribution  may not be  deferred  beyond  December  31st of the
          calendar  year in which the deceased  Participant  would have attained
          Age 70 1/2.

28
(d0  Death Of Surviving Spouse Before Distribution Begins: If the surviving
          spouse dies before distribution begins, then distribution will be made
          as if the surviving spouse were the Participant.  Distribution will be
          considered as having  commenced  when the deceased  Participant  would
          have  reached  Age 70 1/2  even  if  payments  have  been  made to the
          surviving  spouse before that date.  However,  if  distribution to the
          surviving spouse commences in the form of an irrevocable  annuity over
          a period permitted under paragraph (b) before the deceased Participant
          would have  reached Age 70 1/2,  distribution  will be  considered  as
          having begun on the actual annuity commencement date.

     (e0  Participants In Pay Status: If a Participant who has started receiving
          distribution  of his or her retirement  benefit dies before the entire
          benefit  has been  distributed,  the  balance of the  benefit  will be
          distributed  to the  Participant's  Beneficiary at least as rapidly as
          under  the  method  of  distribution  being  used  on the  date of the
          Participant's death.

5.3  DISABILITY  BENEFITS:  Unless a cash-out  occurs  under  Section  5.5,  the
     Disability  benefit a Participant  is entitled to receive under Section 4.4
     will be distributed as follows:

     (a0  Form Of  Distribution:  Any  Employee who became a  Participant  on or
          after January 1, 1998, shall receive his or her Disability  benefit in
          one lump-sum in cash or property.

     (b0  Optional Forms Of Distribution:  Any Employee who became a Participant
          on or after January 1, 1998,  may elect to have his or her  Disability
          benefit  distributed (1) as a Qualified Joint and Survivor  Annuity if
          the  Participant  is married on the Annuity  Starting Date and has not
          died before such date. If the  Participant is unmarried on the Annuity
          Starting  Date and has not died  before such date,  the  Participant's
          Disability  benefit  will be  distributed  as a life  annuity;  (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period certain that does not extend beyond the Participant's  life, or
          beyond the lives of the Participant  and a designated  Beneficiary (or
          beyond the life  expectancy of the  Participant  or the joint and last
          survivor expectancy of the Participant and a designated  Beneficiary),
          in which  event  the lump sum  value of the  benefit  will  either  be
          segregated  and  separately  invested  by the  Trustee,  or it will be
          invested  in  a  nontransferable  annuity  providing  for  installment
          payments; or (3) in one lump sum in cash or property.

     (c)  Time Of  Distribution:  Distribution  will be made under this  Section
          within a  reasonable  time  after  the date on which  the  Participant
          suffers the Disability,  but distribution must begin no later than the
          Participant's Required Beginning Date.

5.4  BENEFIT UPON  TERMINATION:  Unless a cash-out occurs under Section 5.5 or a
     prior  distribution  has been made under  Section 5.2 or Section  5.3,  the
     benefit a Terminated  Participant  is entitled to receive under Section 4.5
     will be distributed as follows:

     (a)  Form  Of  Distribution:   Any  Terminated  Participant  who  became  a
          Participant  on or after January 1, 1998,  shall receive their benefit
          in one lump-sum in cash or property.

                                                                              29
(b)  Optional Forms Of Distribution:  Any Terminated Participant who became
          a Participant  prior to January 1, 1998,  may elect to have his or her
          benefit  distributed (1) as a Qualified Joint and Survivor  Annuity if
          the  Participant  is married on the Annuity  Starting Date and has not
          died before such date. If the  Participant is unmarried on the Annuity
          Starting  Date and has not died  before such date,  the  Participant's
          Disability  benefit  will be  distributed  as a life  annuity;  (2) in
          monthly,  quarterly,  semi-annual or annual cash  installments  over a
          period certain that does not extend beyond the Participant's  life, or
          beyond the lives of the Participant  and a designated  Beneficiary (or
          beyond the life  expectancy of the  Participant  or the joint and last
          survivor expectancy of the Participant and a designated  Beneficiary),
          in which  event  the lump sum  value of the  benefit  will  either  be
          segregated  and  separately  invested  by the  Trustee,  or it will be
          invested  in  a  nontransferable  annuity  providing  for  installment
          payments; or (3) in one lump sum in cash or property.

     (c)  Time Of  Distribution:  Distribution  will be made under this  Section
          within a reasonable time after a Terminated Participant reaches Normal
          or Early Retirement Age, but distribution must begin no later than the
          Required Beginning Date.

5.5  CASH-OUT OF BENEFITS: If the lump sum value of a Participant's benefit does
     not exceed $5,000,  the  Administrator may distribute the benefit in a lump
     sum  without  a  Participant's  consent  as  soon  as  practicable  after a
     Participant becomes eligible for a distribution  thereof,  but distribution
     must  occur  no  later  than  the  date  the  benefit  would  otherwise  be
     distributable  under the terms of the Plan. That portion of a Participant's
     Account which is not a Vested Interest will be treated as a Forfeiture, and
     if such Vested Interest is zero on the date of distribution,  a Participant
     will be deemed to have received a distribution of such Vested Interest.

5.6  RESTRICTIONS  ON  IMMEDIATE  DISTRIBUTIONS:  If the  lump  sum  value  of a
     Participant's  benefit  exceeds  (or at the time of any prior  distribution
     exceeded) $5,000, and the benefit is immediately distributable, the benefit
     may  only  be  distributed   with  the  consent  of  a  Participant  and  a
     Participant's  spouse in accordance  with this  Section.  That portion of a
     Participant's  Account which is not a Vested  Interest will be treated as a
     Forfeiture.

     (a)  Definition Of Immediately  Distributable:  A Participant's  benefit is
          immediately  distributable  if  any  part  of  the  benefit  could  be
          distributed to the Participant (or the Participant's surviving spouse)
          before the Participant reaches (or would have reached if not deceased)
          the later of his or her Normal Retirement Age or Age 62.

     (b)  Consent   Requirements:   The  consent  of  the  Participant  and  the
          Participant's   spouse  (or  where  either  the   Participant  or  the
          Participant's  spouse has died,  the  survivor) to any benefit that is
          immediately  distributable  must be  obtained  in  writing  within the
          90-day period ending on the Annuity Starting Date.  However,  (1) only
          the Participant  need consent to the distribution of a Qualified Joint
          and Survivor  Annuity while the benefit is immediately  distributable;
          and (2) neither the Participant nor the  Participant's  spouse will be
          required  to  consent  to a  distribution  that  is  required  by Code
          ss.401(a)(9) or ss.415.  If this Plan upon  termination does not offer
          an  annuity  option  (purchased  from a  commercial  provider)  and if
          neither the Employer nor an Affiliated Employer maintains

30
another  defined  contribution  plan  other  than  an  employee  stock
          ownership   plan  (ESOP)  as  defined  in  Code   ss.4975(e)(7),   the
          Participant's  benefit will,  without the  Participant's  consent,  be
          distributed  to the  Participant.  If the  Employer  or an  Affiliated
          Employer does maintain another defined contribution plan other than an
          ESOP,  the  Participant's  benefit  will,  without  the  Participant's
          consent,  be transferred to the other plan if the Participant does not
          consent to an immediate distribution under the terms of this Section.

     (c)  Notification   Requirements:   The   Administrator   must  notify  the
          Participant  and the  Participant's  spouse  of the right to defer any
          distribution until the benefit is no longer immediately distributable.
          Notification  will  include  a  general  explanation  of the  material
          features  and  relative  values  of  the  optional  forms  of  benefit
          available  under the Plan in a manner  that would  satisfy  the notice
          requirements of Code  ss.417(a)(3);  and will be provided no less than
          30 days or more  than 90 days  prior  to the  Annuity  Starting  Date.
          Distribution  of the  benefit  may begin less than 30 days  before the
          Annuity  Starting Date if (1) the  Administrator  clearly  informs the
          Participant  that the  Participant has a right to a period of at least
          30 days after  receiving  the  required  notification  to consider the
          decision of whether to waive the Qualified Joint and Survivor  Annuity
          and to consent to another form of distribution; (2) the Participant is
          permitted  to revoke an  affirmative  distribution  election  at least
          until the Annuity  Starting Date,  or, if later,  at any time prior to
          the  expiration  of the 7 day  period  that  begins  the day after the
          explanation of the Qualified Joint and Survivor Annuity is provided to
          the Participant;  (3) the Annuity Starting Date is after the date that
          the  explanation  of the  Qualified  Joint  and  Survivor  Annuity  is
          provided  to the  Participant  (but the Annuity  Starting  Date may be
          before the date that any affirmative  distribution  elections are made
          by the Participant and before the date).

5.7  RESTORATION OF FORFEITED ACCOUNT BALANCE: If a Participant with a partially
     Vested Interest in his or her Participant's  Account terminates  employment
     with  the  Employer  and  receives  (or  is  deemed  to  have  received)  a
     distribution of such Vested Interest,  and such Participant is subsequently
     reemployed by the Employer, then such Participant's Account balance will be
     restored  to the  amount  on the date of  distribution  if the  Participant
     repays  to  the  Plan  the  full  amount  of  the  distribution  which  was
     attributable to Employer  contributions before the earlier of 5 years after
     the first date on which the Participant is  subsequently  reemployed by the
     Employer or the date on which the Participant  incurs 5 consecutive  Breaks
     in Service  following  the date of  distribution.  If a  Participant  whose
     Vested  Interest in his or her  Participant's  Account is zero is deemed to
     have received a distribution  of such Vested  Interest from the Plan before
     the date on which the Participant  incurs 5 consecutive  Breaks in Service,
     upon reemployment  with the Employer,  such  Participant's  Account balance
     which is  attributable  to Employer  contributions  will be restored to the
     amount on the date of the deemed distribution.

5.8  SPOUSAL  CONSENT  REQUIREMENTS:  A married  Participant's  election  not to
     receive a Qualified Joint and Survivor  Annuity (QJSA) under Section 5.1 or
     a Qualified  Preretirement Survivor Annuity (QPSA) under Section 5.2, or an
     unmarried  Participant's  election  not to  receive  a life  annuity  under
     Section 5.1, must be made in accordance with the following provisions:

                                                                              31
(a)  Election Not To Receive A QJSA: A married  Participant's  election not
          to receive a Qualified  Joint and  Survivor  Annuity,  or an unmarried
          Participant's  election  not to  receive  a life  annuity,  must be in
          writing  and must be made  during  the  90-day  period  ending  on the
          Annuity  Starting Date.  Such election may be revoked in writing and a
          new  election  made at any time and any  number  of times  during  the
          election period.

     (b)  Election Not To Receive A QPSA: A married  Participant's  election not
          to  receive a  Qualified  Preretirement  Survivor  Annuity  must be in
          writing and must be made during an election  period  beginning  on the
          first day of the Plan Year in which the Participant reaches Age 35 and
          ending on the date of his or her death. The election may be revoked in
          writing  and a new  election  made at any time and any number of times
          during the election period. A Terminated Participant's election period
          concerning his or her Vested Aggregate  Account before his termination
          will not begin later than such date.

     (c)  Special  Pre-Age  35  QPSA  Election:  A  Participant  who has not yet
          reached  Age 35 as of the end of any  current  Plan  Year  may  make a
          special  election  not to receive a Qualified  Preretirement  Survivor
          Annuity  for the period  beginning  on the date of such  election  and
          ending on the first  day of the Plan  Year in which  such  Participant
          reaches Age 35. This election will not be valid unless the Participant
          receives the same written  explanation of the Qualified  Preretirement
          Survivor  Annuity as  described  in  paragraph  (d)  below.  Qualified
          Preretirement   Survivor   Annuity   coverage  will  be  automatically
          reinstated  as of  the  first  day of  the  Plan  Year  in  which  the
          Participant  reaches  Age 35. Any new  election  on or after such date
          will be subject to the full requirements of this Section 5.8.

     (d)  Required  Written  Explanation Of QJSA Or QPSA: In connection  with an
          election not to receive a Qualified  Joint and Survivor  Annuity,  the
          Administrator  will,  no less  than 30 days  and no more  than 90 days
          prior to the Annuity  Starting Date,  provide the  Participant  with a
          written explanation of the terms and conditions of the Qualified Joint
          and Survivor Annuity;  the Participant's right to make (and the effect
          of) an election to waive the Qualified Joint and Survivor Annuity; the
          rights of the Participant's  spouse;  and the right of the Participant
          to revoke such election (and the effect  thereof).  In connection with
          an election not to receive a Qualified Preretirement Survivor Annuity,
          the Administrator  will provide each Participant within the Applicable
          Period as defined in paragraph (e) with a written  explanation  of the
          Qualified  Preretirement  Survivor  Annuity  in such terms and in such
          manner as would be comparable to the written explanation applicable to
          a Qualified Joint and Survivor Annuity as set forth in this paragraph.

32
(e)  Applicable   Period:  The  Applicable  Period  for  a  Participant  is
          whichever of the following periods ends last: (1) the period beginning
          with the first day of the Plan Year in which the  Participant  attains
          Age 32 and ending with the close of the Plan Year  preceding  the Plan
          Year in which the Participant  attains Age 35; (2) a reasonable period
          after the individual  becomes a Participant;  (3) a reasonable  period
          ending after Code ss.401(a)(11) ceases to apply to the Participant; or
          (4) a reasonable period ending after Code ss.417(a)(5) ceases to apply
          with respect to the  Participant.  For purposes of this  paragraph,  a
          reasonable  period means the end of the two year period  beginning one
          year prior to the date the  applicable  event  occurs,  and ending one
          year after that date.

     (f)  Participants Who Terminate Before Age 35: In the case of a Participant
          who  separates  from  service  before  the  Plan  Year  in  which  the
          Participant  reaches Age 35, the notice  required under  paragraph (d)
          will be provided  within the two year period  beginning one year prior
          to separation  from service and ending one year after  separation from
          service. If such Participant thereafter returns to employment with the
          Employer,   the  Applicable   Period  for  such  Participant  will  be
          redetermined.

