MEDPARTNERS MULLIKIN INC, S-8, 1996-06-11

MEDPARTNERS MULLIKIN INC
S-8, 1996-06-11
HOSPITAL & MEDICAL SERVICE PLANS

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<PAGE> 1

As filed with the Securities and Exchange Commission on June 11, 1996
Registration No. 333-________
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

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

MEDPARTNERS/MULLIKIN, INC.
(Exact Name of Registrant as Specified in its Charter)

DELAWARE 63-1151076
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)

3000 GALLERIA TOWER, SUITE 1000
BIRMINGHAM, ALABAMA 35244
(Address of Principal Executive Offices)
(Zip Code)

MEDPARTNERS, INC.
AND SUBSIDIARIES
EMPLOYEE RETIREMENT SAVINGS PLAN
(Full Title of the Plans)

LARRY R. HOUSE
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
MEDPARTNERS/MULLIKIN, INC.
3000 GALLERIA TOWER, SUITE 1000
BIRMINGHAM, ALABAMA 35244
(Name and Address of Agent for Service)
(205) 733-8996
(Telephone Number, including Area Code, of Agent for Service)

The Commission is requested to send copies of all notices and other
communications to:

F. HAMPTON MCFADDEN, JR., ESQ.
HASKELL SLAUGHTER & YOUNG, L.L.C.
1200 AMSOUTH/HARBERT PLAZA
1901 SIXTH AVENUE NORTH
BIRMINGHAM, ALABAMA 35203
TEL: (205) 251-1000
FAX: (205) 324-1133

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

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
==================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share(1) Price Registration
Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

Common Stock, par value 50,000 $23.625 $1,181,250 $407.33
$.001 per share (including shares (2)
the
Common Stock Purchase
Rights)
==================================================================================================================
</TABLE>

(1) Computed in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. The Computation is based upon the
last sale price of the Common Stock on The New York Stock Exchange,
Inc. on June 5, 1996.
(2) Pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described
herein.

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON
AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

<PAGE> 2

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE

MedPartners/Mullikin, Inc., a Delaware corporation (the "Company"),
hereby incorporates by reference into this registration statement on Form S-8
(the "Registration Statement") the following documents which have heretofore
been filed by the Company with the Securities and Exchange Commission (the
"Commission"):

(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995.

(b) The Company's Quarterly Report on Form 10-Q filed for the
quarter ended March 31, 1996.

(c) The description of securities to be registered contained in
the Registration Statement filed with the Commission on Form
8-B under the Exchange Act and declared effective on November
29, 1995, including any amendment or reports filed for the
purpose of updating such description.

(d) All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since November 29, 1995.

(e) All documents subsequently filed by the Company or
MedPartners, Inc. and Subsidiaries Employee Retirement Savings
Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date
of filing of such documents.

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

ITEM 4. DESCRIPTION OF SECURITIES

Not applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS & COUNSEL

Not applicable.

II-1
<PAGE> 3

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 102(b)(7) of the DGCL grants corporations the right to limit
or eliminate the personal liability of their directors in certain circumstances
in accordance with provisions therein set forth. MedPartners/Mullikin's
Restated Certificate of Incorporation contains a provision eliminating or
limiting director liability to MedPartners/ Mullikin and its stockholders for
monetary damages arising from acts or omissions in the director's capacity as a
director. The provision does not, however, eliminate or limit the personal
liability of a director (i) for any breach of such director's duty to
MedPartners/Mullikin or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under the Delaware statutory provision making directors personally
liable, under a negligence standard, for unlawful dividends or unlawful stock
purchases or redemptions, or (iv) for any transaction from which the director
derived an improper personal benefit. This provision offers persons who serve
on the Board of Directors of MedPartners/Mullikin protection against awards of
monetary damages resulting from breaches of their duty of care (except as
indicated above). As a result of this provision, the ability of
MedPartners/Mullikin or a stockholder thereof to successfully prosecute an
action against a director for a breach of his duty of care is limited.
However, the provision does not affect the availability of equitable remedies
such as an injunction or rescission based upon a director's breach of his duty
of care. The SEC has taken the position that the provision will have no effect
on claims arising under the federal securities laws.

Section 145 of the DGCL grants corporations the right to indemnify
their directors, officers, employees and agents in accordance with the
provisions therein set forth. MedPartners/Mullikin's Amended and Restated
By-laws provide for mandatory indemnification rights, subject to limited
exceptions, to any director, officer, employee, or agent of
MedPartners/Mullikin who, by reason of the fact that he or she is a director,
officer, employee, or agent of MedPartners/Mullikin, is involved in a legal
proceeding of any nature. Such indemnification rights include reimbursement
for expenses incurred by such director, officer, employee, or agent in advance
of the final disposition of such proceeding in accordance with the applicable
provisions of the DGCL.

MedPartners/Mullikin has entered into agreements with all of its
directors and its executive officers pursuant to which MedPartners/Mullikin has
agreed to indemnify such directors and executive officers against liability
incurred by them by reason of their services of a director to the fullest
extent allowable under applicable law.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED

Not applicable.

ITEM 8. EXHIBITS

<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
- -------------- ----------------------
<S> <C>
(4)-1 MedPartners/Mullikin, Inc. Second Amended and Restated Certificate of
Incorporation.

(4)-2 MedPartners/Mullikin, Inc. Amended and Restated By-laws, filed
as Exhibit (3)-2 to the Company's Registration Statement on
Form S-4 (Registration No. 333-00774) is hereby incorporated
herein by reference.

(4)-3 MedPartners, Inc. and Subsidiaries Employee Retirement Savings
Plan.

(4)-4 MedPartners, Inc. and Subsidiaries Employee Retirement Savings
Plan, First Amendment.

</TABLE>

II-2
<PAGE> 4

(23)-1 Consent of Ernst & Young LLP, Independent Auditors

24 Powers of Attorney (set forth on the signature page
of this Registration Statement).

ITEM 9. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales
are being made, 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;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in the
amount of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities
Act if, in the aggregate, the changes in amount and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective 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 (ii) do not apply if
the registration statement is on Form S-3, S-8, or F-3, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in period reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13
or 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.

(2) That, for the purpose of determining any liability
under the 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.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is

II-3
<PAGE> 5

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.

Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions or, otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted 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 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.

II-4
<PAGE> 6

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 the City of Birmingham, State of Alabama, on June 10, 1996.

MEDPARTNERS/MULLIKIN, INC.

By /s/ LARRY R. HOUSE
-----------------------------------------------
Larry R. House
Chairman of the Board, President and
Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Larry R. House and Harold O. Knight,
Jr., and each or either of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and any subsequent registration statements relating to the offering to which
this Registration Statement relates, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully
and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or either
of them, or their or his substitutes or substitute, may lawfully do or cause to
be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C> <C>
Chairman of the Board, President
/s/ Larry R. House and Chief Executive officer
- -------------------------------------------
Larry R. House (Principal Executive Officer) June 10, 1996

Executive Vice President and
/s/ Harold O. Knight, Jr. Chief Financial Officer
- -------------------------------------------
Harold O. Knight, Jr. (Principal Financial and
Accounting Officer) June 10, 1996

/s/ Richard M. Scrushy Director June 10, 1996
- -------------------------------------------
Richard M. Scrushy

/s/ Larry D. Striplin, Jr. Director June 10, 1996
- -------------------------------------------
Larry D. Striplin, Jr.

/s/ Charles W. Newhall III Director June 10, 1996
- -------------------------------------------
Charles W. Newhall III

</TABLE>
<PAGE> 7

<TABLE>
<S> <C> <C> <C>
/s/ Scott F. Meadow Director June 10, 1996
- -------------------------------------------
Scott F. Meadow

/s/ Ted H. McCourtney, Jr. Director June 10, 1996
- -------------------------------------------
Ted H. McCourtney, Jr.

/s/ Walter T. Mullikin, M.D. Director June 10, 1996
- -------------------------------------------
Walter T. Mullikin, M.D.

/s/ John S. McDonald, J.D. Director June 10, 1996
- -------------------------------------------
John S. McDonald, J.D.

/s/ Richard J. Kramer Director June 10, 1996
- -------------------------------------------
Richard J. Kramer

/s/ Rosalio J. Lopez, M.D. Director June 10, 1996
- -------------------------------------------
Rosalio J. Lopez, M.D.

</TABLE>
<PAGE> 8

Pursuant to the requirements of the Securities Act of 1933, the plan
set forth below has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
St. Louis, State of Missouri, on June 10, 1996.

MEDPARTNERS, INC. AND SUBSIDIARIES
EMPLOYEE RETIREMENT SAVINGS PLAN

By /s/ Peter J. Oster
------------------------------------------------
Peter J. Oster, Associate Vice President
A. G. Edwards Trust Company, Trustee

<PAGE> 9

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page Number
---------- ---------------------- -----------
<S> <C>
(4)-1 MedPartners/Mullikin, Inc. Second Amended and Restated Certificate of
Incorporation.

(4)-2 MedPartners/Mullikin, Inc. Amended and Restated By-laws, filed as Exhibit
(3)-2 to the Company's Registration Statement on Form S-4 (Registration No.
333-00774) is hereby incorporated herein by reference.

(4)-3 MedPartners, Inc. and Subsidiaries Employee Retirement Savings Plan.

(4)-4 MedPartners, Inc. and Subsidiaries Employee Retirement Savings Plan, First
Amendment.

5(b) Neither an opinion concerning the Plan's compliance with the requirements
of ERISA nor an Internal Revenue Service determination letter is required
because the Company undertakes that it will submit the Plan (and any
amendments thereto) to the Internal Revenue Service ("IRS") in a timely
manner and has made or will make all changes required by the IRS in order
to qualify the Plan.

(23)-1 Consent of Ernst & Young LLP, Independent Auditors

24 Powers of Attorney (set forth on the signature page of this Registration
Statement).

</TABLE>

<PAGE> 1
EXHIBIT (4)-1

SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MEDPARTNERS/MULLIKIN, INC.

MEDPARTNERS/MULLIKIN, INC., a corporation organized and existing under
and by virtue of the Delaware General Corporation Law of the State of Delaware
("DGCL"), does hereby certify:

That the present name of the Corporation is MedPartners/Mullikin, Inc.
(the "Corporation");

That the date of filing of the original Certificate of Incorporation
of the Corporation with the Secretary of State was August 14, 1995;

That the date of filing of the Restated Certificate of Incorporation
of the Corporation with the Secretary of State was November 29, 1995; and

That the date of filing of the Certificate of Correction of Restated
Certificate of Incorporation of the Corporation with the Secretary of State was
May 13, 1996.

The Restated Certificate of Incorporation of the Corporation is hereby
amended by striking out the first paragraph of Article IV thereof and by
substituting in lieu thereof a new first paragraph of Article IV, which is set
forth in the Second Amended and Restated Certificate of Incorporation
hereinafter provided for.

The provisions of the Certificate of Incorporation, as heretofore
amended and/or supplemented, and as herein amended, are hereby restated and
integrated into the single instrument which is hereinafter set forth, and which
is entitled Second Amended and Restated Certificate of Incorporation of
MedPartners/Mullikin, Inc. without any further amendment other than the
amendment herein certified and without any discrepancy between the provisions
of the Certificate of Incorporation as heretofore amended and supplemented and
the provisions of the said single instrument hereinafter set forth.

The Board of Directors of the Corporation adopted a resolution
proposing and declaring advisable an amendment to the Restated Certificate of
Incorporation in accordance with the provisions of Section 242 of the DGCL.
The amendment to the Restated Certificate of Incorporation was duly adopted by
the stockholders in accordance with the provisions of Section 242 of the DGCL.
The Board of Directors of the Corporation then duly adopted this Second Amended
and Restated Certificate of Incorporation pursuant to the provisions of Section
245 of the DGCL in the form set forth as follows:
<PAGE> 2

ARTICLE I

The name of the Corporation is MedPartners/Mullikin, Inc.

ARTICLE II

The address of the Corporation's registered office in the State of
Delaware is The Prentice-Hall Corporation System, Inc. at 1013 Centre Road, in
the City of Wilmington, County of New Castle. The Registered Agent in charge
thereof is The Prentice-Hall Corporation System, Inc.