     (g)  Elections Must Have Spousal Consent:  A Participant's  election not to
          receive a  Qualified  Joint and  Survivor  Annuity or a  Participant's
          election  not to receive a Qualified  Preretirement  Survivor  Annuity
          will not be effective (1) unless the Participant's  spouse consents in
          writing to the election; (2) unless the election designates a specific
          Beneficiary  (or form of  benefit)  which may not be  changed  without
          spousal  consent  (or the  consent  of the  spouse  expressly  permits
          designations  by the  Participant  without any  requirement of further
          spousal consent); and (3) unless the spouse's consent acknowledges the
          effect of the  election and is  witnessed  by the  Administrator  or a
          notary public.

     (h)  Additional Requirements For Spousal Consent: Notwithstanding paragraph
          (g), a spouse's  consent will not be required if there is no spouse or
          if the spouse cannot be located,  or if there are other  circumstances
          (as set forth in the Code)  present  which  preclude the  necessity of
          such  spouse's  consent.  Any  consent by a  Participant's  spouse (or
          establishment  that consent cannot be obtained) will be effective only
          with respect to such spouse.  A consent that permits  designations  by
          the  Participant  without any  requirement  of further  consent by the
          spouse must acknowledge that the spouse has the right to limit consent
          to a  specific  Beneficiary,  and a  specific  form of  benefit  where
          applicable,  and that the  spouse  voluntarily  elects  to  relinquish
          either or both of such rights. A revocation of a prior election may be
          made by a Participant  without the spouse's consent at any time before
          the commencement of benefits.  No consent obtained under paragraph (g)
          will be valid unless the  Participant  has received notice as provided
          in paragraph (d).

5.9  APPLICATION OF CODE SECTION  401(a)(9):  All  distributions  made under the
     terms of the  Plan  will be  determined  and  made in  accordance  with the
     regulations   issued  under  Code   ss.401(a)(9),   including  the  minimum
     distribution incidental benefit requirement of regulation ss.1.401(a)(9)-2,
     and any  provisions  in this Plan  which  reflect  Code  ss.401(a)(9)  will
     override any  distribution  options which are  inconsistent  with such Code
     section and regulations.

                                                                              33
5.10 STATUTORY  COMMENCEMENT  OF  BENEFITS:  Unless  the  Participant  otherwise
     elects,  distribution of a  Participant's  benefit must begin no later than
     the 60th day  after  the  latest of the close of the Plan Year in which the
     Participant (1) reaches the earlier of Age 65 or Normal Retirement Age; (2)
     reaches the 10th  anniversary  of the year the  Participant  commenced Plan
     participation;  or (3) terminates service with the Employer.  However,  the
     failure  of a  Participant  and the  Participant's  spouse to  consent to a
     distribution  while a  benefit  is  immediately  distributable  within  the
     meaning of  Section  5.6 above  will be deemed to be an  election  to defer
     commencement of payment of any benefit  sufficient to satisfy this Section.
     In addition, if this Plan provides for early retirement,  a Participant who
     satisfied the service requirement for early retirement prior to Termination
     of  Employment  will be  entitled  to receive  his or her Vested  Aggregate
     Account balance, if any, upon satisfaction of the age requirement for early
     retirement.

5.11 DETERMINATION  OF LIFE  EXPECTANCIES:  If a Participant's  Vested Aggregate
     Account is  distributed  through  other than the  purchase of an  immediate
     annuity,  the  applicable  calendar  year  will be the  First  Distribution
     Calendar  Year  and,  if  life  expectancy  is  being  recalculated,   each
     succeeding  calendar year. If annuity payments commence before the Required
     Beginning  Date,  the  applicable  calendar  year is the year such payments
     commence.  If distribution is in the form of an immediate annuity purchased
     after the Participant's  death with the Participant's  remaining  interest,
     the  applicable  calendar  year is the year of  purchase.  For  purposes of
     Section 5.2,  payments will be  calculated  by use of the return  multiples
     specified in regulation  ss.1.72-9.  Life expectancy of a surviving  spouse
     may be  recalculated  annually,  but in the case of any other  Beneficiary,
     life  expectancy will be calculated at the time payment first commences and
     payments  for any  12-consecutive  month  period will be based on such life
     expectancy  minus  the  number  of  whole  years  that  have  passed  since
     distribution  commenced.  The  First  Distribution  Calendar  Year is,  for
     distributions  beginning before the Participant's  death, the calendar year
     immediately  preceding  the  calendar  year  containing  the  Participant's
     Required  Beginning Date. For distributions  beginning after the death of a
     Participant,  the First Distribution  Calendar Year is the calendar year in
     which distributions are required to begin under Section 5.2.

5.12 SEGREGATION  OF  BENEFIT  BEFORE  DISTRIBUTION:  As of the  Valuation  Date
     coinciding  with  or  next  following  the  date a  Participant  terminates
     employment with the Employer for any reason, the Administrator  will, until
     a distribution is made to the Participant or the Participant's  Beneficiary
     in accordance  with Sections 5.1, 5.2, 5.3, 5.4 or 5.5,  direct the Trustee
     in  a  uniform   nondiscriminatory   manner  to  either   (1)   invest  the
     Participant's  Vested  Aggregate  Account  balance  determined  as of  such
     Valuation Date in a separate  interest  bearing  account;  or (2) leave the
     Participant's Vested Aggregate Account balance as part of the general Trust
     Fund,  in which case such account will share in the  allocation of earnings
     and losses under Section 3.3(a).

34
5.13 DISTRIBUTION  IN EVENT OF  LEGAL  INCAPACITY:  If any  person  entitled  to
     benefits  (the  "Payee")  suffers  from a  Disability  or is  under a legal
     incapacity,  payments may be made in one or more of the  following  ways as
     directed  by  the  Administrator:  (a) to the  Payee  directly;  (b) to the
     guardian or legal  representative of the Payee's person or estate; (c) to a
     relative of the Payee,  to be expended for the Payee's  benefit;  or (d) to
     the  custodian  of the Payee  under any Uniform  Gifts to Minors  Act.  The
     Administrator's determination of minority or incapacity will be final.

5.14 DIRECT  ROLLOVERS:  A  distributee  may  elect  to have any  portion  of an
     eligible rollover distribution paid directly to an eligible retirement plan
     specified by the  distributee in a direct  rollover,  which is a payment by
     the Plan to the eligible retirement plan specified by the distributee.

     (a)  Eligible Rollover  Distribution:  An eligible rollover distribution is
          any distribution of all or any portion of the balance to the credit of
          the distributee,  except that an eligible  rollover  distribution does
          not include any distribution  that is one of a series of substantially
          equal periodic  payments (not less  frequently than annually) made for
          the life (or life  expectancy)  of the  distributee  or for the  joint
          lives  (or  joint  life  expectancies)  of  the  distributee  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 Code ss.401(a)(9);  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).

     (b)  Eligible Retirement Plan: An eligible retirement plan is an individual
          retirement   account  described  in  Code  ss.408(a),   an  individual
          retirement  annuity  described  in Code  ss.408(b),  an  annuity  plan
          described in Code  ss.403(a),  or a qualified  trust described in Code
          ss.401(a),   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.

     (c)  Definition Of Distributee: For purposes of this Section, a distributee
          includes an Employee or former Employee. In addition, an Employee's or
          former  Employee's  Surviving  Spouse  and  an  Employee's  or  former
          Employee's  spouse or former Spouse who is the alternate payee under a
          qualified domestic  relations order as defined in Code ss.414(p),  are
          distributees  with  regard  to the  interest  of the  Spouse or former
          Spouse.

5.15 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS:  Excess Elective Deferrals, plus
     any income and minus any loss  allocable  thereto,  will be  distributed no
     later than April 15th to any  Participant to whose account Excess  Elective
     Deferrals  were  allocated  for the  preceding  year and who claims  Excess
     Elective  Deferrals for such taxable year.  Distribution of Excess Elective
     Deferrals will made in accordance with the following provisions:

35
(a)  Assignment Of Excess Elective  Deferrals:  A Participant may assign to
          this Plan any Excess Elective  Deferrals made during a taxable year of
          the Participant by notifying the Administrator on or before April 15th
          of the amount of the Excess  Elective  Deferrals to be assigned to the
          Plan. A Participant will be deemed to notify the  Administrator of any
          Excess Elective Deferrals that arise by taking into account only those
          Elective  Deferrals  made to this  Plan  and any  other  plans  of the
          Employer.

     (b)  Definition  Of Excess  Elective  Deferrals:  The term Excess  Elective
          Deferrals   means   Elective   Deferrals  that  are  includible  in  a
          Participant's  gross  income  under Code  ss.402(g) to the extent such
          Participant's  Elective Deferrals for a taxable year exceed the dollar
          limitation under such Code Section.  Excess Elective Deferrals will be
          treated as Annual Additions under Section 6.1 of the Plan, unless such
          amounts are  distributed  no later than the first April 15th following
          the close of the Participant's taxable year. Excess Elective Deferrals
          that  are   distributed   after  April  15th  are  includible  in  the
          Participant's  gross income in the taxable year in which  deferred and
          the taxable year in which distributed.

     (c)  Determination  Of Income Or Loss:  Excess  Elective  Deferrals will be
          adjusted  for any  income  or loss up to the end of the  Participant's
          taxable  year and,  at the  discretion  of the  Administrator,  may be
          adjusted for income or loss up to the date of distribution. The period
          between  the end of the  Participant's  taxable  year  and the date of
          distribution  will be referred  to as the gap  period,  and any income
          earned   therein  will  be  allocated   at  the   discretion   of  the
          Administrator  applied  consistently  to all  Participants  and to all
          corrective  distributions  for the  taxable  year.  The income or loss
          allocable to a  Participant's  Excess  Elective  Deferrals will be the
          amount  determined  by  either  the  method  in  subparagraph  (1)  or
          subparagraph  (2)  plus,  if  applicable  the  amount   determined  in
          subparagraph (3):

          (1)  The amount determined by multiplying the income or loss allocable
               to his  Elective  Deferrals  for the  taxable  year  (and the gap
               period)  by  a   fraction,   the   numerator   of  which  is  the
               Participant's  Excess  Elective  Deferrals  for the  year and the
               denominator  of which is (A) the  Participant's  Account  balance
               attributable  to Elective  Deferrals  as of the  beginning of the
               Participant's  taxable year plus any Elective Deferrals allocated
               to the Participant's Account during such taxable year and the gap
               period,  if  applicable,  or (B) solely  with  respect to taxable
               years beginning before January 1, 1992, the Participant's Account
               balance  attributable to Elective  Deferrals as of the end of the
               Participant's  taxable year, reduced by any gain and increased by
               any loss allocable thereto during the taxable year; or

          (2)  The amount  determined  by any  reasonable  method of  allocating
               income or loss to Excess Elective  Deferrals for the taxable year
               and for the gap  period  provided  the  method  used is the  same
               method  used by this  Plan for  allocating  income  or  losses to
               Participant's Accounts; and

36
(3)  10% of the amount  determined  under (1) multiplied by the number
               of whole months between the end of the Participant's taxable year
               and the distribution date,  counting the month of distribution if
               it occurs after the 15th of such month.

5.16 DISTRIBUTION OF EXCESS CONTRIBUTIONS: Excess Contributions, plus any income
     and minus any loss allocable thereto, will be distributed no later than the
     last day of each Plan Year to  Participants  to whose  accounts such Excess
     Contributions  were  allocated for the preceding  Plan Year.  The amount of
     Excess  Contributions to be distributed  under this Section will be reduced
     by the amount of any Excess Elective  Deferrals  previously  distributed to
     the  Participant  under  Section  5.15 for the  Participant's  taxable year
     ending with or within the Plan Year.  Distribution of Excess  Contributions
     will be made in accordance with the following provisions:

     (a)  Allocation To Highly Compensated Employees:  Excess Contributions will
          be  allocated  to the  HCEs  with  the  largest  amounts  of  Employer
          contributions  taken into account in calculating  the ADP Test for the
          year in which the Excess Contributions  arose,  beginning with the HCE
          with the largest amount of such Employer  contributions and continuing
          in  descending  order  until all the  Excess  Contributions  have been
          allocated.  For  purposes  of the  preceding  sentence,  the  "largest
          amount" is determined after distribution of any Excess  Contributions.
          If excess  amounts are  distributed  more than 2 1/2 months  after the
          last day of the Plan Year in which they  arose,  a 10% excise tax will
          be imposed on the Employer.  Excess  Contributions  will be treated as
          Annual Additions under Section 6.1.

     (b)  Definition  Of Excess  Contributions:  The term  Excess  Contributions
          means with  respect  to any Plan Year the excess of (a) the  aggregate
          amount of  Employer  contributions  actually  taken  into  account  in
          computing  the ADP Test of  Participants  who are  HCEs for such  Plan
          Year, over (b) the maximum amount of such  contributions  permitted by
          the ADP Test (determined by reducing  contributions  made on behalf of
          Participants  who are HCEs in order of their ADPs,  beginning with the
          highest of such percentages).