ARTICLE III

The purposes of the Corporation are to engage in any lawful act or
activity for which corporations may be organized under the DGCL, including but
not limited to the following:

Section 3.1 To engage in any lawful act or activity for which
corporations may be organized under the DGCL;

Section 3.2 To manufacture, purchase or otherwise acquire, invest
in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of,
trade, deal in and deal with goods, wares and merchandise and personal property
of every class and description;

Section 3.3 To acquire, and pay for in cash, stock or bonds of
this Corporation or otherwise, the goodwill, rights, assets and property, and
to undertake or assume the whole or any part of the obligations or liabilities
of any person, firm, association or corporation;

Section 3.4 To acquire, hold, use, sell, assign, lease, grant
licenses in respect of, mortgage or otherwise dispose of letters patent of the
United States or any foreign country, patent rights, licenses and privileges,
inventions, improvements and processes, copyrights, trademarks and trade names,
relating to or useful in connection with any business of this Corporation;

Section 3.5 To acquire by purchase, subscription or otherwise,
and to receive, hold, own, guarantee, sell, assign, exchange, transfer,
mortgage, pledge or otherwise dispose of or

2
<PAGE> 3

deal in and with any of the shares of the capital stock, or any voting trust
certificates in respect of the shares of capital stock, scrip, warrants,
rights, bonds, debentures, notes, trust receipts, and other securities,
obligations, choses in action and evidences of indebtedness or interest issued
or created by any corporations, joint stock companies, syndicates,
associations, firms, trusts or persons, public or private, or by the government
of the United States of America, or by any foreign government, or by any state,
territory, province, municipality or other political subdivision or by any
governmental agency, and as owner thereto to possess and exercise all the
rights, powers and privileges of ownership, including the right to execute
consents and vote thereon, and to do any and all acts and things necessary or
advisable for the preservation, protection, improvement and enhancement in
value thereof;

Section 3.6 To borrow or raise money for any of the purposes of
the Corporation and, from time to time without limit as to amount, to draw,
make, accept, endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or non-negotiable
instruments and evidences of indebtedness, and to secure the payment of any
thereof and of the interest thereon by mortgage upon or pledge, conveyance or
assignment in trust of the whole or any part of the property of the
Corporation, whether at the time owned or thereafter acquired, and to sell,
pledge or otherwise dispose of such bonds or other obligations of the
Corporation for its corporate purposes;

Section 3.7 To purchase, receive, take by grant, gift, devise,
bequest or otherwise, lease, or otherwise acquire, own, hold, improve, employ,
use and otherwise deal in and with real or personal property, or any interest
therein, wherever situated, and to sell, convey, lease, exchange, transfer or
otherwise dispose of, or mortgage or pledge, all or any of the Corporation's
property and assets, or any interest therein, wherever situated;

Section 3.8 In general, to possess and exercise all the powers
and privileges granted by the DGCL or by any other law of Delaware or by this
Certificate of Incorporation together with any powers incidental thereto, so
far as such powers and privileges are necessary or convenient to the conduct,
promotion or attainment of the business or purposes of the Corporation.

Section 3.9 The business and purposes specified in the foregoing
clauses shall, except where otherwise expressed, be in nowise limited or
restricted by reference to, or inference from, the terms of any other clause in
this Certificate of Incorporation, but the business and purposes specified in
each of the foregoing clauses of this Article shall be regarded as an
independent business and purpose.

3
<PAGE> 4

ARTICLE IV

Section 4.1 AUTHORIZATION OF CAPITAL. The total number of shares
of all classes of capital stock which the Corporation shall have authority to
issue is two hundred ten million (210,000,000) shares, comprised of (a) two
hundred million (200,000,000) shares of Common Stock, with a par value of $.001
per share (the "Common Stock"); (b) five hundred thousand (500,000) shares of
Series C Junior Participating Preferred Stock (the "Series C Preferred Stock"),
with a par value of $.001 per share; and (c) nine million five hundred thousand
(9,500,000) shares of such other Preferred Stock, with a par value of $.001 per
share, as the Board of Directors may decide to issue pursuant to Section 4.3,
which constitutes a total authorized capital of all classes of capital stock of
Two Hundred Ten Thousand Dollars ($210,000.00).

A description of the respective classes of stock and a statement of
the designations, preferences, voting powers, relative, participating, optional
or other special rights and privileges, and the qualifications, limitations and
restrictions of the Series C Preferred Stock, such other Preferred Stock as the
Board of Directors may by resolution or resolutions decide to issue, and the
Common Stock are as follows:

Section 4.2 SERIES C PREFERRED STOCK.

(a) Voting Rights. The holders of shares of Series C Preferred
Stock shall have the following voting rights:

(1) Subject to the provision for adjustment hereinafter
set forth, each share of Series C Preferred Stock shall entitle the holder
thereof to one hundred (100) votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (as defined in subsection 4.2(b)) (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

(2) Except as otherwise provided herein or by law, the
holders of shares of Series C Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.

(3) (A) If at any time dividends on any Series C
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such

4
<PAGE> 5

contingency shall mark the beginning of a period (herein called a "default
period") which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series C Preferred Stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, all holders of Preferred Stock (including holders of the
Series C Preferred Stock) with dividends in arrears in an amount equal to six
(6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.

(B) During any default period, such voting right
of the holders of Series C Preferred Stock may be exercised initially at a
special meeting called pursuant to subsection 4.2(a)(3)(C) or at any annual
meeting of stockholders, and thereafter at annual meetings of stockholders,
provided that such voting right shall not be exercised unless the holders of
ten percent (10%) in number of shares of Series C Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Series C
Preferred Stock of such voting right. At any meeting at which the holders of
Series C Preferred Stock shall exercise such voting right initially during an
existing default period, they shall have the right, voting as a class, to elect
directors to fill such vacancies, if any, in the Board of Directors as may then
exist up to two (2) Directors or, if such right is exercised at an annual
meeting, to elect two (2) Directors. If the number which may be so elected at
any special meeting does not amount to the required number, the holders of the
Series C Preferred Stock shall have the right to make such increase in the
number of directors as shall be necessary to permit the election by them of the
required number. After the holders of the Series C Preferred Stock shall have
exercised their right to elect Directors in any default period and during the
continuance of such period, the number of Directors shall not be increased or
decreased except by vote of the holders of Series C Preferred Stock as herein
provided or pursuant to the rights of any equity securities ranking senior to
or pari passu with the Series C Preferred Stock.

(C) Unless the holders of Series C Preferred
Stock shall, during an existing default period, have previously exercised their
right to elect Directors, the Board of Directors may order, or any stockholder
or stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Series C Preferred Stock outstanding, irrespective of
series, may request, the calling of special meeting of the holders of Series C
Preferred Stock, which meeting shall thereupon be called by the President, a
Vice-President or the Secretary of the Corporation. Notice of such meeting and
of any annual meeting at which holders of Series C Preferred Stock are entitled
to vote pursuant to this subsection 4.2(a)(3)(C) shall be given to each holder
of record of Series C Preferred Stock by mailing a copy of such notice to him
at his last address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than twenty (20) days and not
later than sixty (60) days after such order or request or in default of the
calling of such meeting within sixty (60) days after such order or request,
such meeting may be called on similar notice by any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding. Notwithstanding the provisions of this
subsection 4.2(a)(3)(C), no such special meeting shall be called during the
period within sixty (60) days

5
<PAGE> 6

immediately preceding the date fixed for the next annual meeting of the
Corporation stockholders.

(D) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until the
holders of Series C Preferred Stock shall have exercised their right to elect
two (2) Directors voting as a class, after the exercise of which right (x) the
Directors so elected by the holders of Series C Preferred Stock shall continue
in office until their successors shall have been elected by such holders or
until the expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in subsection 4.2(a)(3)(B) hereof) be filled
by vote of a majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose office shall
have become vacant. References in this Section 4.2(a)(3)(D) to Directors
elected by the holders of a particular class of stock shall include Directors
elected by such Directors to fill vacancies as provided in clause (y) of the
foregoing sentence.

(E) Immediately upon the expiration of a default
period, (x) the right of the holders of Series C Preferred Stock as a class to
elect Directors shall cease, (y) the term of any Directors elected by the
holders of Series C Preferred Stock as a class shall terminate, and (z) the
number of Directors shall be such number as may be provided for in this
Certificate of Incorporation or the By-Laws of the Corporation irrespective of
any increase made pursuant to the provisions of subsection 4.2(a)(3)(B) hereof
(such number being subject, however, to change thereafter in any manner
provided by law or in the Certificate of Incorporation or By-laws). Any
vacancies in the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of the remaining
Directors.

(4) Except as set forth herein, holders of Series C
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.

(b) Dividends and Distributions.

(1) The holders of shares of Series C Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the last day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series C Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$.001 or (b) subject to the provision for adjustment hereinafter set forth, one
hundred (100) times the aggregate per share amount of all cash dividends, and
one hundred (100) times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification

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<PAGE> 7

or otherwise), declared on the Common Stock, since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series C Preferred Stock. In the event the Corporation shall at any
time after November 10, 1994 (the "Rights Declaration Date"), (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series C Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

(2) The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in subsection
4.2(b)(1) hereof immediately after it declares a dividend or distribution of
the Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $.001 per share on the Series C Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.

(3) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series C
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series C
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative From such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series C Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series C Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than thirty (30) days prior to the date fixed for the
payment thereof.

(1) Whenever quarterly dividends or other dividends or
distributions payable on the Series C Preferred Stock as provided in subsection
4.2(b) hereof are in arrears, thereafter

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<PAGE> 8

and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series C Preferred Stock outstanding shall have been
paid in full, the Corporation shall not

(A) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Preferred Stock;

(B) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series C
Preferred Stock, except dividends paid ratably on the Series C Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;

(C) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series C Preferred
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series C Preferred Stock; or

(D) purchase or otherwise acquire for
consideration any shares of Series C Preferred Stock, or any shares of stock
ranking on a parity with the Series C Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among
the respective series or classes.

(2) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under subsection
4.2(c)(1) hereof, purchase or otherwise acquire such shares at such time and in
such manner.

(d) Reacquired Shares. Any shares of Series C Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of preferred
stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.

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<PAGE> 9

(e) Liquidation, Dissolution or Winding Up.

(1) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series C Preferred Stock unless,
prior thereto, the holders of shares of Series C Preferred Stock shall have
received an amount equal to one hundred (100) times the Exercise Price, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment (the "Series C Liquidation
Preference"). The term "Exercise Price" means the price established by the
Board of Directors for purchase of one unit of Series C Preferred Stock equal
to one-one-hundredth of one share of Series C Preferred Stock. If no shares of
convertible Preferred Stock are outstanding at the time of liquidation, then
following the payment of the full amount of the Series C Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series C Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series C Liquidation
Preference by (ii) one hundred (100) (as appropriately adjusted as set forth in
subparagraph (3) below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series C Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series C Preferred Stock and Common Stock, respectively,
holders of Series C Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with respect to such
Series C Preferred Stock and Common Stock, on a per share basis, respectively.

(2) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series C Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series C Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In
the event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.

(3) In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

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<PAGE> 10

(f) Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series C Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to one hundred (100) times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series C Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

(g) No Redemption. The shares of Series C Preferred Stock shall
not be redeemable.

(h) Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series C
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of Series C
Preferred stock, voting separately as a class.

(i) Fractional Shares. Series C Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series C Preferred Stock.

Section 4.3 OTHER PREFERRED STOCK. The Board of Directors of the
Corporation is authorized, subject to the limitations prescribed by law, and
the provisions of this Section 4.3, to adopt one or more resolutions to provide
for the issuance from time to time in one or more series of any number of
shares of Preferred Stock up to a maximum of nine million five hundred thousand
(9,500,000) shares, and to establish the number of shares to be included in
each such series, and to fix the designation, relative rights, preferences,
qualifications and limitations of the shares of each such series. The
authority of the Board of Directors with respect to each such series shall
include, but not be limited to, a determination of the following:

(a) The number of shares constituting that series and the
distinctive designation of that series;

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<PAGE> 11

(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and if so, from which date or dates, and whether
they should be payable in preference to, or in another relation to, the
dividends payable on any other class or classes or series of stock;

(c) Whether that series shall have voting rights, in addition to
the voting rights provided by law, and, if so, the terms of such voting rights;

(d) Whether that series shall have conversion or exchange
privileges, and, if so, the terms and conditions of such conversion or
exchange, including provision for adjustments for the conversion or exchange
rate in such events as the Board of Directors shall determine;

(e) Whether or not the shares of that series shall be redeemable,
and, if so, the terms and conditions of such redemption, including the manner
of selecting shares for redemption if less than all shares are to be redeemed,
the date or dates upon or after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;

(f) Whether that series shall be entitled to the benefit of a
sinking fund to be applied to the purchase or redemption of shares of that
series, and, if so, the terms and amounts of such sinking funds;

(g) The right of the shares of that series to the benefit of
conditions and restrictions upon the creation of indebtedness of the
Corporation or any subsidiary, upon the issuance of any additional stock
(including additional shares of such series or of any other series) and upon
the payment of dividends or the making of other distributions on, and the
purchase, redemption or other acquisition by the Corporation or any subsidiary
of any outstanding stock of the Corporation;

(h) The right of the shares of that series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and whether such rights shall be in preference to, or in other
relation to, the comparable rights of any other class or classes or series of
stock; and

(i) Any other relative, participating, optional or other special
rights, qualifications, limitations or restrictions of that series.