     (c)  Determination Of Income Or Loss: Excess Contributions will be adjusted
          for any  income  or loss up to the end of the Plan  Year  and,  at the
          discretion of the Administrator, may be adjusted for income or loss up
          to the date of  distribution.  The period,  if any, between the end of
          the Plan Year and the date of distribution  will be referred to as gap
          period,  and  any  income  earned  therein  will be  allocated  at the
          Administrator's  discretion  applied  consistently to all Participants
          and to all corrective distributions made for the Plan Year. The income
          or loss allocable to each Participant's  Excess  Contributions will be
          the amount  determined  by either the  method in  subparagraph  (1) or
          subparagraph  (2) plus, if  applicable,  the amount  determined  under
          subparagraph (3), as follows:

                                                                              37
(1)  The amount determined by multiplying the income or loss allocable
               to his or her Elective Deferrals (and if applicable, QNECs and/or
               QMACs) for the Plan Year (and the gap period, if applicable) by a
               fraction,  the  numerator  of which is the  Participant's  Excess
               Contributions  for the year and the  denominator  of which is (A)
               the  Participant's   Account  balance  attributable  to  Elective
               Deferrals (and if applicable, QNECs and/or QMAC that are included
               in the ADP  test) as of the  beginning  of the Plan Year plus any
               Elective  Deferrals (and if  applicable,  QNECs and/or QMACs that
               are included in the ADP test) allocated to the Participant during
               such Plan Year and the gap period,  if applicable,  or (B) solely
               with respect to Plan Years beginning  before January 1, 1992, the
               Participant's  Account balance attributable to Elective Deferrals
               (and if  applicable,  QNECs and/or QMACs that are included in the
               ADP Test) as of the end of the Plan Year  reduced by any gain and
               increased by any loss allocable thereto during the Plan Year; or

          (2)  The amount  determined  by any  reasonable  method of  allocating
               income or loss to the  Participant's  Elective  Deferrals (and if
               applicable, QNECs and/or QMACS) for the Plan Year and for the gap
               period  provided  the  method  used is the same  method  used for
               allocating income or losses to Participants' Accounts; and

          (3)  10% of the amount  determined  under (1) multiplied by the number
               of  whole  months  between  the  end of the  Plan  Year  and  the
               distribution  date,  counting  the  month of  distribution  if it
               occurs after the 15th of such month.

     (d)  Accounting  For Excess  Contributions:  Excess  Contributions  will be
          distributed from the Participant's  Elective Deferral  sub-account and
          QMAC sub-account in proportion to the Participant's Elective Deferrals
          and QMACs  (to the  extent  used in the ADP  Test) for the Plan  Year.
          Excess  Contributions  will be distributed from the Participant's QNEC
          sub-account  only to the extent the  Excess  Contributions  exceed the
          balance in the Participant's  Elective  Deferral  sub-account and QMAC
          sub-account.

5.17 DISTRIBUTION   OF  EXCESS   AGGREGATE   CONTRIBUTIONS:   Excess   Aggregate
     Contributions,  plus any income and minus any loss allocable thereto,  will
     be forfeited, if forfeitable,  or if not forfeitable,  distributed no later
     than the last day of each Plan Year to  Participants to whose Accounts such
     contributions  were allocated for the preceding Plan Year.  Distribution of
     Excess  Aggregate  Contributions  will  be  made  in  accordance  with  the
     following provisions:

38
(a)  Allocation  To  Highly   Compensated   Employees:   Excess   Aggregate
          Contributions   will  be  allocated  to  the  HCEs  with  the  largest
          Contribution  Percentage Amounts taken into account in calculating the
          ACP Test for the year in which the excess  arose,  beginning  with the
          HCE with the largest amount of such  Contribution  Percentage  Amounts
          and  continuing  in  descending  order until all the Excess  Aggregate
          Contributions  have been  allocated.  For  purposes  of the  preceding
          sentence, the "largest amount" is determined after distribution of any
          Excess Aggregate Contributions.  If Excess Aggregate Contributions are
          distributed  more than 2 1/2months after the last day of the Plan Year
          in which they arose,  a 10% excise tax will be imposed on the Employer
          with respect to those amounts.  Excess Aggregate Contributions will be
          treated as Annual Additions under Section 6.1.

     (b)  Forfeitures Of Excess Aggregate  Contributions:  Forfeitures of Excess
          Aggregate   Contributions   will  be   allocated   (after   all  other
          Forfeitures)  to  the  Matching   Contribution   sub-account  of  each
          Participant  who is a NHCE who made  Elective  Deferrals  or Voluntary
          Employee  Contributions  in the ratio  which  each such  Participant's
          Compensation for the Plan Year bears to the total  Compensation of all
          such Participants for such Plan Year.

     (c)  Excess Aggregate Contribution:  The term Excess Aggregate Contribution
          means,  with respect to any Plan Year, the excess of (1) the aggregate
          Contribution  Percentage  Amounts  taken into account in computing the
          numerator of the  Contribution  Percentage  actually made on behalf of
          Participants  who are HCEs for such Plan  Year,  over (2) the  maximum
          Contribution  Percentage Amounts permitted by the ACP Test (determined
          by reducing  contributions made on behalf of Participants who are HCEs
          in order of their  Contribution  Percentage Amounts beginning with the
          highest of such  percentages).  Such  determination will be made after
          first  determining  Excess  Elective  Deferrals  and then  determining
          Excess  Contributions.   The  terms  Actual  Contribution  Percentage,
          Contribution Percentage and Contribution Percentage Amount are defined
          in Section 1.10 of the Plan.

     (d)  Determination  Of  Income:  Excess  Aggregate  Contributions  will  be
          adjusted for any income or loss up to the end of the Plan Year and, at
          the  discretion  of the  Administrator,  may be adjusted for income or
          loss up to the date of distribution. The period between the end of the
          Plan Year and the date of distribution  will be referred to as the gap
          period,  and any income earned during the gap period will be allocated
          at the discretion of the  Administrator  applied  consistently  to all
          Participants  and to all corrective  distributions  for the Plan Year.
          The  income or loss  allocable  to a  Participant's  Excess  Aggregate
          Contributions  will be the amount  determined  by either the method in
          subparagraph (1) or subparagraph  (2) plus, if applicable,  the amount
          determined under subparagraph (3):

                                                                              39
(1)  The amount determined by multiplying the income or loss allocable
               to his Voluntary Employee  Contributions,  Matching Contributions
               (if  not  used  in the  ADP  Test),  QNECs  and,  to  the  extent
               applicable,  Elective  Deferrals  for the Plan  Year (and the gap
               period,  if applicable) by a fraction,  the numerator of which is
               such  Participant's  Excess Aggregate  Contributions for the year
               and the  denominator  of which is (A) the  Participant's  Account
               balance(s)  attributable to Contribution Percentage Amounts as of
               the  beginning  of the Plan  Year,  plus any  additional  amounts
               attributable to Contribution  Percentage Amounts allocated to the
               Participant  during  such  Plan  Year  and  the  gap  period,  if
               applicable,  or (B) solely with  respect to Plan Years  beginning
               before  January  1,  1992,  the  Participant's   Account  balance
               attributable to Contribution  Percentage Amounts as of the end of
               the Plan  Year,  reduced  by any gain and  increased  by any loss
               allocable thereto during the Plan Year; or

          (2)  The amount  determined  by any  reasonable  method of  allocating
               income  or loss  to the  Participant's  Voluntary  Contributions,
               Matching  Contributions  and  QNECs for the Plan Year and for the
               gap period,  if applicable,  provided the method used is the same
               one  used  for  allocating  income  or  losses  to  Participants'
               Accounts; and

          (3)  10% of the amount  determined  under (1) multiplied by the number
               of  whole  months  between  the  end of the  Plan  Year  and  the
               distribution  date,  counting  the  month of  distribution  if it
               occurs after the 15th of such month.

     (e)  Accounting  For  Excess  Aggregate  Contributions:   Excess  Aggregate
          Contributions will be forfeited if forfeitable, or will be distributed
          on  a  pro-rata  basis  from  the  Participant's   Voluntary  Employee
          Contribution  Account,  Matching  Contribution  sub-account  and  QMAC
          sub-account,   and  if  applicable,   from  the   Participant's   QNEC
          sub-account or the Elective Deferral sub-account, or both.

5.18 FINANCIAL HARDSHIP DISTRIBUTIONS: A Participant who has attained age 59 1/2
     may  request  in  writing  to the  Administrator  that  up to  100%  of the
     Participant's  Elective  Deferral Account  (including any earnings credited
     thereto as of the end of the last Plan Year ending  before July 1, 1989) as
     of the Valuation  Date  immediately  preceding  such request be distributed
     because of the Participant's  financial hardship,  subject to the following
     provisions:

     (a)  Amount And Form Of  Distribution:  The  maximum  amount  distributable
          cannot exceed the amount  required to relieve the financial  hardship,
          including amounts necessary to pay any federal,  state or local income
          taxes  or  penalties   reasonably   anticipated  to  result  from  the
          distribution.  A hardship distribution will only be made in a lump sum
          provided  the   Participant's   spouse,   if  any,   consents  to  the
          distribution in accordance with Section 5.8.

40
(b)  Definition  Of  Financial   Hardship:   Financial  hardship  means  an
          immediate  and  heavy  financial  need  that  the  Participant   lacks
          available  resources  to  satisfy.  For  purposes  of this  Plan,  the
          following financial needs will be considered  immediate and heavy: (1)
          payment of medical  expenses within the meaning of Code ss.213(d) that
          are incurred by the Participant,  his spouse or his children;  (2) the
          purchase  (excluding  mortgage payments) of a principal  residence for
          the Participant;  (3) payment of tuition and related  educational fees
          for  the  next  12  months  of   post-secondary   education   for  the
          Participant,  the Participant's spouse or the Participant's  children;
          (4) the need to prevent the  eviction of the  Participant  from his or
          her  principal  residence  or  foreclosure  on  the  mortgage  of  the
          Participant's principal residence; (5) payment of funeral expenses for
          a member of the  Participant's  family; or (6) any other immediate and
          heavy financial need as determined by the  Administrator  in a uniform
          nondiscriminatory manner.

     (c)  Participant's Written Representations: Except as otherwise provided in
          paragraph (d), a hardship  distribution can only be made to the extent
          a  Participant's  financial  hardship  cannot be satisfied  from other
          resources  reasonably  available to the Participant,  as determined by
          the   Administrator   on  the   basis  of  all   relevant   facts  and
          circumstances.  However, the Administrator may treat a distribution as
          necessary to satisfy a financial hardship if the Administrator, in the
          absence  of  actual  knowledge  to  the  contrary,   relies  upon  the
          Participant's  written  representation  that  the  financial  hardship
          cannot be  relieved  (1)  through  reimbursement  or  compensation  by
          insurance  or  otherwise;  (2) by  liquidation  of  the  Participant's
          assets,  to the  extent  such  liquidation  would not  itself  cause a
          financial  hardship;  (3) by cessation of the  Participant's  Elective
          Deferrals or Voluntary  Employee  Contributions to the Plan; or (4) by
          other distributions or nontaxable (at the time of the loan) loans from
          any other  Employer-maintained plans or from any other employer, or by
          borrowing from commercial sources on reasonable commercial terms.

     (d)  Safe  Harbor  Deemed  Distributions:  If a  Participant  elects not to
          comply  with the  written  representation  requirements  set  forth in
          paragraph  (c)  with  respect  to a  distribution  made for one of the
          reasons set forth in paragraphs (b)(1), (2), (3) or (4), then any such
          distribution  will be deemed to be  necessary  to satisfy a  financial
          hardship if the Participant has obtained all distributions (other than
          financial  hardship  distributions) and all nontaxable loans currently
          available under all plans maintained by the Employer.  Furthermore, by
          electing not to comply with the  requirements  of  paragraph  (c), the
          Participant  cannot make Elective  Deferrals  and  Voluntary  Employee
          Contributions  to  this  Plan  or any  other  plan  maintained  by the
          Employer  for at  least  12  months  after  receipt  of  the  hardship
          distribution;  and  for the  Participant's  taxable  year  immediately
          following  the  taxable  year  of  the  hardship   distribution,   the
          Participant  cannot make Elective  Deferrals to this Plan or any other
          plan  maintained  by the  Employer in excess of the  applicable  limit
          under Code  ss.402(g)(5)  for such taxable  year,  minus the amount of
          such  Participant's  Elective  Deferrals  made for the taxable year in
          which the financial hardship distribution was made.

                                                                              41
(e)  Restriction  On  Certain  Transferred   Assets:   Notwithstanding  any
          provision in this Section to the  contrary,  no hardship  distribution
          can be made under this Section  with respect to benefits  attributable
          to assets (including  post-transfer  earnings thereon) and liabilities
          that are  transferred,  within the meaning of Code  ss.414(l),  from a
          money  purchase  pension plan  qualified  under Code ss.401(a) to this
          Plan  (other  than  any  portion  of  those  assets  and   liabilities
          attributable to Voluntary Employee Contributions).

42
ARTICLE 6
                          CODE SECTION 415 LIMITATIONS

6.1  MAXIMUM  ANNUAL  ADDITION:  The  maximum  Annual  Addition  (as  defined in
     paragraph (c) below) made to a Participant's  various  accounts  maintained
     under the Plan for any Limitation  Year  beginning  after December 31, 1986
     will not exceed the  lesser of the Dollar  Limitation  set forth in Section
     6.1(a) or the  Compensation  Limitation  set forth in  Section  6.1(b),  as
     follows:

     (a)  Dollar  Limitation:  The Dollar  Limitation  is  $30,000,  as annually
          adjusted  by  the  Secretary  of  the  Treasury  in  accordance   with
          Code ss.415(d).

     (b)  Compensation  Limitation:  The  Compensation  Limitation  is an amount
          equal to 25% of the  Participant's  Section 415  Compensation  for the
          Limitation  Year.  However,  this  limitation  will  not  apply to any
          contribution  made for  medical  benefits  within the  meaning of Code
          ss.401(h) or Code ss.419A(f)(2) after separation from service which is
          otherwise  treated as an Annual  Addition under Code  ss.415(l)(1)  or
          Code ss.419A(d)(2).