Section 4.4 COMMON STOCK.

(a) Voting Rights. Except as otherwise required by law or this
Certificate of Incorporation, each holder of Common Stock shall have one vote
in respect of each share of stock held by him of record on the books of the
Corporation for the election of Directors and on all matters submitted to a
vote of stockholders of the Corporation.

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(b) Dividends. Except as otherwise provided by the resolution or
resolutions of the Board of Directors providing for the issuance of any series
of Preferred Stock pursuant to Section 4.3, the holders of shares of Common
Stock shall be entitled to receive, when and if declared by the Board of
Directors, out of the assets of the Corporation which are by law available
therefor, dividends payable either in cash, in property or in shares of capital
stock.

(c) Dissolution, Liquidation or Winding Up. Except as otherwise
provided by the resolution or resolutions of the Board of Directors providing
for the issuance of any series of Preferred Stock pursuant to Section 4.3, in
the event of any dissolution, liquidation or winding up of the affairs of the
Corporation, after distribution in full of the preferential amounts, if any, to
be distributed to the holders of the Series C Preferred Stock, the rights of
the holders of Common Stock to receive any remaining assets of the Corporation
shall be as provided in subsection 4.2(e).

ARTICLE V

Section 5.1 GENERAL PROVISIONS. The business and affairs of the
Corporation shall be managed under the direction of the Board of Directors.
The exact number of Directors shall be fixed from time to time by, or in the
manner provided in, the By-laws of the Corporation and may be increased or
decreased as therein provided. Directors of the Corporation need not be
elected by ballot unless required by the By-laws.

Section 5.2 CLASSIFICATION OF BOARD OF DIRECTORS. The Directors
shall be divided into three classes. Each such class shall consist, as nearly
as may be possible, of one-third of the total number of Directors, and any
remaining Directors shall be included within such groups as the Board of
Directors shall designate. The first class of Directors will be elected for a
term which expires in 1996. The second class will be elected for a term which
expires in 1997. The third class will be elected to a term which expires in
1998. At each annual meeting of stockholders, beginning in 1996, successors to
the class of Directors whose term expires at the annual meeting shall be
elected for a three-year term. If the number of Directors is changed, any
increase or decrease shall be apportioned among the classes so as to maintain
the number of Directors in each class as nearly equal as possible, but in no
case shall a decrease in the number of Directors shorten the term of any
incumbent Director. A director may be removed from office for cause only and,
subject to such removal, death, resignation, retirement or disqualification,
shall hold office until the annual meeting for the year in which his term
expires and until his successor shall be elected and qualify. No alteration,
amendment or repeal of this Article V or the By-laws of the Corporation shall
be effective to shorten the term of any Director holding office at the time of
such alteration, amendment or repeal, to permit any such Director to be removed
without cause, or to increase the number of Directors in any class or in the
aggregate from that existing at the time of such alteration, amendment or
repeal until the expiration of the terms of office of all Directors then
holding office, unless (i) in the case of this

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Article V, such alteration, amendment or repeal has been approved by the
holders of all shares of stock entitled to vote thereon, or (ii) in the case of
the By-laws, such alteration, amendment or repeal has been approved by either
the holders of all shares entitled to vote thereon or by a vote of a majority
of the entire Board of Directors.

Section 5.3 DIRECTORS APPOINTED BY A SPECIFIC CLASS OF
STOCKHOLDERS. To the extent that any holders of any class or series of stock
other than Common Stock issued by the Corporation shall have the separate
right, voting as a class or series, to elect Directors, the Directors elected
by such class or series shall be deemed to constitute an additional class of
Directors and shall have a term of office for one year or such other period as
may be designated by the provisions of such class or series providing such
separate voting right to the holders of such class or series of stock, and any
such class of Directors shall be in addition to the classes designated above.

Section 5.4 NOMINATIONS. Advance notice of nominations for the
election of Directors shall be given in the manner and to the extent provided
in the By-laws of the Corporation.

Section 5.5 VACANCIES. Vacancies and newly created directorships
resulting from any increase in the authorized number of Directors may be filled
by a majority of the Board of Directors and any vacancies on the Board of
Directors resulting from death, resignation, removal or other cause shall only
be filled by the affirmative vote of a majority of the remaining Directors then
in office, even though less than a quorum of the Board of Directors, or by a
sole remaining director. Any Director elected in accordance with the preceding
sentence of this Section 5.5 shall hold office for the remainder of the full
term of the Directors whose vacancy is so filled and until such Director's
successor shall have been elected and qualified.

ARTICLE VI

The Corporation is to have perpetual existence.

ARTICLE VII

In furtherance and not in limitation of the powers conferred upon it
by law, the Board of Directors is expressly authorized:

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Section 7.1 To adopt, repeal, alter or amend the By-laws of the
Corporation by a vote of a majority of the entire Board of Directors.

Section 7.2 To authorize and cause to be executed mortgages and
liens upon the real and personal property of the Corporation.

Section 7.3 To set apart out of any of the funds of the
Corporation available for dividends a reserve or reserves for any proper
purpose and to abolish any such reserve in the manner in which it was created.

Section 7.4 By a majority of the whole Board of Directors, to
designate one or more committees, each committee to consist of one or more of
the Directors of the Corporation. The Board of Directors may designate one or
more Directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. The By-laws may
provide that in the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member. Any such committee, to the extent
provided in the resolution of the Board of Directors, or in the By-laws of the
Corporation, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the Certificate of Incorporation, adopting
an agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, or amending the By-laws of the
Corporation; and, unless the resolution or By-laws expressly so provide, no
such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock.

Section 7.5 When and as authorized by the stockholders in
accordance with statute, to sell, lease or exchange all or substantially all of
the property and assets of the Corporation, including its goodwill and its
corporate franchises, upon such terms and conditions and for such
consideration, which may consist in whole or in part of money or property
including shares of stock in, and/or other securities of, any other corporation
or corporations, as the Board of Directors shall deem expedient and for the
best interests of the Corporation.

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ARTICLE VIII

Section 8.1 Except as provided in Section 8.2 of this Article
VIII, any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of the
stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders. Advance notice of items of business to be
considered at any meeting of the stockholders shall be given in the manner and
to the extent provided in the By-laws of the Corporation.

Section 8.2 Notwithstanding the foregoing, this Article VIII
shall not apply to the Corporation if it does not have a class of voting stock
that is either (i) listed on a national securities exchange, (ii) authorized
for quotation on an inter dealer quotation system of the registered national
securities association, or (iii) held of record by more than two thousand
(2,000) stockholders.

ARTICLE IX

Section 9.1 LIMITATION OF LIABILITY OF DIRECTORS. A Director of
the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a Director,
except for liability (i) for any breach of the Director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the DGCL, or (iv) for any transaction from which the
Director derived an improper personal benefit.

If the DGCL is amended after the date hereof to authorize action by
corporations organized pursuant to the DGCL to further eliminate or limit the
personal liability of directors, then the liability of a Director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as amended.

Section 9.2 INDEMNIFICATION OF DIRECTORS.

(a) Each person who was or is made a party or is threatened to be
made a party or is involved in any threatened, pending or completed action,
suit or proceeding, whether formal or informal, whether of a civil, criminal,
administrative or investigative nature (hereinafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a Director of the Corporation, whether the basis of
such proceeding is an alleged action or inaction in an official capacity or in
any other capacity while serving as a Director, shall be indemnified and held
harmless by the Corporation to the fullest extent

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permissible under Delaware law, as the same exists or may hereafter exist in
the future (but, in the case of any future change, only to the extent that such
change permits the Corporation to provide broader indemnification rights than
the law permitted prior to such charge), against all costs, charges, expenses,
liabilities and losses (including, without limitation, attorneys' fees,
judgments, fines, Employee Retirement Income Security Act of 1974 ("ERISA")
excise taxes, or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a Director
and shall inure to the benefit of his or her heirs, executors and
administrators.

(b) The Corporation shall pay expenses actually incurred in
connection with any proceeding in advance of its final disposition; provided,
however, that if Delaware law then requires, the payment of such expenses
incurred in advance of the final disposition of a proceeding shall be made only
upon delivery to the Corporation of an undertaking, by or on behalf of such
Director or officer, to repay all amounts so advanced if it shall ultimately be
determined that such Director or officer is not entitled to be indemnified.

(c) If a claim under subsection 9.2(a) hereof is not paid in full
by the Corporation within thirty (30) days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination that indemnification of the claimant
is permissible in the circumstances because the claimant has met the applicable
standard of conduct, if any, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the claimant has not met the standard of conduct, shall be a
defense to the action or create a presumption that the claimant has not met the
standard of conduct.

Section 9.3 INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS.
The Corporation may provide indemnification to employees and agents of the
Corporation to the fullest extent permissible under Delaware law.

Section 9.4 EXPENSES AS A WITNESS. To the extent that any
Director, officer, employee or agent of the Corporation is by reason of such
position, or position with another entity at the request of the Corporation, a
witness in any action, suit or proceeding, he or she shall be indemnified
against all costs and expenses actually and reasonably incurred by him or her
on his or her behalf in connection therewith.

Section 9.5 INSURANCE. The Corporation may maintain insurance,
at its expense, to protect itself and any Director, officer, employee or agent
of the Corporation or another

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corporation, partnership, joint venture, trust or other enterprise against any
such expense, liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss under
Delaware law.

Section 9.6 INDEMNITY AGREEMENTS. The Corporation may enter into
agreements with any Director, officer, employee or agent of the Corporation
providing for indemnification to the fullest extent permissible under Delaware
law.

Section 9.7 SEPARABILITY. Each and every paragraph, sentence,
term and provision of this Article IX is separate and distinct, so that if any
paragraph, sentence, term or provision hereof shall be held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not
affect the validity or enforceability of any other paragraph, sentence, term or
provision hereof. To the extent required, any paragraph, sentence, term or
provision of this Article IX may be modified by a court of competent
jurisdiction to preserve its validity and to provide the claimant with, subject
to the limitations set forth in this Article IX and any agreement between the
Corporation and claimant, the broadest possible indemnification permitted under
applicable law.

Section 9.8 CONTRACT RIGHT. Each of the rights conferred on
Directors of the Corporation by Sections 9.1, 9.2 and 9.4 of this Article IX
and on officers, employees or agents of the Corporation by Section 9.4 of this
Article shall be a contract right and any repeal or amendment of the provisions
of this Article shall not adversely affect any right hereunder of any person
existing at the time of such repeal or amendment with respect to any act or
omission occurring prior to the time of such repeal or amendment, and, further,
shall not apply to any proceeding, irrespective of when the proceeding is
initiated, arising from the service of such person prior to such repeal or
amendment.

Section 9.9 NONEXCLUSIVITY. The rights conferred in this Article
shall not be exclusive of any other rights that any person may have or
hereafter acquire under any statute, By-law, agreement, vote of stockholders or
disinterested Directors or otherwise.

ARTICLE X

The Corporation reserves the right to amend, alter or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are subject to this reservation.

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IN WITNESS WHEREOF, said MedPartners/Mullikin, Inc. has caused this
Certificate to be signed by Harold O. Knight, Jr., its Executive Vice
President, and attested by Tracy P. Thrasher, its Secretary, this 29th day of
November, 1995.

MEDPARTNERS/MULLIKIN, INC.