     (c)  Annual  Additions:  The term  Annual  Additions  means  the sum of the
          following  amounts  credited  to  a  Participant's   Account  for  the
          Limitation   Year:   (1)   Employer   contributions;    (2)   Employee
          contributions; (3) Forfeitures; (4) amounts allocated, after March 31,
          1984,  to  an  individual   medical   account,   as  defined  in  Code
          ss.415(l)(2), which is part of a pension or annuity plan maintained by
          the  Employer;  and (5) amounts  derived  from  contributions  paid or
          accrued  after  December 31, 1985,  in taxable years ending after such
          date,  which are  attributable to  post-retirement  medical  benefits,
          allocated to the  separate  account of a key  employee,  as defined in
          Code  ss.419A(d)(3),   under  a  welfare  fund,  as  defined  in  Code
          ss.419(e), maintained by the Employer.  Notwithstanding the foregoing,
          a Participant's  Annual Additions do not include his or her rollovers,
          loan  repayments,  repayments  of prior  Plan  distributions  or prior
          distributions   of  mandatory   contributions,   direct  transfers  of
          contributions from another plan to this Plan, deductible contributions
          to  a  simplified  employee  pension  plan,  or  voluntary  deductible
          contributions.

6.2  ADJUSTMENTS  TO MAXIMUM  ANNUAL  ADDITION:  In applying the  limitation  on
     Annual  Additions set forth in Section 6.1, the following  adjustments must
     be made:

     (a)  Short  Limitation  Year: In a Limitation  Year of less than 12 months,
          the Defined  Contribution  Dollar Limitation in Section 6.1(a) will be
          adjusted by  multiplying  it by the ratio that the number of months in
          the short Limitation Year bears to 12.

     (b)  Plans With Different Anniversary Dates: If a Participant  participates
          in multiple defined contribution plans sponsored by the Employer which
          have different  Anniversary Dates, the maximum Annual Addition in this
          Plan for the Limitation  Year will be reduced by the Annual  Additions
          credited  to  the   Participant's   accounts  in  the  other   defined
          contribution plans for such Limitation Year.

                                                                              43
(c)  Plans With The Same Anniversary Date: If a Participant participates in
          multiple  defined  contribution  plans sponsored by the Employer which
          have the same  Anniversary  Date, then (1) if only one of the plans is
          subject to Code ss.412, Annual Additions will first be credited to the
          Participant's  accounts  in the plan  subject;  and (2) if none of the
          plans are

44
subject to Code ss.412, the maximum Annual Addition in this Plan for a
          given Limitation Year will equal the product of (A) the maximum Annual
          Addition for such  Limitation  Year minus any other  Annual  Additions
          previously  credited to the Participant's  account,  multiplied by the
          ratio  that  the  Annual  Additions  which  would  be  credited  to  a
          Participant's  accounts hereunder without regard to the limitations in
          Section 6.1 bears to the Annual  Additions for all plans  described in
          this paragraph.

6.3  MULTIPLE PLANS AND MULTIPLE  EMPLOYERS:  All defined benefit plans (whether
     terminated or not) of the Employer  will be treated as one defined  benefit
     plan, and all defined contribution plans (whether terminated or not) of the
     Employer will be treated as one defined contribution plan. In addition, all
     Affiliated Employers will be considered a single employer.

6.4  MULTIPLE PLAN REDUCTION:  For Plan Years beginning  before January 1, 2000,
     if  an  Employee   is,  or  has  been,  a   Participant   in  one  or  more
     Employer-sponsored   defined   benefit   plans   and   in   one   or   more
     Employer-sponsored  defined  contribution  plans,  the  sum of the  defined
     benefit plan  fraction and the defined  contribution  plan fraction for any
     Limitation  Year may not exceed  1.0,  determined  in  accordance  with the
     following:

     (a)  Defined Benefit  Fraction:  The Defined Benefit Fraction is a fraction
          which has as its numerator the Participant's Projected Annual Benefits
          determined as of the close of the Limitation Year and which has as its
          denominator  the  lesser  of 125%  of the  dollar  limitation  for the
          Limitation Year determined under Code ss.415(b) and ss.415(d), or 140%
          of  the   amount   which  may  be  taken  into   account   under  Code
          ss.415(b)(1)(B)   for  such  Limitation  Year.   Notwithstanding   the
          foregoing,  with  respect  to anyone who was a  Participant  as of the
          first day of the first  Limitation  Year beginning  after December 31,
          1986, in one or more defined benefit plans  maintained by the Employer
          which were in existence on May 6, 1986, the denominator of the defined
          benefit  fraction  will not be less than 125% of the  Current  Accrued
          Benefit.

     (b)  Definitions:  As used in paragraph (a) above,  (1) the term  Projected
          Annual  Benefits  means the annual  benefits  payable to a Participant
          under all defined  benefit  plans  (whether  terminated or not) of the
          Employer as determined under  regulationss.1.415-7(b)(3);  and (2) the
          term Current  Accrued  Benefit means a  Participant's  accrued benefit
          under a defined  benefit plan,  determined as if the  Participant  had
          separated  from  service as of the close of the last  Limitation  Year
          beginning  before January 1, 1987, when expressed as an annual benefit
          within  the   meaning  of  Code   ss.415(b)(2).   In   determining   a
          Participant's   Current  Accrued  Benefit,   the  Administrator   will
          disregard  any changes in the terms and  conditions  of the Plan after
          May 5, 1986, and any cost of living adjustment  occurring after May 5,
          1986. The Current Accrued Benefit will only be used as set forth above
          if the  defined  benefit  plans  individually  and  in  the  aggregate
          satisfied the  requirements  of Code ss.415 for all  Limitation  Years
          beginning before January 1, 1987.

     (c)  Defined Contribution  Fraction: The Defined Contribution Fraction is a
          fraction the numerator of which is the sum of the Annual  Additions to
          the  Participant's  Account under all the defined  contribution  plans
          (whether terminated or not) maintained by the Employer for the current
          Limitation Year and all prior  Limitation  Years (including the Annual
          Additions    attributable   to   the   Participant's    non-deductible
          contributions to all

                                                                              45
Employer maintained defined benefit plans,  whether terminated or not,
          and the Annual Additions

46
attributable  to  all  welfare  benefit  funds,  as  defined  in  Code
          ss.419(e),  and  individual  medical  accounts,  as  defined  in  Code
          ss.415(l)(2) maintained by the Employer), and the denominator of which
          is the sum of the maximum aggregate amounts for the current Limitation
          Year and all prior  Limitation  Years the Employee was employed by the
          Employer  (regardless  of  whether  a  defined  contribution  plan was
          maintained by the Employer).  The maximum permissible aggregate amount
          in any  Limitation  Year  is the  lesser  of (1)  125%  of the  dollar
          limitation in effect in Code  ss.415(c)(1)(A) for such Limitation Year
          determined  without  regard  to Code  ss.415(c)(6)  and  adjusted  per
          regulation  ss.1.415-7(d)(1)  and  Notice  83-10,  or  (2)  35% of the
          Participant's Section 415 Compensation.

     (d)  Transition Rule For  Denominator:  For defined  contribution  plans in
          effect on or before July 1, 1982, the  Administrator may elect for any
          Limitation  Year ending after  December 31, 1982 that the  denominator
          will be the product of the  denominator for the Limitation Year ending
          in 1982 determined  under the law in effect for such Limitation  Year,
          multiplied by the Transition  Fraction,  which is a fraction which has
          as its numerator the lesser of $51,875 or 1.4 multiplied by 25% of the
          Participant's  Section  415  Compensation  for the Plan Year ending in
          1981, and which has as its denominator the lesser of $41,500 or 25% of
          the Participant's Section 415 Compensation for the Plan Year ending in
          1981. In any Top Heavy  Limitation  Year,  $41,500 will be substituted
          for $51,875 in determining  the Transition  Fraction  unless the Extra
          Minimum  Allocation  is being  provided in Section 3.5. In a Super Top
          Heavy Plan Year, $41,500 will always be substituted for $51,875.

     (e)  Adjustment Of Fraction: If an Employee was a Participant as of the end
          of the first day of the first Limitation Year beginning after December
          31, 1986 in one or more defined  contribution  plans maintained by the
          Employer  which were in existence on May 6, 1986, the numerator of the
          defined  contribution  fraction  will be  adjusted  if the sum of such
          defined  contribution  fraction and the defined benefit fraction would
          otherwise  exceed  1.0  under  the  terms  of  this  Plan.  Under  the
          adjustment, an amount equal to the product of the excess of the sum of
          the defined  benefit  fraction and the defined  contribution  fraction
          over 1.0  multiplied by the  denominator  of the defined  contribution
          fraction  will be  permanently  subtracted  from the  numerator of the
          defined contribution fraction. The adjustment will be calculated using
          the  fractions  as they  would be  computed  as of the end of the last
          Limitation  Year beginning  before January 1, 1987,  disregarding  any
          changes  in the terms  and  conditions  of the Plan made  after May 5,
          1986,  but using the Code ss.415  limitation  applicable  to the first
          Limitation Year beginning on or after January 1, 1987.

     (f)  Top Heavy  Adjustments  To Multiple  Plan  Fraction:  In any Top Heavy
          Limitation  Year,  100% will be substituted  for 125% in paragraph (a)
          and paragraph (c) above unless (1) a 7.5% allocation is being provided
          to Non-Key  Employees  in Section  3.5,  or (2) a Non-Key  Employee is
          being provided with a retirement  benefit under a defined benefit plan
          that  is  equal  to 3% of his  or  her  average  monthly  Section  415
          Compensation.  However,  in any Super Top Heavy  Limitation Year, 100%
          will be substituted  for 125% in any event.  If the 100% limitation is
          exceeded for any  Participant  in any  Limitation  Year,  then (1) the
          Participant's  accrued benefit in the defined benefit plan will not be
          increased; (2) no Annual Additions may be credited to

                                                                              47
the  Participant's  accounts under this Plan; and (3) the  Participant
          may not make any  contributions,  whether  voluntary or mandatory,  to
          this Plan or any other Employer sponsored qualified plan.

48
6.5  ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS:  If an allocation of Forfeitures
     or an error in calculating a Participant's  Compensation  causes the Annual
     Additions allocated to such Participant's Account to exceed the maximum set
     forth in Section  6.1,  such  Participant's  Account  will be  adjusted  as
     follows in order to reduce such excess:

     (a)  Return  Of  Elective   Deferrals  And  Employee   Contributions:   The
          Administrator  will  return any  Elective  Deferrals  and/or  Employee
          contributions  (whether such Employee  contributions  are voluntary or
          mandatory),  and  will  distribute  the  gains  attributable  to those
          Elective Deferrals and/or Employee  contributions,  to the extent that
          such  return or  distribution  would  reduce the excess  amount in the
          Participant's Account.

     (b)  Reallocation  In The Current Year:  After the return of  contributions
          and the  distribution  of gains  specified in paragraph  (a) have been
          made,  and prior to the creation of a Section 415 Suspense  Account as
          set forth in paragraph (c) below,  any excess will be  reallocated  in
          accordance  with  Section  3.2 to all  Participants  who  have not yet
          attained   their  maximum   Annual   Addition.   If   necessary,   the
          Administrator will repeat the reallocation until all Participants have
          reached their maximum Annual Addition.

     (c)  Remaining Excess: If an excess amount still remains in a Participant's
          Account,  then (1) if the  Participant  is employed by the Employer at
          the end of the Limitation Year, the Administrator will hold the excess
          in the Section  415  Suspense  Account  and use it to reduce  Employer
          contributions  (including any allocation of Forfeitures)  for the next
          Limitation Year (and each succeeding Limitation Year if necessary) for
          the  Participant;  and (2) if the  Participant  is not employed by the
          Employer  at the  end of a  Limitation  Year,  the  excess  may not be
          distributed  to the  Participant  but will be held  unallocated in the
          Section  415  Suspense  Account  and  will be used  to  reduce  future
          Employer  contributions  (including the allocation of Forfeitures) for
          all  remaining  Participants  in the  next  Limitation  Year  and each
          succeeding Limitation Year if necessary.

     (d)  Earnings, Losses And Reallocation: If the Section 415 Suspense Account
          is in existence at any time during a Limitation  Year pursuant to this
          Section, it will not share in the allocation of the earnings or losses
          of the Trust Fund. If the Section 415 Suspense Account is in existence
          at any time during a particular  Limitation  Year, all amounts in such
          account must be allocated and  reallocated to  Participants'  Accounts
          before any Employer contributions or any Employee contributions may be
          made to the Plan for  that  Limitation  Year.  Excess  amounts  in the
          Section 415 Suspense Account may not be distributed to Participants or
          former Participants.

                                                                              49
ARTICLE 7
                              DUTIES OF THE TRUSTEE

7.1  APPOINTMENT,  RESIGNATION,  REMOVAL AND SUCCESSION: This Plan will have one
     or more  individual  Trustees,  a  corporate  Trustee,  or any  combination
     thereof, appointed as follows:

     (a)  Appointment Of Trustee: Each Trustee will be appointed by the Employer
          and will  serve  until  its  successor  has been  named or until  such
          Trustee's resignation,  death, incapacity,  or removal, in which event
          the  Employer  will name a successor  Trustee.  The term  Trustee will
          include the original and any successor Trustees.

     (b)  Resignation Of Trustee:  A Trustee may resign at any time by giving 30
          days written notice in advance to the Employer,  unless such notice is
          waived by the  Employer.  The  Employer may remove a Trustee by giving
          such  Trustee 30 days written  notice in advance.  Such removal may be
          with or without cause.

     (c)  Successor Trustee: Each successor Trustee will succeed to the title to
          the Trust by accepting his  appointment  in writing and by filing such
          written  acceptance  with the former  Trustee  and the  Employer.  The
          former  Trustee,  upon  receipt of such  acceptance,  will execute all
          documents  and perform  all acts  necessary  to vest the Trust  Fund's
          title of record in any successor Trustee. No successor Trustee will be
          personally  liable for any act or  failure  to act of any  predecessor
          Trustee.

     (d)  Merger Of Corporate Trustee: If any corporate Trustee, before or after
          qualification,  changes its name,  consolidates or merges with another
          corporation, or otherwise reorganizes, any resulting corporation which
          succeeds  to the  fiduciary  business  of such  Trustee  will become a
          Trustee hereunder in lieu of such corporate Trustee.