[S E A L] By /s/ Harold O. Knight, Jr.
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Harold O. Knight, Jr.
Executive Vice President

ATTEST:

/s/ Tracy P. Thrasher
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Tracy P. Thrasher
Its Secretary

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EXHIBIT (4)-3

AMENDED
MED PARTNERS 401(k) PLAN

RETROACTIVELY
EFFECTIVE APRIL 1, 1994

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<CAPTION>
TABLE OF CONTENTS
FOR
MEDPARTNERS, INC. AND SUBSIDIARIES
EMPLOYEE RETIREMENT SAVINGS PLAN
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ARTICLE I PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II NAME AND EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.1 Name of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 Contribution Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE III DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

3.1 "Accrued Benefit" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.2 "Actual Contribution Percentage" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.3 "Actual Deferral Percentage" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.4 "Affiliated Service Group" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.5 "Age" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.6 "Allocation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.7 "Anniversary Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.8 "Annual Addition Suspense Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.9 "Annuity Starting Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.10 "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.11 "Board" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.12 "Break In Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.13 "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.14 "Compensation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.15 "Controlled Group" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.16 "Disability" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.17 "Discretionary Employer Contribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.18 "Discretionary Employer Contribution Account" . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.19 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.20 "Elective Deferrals" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.21 "Elective Deferral Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.22 "Eligibility Computation Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.23 "Eligibility Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.24 "Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.25 "Employer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.26 "Employer Matching Contribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.27 "Employer Matching Contribution Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.28 "Employment Commencement Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.29 "Family Member" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.30 "Five-Percent Owner" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.31 "Highly Compensated Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.32 "Hour of Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.33 "Inactive Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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3.34 "Key-Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.36 "Limitation Year" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.37 "Named Fiduciary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.38 "Nonhighly Compensated Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.39 "Normal Retirement Age" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.40 "Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.42 "Permissive Aggregation Group" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.43 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.44 "Plan Administrator" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.45 "Plan Year" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.46 "Qualified Discretionary Employer Contribution" . . . . . . . . . . . . . . . . . . . . . . . . 11
3.47 "Qualified Employer Matching Contribution" . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.48 "Qualified Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.49 "Required Aggregation Group" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.50 "Rollover Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.51 "Taxable Wage Base" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.52 "Taxable Year" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.53 "Top-Heavy Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.54 "Trust Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.55 "Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.56 "Trust Fund" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.57 "Valuation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.58 "Vested" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.59 "Vesting Computation Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.60 "Year of Credited Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.61 "Year of Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE IV ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

4.1 Powers of the Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.2 Employer as Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Administrative Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Bonding of the Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Non-Discriminatory Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Terminated Participant Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.7 Delegation by Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE V PARTICIPATION OF EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

5.1 Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Re-Hired Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Participation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Leave of Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE VI CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

6.1 Employer Contributions: Types and Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.2 Elective Deferrals: Amounts and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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6.3 Elective Deferral Dollar Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.4 Restrictions Against Employee Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.5 Actual Deferral Percentage Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.6 Actual Contribution Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Aggregate Limit for Multiple Use of Alternative Limitation . . . . . . . . . . . . . . . . . . 22
6.8 Additional Contribution to Restore Cashed-Out Benefits . . . . . . . . . . . . . . . . . . . . 23
6.9 Omission of Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.10 Inclusion of Ineligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ARTICLE VII ALLOCATIONS AND ADJUSTMENTS TO ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

7.1 Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Accrual of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.3 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.4 Limitations on Annual Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.5 Contribution and Benefit Limits for Multiple Plans . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE VIII BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

8.1 Participant's Rights and General Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.2 Normal Retirement Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 Deferred Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.4 Disability Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.5 Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.6 Benefit Upon Other Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.7 Method of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.8 General Consent Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.9 Statutory Commencement of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.10 General Rules for Required Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.11 Required Beginning Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.12 Statutory Distributions Upon Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.13 Location of Participants and Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.14 Payments for the Benefit of Incompetents . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ARTICLE IX VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

9.1 Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.2 Cash-Out; Buy-Back . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.3 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.4 Computation of Years of Credited Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.5 Hours of Service Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE X TOP-HEAVY PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

10.1 Top-Heavy Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.2 Top-Heavy Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE XI ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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11.1 Direct Rollovers by Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.3 Rollovers Other than Direct Rollover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.4 Direct Rollovers From Other Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.5 Procedures and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.6 Allocations to Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.7 Vesting of Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.8 Distributions of Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.9 Eligible Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

ARTICLE XII LOANS TO PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

12.1 Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
12.2 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.3 Loans as Directed Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

ARTICLE XIII DESIGNATED INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

13.1 Written Direction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.2 Information Provided to Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

ARTICLE XIV ADOPTION OF PLAN BY PARTICIPATING EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . . . . . 43

14.1 Right of Participating Employers to Participate . . . . . . . . . . . . . . . . . . . . . . . . 43
14.2 Participant Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14.3 Administrative Powers of Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14.4 Creation of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14.5 Transfer of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14.6 Withdrawal of Participating Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14.7 Internal Revenue Service Approval of Plan for a Participating Employer . . . . . . . . . . . . 45
14.8 Commingled Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
14.9 Joint Venture Restriction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

ARTICLE XV FIDUCIARY RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

15.1 Allocation of Responsibilities Among Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . 46
15.2 No Joint Fiduciary Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
15.3 Advisor to Named Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

ARTICLE XVI AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

16.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
16.2 Election of Pre-Amendment Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . 47
16.3 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

ARTICLE XVII CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

17.1 Initial Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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17.2 Review Procedure for Disallowed Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

ARTICLE XVIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

18.1 Participant's Rights; Acquittance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
18.2 Board Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
18.3 ERISA Preemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
18.4 Indemnification By Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
18.5 Exclusive Benefit Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
18.6 Employer Reversion Upon Initial Disqualification . . . . . . . . . . . . . . . . . . . . . . . 50
18.7 Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
18.8 Non-Alienation Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
18.9 Delegation of Responsibilities by Named Fiduciary . . . . . . . . . . . . . . . . . . . . . . . 51
18.10 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
18.11 Non-Contractual Obligation of Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
18.12 Basis for Payments From the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
18.13 Funding Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>

v
<PAGE> 7

STATE OF DELAWARE

NEW CASTLE COUNTY

AMENDMENT AND RESTATEMENT OF THE
EMPLOYEE RETIREMENT SAVINGS PLAN FOR
MEDPARTNERS, INC. AND SUBSIDIARIES

THIS PLAN, set forth on the 14th day of July, 1995, by
MEDPARTNERS, INC., a Corporation organized and existing under the laws of the
State of Delaware, with its principal place of business in Birmingham, Alabama
(hereinafter called the "Employer"), as follows:

W I T N E S S E T H:

WHEREAS, the Employer deems it advisable to amend its Employee
Retirement Savings Plan, which is now in the form of the Donaldson, Holman &
West, P.C. Defined Contribution Prototype Plan and Trust Agreement (basic Plan
document #01); and

WHEREAS, it is advisable that said Plan be divided into the
MedPartners, Inc. and Subsidiaries Employee Retirement Savings Plan and the
MedPartners, Inc. and Subsidiaries Employee Retirement Savings Trust
Agreement, which will be two separate documents; and

WHEREAS, said Plan provides that Employer reserves the right
at any time and from time to time, by action of its Board to amend in whole or
in part, any and all provisions of the Plan; and

WHEREAS, the Board of Directors of the Employer, specifically
approved and adopted, by resolution, the MedPartners, Inc. and Subsidiaries
Employee Retirement Savings Plan, as is hereinafter set forth, which together
with the Trust Agreement amends and restates the MedPartners, Inc. and
subsidiaries Employee Retirement Savings Plan in its entirety; and

NOW, THEREFORE, in consideration of the above premises and
covenants herein contained, the Employer amends said Plan as of the dates
hereof and causes the terms and provisions of the original plan and amendments
thereto to be modified as set forth herein:

ARTICLE I

PURPOSE

1.1 The purpose of the Plan is to provide a regular
method whereby Employer will make contributions to a Trust Fund, to be
received, held and disbursed pursuant to the terms of a Trust Agreement dated
the 14th day of July, 1995 (hereinafter for brevity referred to as the "Trust
Agreement") and to provide financial security for its employees upon their
retirement or disability and for their beneficiaries in the event of death.
It is intended that this Plan qualify as a profit sharing plan for
purposes of Section 401(a) of the Code. It is also intended that the Plan
provide a method for employees to contribute a portion of their compensation
pursuant to a written salary reduction agreement and that the Plan qualify as a
cash or deferred Plan pursuant to Section 401(k) of the Code. The Trust Fund
will be devoted to the exclusive benefit of the participating employees and
their beneficiaries, and
<PAGE> 8

in no event will any part of the corpus or trust income revert to Employer or
be used for or devoted to any other purpose.

ARTICLE II

NAME AND EFFECTIVE DATE

2.1 Name of Plan. The name of this Plan shall be the
MedPartners, Inc. and Subsidiaries Employee Retirement Savings Plan.

2.2 Effective Date. The Effective Date of the Plan is
April 1, 1994.

2.3 Restated Effective Date. Unless specifically stated
otherwise in the Plan or Code, the effective date of all other sections as
amended and restated shall be April 1, 1994.

2.4 Contribution Date. The contributing date shall be as
of the Anniversary Date of the Plan.

ARTICLE III

DEFINITIONS

When used herein, the following words and phrases shall have
the following meanings, unless the context clearly indicates otherwise.

3.1 "Accrued Benefit" shall mean the sum, as of the last
Valuation Date, of balances in all accounts maintained for a Participant.

3.2 "Actual Contribution Percentage" shall mean the
average of ratios (expressed as a percentage to the nearest one-hundredth of
one percent) of Employees in the group for a Plan Year, calculated separately
for each Employee in such group as follows:

(a) The numerator of such ratio is the sum of any
non-deductible Employee Contributions, Employer Matching Contribution, and
Qualified Employer Matching Contributions (to the extent not taken into account
for purposes of the Actual Deferral test).

(b) The denominator of such ratio is the
Compensation (as defined in Section 3.14 hereinbelow) of each Employee in the
group for the portion of such Plan Year that the Employee was a Participant in
the Plan.

(c) At the Employer's election, the numerator may
include Qualified Discretionary Employer Contributions and Elective Deferrals,
provided the Actual Deferral Percentage test is met before the Elective
Deferrals are used in the Actual Contribution Percentage test and continues to
be met following the exclusion of such Elective Deferrals that are used in the
Actual Contribution Percentage test.

2
<PAGE> 9

(d) The numerator shall not include Employer
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.

(e) The ratio shall be zero for a Participant who
makes no Employee Contributions, and for whom no Employer Matching
Contributions, Qualified Discretionary Employer Contributions or Elective
Deferrals are made.

3.3 "Actual Deferral Percentage" shall mean the average
of ratios (expressed as a percentage to the nearest one-hundredth of one
percent) of Employees in the group for a Plan Year, calculated separately for
each Employee in the group as follows:

(a) The numerator of such ratio is the sum of the
following Employer contributions actually paid over to the Trust on behalf of
each Employee in the group for the Plan Year:

(i) Elective Deferrals made pursuant to
the Participant's deferral election (including Excess Elective Deferrals of
Highly Compensated Employees, excluding Excess Elective Deferrals of non-highly
Compensated Employees that arise solely from Elective Deferrals made under the
Plan or plans of the Employer, and excluding Elective Deferrals that are taken
into account in the Actual Contribution Percentage), and

(ii) At the election of the Employer,
Qualified Discretionary Employer Contributions and Qualified Employer Matching
Contributions of each Employee in the group.

3.4 "Affiliated Service Group" shall mean:

(a) a group of service Organizations consisting
of the Employer and one or more of the following:

(i) Any service Organization which --

(A) is a shareholder or partner of
the Employer, and

(B) regularly performs services for
the Employer or is regularly associated with the Employer in performing
services for third persons, and

(ii) Any other Organization if

(A) a significant portion of the
business of such Organization is the performance of services for the Employer,
for Organizations described in subparagraph (a)(i)

3
<PAGE> 10

hereinabove, or for both, which is of a type historically performed in such
service field by employees, and

(B) ten percent (10%) or more of
the interests in such Organization is held by persons who are highly
compensated employees (within the meaning of Section 414(q) of the Code) of the
Employer or an Organization described in subparagraph (a)(i) hereinabove; or

(b) a group of Organizations consisting of:

(i) an Organization the principal
business of which is performing, on a regular and continuing basis, management
functions for the Employer or any Organization which is a "Related
Organization" to the Employer; and

(ii) the Employer and the Related
Organization for which said services are performed.

(iii) for purposes of this Section,
"Related Organization" shall mean:

(A) any Organization which would be
a member of the Controlled Group pursuant to Section 1563(a) of the Code,
except that for purposes of Section 415 of the Code, the phrase "more than 50%"
shall be substituted for the phrase "at least 80%" each place it appears in
Section 1563(a) of the Code; or

(B) the relationship of the
Employer and the Organization would result in a disallowance of losses under
Sections 267 or 707(b) of the Code.

(c) For purposes of this Section, after December
31, 1984, the term "Organization" shall mean a corporation, partnership, or
other Organization and, in determining ownership pursuant to subsection (a)
hereinabove, the principles of Section 318(a) of the Code shall apply.

3.5 "Age" shall mean attained age.

3.6 "Allocation Date" shall mean the last day of each
quarter of the Plan Year or other such date selected by the Administrator.

3.7 "Anniversary Date" shall mean the last day of the
Plan Year.

3.8 "Annual Addition Suspense Account" shall mean the
account maintained in the Plan to record reductions in the annual addition as
required by Section 7.4 hereof.

3.9 "Annuity Starting Date" shall mean 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 in the form of an annuity, the first day on which all
events have occurred which entitle the Participant to such benefit.

3.10 "Beneficiary" shall mean, subject to the distribution
provisions of Article VIII, the person or persons selected in writing by the
Participant to receive the benefits under the Plan in the

4
<PAGE> 11

event of the Participant's death. Wherever the rights of a Participant are
stated or limited herein, his Beneficiary shall be deemed bound thereby. If
any Participant shall fail to designate a Beneficiary, or if there is no
designated Beneficiary surviving at the Participant's death, the Administrator
shall be empowered to designate a Beneficiary or Beneficiaries on his behalf,
but only from among the following, in the order named: (1) spouse, (2)
children, in equal shares, (3) parents, in equal shares or survivor, (4)
brothers and sisters, per stirpes, and (5) estate of the Participant. In the
event any of the above shall be under the age of majority, the Administrator
shall pay the share of such minor to his or her parents or legally appointed
guardian, as custodian under the Alabama Uniform Transfers to Minors Act.

3.11 "Board" shall mean the Board of Directors of the
Employer.

3.12 "Break In Service" shall mean a Plan Year during
which a Participant has not completed more than five hundred (500) Hours of
Service.

3.13 "Code" shall mean the Internal Revenue Code of 1986,
as amended.

3.14 "Compensation" shall mean:

(a) Except as provided hereinbelow, the total of
all amounts paid by the Employer as wages, salaries, fees for professional
services, amounts received (without regard to whether or not an amount is paid
in cash) for personal services actually rendered in the course of employment
with the Employer to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen, compensation for
service on the basis of a percentage of profits, commissions on insurance
premiums, tips, and bonuses) during the taxable year of the Employer for which
a contribution is made, but excluding contributions to any Qualified Plan or
any non-qualified deferred compensation plan.

(b) Compensation shall include Employer
contributions made pursuant to a salary reduction agreement which are not
includible in the gross income of the Employee under Sections 125, 402(e)(3),
402(h) or 403(b) of the Code.

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

(d) For Plan Years beginning on or after January
1, 1994, any reference in this Plan to the limitation under Section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set forth in this
provision.

(e) If compensation for any prior determination
period is taken into account in determining an Employee's benefits accruing in
the current Plan Year, the compensation for the prior

5
<PAGE> 12

determination period is subject to the OBRA '93 annual compensation limit in
effect for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, the OBRA '93 annual compensation limit
is $150,000.

(f) In determining the Compensation of a
Participant for purposes of this limitation, the rules of Code Section
414(q)(6) shall apply, except that the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the year. If, as a result of the
application of such rules, the adjusted $150,000 limitation is exceeded, then
(except for purposes of determining the portion of compensation up to the
integration level if the Plan provides for permitted disparity) the limitation
shall be prorated among the affected Participants in proportion to each
Participant's Compensation as determined prior to the application of this
limitation.

(g) In the case of an Employee who becomes
eligible to participate in the Plan on April 1, July 1, or October 1 of a Plan
Year, Compensation with respect to such Year shall mean seventy-five percent
(75%), fifty percent (50%), or twenty-five percent (25%) respectively, of the
amount determined hereinabove.

3.15 "Controlled Group" shall mean any group of
corporations which, together with the Employer, are members of a Controlled
Group within the meaning of Section 1563(a) of the Code, determined without
regard to Section 1563(a)(4) or (e)(3)(c) or would be a part of such a group if
Section 1563(a) applied to partnerships or proprietorships.

3.16 "Disability" shall mean, for all purposes under this
Plan, a condition under which a Participant is deemed to be totally and
permanently disabled, if, supported by medical evidence, he will be totally
unable, due to physical or mental disability, ever to discharge or to resume
full duties of the same general nature as those which he performed immediately
prior to such disability provided that: (a) such disability did not arise
while engaged in or as a result of having engaged in a wrongful, illegal or
criminal act, or an act contrary to the best interest of Employer; or (b) such
disability did not result from habitual drunkenness or addiction to narcotics
or self- inflicted injury while sane or insane.

3.17 "Discretionary Employer Contribution" shall mean a
contribution made by the Employer pursuant to Section 6.1(a).

3.18 "Discretionary Employer Contribution Account" shall
mean the account maintained for a Participant to record his share of
Discretionary Employer Contributions and forfeitures, and adjustments relating
thereto.

3.19 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.

3.20 "Elective Deferrals" shall mean any Employer
contributions made to the Plan at the election of the Participant, in lieu of
cash compensation, and shall include contributions made pursuant to a salary
reduction agreement or other deferral mechanism. With respect to any taxable
year, a Participant's Elective Deferral is the sum of Employer contributions
made on behalf of such Participant pursuant to an election to defer under any
qualified CODA as described in Section 401(k) of the Code, any simplified
employee pension cash or deferred arrangement as described in Section
402(h)(1)(B), any

6
<PAGE> 13

eligible deferred compensation plan under Section 457, any plan as described
under Section 501(c)(18), and any Employer contributions made on behalf of a
participant for the purchase of an annuity contract under Section 403(b)
pursuant to a salary reduction agreement. Elective Deferrals shall not include
any deferrals properly distributed as excess annual additions.

3.21 "Elective Deferral Account" shall mean the account
maintained for a Participant to record his Elective Deferrals with adjustments
relating thereto.

3.22 "Eligibility Computation Period" shall mean the
period of twelve (12) consecutive months beginning with an Employee's
Employment Commencement Date, and thereafter, shall mean the next succeeding
Plan Year which includes the first anniversary of the Participant's Employment
Commencement Date. An Employee who is credited with 1000 Hours of Service in
both the initial Eligibility Computation Period and the first Plan year which
commences prior to the first anniversary of the Employee's initial Eligibility
Computation Period will be credited with two Years of Service.

3.23 "Eligibility Date" shall mean January 1, April 1,
July 1, or October 1 of a Plan Year.

3.24 "Employee" shall mean any person employed by Employer
maintaining the Plan or any other employer required to be aggregated with such
Employer under Sections 414(b), (c), (m) or (o) of the Code. For purposes of
determining whether or not the Plan meets the requirements of Section 10.2
hereof, the term Employee shall also include the Beneficiary of an Employee.
The term Employee shall also include leased employees within the meaning of
Section 414(n) or 414(o) of the Code.

3.25 "Employer" shall mean MedPartners, Inc., a
Corporation having its principal office at Birmingham, Alabama, or any
successor thereto by merger, purchase, or otherwise, and any participating
employer which adopts the Plan.

3.26 "Employer Matching Contribution" shall mean a
contribution made by the Employer on behalf of a Participant on account of an
Elective Deferral made pursuant to Section 6.1(b).

3.27 "Employer Matching Contribution Account" shall mean
the account maintained for a Participant to record Employer Matching
Contributions (and adjustments thereto) made on his behalf.

3.28 "Employment Commencement Date" shall mean the date on
which an Employee first performed an Hour of Service for the Employer. In the
case of a re-hired Employee, "Employment Commencement Date" shall mean the date
on which the Employee first performed an Hour of Service after being re-hired.

3.29 "Family Member" shall mean a person described in
Section 414(q)(6)(B) of the Code.

3.30 "Five-Percent Owner" shall mean any person who is
defined as a Five-Percent Owner in Section 416(i)(1)(B) of the Code and the
Regulations promulgated thereunder, which are hereby incorporated by reference
as if fully set out herein.

7
<PAGE> 14

3.31 "Highly Compensated Employee" shall mean a highly
compensated active employee and/or highly compensated former employee as
follows:

(a) A highly compensated active employee includes
any Employee who performs service for the Employer during the determination
year and who, during the look-back year: (i) received compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section 415(d) of the
Code); (ii) received compensation from the Employer in excess of $50,000 (as
adjusted pursuant to section 415(d) of the Code) and was member of the top-paid
group for such year; or (iii) was an officer of the Employer and received
compensation during such year that is greater than 50% of the dollar limitation
in effect under Section 415(b)(1)(A) of the Code. The term highly compensated
employee also includes; (i) Employees who are both described in the preceding
sentence if the term "determination year" is substituted for the term
"look-back year" and if the Employee is one of the 100 Employees who received
the most compensation from the Employer during the determination year; and (ii)
Employees who are 5% owners at any time during the look-back year or
determination year.

(b) If no officer has satisfied the compensation
requirement of (iii) above during either a determination year or look-back
year, the highest paid officer for such year shall be treated as a highly
compensated employee.

(c) For this purpose, the determination year
shall be the Plan Year. The look-back year shall be the 12-month period
immediately preceding the determination year. The top-paid group shall consist
of the top 20% of active employees, ranked on the basis of compensation paid
during such year. Compensation shall mean compensation within the meaning of
Code Section 415(c)(3).

(d) A highly compensated former Employee includes
any Employee who separated from service (or was deemed to have separated) prior
to the determination year, performs no service for the Employer during the
determination year, and was a highly compensated active Employee for either the
separation year or any determination year ending on or after the Employee's
55th birthday.

(e) If an Employee is, during a determination
year or look-back year, a family member of either a 5% owner who is an active
or former Employee or a highly compensated Employee who is one of the 10 most
highly compensated Employees ranked on the basis of compensation paid by the
Employer during such year, then the family member and the 5% owner or top-ten
highly compensated Employee shall be aggregated. In such case, the family
member and 5% owner or top-ten highly compensated Employee shall be treated as
a single Employee receiving compensation and Plan contributions or benefits
equal to the sum of such compensation and contributions or benefits of the
family member and 5% owner or top-ten highly compensated Employee. For
purposes of this Section, family member includes the spouse, lineal ascendants
and descendants of the Employee or former Employee and the spouses of such
lineal ascendants and descendants.

(f) The determination of who is a highly
compensated Employee, including the determinations of the number and identity
of Employee in the top-paid group, the top 100 Employees, the number of
Employees treated as officers and the compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the regulations
thereunder.

8
<PAGE> 15

3.32 "Hour of Service" shall mean:

(a) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer. These
hours shall be credited to the Employee for the computation period or periods
in which the duties are performed; and

(b) Each hour for which an Employee is paid, or
entitled to payment, by the 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 of Service shall be credited under this paragraph for
any single continuous period (whether or not such period occurs in a single
computation period); and

(c) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer. The
same Hours of Service shall not be credited under both paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c). These hours
shall be credited to the Employees 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.

(d) The provisions of Sections 2530.200(b)-2(b)
and 2530.200(b)-2(c) of the regulations of the Labor Department (relating to
determining Hours of Service for reasons other than the performance of duties
and crediting of Hours of Service to computation periods) are hereby
incorporated by reference as if fully set out herein.

(e) An Employee who is not paid on an hourly
basis and whose hours are not counted and recorded shall be credited with ten
(10) Hours of Service for each day during the Plan Year for which he actually
performs services for any portion of that day. An Employee shall also be
credited with ten (10) Hours of Service for any day during the Plan Year for
which no services are performed if the Employee would be entitled to be
credited with at least one (1) Hour of Service for that day under Paragraph (b)
or (c) hereinabove.

(f) For Plan Years beginning after December 31,
1984, solely for purposes of determining whether a Break In Service (as defined
in Section 3.12) has occurred in a computation period, for participation and
vesting purposes, a Participant who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such Participant but for such absence, or in
any case in which such hours cannot be determined, eight (8) Hours of Service
per day of absence. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence: (1) by reason of the
pregnancy of the Participant, (2) by reason of a birth of a child of the
Participant, (3) by reason of the placement of a child with the Participant in
connection with the adoption of such child by such Participant or (4) for
purposes of caring for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under this Section
shall be credited: (1) in the computation period in which the absence begins
if the crediting is necessary to prevent a Break In Service in that period, or
(2) in all other cases, in the following computation period. No credit will be
given under this Section, however, unless the Participant furnishes to the Plan
Administrator such timely information as the Administrator may reasonably
require to establish that the absence from work is for reasons qualifying for
the maternity/paternity provisions set forth above, and the number of days for
which there was such an absence.

9
<PAGE> 16

(g) Hours of service will be credited for
employment with other members of an affiliated service group (under Section
414(m)), a controlled group of corporations (under Section 414(b)), or a group
of trades or businesses under common control (under Section 414(c)) of which
the adopting employer is a member, and any other entity required to be
aggregated with the employer pursuant to Section 414(o) and the regulations
thereunder.