7.2  INVESTMENT  ALTERNATIVES  OF THE TRUSTEE:  The Trustees  will  implement an
     investment  program based on the Employer's  investment  objectives and the
     Employee  Retirement  Income  Security  Act of 1974.  In addition to powers
     given by law, the Trustee may:

     (a)  Property:  Invest  the Trust Fund in any form of  property,  including
          common and preferred  stocks,  exchange  covered call options,  bonds,
          money market instruments, mutual funds, savings accounts, certificates
          of deposit,  Treasury bills,  insurance policies and contracts,  or in
          any other property,  real or personal,  foreign or domestic,  having a
          ready market including  securities issued by an institutional  Trustee
          and/or affiliate of the institutional  Trustee. The Trustee may invest
          on margin. An institutional  Trustee may invest in its own deposits if
          they bear a reasonable interest rate. The Trustee may retain,  manage,
          operate,  repair, improve and mortgage or lease for any period on such
          terms as it deems proper any real estate or personal  property held by
          the  Trustee,  including  the power to demolish  any building or other
          improvements  in whole or part.  The  Trustee may erect  buildings  or
          other improvements, make leases that

50
extend beyond the term of this Trust,  and foreclose,  extend,  renew,
          assign,  release or partially release and discharge mortgages or other
          liens.

     (b)  Pooled Funds: The Trustee may transfer any assets of the Trust Fund to
          a  collective  trust  established  to permit  the  pooling of funds of
          separate  pension and  profit-sharing  trusts  provided  the  Internal
          Revenue Service has ruled such collective  trust to be qualified under
          Code  ss.401(a)  and exempt under Code  ss.501(a)  (or the  applicable
          corresponding  provision  of any  other  Revenue  Act) or to any other
          common,  collective,  or  commingled  trust fund which has been or may
          hereafter  be  established   and  maintained  by  the  Trustee  and/or
          affiliates of an institutional  Trustee. Such commingling of assets of
          the  Fund  with  assets  of other  qualified  trusts  is  specifically
          authorized,  and to the extent of the  investment of the Trust Fund in
          such a  group  or  collective  trust,  the  terms  of  the  instrument
          establishing  the group or  collective  trust will be a part hereof as
          though set forth herein.

     (c)  Employer  Stock:  The  Trustee may invest the Trust Fund in the common
          stock, debt obligations,  or any other security issued by the Employer
          or by an  affiliate of the Employer  within the  limitations  provided
          under  Sections  406,  407,  and  408  of  ERISA  provided  that  such
          investment  does not  constitute a prohibited  transaction  under Code
          Section  4975.  Any such  investment  will only be made  upon  written
          direction  of the  Employer  who will be  solely  responsible  for the
          propriety of such investment.

     (d)  Cash  Reserves:  The  Trustee  may retain in cash as much of the Trust
          Fund as the Trustee may deem advisable to satisfy the liquidity  needs
          of the Plan and to  deposit  any cash held in the Trust Fund in a bank
          account without liability for the highest rate of interest  available.
          If a bank is acting as Trustee,  such  Trustee is  specifically  given
          authority to invest in deposits of such Trustee.  The Trustee may also
          hold  cash  un-invested  at any time and from time to time and in such
          amount or to such extent as the Trustee deems prudent, and the Trustee
          will not be liable for any losses  which may be incurred as the result
          of the failure to invest same, except to the extent provided herein or
          in ERISA.

     (e)  Reorganizations   Etc:   The   Trustee  may  join  in  or  oppose  the
          reorganization,  recapitalization,  consolidation,  sale or  merger of
          corporations or properties, upon such terms as the Trustee deems wise.

     (f)  Registration  of  Securities:  The Trustee may cause any securities or
          other  property to be  registered  in the Trustee's own name or in the
          name  of  the  Trustee's  nominee  or  nominees,   and  may  hold  any
          investments in bearer form, but the records of the Trustee will at all
          times show all such investments as part of the Trust Fund.

     (g)  Proxies:  The Trustee may vote proxies and if appropriate pass them on
          to any  investment  manager which may have directed the  investment in
          the equity giving rise to the proxy.

     (h)  Ownership  Rights:  The Trustee may exercise all ownership rights with
          respect to any assets held in the Trust Fund.

                                                                              51
(i)  Other Investments:  The Trustee may accept and retain for such time as
          the Trustee deems advisable any securities or other property  received
          or  acquired as Trustee,  whether or not such  securities  or property
          would normally be purchased as investments hereunder.

     (j)  Key Man Insurance: The Trustee, with the consent of the Administrator,
          may purchase  insurance  Policies on the life of any Participant whose
          employment is deemed to be key to the  Employer's  financial  success.
          Such key man Policies  will be deemed to be an investment of the Trust
          Fund and will be payable to the Trust Fund as the beneficiary thereof.
          The  Trustee  may  exercise  any and all  rights  granted  under  such
          Policies.

     (k)  Loans To The Trust: The Trustee may borrow or raise money for purposes
          of the Plan in such amounts,  and upon such terms and  conditions,  as
          the Trustee deems advisable;  and for any sum so borrowed, the Trustee
          may issue a promissory  note as Trustee,  and secure  repayment of the
          loan by pledging all, or any part, of the Trust Fund as collateral. No
          person  lending  money  to the  Trustee  will be  bound  to see to the
          application  of the money  lent or to  inquire  into the  validity  or
          propriety of any borrowing.

     (l)  Agreements  With  Banks:  The  Trustee  may  with the  consent  of the
          Employer  and  upon  such  terms  as they  in  their  discretion  deem
          necessary,  enter  into  an  agreement  with a bank or  trust  company
          providing for (a) the deposit of all or part of the funds and property
          of the Trust with such bank or trust company,  (b) the  appointment of
          such bank or trust  company as the agent or  custodian of the Trustees
          for  investment  purposes,  with  such  discretion  in  investing  and
          reinvesting  the funds of the Trust as the Trustees  deem it necessary
          or desirable to delegate.

     (m)  Litigation:  The Trustee may begin, maintain, or defend any litigation
          necessary in connection with the  administration  of the Plan,  except
          that the  Trustee  will not be  obliged  or  required  to do so unless
          indemnified to its satisfaction.

     (n)  Claims,  Debts or Damages:  The Trustee  may  settle,  compromise,  or
          submit to arbitration any claims, debts, or damages due or owing to or
          from the Plan.

     (o)  Miscellaneous:  The Trustee may do all such acts and exercise all such
          rights,  although not specifically  mentioned  herein,  as the Trustee
          deems  necessary  to carry out the  purposes of the Plan.  The Trustee
          will  not  be  restricted  to  securities  or  other  property  of the
          character   expressly   authorized   by   applicable   law  for  trust
          investments, subject to the requirement that the Trustee discharge his
          duties  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 similar  character and with similar aims by diversifying
          the investments to minimize the risks of large losses unless under the
          circumstances it is clearly prudent not to do so.

52
7.3  VALUATION  OF THE TRUST FUND:  On each  Valuation  Date,  the Trustee  will
     determine  the net  worth  of the  Trust  Fund.  The  value  of  marketable
     investments  will be  determined  using the most recent  price  quoted on a
     national  securities  exchange  or  over-the-counter  market.  The value of
     non-marketable   investments   will  be  determined   periodically   by  an
     independent third-party appraiser as required by law, and the Trustees will
     have no responsibility for the valuation of such assets.

7.4  COMPENSATION AND EXPENSES: The Trustee,  either from the Trust Fund or from
     the Employer,  will be reimbursed  for all of its expenses and will be paid
     reasonable compensation as agreed upon from time to time with the Employer;
     but no person who receives full-time pay from the Employer will receive any
     fees for services to the Plan as Trustee or in any other capacity. Expenses
     will be paid by each  Adopting  Employer  in the ratio  that each  Adopting
     Employer's   Participants'   Accounts   bears  to  the  total  of  all  the
     Participants' Accounts maintained by this Plan.

7.5  PAYMENTS FROM THE TRUST FUND:  The Trustee will pay Plan benefits and other
     payments as the Administrator directs, and except as provided by ERISA, the
     Trustee will not be  responsible  for the propriety of such  payments.  Any
     payment made to a Participant,  or a Participant's legal  representative or
     Beneficiary in accordance with the terms of the Plan will, to the extent of
     such payment,  be in full  satisfaction  of all claims arising  against the
     Trust, the Trustee,  the Employer,  and the  Administrator.  Any payment or
     distribution made from the Trust is contingent on the recipient executing a
     receipt and release acceptable to the Trustee, Administrator, or Employer.

7.6  PAYMENT  OF  TAXES:  The  Trustee  will pay all  taxes of the  Trust  Fund,
     including property, income, transfer and other taxes which may be levied or
     assessed  upon or in respect of the Trust  Fund or any money,  property  or
     securities  forming a part of the Trust Fund. The Trustee may withhold from
     distributions to any payee such sum as the Trustee may reasonably  estimate
     as necessary to cover  federal and state taxes for which the Trustee may be
     liable,  which  are,  or  may  be,  assessed  with  regard  to  the  amount
     distributable to such payee.  Prior to making any payment,  the Trustee may
     require such releases or other  documents from any lawful taxing  authority
     and may require such indemnity from any payee or distributee as the Trustee
     deems necessary.

7.7  ACCOUNTS,  RECORDS AND  REPORTS:  The Trustee  will keep  accurate  records
     reflecting its  administration of the Trust Fund and will make such records
     available to the  Employer for review and audit.  Within 90 days after each
     Plan Year, and within 90 days after its removal or resignation, the Trustee
     will file with the  Employer an  accounting  of its  administration  of the
     Trust Fund during such year or from the end of the  preceding  Plan Year to
     the  date of  removal  or  resignation.  Such  accounting  will  include  a
     statement  of cash  receipts and  disbursements  since the date of its last
     accounting  and will contain an asset list showing the fair market value of
     investments  held  in the  Trust  Fund as of the  end of the  Plan  Year as
     determined  under Section 7.3. The Employer will review the  accounting and
     will  notify  the  Trustee  in the event of its  disapproval  of the report
     within 90 days,  providing  the Trustee with a written  description  of the
     items in question.  The Trustees  will have 60 days to provide the Employer
     with a written explanation of the items in question.  If the Employer again
     disapproves of the report,  the Trustee will file its accounting in a court
     of competent jurisdiction for audit and adjudication.

                                                                              53
7.8  EMPLOYMENT  OF AGENTS AND  COUNSEL:  The Trustee  may employ  such  agents,
     counsel,  consultants,  or service  companies as it deems necessary and may
     pay their  reasonable  expenses and  compensation.  The Trustee will not be
     liable  for any  action  taken or  omitted  by the  Trustee  in good  faith
     pursuant  to the advice of such  agents and  counsel.  Any agent,  counsel,
     consultant,   service  company  and/or  its  successors  will  exercise  no
     discretionary  authority  over  investments  or the  disposition  of  Trust
     assets,  and their services and duties will be ministerial only and will be
     to provide  the Plan with those  things  required by law or by the terms of
     the  Plan  without  in  any  way  exercising  any  fiduciary  authority  or
     responsibility  under the Plan.  The duties of a third party  administrator
     will be to safe-keep the  individual  records for all  Participants  and to
     prepare all  required  actuarial  services and  disclosure  forms under the
     supervision  of the  Administrator  and any  Fiduciaries of the Plan. It is
     expressly  stated that the third party  administrator's  services  are only
     ministerial in nature and that under no circumstances will such third party
     administrator  exercise any  discretionary  authority  whatsoever over Plan
     Participants, Plan investments, or Plan benefits.

7.9  DIVISION  OF DUTIES AND  INDEMNIFICATION:  The  division  of duties and the
     indemnification  of the  Trustees  of this  Plan  will be  governed  by the
     following provisions:

     (a)  No Guarantee  Against  Loss:  The Trustees will have the authority and
          discretion  to manage and control  the Fund to the extent  provided in
          this  instrument,  but do not guarantee the Fund in any manner against
          investment  loss or  depreciation  in asset value,  or  guarantee  the
          adequacy of the Fund to meet and discharge all or any  liabilities  of
          the Plan. Furthermore, the Trustees will not be liable for the making,
          retention or sale of any  investment  or  reinvestment  made by it, as
          herein provided,  or for any loss to or diminution of the Fund, or for
          any other loss or damage  which may result from the  discharge  of its
          duties  hereunder,  except to the extent it is  judicially  determined
          that the Trustees  have failed to exercise the care,  skill,  prudence
          and diligence under the  circumstances  then prevailing that a prudent
          person  acting in a like capacity and familiar with such matters would
          use in the conduct of an enterprise of a like character and like aims.

     (b)  Representations  Of The  Employer:  The  Employer  warrants  that  all
          directions issued to the Trustees by it or the Plan Administrator will
          be in  accordance  with the terms of the Plan and not  contrary to the
          provisions of the Employee  Retirement Income Security Act of 1974 and
          the regulations issued thereunder.

     (c)  Directions  By Others:  The Trustees  will not be  answerable  for any
          action taken pursuant to any direction, consent, certificate, or other
          paper or document on the belief that the same is genuine and signed by
          the proper person.  All  directions by the Employer,  a Participant or
          the Plan Administrator will be in writing. The Plan Administrator will
          deliver to the Trustees  certificates  evidencing  the  individual  or
          individuals authorized to act as the Administrator and will deliver to
          the Trustees specimens of their signatures.

     (d)  Duties And Obligations Limited By The Plan: The duties and obligations
          of the Trustees will be limited to those expressly  imposed upon it by
          this Plan or subsequently

54
agreed upon by the parties.  Responsibility for administrative  duties
          required under the Plan or applicable  law not expressly  imposed upon
          or agreed to by the  Trustees,  will rest solely with the Employer and
          with the Administrator.