(h) Hours of service will also be credited for
any individual considered an employee for purposes of this Plan under Section
414(n) or Section 414(o) and the regulations thereunder.

3.33 "Inactive Participant" shall mean a Participant who
has separated from service with the Employer.

3.34 "Key-Employee" shall mean any person who is defined
as a Key-Employee in Section 416(i)(1) of the Code, and the Regulations
promulgated thereunder, which are hereby incorporated by reference as if fully
set out herein. For purposes of determining whether the Plan is a Top-Heavy
Plan as defined in Section 10.2 hereof, the term Key-Employee shall also
include the Beneficiary of a Key-Employee. The term "non-key employee" means
any Employee who is not a Key Employee and shall also include Employees who are
former Key-Employees.

3.35 "Leased Employee" shall mean:

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

(b) A leased employee shall not be considered an
employee of the recipient if: (i) such employee is covered by a money purchase
pension plan providing: (1) a nonintegrated employer contribution rate of at
least 10 percent of compensation, as defined in section 415(c)(3) of the Code,
but including amounts contributed pursuant to a salary reduction agreement
which are excludable from the employee's gross income under Sections 125,
402(a)(8), 402(h) or 403(b) of the Code, (2) immediate participation, and (3)
full and immediate vesting; and (ii) leased employees do not constitute more
than 20 percent of the recipient's nonhighly compensated workforce.

3.36 "Limitation Year" shall mean the Plan Year.

3.37 "Named Fiduciary" shall be the Employer or such other
party, individual or otherwise, appointed by the Board.

3.38 "Nonhighly Compensated Participant" shall mean a
participant who is neither a Highly Compensated Employee nor a Family Member.

3.39 "Normal Retirement Age" shall mean the Anniversary
Date of the Plan Year in which a Participant attains age sixty-five (65) or the
fifth Anniversary Date next following the Participant's first Eligibility Date,
whichever shall occur later.

10
<PAGE> 17

3.40 "Participant" shall mean any Employee who meets (or
has met in prior plan years) the participation and eligibility requirements set
out in the Plan, and whose nonforfeitable benefits have not been fully
distributed.

3.41 "Participating Employer" shall mean any corporation,
partnership, professional corporation or professional association which has
adopted the Plan pursuant to Article XIV of the Plan.

3.42 "Permissive Aggregation Group" shall mean all plans
in the Required Aggregation Group and any other Qualified Plans maintained by
the Employer or by any member of the Controlled Group or Affiliated Service
Group, but only if such group of plans would satisfy, in the aggregate, the
requirements of Sections 401(a)(4) and 410 of the Code and contributions or
benefits in the other Qualified Plan are comparable to contributions or
benefits of plans in the Required Aggregation Group. The Plan Administrator
shall determine which plan or plans shall be taken into account in determining
the Permissive Aggregation Group.

3.43 "Plan" shall mean MedPartners, Inc. and Subsidiaries
Employee Retirement Savings Plan, as set forth by this document and all
amendments thereto.

3.44 "Plan Administrator" (hereinafter sometimes for
brevity referred to as "Administrator") shall be MedPartners, Inc., or such
other party, individual or otherwise, appointed by the Board.

3.45 "Plan Year" shall mean the period of twelve (12)
consecutive months beginning on the first day of January, and ending on the
last day of December, both dates inclusive, except that the first Plan Year
shall commence on April 1, 1994, and end on December 31, 1994, both dates
inclusive.

3.46 "Qualified Discretionary Employer Contribution" shall
mean a Discretionary Employer Contribution which is subject to the distribution
and nonforfeitability requirements under Code Section 401(k) when made.

3.47 "Qualified Employer Matching Contribution" shall mean
an Employer Matching Contribution that is subject to the distribution and
nonforfeitability requirements under Code Section 401(k) when made.

3.48 "Qualified Plan" shall mean any plan which is
qualified under Section 401(a) of the Code.

3.49 "Required Aggregation Group" shall mean:

(a) Each Qualified Plan of the Employer or any
member of the Controlled Group or the Affiliated Service Group in which at
least one (1) Key-Employee participates; and

(b) Any other Qualified Plan of the Employer or
any member of the Controlled Group or the Affiliated Service Group which
enables a Plan described in Subsection (a) hereinabove to meet the requirements
of Sections 401(a)(4) and 410 of the Code.

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3.50 "Rollover Account" shall mean the account maintained
by the Employer to record transfers to the Trust Fund pursuant to ARTICLE XI of
the Plan. Each Rollover Account shall be designated as one of the following:

(a) Unrelated Post-TEFRA Rollover Account shall
mean the account maintained to record a transfer to the Trust Fund which is
accepted after December 31, 1983, and which is initiated by the Employee and
made to this Plan from a plan which is not maintained by the Employer or any
member of the Controlled Group or the Affiliated Service Group.

(b) Unrelated Pre-TEFRA Rollover Account shall
mean the account maintained to record a transfer to the Trust Fund which is
accepted before January 1, 1984 and which is initiated by the Employee and made
to this Plan from a plan which is not maintained by the Employer or any member
of the Controlled Group or the Affiliated Service Group.

(c) Related Rollover Account shall mean the
account maintained to record a transfer to the Trust Fund which is either: (1)
not initiated by the Employee; or (2) made to this Plan from a plan which is
maintained by either the Employer or any member of the Controlled Group or the
Affiliated Service Group.

(d) Rollover Account - Self-Employed shall mean
the account maintained for each Participant to record assets or funds
transferred to the Trust Fund from another Qualified Plan in which the
Participant was an employee as defined in Section 401(c)(1) of the Code.

3.51 "Taxable Wage Base" shall mean the contribution and
benefit base under Section 230 of the Social Security Act in effect as of the
beginning of the Plan Year.

3.52 "Taxable Year" shall mean the annual accounting
period for which the Employer regularly computes income for federal income tax
purposes.

3.53 "Top-Heavy Plan" shall mean the Plan for any Plan
Year in which it is determined to be top- heavy under Section 10.2 hereof.

3.54 "Trust Agreement" shall mean the MedPartners, Inc.
and Subsidiaries Employee Retirement Savings Trust Agreement executed by the
Employer and the Trustee contemporaneously with the execution of this Plan, and
as it may subsequently be amended from time to time.

3.55 "Trustee" shall mean the individuals or duly
authorized corporate trustee selected by the Board to perform the duties of
Trustee as set out in the Trust Agreement.

3.56 "Trust Fund" shall mean all funds and property
received by the Trustee, including Contracts, if any, together with all income,
profits or other increments thereon.

3.57 "Valuation Date" shall mean the date as of which the
Trust Fund is valued, account balances are determined, and adjustments and
allocations are made to each account by the Administrator.

3.58 "Vested" shall mean the portion of the Participant's
Accrued Benefit which is nonforfeitable; fully Vested shall mean totally
nonforfeitable.

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3.59 "Vesting Computation Period" shall mean the Plan
Year.

3.60 "Year of Credited Service" shall mean each Vesting
Computation Period during which an Employee has completed not less than one
thousand (1,000) Hours of Service with the Employer or with any member of the
Controlled Group or Affiliated Service Group.

3.61 "Year of Service" shall mean each Eligibility
Computation Period during which an Employee has completed not less than one
thousand (1,000) Hours of Service with the Employer.

ARTICLE IV

ADMINISTRATION OF THE PLAN

4.1 Powers of the Administrator. The Administrator is
empowered to administer the Plan in accordance with its terms and shall have
all powers and authority necessary to carry out the provisions of the Plan.
The Administrator shall perform the following functions:

(a) Construe and interpret the provisions of the
Plan, and all parts thereof, including the interpretation of any ambiguity, the
supplying of any language which is omitted and the reconciling of any
inconsistency so that the Plan is given a reasonable interpretation and
construction in light of what was intended in establishing the Plan;

(b) To determine all questions with respect to
the individual rights of the Participants and their Beneficiaries under the
Plan, including, but not limited to, all issues with respect to a Participant's
eligibility for participation and eligibility for benefits, a Participant's
Compensation, a Participant's eligibility for disability benefits and
retirement benefits;

(c) To decide and resolve any disputes which may
arise relative to the rights of Employees, current and former, and their
Beneficiaries, under the terms of the Plan, except to the extent that the
claims procedure set forth in ARTICLE VI of the Trust Agreement shall authorize
any other person or party to determine or review claims of Participants or
Beneficiaries.

(d) To provide the Trustee with such directions
and instructions as may be necessary to carry out the terms of the Plan.

(e) To maintain all Plan records and relevant
data, including Employee data relating to Hours of Service, other than those
required to be maintained by the Trustee.

(f) If all or any part of a Participant's
Compensation received from the Employer is determined to be unreasonable in
amount by the Internal Revenue Service, the Administrator shall be empowered
and authorized to adjust the Employer's contribution, which is based on the
unreasonable Compensation, in any manner permitted by Revenue Ruling 67-341,
and subsequent rulings, regulations and laws pertaining thereto; or, in the
alternative, the Administrator shall be empowered and authorized to reallocate
the contribution among other Participants in any manner permitted by Revenue
Ruling 67-341, and subsequent rulings, regulations and laws pertaining thereto.

(g) To make allocations of contributions,
earnings, losses and forfeitures among Participants, from year to year.

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<PAGE> 20

(h) To provide appropriate parties, including
government agencies, with such returns, reports, schedules, descriptions and
individual statements as are required by law within the times prescribed by
law; and to furnish to the Employer, upon request, copies of any or all such
materials, and further, to make copies of such instruments, reports and
descriptions as are required by law available for examination by Participants
and such of their Beneficiaries who are or may be entitled to benefits under
the Plan in such places and in such manner as required by law.

(i) To ascertain from the Employer the eligible
Employees who shall become Participants in the Plan and the Participants who
have terminated employment.

(j) To communicate with each eligible Employee
and inform him of the existence of the Plan and its pertinent provisions and to
make certain that such additional disclosure requirements which may be imposed
by the Department of Labor or the Department of Treasury are carried out.

(k) To give necessary instructions and directions
to the Trustee to assure the payment of benefits to any Participant or his
Beneficiary, at such time as the Participant or Beneficiary may become entitled
thereto.

(l) To give appropriate instructions and
directions to the Trustee where any Participant terminates his participation
under the Plan or ceases to be entitled to benefits.

(m) To make certain that all benefits are paid to
a Participant or his Beneficiary in accordance with the terms and provisions of
this Plan.

(n) To determine whether a Disability (as defined
in Article III) exists. The Administrator may require as a condition precedent
to the receipt of any benefits hereunder, that the Employee submit to
examination by one or more duly licensed and practicing physicians. The
Administrator shall have the right from time to time to have medical
examinations made by a duly licensed physician or physicians to determine
whether such disability is continuing, and the degree thereof, and to ascertain
from the Participant by warranties or otherwise the extent to which he has had
his earning power restored and upon such findings to discontinue the payments
being made. If the disabled Participant refuses to submit to such physical
examination or to give any other information requested, the Administrator shall
have the power to suspend or withhold payment of any benefit until the
Participant does so submit or comply. The Administrator shall have the right
to accept evidence for the purpose of determining whether the Participant is
still eligible to receive any disability payments and to act upon such
evidence.

(o) To hire persons to provide necessary services
to the Plan.

(p) To issue directions to the Trustee to pay any
fees, taxes, charges or other costs incidental to the operation and management
of the Plan.

(q) To comply with all disclosure requirements
imposed by state or federal law.

4.2 Employer as Administrator. If the Administrator is
the Employer, then the Administrator shall only act by and through the Board in
accordance with the authority of the Board as

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<PAGE> 21

provided under the Articles and by-laws of the Employer. In such event, the
action of the Administrator shall be deemed to be the action of the entire
Board, and not the action of any individual member thereof. Any documents,
reports, forms or returns, which are to be executed by the Administrator, shall
be executed by a member of the Board who is so authorized, and the execution
thereof shall be deemed to be made on behalf of the entire Board and not by
that individual Board member.

4.3 Administrative Records. The records of the
Administrator and of all its proceedings and acts shall be made a part of the
records and minutes of the Board.

4.4 Bonding of the Administrator. Bonding shall be made
in accordance with Act Section 412 of ERISA.

4.5 Non-Discriminatory Administration. Wherever under
the provisions of this Plan discretion is granted to the Administrator, which
shall affect the benefits, rights and privileges of Participants or their
Beneficiaries under this Plan, such discretion shall be exercised uniformly so
that all Participants or Beneficiaries similarly situated shall be similarly
treated.

4.6 Terminated Participant Statement. The Administrator
shall furnish to each Participant who during a Plan Year has separated from the
service of the Employer, or who is entitled to a deferred vested benefit under
the Plan as of the end of such Plan Year, and with respect to whom retirement
benefits were not paid under the Plan during such Plan Year, an individual
statement setting forth the following: (a) the name of the Plan; (b) the name
and address of the Plan Administrator; (c) the nature, amount and form of the
deferred vested benefit to which such Participant is entitled; and (d) such
additional information as the Secretary of the Treasury or his delegate may
require. Such statement shall be furnished by the Administrator within such
period after the end of a Plan Year as prescribed by the Secretary of the
Treasury in Regulations.

4.7 Delegation by Administrator. The Administrator may
delegate to the Trustee or any other agent, advisor or consultant any of its
functions, particularly those set forth in ARTICLE VII hereinbelow.

ARTICLE V

PARTICIPATION OF EMPLOYEES

5.1 Requirements.

(a) Each Employee hired before September 30,
1994, shall participate commencing with the later of:

(i) April 1, 1994;

(ii) the Employee's employment
commencement date; or

(iii) the Eligibility Date next following
the Employee's attainment of age twenty-one (21).

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<PAGE> 22

(b) Each Employee hired on or after September 30,
1994, shall participate under the terms of this Plan commencing with the
Eligibility Date next following the date on which he completes one (1) Year of
Service or attains age twenty-one (21), whichever is later. For purposes of
meeting the requirements of this Section, a Year of Service shall include
service with any member of the Controlled Group or Affiliated Service Group.

(c) For purposes of determining eligibility under
this Section 5.1, all Years of Service with the Employer shall be taken into
account, except that in the case of an Employee who has a Break In Service,
Years of Service before such Break shall not be required to be taken into
account until he has completed a Year of Service after his return.

5.2 Re-Hired Employees. An Inactive Participant (who is
not Vested in his Accrued Benefit derived from Employer Contributions) who
incurs a Break In Service and who is later re-hired by the Employer must
satisfy the eligibility requirements set forth in Section 5.1 if the number of
consecutive 1-year Breaks In Service equals or exceeds the greater of five (5)
or the aggregate number of Years of Service before such period. If such
Inactive Participant need not satisfy the eligibility requirements of Section
5.1, he shall participate immediately upon reemployment.

5.3 Participation Agreement. Within ninety (90) days
after becoming eligible to participate in the Plan, each Participant may be
required to execute a written statement, on a form or forms to be furnished by
the Administrator, wherein he shall evidence (a) his designation of a
Beneficiary or Beneficiaries to receive any benefits payable under the Plan;
and (b) his consent to be bound by all the terms and conditions of this Plan
and the Trust Agreement and all amendments thereto.

5.4 Leave of Absence. A Participant's employment is not
considered terminated for purposes of the Plan while he is on leave of absence
with the consent of the Employer, provided that he returns to the employ of the
Employer at the expiration of such leave. Leaves of absence shall mean leaves
granted by the Employer, in accordance with established rules uniformly applied
to all Employees, for reasons of health or public service, for reasons set
forth under the Family and Medical Leave Act of 1993, or for reasons determined
by the Employer to be in its best interests. The taking of leave under this
Section 5.4 shall not result in the loss of any benefit accrued under the Plan
prior to the date on which the leave commenced. A Participant's employment
shall also not be deemed to have terminated while he is a member of the Armed
Forces of the United States, provided that he returns to the employment of the
Employer within ninety (90) days (or such longer period as may be prescribed by
law) from the date he first became entitled to his discharge. Participants who
do not return to the employ of the Employer within sixty (60) days following
the end of the leave of absence, or within the required time in case of service
with the Armed Forces, shall be deemed to have terminated their employment as
of the date when their leaves of absence began, unless such failure to return
was the result of Normal Retirement, deferred retirement, Disability or death.
The provisions of this Section shall be effective January 1, 1993.

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<PAGE> 23

ARTICLE VI

CONTRIBUTIONS

6.1 Employer Contributions: Types and Amounts.

(a) Discretionary Employer Contributions. From
time to time during the continuance of this Plan, the Employer may make
Discretionary Employer Contributions, in cash or in kind, to the Trust Fund in
an amount determined by the Board, on or before the date prescribed in the Code
for the filing of the Employer's Federal Income Tax Return, including
extensions thereof, for the Taxable Year of the Employer for which the
contribution has been made.

(b) Employer Matching Contributions. From time
to time during the continuance of this Plan, subject to the Actual Contribution
Percentage limitations hereinbelow, the Employer may make Employer Matching
Contributions to Nonhighly Compensated Participants in an amount determined by
the Board equal to a matching percentage of the amount a Nonhighly Compensated
Participant elects to defer pursuant to Section 6.2 hereinbelow. Such
contribution shall be paid in cash or in kind to the Trust Fund on or before
the date prescribed in the Code for the filing of the Employer's Federal Income
Tax Return, including extensions thereof, for the Taxable Year of the Employer
for which the contribution has been made.

(c) Elective Deferrals as Employer Contributions.
Contributions made pursuant to Section 6.2 hereinbelow, unless otherwise
specifically provided in the Code or Treasury regulations, are treated as a
contribution of the Employer for purposes of Sections 401(a), 401(k), 404, 411,
415, 416 and 417 of the Code.

6.2 Elective Deferrals: Amounts and Procedures. The
amounts of Elective Deferrals by Participants under the Plan shall be
accumulated through payroll deductions and shall be paid to the Trustee with
reasonable promptness but not later than the end of the succeeding month
following such payroll deduction. Elective Deferrals may be made as follows:

(a) Each Participant may elect to defer a portion
of his Compensation equal to or greater than two percent (2%) of Compensation
by directing the Employer in a written salary reduction agreement to withhold
such contribution through payroll deduction.

(b) The Employer and Administrator shall adopt
procedures necessary to implement all arrangements for the election and payment
of Elective Deferrals. Elections to commence, modify or terminate such
Elective Deferrals may be made by the Participant as often as the Administrator
determines, but not less frequently than annually. Participant elections
described in this subparagraph must be made before the Compensation to be
deferred becomes currently available to the Employee and may not be applied
retroactively.

6.3 Elective Deferral Dollar Limitations.

(a) No Participant shall be permitted to make
Elective Deferrals during any taxable year of the Participant, in excess of
Seven Thousand Dollars ($7,000). The sum of Seven Thousand Dollars ($7,000)
shall be adjusted for increases in the cost of living pursuant to Code Section
402(g) and the regulations thereunder.

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<PAGE> 24

(b) "Excess Elective Deferrals" shall mean those
Elective Deferrals that are includible in a Participant's gross income under
Code Section 402(g) to the extent such Participant's Elective Deferrals for a
taxable year exceed the dollar limitation under such Code Section.

(i) Distribution After Taxable Year. By
March 1 of the year following the close of his taxable year, the Participant
must notify the Plan Administrator in writing of the excess and the amount of
the excess to be allocated to the Plan. The Participant is deemed to have
notified the Plan of excess deferrals to the extent such Participant has excess
deferrals for the taxable year calculated by taking into account only elective
deferrals under the Plan and other plans of the Employer. Under such
circumstances, the Employer may notify the Plan on behalf of the Participant.
Notwithstanding any other provision of the Plan, and provided notification has
been given in accordance with this subparagraph, the excess amount (adjusted
for gains/losses) shall be distributed to the Participant no later than April
15 following the close of the Participant's taxable year in which the excess
deferral occurred.

(ii) Distribution During Taxable Year. A
Participant may receive a corrective distribution of excess deferrals during
the same taxable year in which the excess deferral occurred, provided the
Participant and the Plan designate the distribution as an excess deferral, and
the correcting distribution is made after the date on which the Plan received
the excess deferral.

(iii) Retention in Plan. Elective
Deferrals which are not distributed on or before April 15 following the close
of the Participant's taxable year shall remain in the Plan until such time that
distributions are otherwise allowed in accordance with the terms and provisions
of ARTICLE VIII hereinbelow.

(d) Determination of income or loss: Excess
Elective Deferrals shall be adjusted for any income of loss for the taxable
year of the Participant. The Plan shall compute the income or loss allocable
to Excess Elective Deferrals in the same manner specified in Section 7.1 (a)
hereinbelow for allocating income to Participant's accounts.

(e) In the event any of the foregoing provisions
of this Section are not in conformity with regulations of the Department of the
Treasury that are, from time to time promulgated, the non-conforming provision
or provisions may be amended retroactively to insure conformity.

6.4 Restrictions Against Employee Contributions. A
Participant shall not be required nor permitted to make non-deductible
contributions to the Trust Fund.

6.5 Actual Deferral Percentage Limitations.

(a) The Plan shall meet and incorporate by
reference the Actual Deferral Percentage test set forth in Code Section
401(k)(3) and the regulations thereunder.

(b) Corrective Measures. In the event the Actual
Deferral Percentage for Highly Compensated Employees does not satisfy the test
set forth in subparagraph (a) hereinabove, the

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<PAGE> 25

Administrator shall utilize one or more of the following corrective measures
with respect to the Elective Deferrals that exceed those permitted under such
tests (hereinafter referred to as "Excess Contributions"):

(i) Distributions. Excess Contributions
(adjusted for any income or loss) that are specifically designated as such by
the Employer may be distributed to the appropriate Highly Compensated Employees
within two and one-half (2 1/2) months after the close of the Plan Year for
which such Excess Contributions were made. The amount of Excess Contributions
for a Highly Compensated Employee is determined in the following manner: (1)
the actual deferral ratio (ADR) of the Highly-Compensated Employee with the
highest ADR is reduced to the extent necessary to satisfy the actual deferral
percentage (ADP) test or cause such ratio to equal the ADR of the
Highly-Compensated Employee with the next highest ratio; (2) the process is
repeated until the ADP test is satisfied. The amount of Excess Contributions
for a Highly-Compensated Employee is then equal to: his Elective Deferrals and
other contributions taken into account for the ADP using the prior ratio, minus
his Elective Deferrals and other contributions taken into account for the ADP
using the reduced ratio. Distributions under this subparagraph will be made on
the basis of the respective portions of such amounts that are attributable to
each Highly Compensated Employee. The following additional provisions apply to
distributions under this subparagraph (b)(i):

(A) Distributions may be postponed
but not later than the close of the Plan Year following the Plan Year for which
such Excess Contributions were made. Distributions that are postponed pursuant
to the preceding sentence shall cause the Employer to be subject to the excise
tax imposed by Code Section 4979.

(B) Excess Contributions shall be
distributed from a Participant's Elective Deferral Account and Qualified
Employer Matching Contribution Account (if applicable) in proportion to his
Elective Deferrals and Qualified Employer Matching Contribution Account (to the
extent used in the Actual Deferral Percentage test) for the Plan Year. Excess
Contributions shall be distributed from the Participants Qualified
Discretionary Employer Contribution Account only to the extent that such Excess
Contributions exceed the balance in the Participant's Elective Deferral Account
and Qualified Employer Matching Contribution Account.

(C) Determination of income or
loss: Excess Contributions shall be adjusted for any income of loss for the
Plan Year. The Plan shall compute the income or loss allocable to Excess
Contributions in the same manner specified in Section 7.1 (a) hereinbelow for
allocating income to Participant's accounts.

(D) If, pursuant to Section 6.3
above, Excess Elective Deferrals have been distributed for the Employee's
taxable year ending with or within the Plan Year, the Plan shall offset such
distribution from the amount of such Employee's Excess Contributions to be
distributed for such Plan Year. The amount of Excess Elective Deferrals that
may be distributed by the Plan for a taxable year of the Employee must be
reduced by the amount of Excess Contributions previously distributed for the
Plan Year beginning with or within that taxable year.

(E) Excess Contributions of
Participants who are subject to the family aggregation rules shall be allocated
among the family members in proportion to the Elective Deferrals (and mounts
treated as Elected Deferrals) of each family member that is combined to
determine the combined ADP.

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<PAGE> 26

(ii) Additional Contributions. Within
twelve (12) months after the end of the Plan Year, the Employer may make a
Qualified Employer Matching Contribution or a Qualified Discretionary Employer
Contribution on behalf of specified Non-Highly Compensated Employees in an
amount sufficient to satisfy the test set forth in subparagraph (a)
hereinabove. Such contribution shall be allocated to the Qualified
Discretionary Employer Contribution Account or Qualified Matching Employer
Contribution Account of the specified Non-Highly Compensated Employee(s) on the
same basis on which such Employer contributions are made. Additional
contributions under this subparagraph shall meet the additional requirements of
Section 1.401(k)-1(b)(5) of the proposed regulations, which are incorporated
herein by reference. Additional contributions under this Section shall first
be allocated to the lowest compensated Non-Highly Compensated Employee which
may be necessary to satisfy the actual deferral percentage (ADP) test for such
Plan Year.