     (e)  Indemnification  Of Trustees:  The Trustees  will be  indemnified  and
          saved  harmless by the Employer from and against any and all liability
          to  which  the  Trustees  may be  subjected,  including  all  expenses
          reasonably  incurred in its defense,  for any action or failure to act
          resulting from compliance with the  instructions of the Employer,  the
          employees or agents of the Employer,  the Administrator,  or any other
          Fiduciary to the Plan, and for any liability  arising from the actions
          or  non-actions  of any  predecessor  Trustees or  Fiduciary  or other
          Fiduciaries of the Plan.

     (f)  Trustees Not  Responsible  For  Application Of Payments:  The Trustees
          will not be responsible in any way for the application of any payments
          it is  directed  to make or for the  adequacy  of the Fund to meet and
          discharge any and all liabilities under the Plan.

     (g)  Multiple  Trustees:  If more than one Trustee is  appointed,  all acts
          and/or  transactions  taken on  behalf  of the Trust can only be taken
          with the consent of a majority  of the  Trustees  unless the  Trustees
          have agreed by a majority of their number that a particular act and/or
          transaction can be taken or approved by a single Trustee.

     (h)  Limitation Of Liability:  No Trustee will be liable for the act of any
          other  Trustee or Fiduciary  unless the Trustee has  knowledge of such
          act.

     (i)  Trustees  As  Participants  Or  Beneficiaries:  Trustees  will  not be
          prevented from receiving any benefits to which they may be entitled as
          Participants or Beneficiaries in the Plan, so long as the benefits are
          computed and paid on a basis which is consistent with the terms of the
          Plan as applied to all other Participants and Beneficiaries.

     (j)  No Self-Dealing: The Trustees will not (1) deal with the assets of the
          Trust  Fund in their own  interest  or for their own  account;  (2) in
          their  individual  or in any other  capacity,  act in any  transaction
          involving  the Trust Fund on behalf of a party (or  represent a party)
          whose  interests  are  adverse to the  interests  of the Plan,  or its
          Participants or  Beneficiaries;  or (3) receive any  consideration for
          their own personal  accounts  from any party  dealing with the Plan in
          connection with a transaction involving assets of the Trust Fund.

7.10 APPOINTMENT  OF INVESTMENT  MANAGER:  The Trustee may appoint an Investment
     Manager to manage and control the  investment  of all or any portion of the
     Trust Fund. Each Investment Manager will be either be an investment advisor
     registered under the Investment  Advisors Act of 1940; a bank as defined in
     that Act; or an insurance company  qualified to manage,  acquire or dispose
     of any  asset of the  Trust  under  the laws of more  than  one  state.  An
     Investment  Manager will  acknowledge  in writing that it is a Fiduciary of
     the Plan.  The Trustee  will enter into an  agreement  with the  Investment
     Manager  specifying the duties and  compensation of the Investment  Manager
     and  further  specifying  any other  terms and  conditions  under which the
     Investment Manager will be retained. The Trustee will not be liable for any
     act or  omission  of an  Investment  Manager,  and will not be  liable  for
     following  the advice of an  Investment  Manager with respect to any duties
     delegated by the Trustee to the Investment  Manager.  The Trustee will have
     the power to determine the portion of the Plan's assets to be

                                                                              55
invested by a designated  Investment  Manager and to  establish  investment
     objectives and guidelines for the Investment Manager to follow.

7.11 ASSIGNMENT AND ALIENATION OF BENEFITS: Except as may otherwise be permitted
     under Code  ss.401(a)(13)(C),  or as may  otherwise  be  permitted  under a
     Qualified  Domestic  Relations  Order as provided in Section 8.6, or as may
     otherwise  be   permitted   under   Section  7.14   relating  to  loans  to
     Participants,  no right or claim to, or interest  in, any part of the Trust
     Fund,  or any  payment  therefrom,  will be  assignable,  transferable,  or
     subject   to   sale,   mortgage,   pledge,   hypothecation,    commutation,
     anticipation,  garnishment, attachment, execution, or levy of any kind, and
     the Trustees  will not  recognize  any attempt to assign,  transfer,  sell,
     mortgage, pledge,  hypothecate,  commute, or anticipate the same, except to
     the extent required by law.

7.12 EXCLUSIVE  BENEFIT  RULE:  All  contributions  made by the  Employer  or an
     Affiliated  Employer  to the  Trust  Fund  will be used  for the  exclusive
     benefit of the Participants who are Employees of the Employer or Affiliated
     Employer and for their  Beneficiaries and will not be used for nor diverted
     to any other  purpose  except the payment of the costs of  maintaining  the
     Plan.  All  contributions  made  by an  Adopting  Employer  who  is  not an
     Affiliated  Employer  will  be  used  for  the  exclusive  benefit  of  the
     Participants  who are  Employees  of the  Adopting  Employer  and for their
     Beneficiaries  and will not be used for nor  diverted to any other  purpose
     except  the  payment  of the  Adopting  Employers'  proportionate  costs of
     maintaining the Plan pursuant to Section 7.4.

7.13 PURCHASE OF INSURANCE:  The purchase of insurance Policies on the life of a
     Participant,  other than key man  insurance  under Section  7.2(j),  is not
     currently permitted in this Plan.

7.14 LOANS TO  PARTICIPANTS:  The Employer,  in  accordance  with a written loan
     procedure established by the Employer, may permit loans to be made from the
     Trust Fund to Participants and Beneficiaries on a non-discriminatory basis.
     If made available, a Participant or Beneficiary may make application to the
     Administrator requesting a loan. The Administrator will have the sole right
     to approve or disapprove the  application  provided that loans will be made
     available to all Participants on a reasonably  equivalent  basis. All loans
     must be evidenced  by a legally  enforceable  agreement  (which may include
     more than one  document)  set forth in writing or in such other form as may
     be  approved  by the  Internal  Revenue  Service,  and  the  terms  of such
     agreement  must specify the amount and term of the loan,  and the repayment
     schedule.  Loans will not be made available to Highly Compensated Employees
     in an amount greater than the amount made available to other Employees, and
     no  loan  will  be  made to a  Participant  who is an  Owner-Employee  or a
     Shareholder-Employee  except  to the  extent  such  loan  is  treated  as a
     prohibited  transaction under Code ss.4975.  Subject to the loan procedure,
     loans will be made in accordance with the following:

     (a)  Minimum Loan And Maximum Loan: No loan will be less than $500 or, when
          added  to  the   outstanding   balance  of  all  other  loans  to  the
          Participant,  will  exceed  the lesser of (1)  $50,000  reduced by the
          excess, if any, of the Participant's  highest  outstanding  balance of
          loans during the 1-year  period  ending on the day before the loan was
          made, over the Participant's  outstanding  balance of loans on the day
          the  loan  was  made;  or (2)  one-half  of the  Participant's  Vested
          Aggregate Account.

56
(b)  Aggregation Of Loans: For purposes of the limitations in paragraph (a)
          above,  all  loans  from all  plans  of the  Employer  and  Affiliated
          Employers will be  aggregated.  An assignment or pledge of any portion
          of the  Participant's  Vested Aggregate  Account balance,  and a loan,
          pledge, or assignment with respect to any insurance contract purchased
          under the Plan, will be treated as a loan under this Section.

     (c)  Loans Must Bear Reasonable  Interest:  Any loan granted hereunder must
          bear  interest  at a rate  reasonable  at  the  time  of  application,
          considering  the  purpose  of the loan and the rate  being  charged by
          representative  commercial banks in the local area for a similar loan,
          unless the Administrator sets forth a different method for determining
          loan  interest  rates in its loan  procedures  such as using the prime
          rate or some other rate based on the prime  rate.  The loan  agreement
          will also provide for the payment of  principal  and interest not less
          than  quarterly.  The interest earned by the Trust on any loan granted
          hereunder will be credited  directly to the  individual  Participant's
          Account.

     (d)  Loans Must Be Secured: If a Participant's loan application is approved
          by the  Administrator,  such Participant will be required to execute a
          note,  a loan  agreement  and  an  assignment  of  his  or her  Vested
          Aggregate  Account as collateral  for the loan. The  Participant  must
          obtain the  consent of his or her  spouse,  if any,  within the 90 day
          period before the  Participant's  Vested Aggregate  Account is used as
          security  for the  loan.  A new  consent  is  required  if the  Vested
          Aggregate Account is used for any renegotiation, extension, renewal or
          other  revision  of the loan,  including  any  increase  in the amount
          thereof.  The consent must be written,  must acknowledge the effect of
          the  loan,   and  must  be  witnessed  by  a  notary   public  or  the
          Administrator. Such consent will thereafter be binding with respect to
          the consenting Spouse or any subsequent Spouse.

     (e)  Terms Of Repayment:  The term of a loan will not exceed 5 years except
          in the  case  of a loan  for  the  purpose  of  acquiring  any  house,
          apartment, condominium, or mobile home (not used on a transient basis)
          which  is  used  or is to be  used  within  a  reasonable  time as the
          principal  residence  of the  Participant.  The term of a loan will be
          determined by the Administrator  considering the maturity dates quoted
          by  representative  commercial  banks in the local  area for a similar
          loan.  Notwithstanding  the  foregoing,  however,  loans made prior to
          January 1, 1987 which are used to acquire,  construct,  reconstruct or
          substantially   rehabilitate   any  dwelling  unit  which,   within  a
          reasonable  period of time is to be used  (determined  at the time the
          loan is made) as a principal  residence of the Participant or a member
          of his or her family  within  the  meaning  of Code  ss.267(c)(4)  may
          provide for periodic  repayment over a reasonable  period of time that
          may exceed 5 years. Additionally,  loans made prior to January 1, 1987
          may provide for periodic  payments which are made less frequently than
          quarterly and which do not necessarily  result in level  amortization.
          The  Administrator  may  allow a grace  period  for the  making of any
          required installment payment, but any such period cannot extend beyond
          the last day of the calendar quarter following the calendar quarter in
          which the required installment was due.

                                                                              57
(f)  Suspension Of Installment  Payments:  Loan installment payments may be
          suspended  for a  period  not  longer  than  one  year  in  which  the
          Participant is on a leave of absence,  either without pay or at a rate
          of pay (after income and employment tax withholding) that is less than
          the amount of the installment payments required under the terms of the
          loan.  However,  even if  payments  are  suspended  due to a leave  of
          absence,  the loan must still be repaid by the latest  date  permitted
          under the  original  terms of the loan and the  payments due after the
          leave ends (or,  if  earlier,  after the first year of the leave) must
          not be less than those required under the original terms of the loan.

     (g)  Repayment Of Loan Before Distribution Of Benefit: If a Participant has
          received a loan from the Plan and the Participant or the Participant's
          Beneficiary  is entitled  to a payment  from the Trust Fund before the
          loan is  repaid  in  full,  the  Trustee  will  offset  at the time of
          distribution the unpaid loan balance (including accrued interest) from
          the total amount otherwise due to the Participant or Beneficiary. If a
          valid  spousal  consent has been  obtained  pursuant to paragraph  (d)
          above,  then  notwithstanding  any other  provision of this Plan,  the
          portion  of the  Participant's  Vested  Aggregate  Account  used  as a
          security interest for a loan will be taken into account in determining
          the  amount of the  Vested  Aggregate  Account  payable at the time of
          death  or  distribution,  but  only  if the  reduction  is  used  as a
          repayment of the loan. If less than 100% of the  Participant's  Vested
          Aggregate  Account   (determined   without  regard  to  the  preceding
          sentence) is payable to the Participant's  surviving spouse, then such
          Vested Aggregate Account will be adjusted by first reducing the Vested
          Aggregate  Account by the amount of the security  used as repayment of
          the loan, and then  determining  the benefit  payable to the surviving
          spouse.

     (h)  Immediate Repayment:  A Participant's loan will become immediately due
          and payable if the Participant fails to make principal and/or interest
          payments for two  successive  calendar  quarters.  In such event,  the
          Administrator  will reduce the Participant's  Vested Aggregate Account
          by the  remaining  principal  and  interest  of  the  loan,  and  such
          reduction will constitute a distributable  event (to the extent of the
          reduction)  under  the Plan.  If the  Participant's  Vested  Aggregate
          Account  is less than the  amount  due,  the  Administrator  will take
          whatever  steps are  necessary  to collect  the  balance  due from the
          Participant.

7.15 DIRECTED INVESTMENT ACCOUNTS:  If agreed to by the Trustees and approved by
     the  Employer,  Participants  will  be  given  the  option  to  direct  the
     investment  of all or a portion  of their  Participant's  Account  (and any
     Rollover  Contributions  and  Voluntary  Employee   Contributions)  into  a
     directed,  or segregated  investment selected by the Participant;  or among
     alternative  investment funds established as part of the overall Fund. Such
     alternative  investment  funds  will  be  under  the  full  control  of the
     management  of the  Trustees.  Alternatively,  if  investments  outside the
     Trustees' control are allowed, Participants may not direct that investments
     be made in collectibles,  other than U.S. Government gold and silver coins.
     In this connection,  a Participant's  right to direct the investment of his
     or her own Rollover Contributions and Voluntary Employee Contributions will
     apply only to the selection of the desired fund.  The following  rules will
     apply  to  the  administration  of  such  funds  and  to  the  handling  of
     Participants' investment directions:

58
(a)  Investment  Form:  Eligible  Participants  will complete an investment
          designation   form  stating  the  percentage  to  be  invested  in  or
          transferred to or from the available  funds. A Participant  may change
          his or her investment election by filing a new investment  designation
          form with the Employer or the Employer's designee. Such change will be
          effective  no later  than the first day of the next  Election  Period.
          Election Periods will be established at the discretion of the Employer
          but in any  event  will  occur no less  frequently  than once in every
          12-month period or, at the discretion of the Employer and the Trustee,
          once in every 3-month or 6-month period or at such other more frequent
          time which is uniformly  available as  determined  by the Employer and
          the Trustee.

     (b)  Transfers  Between Funds:  A Participant  may elect to transfer all or
          part of his or her  account  balance in one or more of the  investment
          funds from one investment fund to another investment fund by filing an
          investment  designation  form with the Employer or with the Employer's
          designee within a reasonable  administrative  period prior to the next
          Election  Period.  The funds will be transferred by the Trustee or the
          Employer's  designee as soon as practicable  prior to, or by the start
          of, the new Election  Period.  Telephone  transfers  will be permitted
          under uniform procedures approved by the Trustee.

     (c)  Administrator  Responsibility:  The  Plan  Administrator  or the  Plan
          Administrator's   designee  will  be  responsible  when   transmitting
          Employer and Employee  contributions  to show the dollar  amount to be
          credited to each investment fund for each Participant.

     (d)  No  Administrator  Liability:  Except as  otherwise  provided  herein,
          neither the Trustee, nor the Employer,  nor any Plan fiduciary will be
          liable to the  Participant  or his or her  Beneficiaries  for any loss
          resulting from action taken at the direction of the Participant.

     (e)  Adoption  Of   Procedures:   All  investment   designations   by  Plan
          Participants  are to be made in accordance with such procedures as the
          Employer  may  adopt.  At the  discretion  of  the  Employer  and  the
          Trustees,  such  procedures  will permit  sufficient  selection  among
          investment  alternatives  to satisfy the  provisions of DOL regulation
          ss.2550.404(c)-1.

                                                                              59
ARTICLE 8
                           DUTIES OF THE ADMINISTRATOR

8.1  APPOINTMENT,   RESIGNATION,  REMOVAL  AND  SUCCESSION:  Each  Administrator
     appointed by the Employer will continue  until his death,  resignation,  or
     removal by the Employer, and any Administrator may resign by giving 30 days
     written notice to the Employer.  If an Administrator  dies,  resigns, or is
     removed by the  Employer,  his  successor  will be appointed as promptly as
     possible, and such appointment will become effective upon its acceptance in
     writing by such  successor.  Pending the  appointment and acceptance of any
     successor  Administrator,  any then acting or remaining  Administrator will
     have full power to act.

8.2  POWERS  AND  DUTIES OF THE  ADMINISTRATOR:  The  powers  and  duties of the
     Administrator will include (a) appointing the Plan's attorney,  accountant,
     actuary,  or any other party needed to administer  the Plan;  (b) directing
     the  Trustees   with  respect  to  payments   from  the  Trust  Fund;   (c)
     communicating  with Employees  regarding their  participation  and benefits
     under the Plan, including the administration of all claims procedures;  (d)
     filing  any  returns  and  reports  with  the  Internal   Revenue  Service,
     Department of Labor, or any other  governmental  agency;  (e) reviewing and
     approving  any  financial  reports,  investment  reviews,  or other reports
     prepared by any party under (a) above;  (f)  establishing  a funding policy
     and investment  objectives consistent with the purposes of the Plan and the
     Employee  Retirement  Income  Security Act of 1974;  and (g) construing and
     resolving  any  question  of  Plan   interpretation.   The  Administrator's
     interpretation of Plan provisions, including eligibility and benefits under
     the  Plan,  is  final,  and  unless  it can be  shown to be  arbitrary  and
     capricious  will not be subject to "de novo" review.  If there is more than
     one    Administrator,    the    Administrators    may   delegate   specific
     responsibilities  among  themselves,  including  the  authority  to execute
     documents  unless the Employer  revokes such  delegation.  The Employer and
     Trustee   will  be   notified  in  writing  of  any  such   delegation   of
     responsibilities,  and the Trustee  thereafter  may rely upon any documents
     executed by the appropriate Administrator.

8.3  EMPLOYMENT  OF AGENTS AND  COUNSEL:  The  Administrator  may  appoint  such
     actuaries, accountants, custodians, counsel, agents, consultants, and other
     persons deemed necessary or desirable in connection with the administration
     and  operation of the Plan.  The actions of any such third  parties will be
     subject to the  limitations  described  in Section 7.8 of the Plan;  and no
     such third parties will be given any authority or discretion concerning the
     management  and  operation  of the Plan  that  would  cause  them to become
     Fiduciaries of the Plan.

8.4  COMPENSATION AND EXPENSES:  The Administrator may receive such compensation
     as agreed upon between the Employer and the  Administrator,  provided  that
     any person who already  receives  full-time  pay from the  Employer may not
     receive any fees for services to the Plan as  Administrator or in any other
     capacity.  In  addition,  the  Employer  will pay all  reasonable  expenses
     incurred by the  Administrator  in the performance of its duties under this
     Plan.  If the  Employer  fails  to pay  such  expenses,  the  Trustee  will
     reimburse the Administrator out of the Trust Fund. Expenses will be paid by
     each Adopting Employer in the ratio that each

60
Adopting  Employer's  Participants'  Accounts bears to the total of all the
     Participants' Accounts maintained by this Plan.

8.5  CLAIMS  PROCEDURES:  Upon retirement,  death,  Disability or Termination of
     Employment,  the Participant or representative of such Participant may make
     application to the Administrator requesting payment of benefits due and the
     manner of payment, in accordance with the following:

     (a)  Automatic  Payment If No Application  Is Made: If no  application  for
          benefits is made and no cash-out of benefits occurs under Section 5.5,
          the  Administrator  will  automatically  pay  a  Participant's  Vested
          Aggregate  Account  balance in the form that does not require  spousal
          consent no later than the time prescribed in Section 5.10.

     (b)  Denial  Of  Claim:  If  an  application  for  benefits  is  made,  the
          Administrator  will  accept,  reject,  or modify such request and will
          notify the  Participant  in writing  setting forth the response of the
          Administrator  and  in  the  case  of a  denial  or  modification  the
          Administrator  will (1) state the  specific  reason or reasons for the
          denial, (2) provide specific reference to pertinent Plan provisions on
          which the denial is based, (3) provide a description of any additional
          material  or  information   necessary  for  the   Participant  or  his
          representative  to perfect  the claim and an  explanation  of why such
          material or information is necessary, and (4) explain the Plan's claim
          review procedure as contained herein.

     (c)  Review  Procedure:  In the event the request is rejected or  modified,
          the  Participant  or his  representative  may within 60 days following
          receipt by the  Participant  or  representative  of such  rejection or
          modification,  submit  a  written  request  for  review  by  the  Plan
          Administrator of its initial  decision.  Within 60 days following such
          request  for  review,  the Plan  Administrator  will  render its final
          decision  in  writing to the  Participant  or  representative  stating
          specific   reasons  for  such   decision.   If  the   Participant   or
          representative  is not satisfied with the Plan  Administrator's  final
          decision, the Participant or representative can institute an action in
          a federal court of competent jurisdiction;  for this purpose,  process
          would be served on the Plan Administrator.

8.6  QUALIFIED  DOMESTIC RELATIONS ORDERS: A Qualified Domestic Relations Order,
     or QDRO, is a signed domestic relations order issued by a State Court which
     creates,  recognizes  or  assigns  to an  alternate  payee(s)  the right to
     receive all or part of a Participant's Plan benefit.  An alternate payee is
     a Spouse,  former Spouse, child, or other dependent of a Participant who is
     treated  as a  Beneficiary  under  the Plan as a result  of the  QDRO.  The
     Administrator  will determine if a domestic  relations order is a Qualified
     Domestic Relations Order as follows:

     (a)  Administrator's  Determination:  Promptly  upon  receipt of a domestic
          relations order, the Administrator will notify the Participant and any
          alternate  payee(s)  named  in the  order  of such  receipt,  and will
          include a copy of this  Section 8.6.  Within a  reasonable  time after
          receipt of the order,  not to exceed 60 days, the  Administrator  will
          make a  determination  as to  whether  or not the  order  is a QDRO as
          defined in Code ss.414(p) and will promptly notify the Participant and
          any alternate payee(s) in writing of the determination.

                                                                              61
(b)  Specific Requirements Of QDRO: In order for a domestic relations order
          to be a QDRO, it must specifically state all of the following: (1) the
          name and last known mailing address (if any) of the Participant and of
          each alternate payee covered by the order.  However,  if the QDRO does
          not specify the current  mailing address of the alternate  payee,  but
          the Administrator has independent  knowledge of that address, the QDRO
          will  still be  valid;  (2) the  dollar  amount or  percentage  of the
          Participant's  benefit to be paid by the Plan to each alternate payee,
          or the manner in which the amount or  percentage  will be  determined;
          (3) the number of payments or period for which the order applies;  and
          (4) the  specific  plan (by  name) to which  the  order  applies.  The
          domestic relations order will not be deemed a

62
QDRO if it  requires  the Plan to provide any type or form of benefit,
          or any option  not  already  provided  for in the Plan,  or  increased
          benefits,  or benefits in excess of the Participant's Vested Interest,
          or payment of benefits to an alternate  payee which are required to be
          paid to another alternate payee under another QDRO.

     (c)  Disputed  Orders:  If there is a question as whether or not a domestic
          relations order is a QDRO,  there will be a delay in any payout to any
          payee including the Participant, until the status is resolved. In such
          event,  the  Administrator  will  segregate the amount that would have
          been payable to the alternate  payee(s) if the order had been deemed a
          QDRO.  If the order is not  determined  to be a QDRO, or the status is
          not  resolved  (for  example,  it has been  sent back to the Court for
          clarification  or  modification)  within 18 months  beginning with the
          date the first  payment  would have to be made  under the  order,  the
          Administrator  will pay the  segregated  amounts plus  interest to the
          person(s)  who would have been entitled to the benefits had there been
          no order. If a determination  as to the Qualified  status of the order
          is made after the 18-month period, then the order will only be applied
          on a prospective  basis.  If the order is determined to be a QDRO, the
          Participant  and alternate  payee(s)  will again be notified  promptly
          after  such  determination.  Once an  order  is  deemed  a  QDRO,  the
          Administrator  will pay to the alternate  payee(s) all the amounts due
          under the QDRO,  including  segregated amounts plus interest which may
          have accrued during a dispute as to the order's qualification.

     (d)  Payment Prior To Termination Of Employment: A QDRO may provide for the
          payment  of  benefits  to an  alternative  payee  prior  to the time a
          Participant has terminated  employment.  Further,  such payment can be
          made even if the affected Participant has not yet reached the Earliest
          Retirement  Age. For  purposes of this  paragraph,  the term  Earliest
          Retirement  Age  means  the  earlier  of (1)  the  date on  which  the
          Participant is entitled to a distribution  under this Plan, or (2) the
          later of (i) the  date the  Participant  attains  age 50,  or (ii) the
          earliest date on which the  Participant  could receive  benefits under
          this Plan if the Participant terminated employment with the Employer.

     (e)  Effect  Of  QDRO On  Survivor  Annuity  Requirements:  Notwithstanding
          Section 5.1 and 5.2 to the contrary,  a  Participant's  benefits which
          are payable from the Plan in the form of either a Qualified  Joint and
          Survivor  Annuity or a Qualified  Preretirement  Survivor Annuity need
          not be paid in such form if such payment is inconsistent  with, or has
          been modified by, the terms of a Qualified Domestic Relations Order.

                                                                              63
ARTICLE 9
                        AMENDMENT, TERMINATION AND MERGER

9.1  AMENDMENT: The Employer, by action of its board of directors, will have the
     right to amend  the Plan at any  time if the  amendment  complies  with the
     following requirements:

     (a)  General  Requirements:  Amendments  must be in writing  and cannot (1)
          increase the responsibilities of the Trustee or Administrator  without
          written  consent;  (2) deprive any  Participant or Beneficiary of Plan
          benefits to which he or she is  entitled;  (3)  decrease the amount of
          any  Participant's  Account  balance  except as  permitted  under Code
          ss.412(c)(8);  (4) permit any part of the Trust Fund to be used for or
          diverted  to  purposes  other  than  the  exclusive   benefit  of  the
          Participants  or their  Beneficiaries  except as required to pay taxes
          and  administration  expenses,  or cause or permit any  portion of the
          Trust Fund to revert to or become the property of the Employer; or (5)
          eliminate or reduce a retirement-type  subsidy, or an early retirement
          benefit,  or an  optional  form of benefit  with  respect to  benefits
          attributable  to  service  before  the  amendment.  In the  case  of a
          retirement-type  subsidy,  this provision will apply only with respect
          to a Participant  who satisfies the  pre-amendment  conditions for the
          subsidy either before or after the amendment.

     (b)  Certain Corrective Amendments:  For purposes of satisfying the minimum
          coverage requirements of Code ss.410(b),  the nondiscriminatory amount
          requirement    of    regulation    ss.1.401(a)(4)-1(b)(2),    or   the
          nondiscriminatory    plan   amendment    requirement   of   regulation
          ss.1.401(a)(4)-1(b)(4),   a  corrective  amendment  may  retroactively
          increase allocations for Employees who benefited under the Plan during
          the Plan Year being corrected,  or may grant  allocations to Employees
          who did not  benefit  under  the  Plan  during  the  Plan  Year  being
          corrected.  In  addition,  to satisfy  the  nondiscriminatory  current
          availability   requirement  of  regulation   ss.1.401(a)(4)-4(b)   for
          benefits,  rights  or  features,  a  corrective  amendment  may make a
          benefit,  right  or  feature  available  to  Employees  to whom it was
          previously  not  available.  A corrective  amendment will not be taken
          into account prior to the date of its adoption unless it satisfies the
          applicable  requirements  of  regulation   ss.1.401(a)(4)-11(g)(3)(ii)
          through  (vii),  including  the  requirement  that,  in  order  to  be
          effective for the preceding Plan Year,  such amendment must be adopted
          by the 15th day of the 10th  month  after the  close of the  preceding
          Plan Year.

9.2  TERMINATION:  The Employer at any time can  terminate the Plan and Trust in
     whole or in part by filing written  notice  thereof with the  Administrator
     and Trustee or by completely discontinuing  contributions to the Plan. Upon
     termination  of the Plan, the Trustee will continue to administer the Trust
     until  distribution has been made to the Participants,  which  distribution
     must occur as soon as  administratively  feasible after the  termination of
     the Plan,  and must be made in accordance  with the provisions of Article 5
     of the Plan. Upon termination of the Plan (whether partial or complete), or
     upon  a  complete   discontinuance   of  contributions  to  the  Plan,  any
     Participant  who is  affected by such  termination  will have a 100% Vested
     Interest in his Participant's Account.

64
9.3  MERGER  OR  CONSOLIDATION:  This  Plan  and  Trust  may  not be  merged  or
     consolidated  with, nor may any of its assets or liabilities be transferred
     to, any other plan,  unless the benefits payable to each Participant if the
     Plan was  terminated  immediately  after such  action  would be equal to or
     greater  than the  benefits  to which  such  Participant  would  have  been
     entitled if this Plan had been terminated immediately before such action.

                                                                              65
ARTICLE 10
                            MISCELLANEOUS PROVISIONS

10.1 NO CONTRACT OF EMPLOYMENT: Except as otherwise provided by law, neither the
     establishment  of this Plan, any modification  hereto,  the creation of any
     fund or account,  nor the payment of any  benefits,  will be  construed  as
     giving  any  Participant  or other  person  any legal or  equitable  rights
     against the  Employer,  any officer or Employee  thereof,  or the  Trustee,
     except as herein provided.  Further,  under no circumstances will the terms
     of employment of any Participant be modified or otherwise  affected by this
     Plan.

10.2 TITLE TO ASSETS:  No Participant or Beneficiary  will have any right to, or
     any interest in, any assets of the Trust upon  separation from service with
     the  Employer,   Affiliated  Employer,  or  Adopting  Employer,  except  as
     otherwise provided by the terms of the Plan.

10.3 QUALIFIED MILITARY SERVICE:  Notwithstanding  any provision of this Plan to
     the  contrary,  effective  December 12, 1994,  contributions,  benefits and
     service credit with respect to qualified  military service will be provided
     in accordance with Code ss.414(u).

10.4 FIDUCIARIES AND BONDING:  The Fiduciaries of this Plan will have only those
     powers and duties which are specifically given to the Fiduciaries under the
     terms of this Plan.  In addition,  every  Fiduciary  other than a bank,  an
     insurance  company,  or a Fiduciary of an Employer  which has no common-law
     employees,  will be bonded in an amount  not less than 10% of the amount of
     funds under such  Fiduciary's  supervision,  but such bond will not be less
     than $1,000 or more than $500,000.  The bond will provide protection to the
     Plan against any loss for acts of fraud or dishonesty by a Fiduciary acting
     alone or in concert with  others.  The cost of such bond will be an expense
     of either the Employer or the Trust, at the election of the Employer.

10.5 SEVERABILITY  OF  PROVISIONS:  If any Plan  provision  is held  invalid  or
     unenforceable,  such  invalidity  or  unenforceability  will not affect any
     other  provision of this Plan, and this Plan will be construed and enforced
     as if such provision had not been included.

10.6 GENDER AND NUMBER:  Words used in the masculine gender will be construed as
     though  they  were  also  used  in the  feminine  or  neuter  gender  where
     applicable, and words used in the singular form will be construed as though
     they were also used in the plural form where applicable.

10.7 HEADINGS  AND  SUBHEADINGS:  Headings  and  subheadings  are  inserted  for
     convenience of reference.  They constitute no part of this Plan and are not
     to be considered in its construction.

10.8 LEGAL ACTION: In any claim,  suit or proceeding  concerning the Plan and/or
     Trust which is brought against the Trustee or the Administrator,  this Plan
     and Trust will be construed and enforced according to the laws of the state
     in which the Employer  maintains  its principal  place of business,  to the
     extent  that is not  preempted  by the  provisions  of ERISA.  Furthermore,
     unless  otherwise  prohibited by law,  either the Employer or the Trust, in
     the sole discretion of

66
the Employer,  will reimburse the Trustee and/or the  Administrator for all
     costs,  attorneys fees and other expenses  associated  with any such claim,
     suit or proceeding.

                                                                              67
IN WITNESS WHEREOF,  this Plan and Trust have been executed by the Employer
and the  Trustees  on the  day,  month  and  year  set  forth  on page 1 of this
Agreement.

                                                     FREQUENCY ELECTRONICS, INC.

                                                     By: _______________________

                                                     TRUSTEES

                                                     ___________________________
                                                     Robert Klomp

                                                     ___________________________
                                                     Marvin P. Meirs

                                                     ___________________________
                                                     Markus Hechler

68
EXHIBIT 4.9

                                 FIRST AMENDMENT

     WHEREAS,  FREQUENCY  ELECTRONICS,  INC., a Delaware corporation,  adopted a
certain 401(k)  Sharing Plan,  effective  January 1, 1985,  which was thereafter
amended and restated, and which it is now deemed desirable to further amend said
Plan.

     NOW,  THEREFORE,  it is  agreed  by the  undersigned  that the said Plan is
hereby amended in the following manner:

     1. Section 1.19 ("ELIGIBLE  PARTICIPANT")  shall be amended by deleting the
entire Section and replacing it with the following:

1.19 ELIGIBLE  PARTICIPANT:  The term Eligible  Participant  means a Participant
     eligible to receive an allocation of Employer contributions allocable for a
     Plan  Year.  Any  Participant  who  is an  Employee  will  be  an  Eligible
     Participant.

     2.   Paragraph   (b)   ("Matching   Contributions")   and   Paragraph   (c)
("Non-Elective  Contributions") of Section 3.1 ("EMPLOYER  CONTRIBUTIONS") shall
be amended  by  deleting  the  entire  Paragraphs  and  replacing  them with the
following:

     (b)  Matching  Contributions:  The  Employer may  contribute  in cash or in
          Employer Stock on behalf of each  Participant a Matching  Contribution
          to be  determined  each year by the Employer.  Matching  Contributions
          made  for  each  Plan  Year  must  satisfy  the  ACP  Test.   Matching
          Contributions  which do not satisfy the ACP Test will be deemed Excess
          Aggregate  Contributions  and will be returned as set forth in Section
          5.17. The Employer may elect to treat all or any portion of a Matching
          Contribution  as a  Qualified  Matching  Contribution  to  the  extent
          necessary to satisfy the ACP Test.

     (c)  Non-Elective  Contributions:  The  Employer  may  make a  Non-Elective
          Contribution  in cash or in  Employer  Stock  in  such  an  amount  as
          determined by the  Employer,  and the Employer will convey such amount
          to the Trustee in writing. The Employer's  determination of the amount
          of its Non-Elective  Contribution will be binding on the Trustee,  the
          Administrator  and all  Participants  and may not be  reviewed  in any
          manner.  However,  (1) no  Non-Elective  Contribution  may  exceed the
          maximum  amount   deductible  under  Code  ss.404;   (2)  Non-Elective
          Contributions  will be limited as required by Code ss.415;  and (3) no
          Non-Elective  Contribution will be made for any Participant who is not
          an Eligible Participant unless required by Section 3.5.
3. Paragraph (c) ("Non-Elective Contributions") of Section 3.2 ("ALLOCATION
OF EMPLOYER  CONTRIBUTIONS")  shall be amended by deleting the entire  Paragraph
and replacing it with the following:

     (c)  Non-Elective   Contributions:   Non-Elective   Contributions  will  be
          allocated on the annual  Valuation Date to the Eligible  Participant's
          Non-Elective  Contribution  Account of each Eligible  Participant on a
          per capita basis.

     4.  Section  4.2  ("BENEFIT  UPON LATE  RETIREMENT")  shall be  amended  by
deleting the entire Section and replacing it with the following:

4.2  BENEFIT UPON LATE RETIREMENT: A Participant who has reached Normal or Early
     Retirement  Age may elect to remain  employed  and retire at a later  date.
     Such  Participant  will continue to  participate in the Plan and his or her
     Participant's  Account will continue to receive allocations under Article 3
     until the  Participant  actually  retires.  A  Participant  who elects late
     retirement may at any time (1) choose to have  distributed  prior to actual
     retirement  all or  part of his or her  Vested  Aggregate  Account  balance
     determined  as of  the  most  recent  Valuation  Date  coinciding  with  or
     immediately preceding the date of distribution;  or (2) choose to have such
     Vested  Aggregate   Account  balance   transferred  to  another   qualified
     retirement plan  maintained by the Employer.  Upon actual  retirement,  the
     Participant will be entitled to his or her  undistributed  Vested Aggregate
     Account balance  determined as of the most recent Valuation Date coinciding
     with or immediately  preceding the date of distribution.  Distribution will
     be made in accordance with Section 5.1.

     5. Article 5  ("DISTRIBUTION  OF BENEFITS")  shall be amended by adding the
following new Section:

5.19 PRE-RETIREMENT DISTRIBUTIONS:  A Participant who has reached Age 59 1/2 may
     request in writing  that the  Administrator  distribute  all or part of the
     Participant's  Elective Deferral Account within 60 days of such request. In
     addition,  a Participant may request in writing to the  Administrator  that
     within  60 days  of such  request  up to 100% of the  Participant's  Vested
     Interest  in his or her  Non-Elective  Contribution  Account  and  Matching
     Contribution Account be distributed, subject to the following provisions:

     (a)  Eligibility   Requirements:   On  the   date  of   distribution,   the
          Non-Elective    Contributions   and   Matching   Contributions   being
          distributed must have accumulated in the Participant's  Account for at
          least  two  consecutive  Plan  Years,  or the  Participant  must  have
          completed at least 5 Years of Plan  Participation.  In addition to the
          foregoing,  the Participant must have reached Age 59 1/2 and must have
          a 100% Vested Interest in his or her Participant's Account.

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(b)  Amount And Form Of  Distribution:  The maximum amount of  Non-Elective
          Contributions  and  Matching  Contributions  distributable  under this
          Section  is  the   Participant's   Vested   Interest  in  his  or  her
          Non-Elective Contribution Account and Matching Contribution Account as
          of the Valuation Date which coincides with or immediately precedes the
          date of  distribution.  Distribution  will  only be made in a lump sum
          payment provided the  Participant's  spouse,  if any,  consents to the
          distribution in accordance with the provisions of Section 5.8.

     (c)  Restriction  On  Certain  Transferred   Assets:   Notwithstanding  any
          provision  in  this  Section  to  the  contrary,   no   pre-retirement
          distribution  can be made under this  Section with respect to benefits
          attributable to assets (including  post-transfer earnings thereon) and
          liabilities  that  are   transferred,   within  the  meaning  of  Code
          ss.414(l),  from a money purchase  pension plan  qualified  under Code
          ss.401(a)  to this Plan (other  than any  portion of those  assets and
          liabilities attributable to Voluntary Employee Contributions).

     6.   The first Paragraph of Section 7.14 ("LOANS TO PARTICIPANTS") shall be
          amended by deleting  the entire  Paragraph  and  replacing it with the
          following:

7.14 LOANS TO  PARTICIPANTS:  The Employer,  in  accordance  with a written loan
     procedure established by the Employer, may permit loans to be made from the
     Trust Fund to Participants and Beneficiaries on a non-discriminatory basis,
     however  Participants and Beneficiaries shall not have the option to borrow
     from any  portion of their  Participant's  Accounts  invested  in  Employer
     Stock. If made available, a Participant or Beneficiary may make application
     to the  Administrator  requesting a loan. The  Administrator  will have the
     sole right to approve or  disapprove  the  application  provided that loans
     will be made  available  to all  Participants  on a  reasonably  equivalent
     basis.  All loans  must be  evidenced  by a legally  enforceable  agreement
     (which may include more than one  document) set forth in writing or in such
     other form as may be  approved by the  Internal  Revenue  Service,  and the
     terms of such  agreement  must specify the amount and term of the loan, and
     the  repayment  schedule.  Loans  will  not be  made  available  to  Highly
     Compensated  Employees in an amount  greater than the amount made available
     to other  Employees,  and no loan will be made to a  Participant  who is an
     Owner-Employee or a Shareholder-Employee  except to the extent such loan is
     treated as a prohibited transaction under Code ss.4975. Subject to the loan
     procedure, loans will be made in accordance with the following:

     7. The first  Paragraph of Section 7.15  ("DIRECTED  INVESTMENT  ACCOUNTS")
shall be amended by deleting  the entire  Paragraph  and  replacing  it with the
following:
7.15 DIRECTED INVESTMENT ACCOUNTS:  If agreed to by the Trustees and approved by
     the  Employer,  Participants  will  be  given  the  option  to  direct  the
     investment  of all or a portion  of their  Participant's  Account  (and any
     Rollover  Contributions  and  Voluntary  Employee   Contributions)  into  a
     directed,  or segregated  investment selected by the Participant;  or among
     alternative  investment  funds  established  as part of the  overall  Fund,
     however  Participants shall not have the option to direct the investment of
     any portion of their  Participant's  Accounts  invested in Employer  Stock.
     Such  alternative  investment  funds will be under the full  control of the
     management  of the  Trustees.  Alternatively,  if  investments  outside the
     Trustees' control are allowed, Participants may not direct that investments
     be made in collectibles,  other than U.S. Government gold and silver coins.
     In this connection,  a Participant's  right to direct the investment of his
     or her own Rollover Contributions and Voluntary Employee Contributions will
     apply only to the selection of the desired fund.  The following  rules will
     apply  to  the  administration  of  such  funds  and  to  the  handling  of
     Participants' investment directions:

     8. In all  other  respects,  except  as  hereinbefore  modified,  the  said
Retirement  Plan is hereby  ratified and confirmed,  the within  amendment to be
effective as of January 1, 2000.

     IN WITNESS WHEREOF, FREQUENCY ELECTRONICS, INC., has caused this instrument
to be duly executed as of the 12th day of June, 2000.

                                                     FREQUENCY ELECTRONICS, INC.

                                                     By_________________________
                                                             President

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