(c) If a Highly Compensated Employee 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
shall be treated as a single arrangement.

(d) For Plan Years beginning after December 31,
1989, plans may be aggregated in order to satisfy Section 401(k) of the Code
only if such plans have the same Plan Year.

(e) The Employer shall maintain records
sufficient to demonstrate satisfaction of the Actual Deferral Percentage test.

6.6 Actual Contribution Percentage. The Plan shall meet and
incorporate by reference the Actual Contribution Percentage test set forth in
Code Section 401(m)(2) and the regulations thereunder.

(a) Corrective Measures. In the event the Actual
Contribution Percentage for Highly Compensated Employees does not satisfy the
test set forth in subparagraph (a) hereinabove, the Administrator shall utilize
one or more of the following corrective measures with respect to the
contributions that exceed those permitted under such tests (hereinafter
referred to as "Excess Aggregate Contributions"):

(i) Additional Contributions. Within twelve (12)
months after the end of the Plan Year, the Employer may make a Qualified
Discretionary Employer Contribution or a Qualified Employer Matching
Contribution on behalf of specified Non-Highly Compensated Employees in an
amount sufficient to satisfy the test set forth in subparagraph (a)
hereinabove. Such contribution shall be allocated to the Qualified
Discretionary Employer Contribution Account or Qualified Employer Matching
Contribution of the specified Non-Highly Compensated Employee(s) on the same
basis on which such Employer contributions are made. Additional contributions
under this subparagraph shall meet the additional requirements of Section
1.401(m)-1(b)(5) of the proposed regulations, which are incorporated herein by
reference. Additonal contribtuions under this Section shall first be allocated
to the lowest compensated Non-Highly Compensated Employee which may be
necessary to satisfy the actual contribution percentage (ACP) test for such
Plan Year.

(ii) Distributions and Forfeitures.
Excess Aggregate Contributions (adjusted for any income or loss) that are
specifically designated as such by the Employer may be forfeited, if
forfeitable, or may be distributed to the appropriate Highly Compensated
Employees within two and one-half (2 1/2) months after the close of the Plan
Year for which such Excess Aggregate Contributions were made. The amount of
Excess Aggregate Contributions for a Highly Compensated

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<PAGE> 27

Employee is determined in the following manner: (1) the actual contribution
ratio (ACR) of the Highly-Compensated Employee with the highest ACR is reduced
to the extent necessary to satisfy the actual contribution percentage (ACP)
test or cause such ratio to equal the ACR of the Highly-Compensated Employee
with the next highest ratio; (2) the process is repeated until the ACP test is
satisfied. The amount of Excess Aggregate Contributions for a Highly-
Compensated Employee is then equal to: his total contributions taken into
account for the ACP using the prior ratio, minus his total contributions taken
into account for the ACP using the reduced ratio. Excess Aggregate
Contributions Participants who are subject to the family member aggregation
rules shall be allocated among the family members in proportion to the
contributions of each family member that is combined to determine the combined
Actual Contribution Percentage. Distributions under this subparagraph will be
made on the basis of the respective portions of such amounts that are
attributable to each Highly Compensated Employee.

(iii) Amounts shall be forfeited or
distributed, as applicable, on a pro rata basis from the Participant's
Employee Contribution Account, Employer Matching Contribution Account, and
Qualified Employer Matching Contribution Account (and if applicable, the
Participant's Qualified Discretionary Employer Contribution Account or Elective
Deferral account, or both), to the extent not used in the actual deferral
percentage test. Amounts forfeited by Highly Compensated Employees under this
Section shall be allocated or applied in accordance with Section 9.3, provided
that no forfeitures arising under this Section shall be allocated to the
Account of any Highly Compensated Employee.

(iv) Distributions and forfeitures under
this Section may be postponed but not later than the close of the Plan Year
following the Plan Year for which such Excess Contributions were made.
Distributions and/or forfeitures that are postponed pursuant to the preceding
sentence shall cause the Employer to be subject to the excise tax imposed by
Code Section 4979.

(v) Determination of income or loss: Excess
Aggregate Contributions shall be adjusted for any income or loss for the Plan
Year. The Plan shall compute the income or loss allocable to Excess Aggregate
Contributions in the same manner specified in Section 7.1(a) hereinbelow for
allocating income to Participant's accounts.

(b) The amount of Excess Aggregate Contributions
with respect to an Employee for a Plan Year is calculated after determining the
Excess Contributions to be recharacterized as Employee Contributions for the
Plan Year.

(d) For Plan Years beginning after December 31,
1989, plans may be aggregated in order to satisfy Section 401(m) of the Code
only if such plans have the same Plan Year.

(e) The Employer shall maintain records
sufficient to demonstrate satisfaction of the Average Contribution Percentage
test.

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<PAGE> 28

6.7 Aggregate Limit for Multiple Use of Alternative
Limitation.

(a) This Section 6.7 applies if the Plan relies
on the following alternative limitations to satisfy the Actual Deferral
Percentage and Actual Contribution Percentage tests, respectively:

(i) The Actual Deferral Percentage for
Highly Compensated Employees for the Plan Year shall not be more than two
hundred percent (200%) of the Actual Deferral Percentage for all Nonhighly
Compensated Employees, provided the difference between such percentages is not
more than two (2) percentage points.

(ii) The Actual Contribution Percentage
for Highly Compensated Employees for the Plan Year shall not be more than two
hundred percent (200%) of the Actual Contribution Percentage for all Nonhighly
Compensated Employees, provided the difference between such percentages is not
more than two (2) percentage points.

(b) If subparagraph (a) above applies, the sum of
the Actual Deferral Percentage and Actual Contribution Percentage for Highly
Compensated Employees is subject to the aggregate limit. For purposes of this
Section, the aggregate limit is the greater of:

(i) The sum of:

(A) 125 percent of the greater of
(1) the Actual Deferral Percentage of the group of Non-Highly Compensated
Employees eligible under the arrangement subject to Code Section 401(k) for the
Plan Year, or (2) the Actual Contribution Percentage of the group of Non-Highly
Compensated Employees eligible under this Plan which is subject to Code Section
401(m) for the Plan Year, and

(B) Two plus the lesser of (1) or
(2) above (provided that in no event shall this amount exceed 200 percent of
the lesser of (1) or (2) above); or

(ii) The limit in subparagraph (b)(i)
above modified by substituting the word "lesser" for "greater" each time it
appears in (b)(i)(A) and by substituting the word "greater" for "lesser" each
time it appears in (b)(i)(B).

(c) If the aggregate limit set forth in this
Section 6.7 is exceeded, the Employer shall utilize corrective measures in the
following order:

(i) The Administrator shall reduce the
Actual Deferral Percentage of all Highly-Compensated Employees in the Plan to
the extent that the combined Actual Deferral Percentage and Actual Contribution
Percentage does not exceed the aggregate limit described in this Section 6.7.
The amount of the reduction for a Highly Compensated Employee is determined by
reducing the contribution ratios of the Highly Compensated Employees who have
the highest ratios to the maximum acceptable level. Such amount shall be
treated as an Excess Contribution.

(ii) The Administrator shall reduce the
Actual Contribution Percentage of all Highly-Compensated Employees in the Plan
to the extent that the combined Actual Deferral Percentage and Actual
Contribution Percentage does not exceed the aggregate limit described in this

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<PAGE> 29

Section 6.7. The amount of the reduction for a Highly Compensated Employee is
determined by reducing the contribution ratios of the Highly Compensated
Employees who have the highest ratios to the maximum acceptable level. Such
amount shall be treated as an Excess Aggregate Contribution.

(iii) The Employer shall make additional
Qualified Discretionary Employer Contributions in accordance with Section 6.6
hereinabove. Such Qualified Discretionary Employer Contributions shall be on
behalf specified Non-Highly Compensated Employees to the extent that the
combined Actual Deferral Percentage and Actual Contribution Percentage does not
exceed the aggregate limit described in this Section 6.7.

6.8 Additional Contribution to Restore Cashed-Out
Benefits. In the event a Participant who has received a distribution of his
Vested Accrued Benefit under Section 9.2 hereinbelow, and who is subsequently
reemployed by the Employer, repays the amount of such distribution as required
by Section 9.2, the Employer shall, as of the next succeeding Anniversary Date,
make a contribution to such Participant's Employer Contribution Account in an
amount equal to the part of his Employer Contribution Account which was
forfeited.

6.9 Omission of Eligible Employee. If, in any Plan Year,
any Employee who should be included as a Participant in the Plan is erroneously
omitted and discovery of such omission is not made until after a contribution
by the Employer for the year has been made, the Employer shall make an
additional contribution so that the omitted Employee receives a total amount
which the said Employee would have received had he not been omitted. Such
contribution shall be made regardless of whether or not it is deductible in
whole or in part in any taxable year under applicable provisions of the Code.

6.10 Inclusion of Ineligible Employee. If, in any Plan
Year, any person who should not have been included as a Participant in the Plan
is erroneously included and discovery of such incorrect inclusion is not made
until after a contribution for the year has been made, the Employer shall not
be entitled to recover the contribution made with respect to the ineligible
person regardless of whether or not a deduction is allowable with respect to
such contribution. In such event, the amount contributed with respect to the
ineligible person shall constitute a forfeiture for the Plan Year in which the
discovery is made.

ARTICLE VII

ALLOCATIONS AND ADJUSTMENTS TO ACCOUNTS

7.1 Procedure. The balance in each Participant's
Accounts shall be determined as of the first day of each Plan Year. After such
balance has been determined, adjustments and allocations shall be made to each
account by the Administrator, as of each Allocation Date or Anniversary Date,
as the case may be, according to the following procedure:

(a) As of each Allocation Date, the Administrator
shall determine the earnings, losses and increases or decreases in the fair
market value of each of the investment pools established per ARTICLE XIII since
the immediately preceding Allocation Date, or in the case of the first
Allocation Date of the Plan, since the effective date of the Plan. The
earnings or losses within each pool shall be allocated to each active and
inactive Participant's account(s) based on each Participant's prorata share of
such pool, valued as of the immediately preceding Allocation Date.

23
<PAGE> 30

(b) If a Participant has forfeited all or part of
his Accrued Benefit, pursuant to ARTICLE IX, his Accounts which included the
part forfeited shall be reduced by the amount of such forfeiture.

(c) As of each Allocation Date and as soon as
administratively possible following such date, Elective Deferrals made pursuant
to Sections 6.1 and 6.2 hereinabove during the period ending on such Allocation
Date shall be allocated to each Participant's Elective Deferral Account(s) in
an amount equal to the Elective Deferrals.

(d) As of each Anniversary Date, and as soon as
administratively possible following such date, Employer Matching Contributions
made pursuant to Section 6.1(b), hereinabove during the period ending on such
Anniversary Date shall be allocated to the Employer Matching Contribution
Accounts of all Nonhighly Compensated Participants in the proportion that the
Elective Deferral (limited to the portion that is matched) of each Nonhighly
Compensated Participant bears to the Elective Deferrals (limited to the portion
that is matched) of all Nonhighly Compensated Participants.

(e) Subsequent to the allocation provided for in
the preceding Sections, forfeitures for the Plan Year shall be added to
Employer Contributions for the Plan Year and the total shall be allocated to
the Employer Contribution Account of each Participant who is to share in such
allocation, as provided in Section 7.2. The Employer may choose to allocate
the Discretionary Employer Contribution only to Participants considered
Non-Highly Compensated Employees, as follows:

(i) If the Plan is Top Heavy for a Plan
Year, then the allocation for that Plan Year shall be:

(A) To the extent of 3% of the
Compensation of each Participant, in proportion to the ratio which each such
Participant's Compensation for the Plan Year bears to the total Compensation of
all such Participants;

(B) The balance, if any, to the
Employer Contribution Account of each Participant to the extent of 3% of the
amount by which the Compensation of each Participant exceeds the Taxable Wage
Base for the year for which the contribution is made (hereinafter referred to
as "excess Compensation") in proportion to the ratio which each such
Participant's excess Compensation for such Plan Year bears to the total excess
Compensation of all such Participants; and

(C) Any balance of the amount not
allocated in (A) or (B) hereinabove shall be allocated to the extent of 2.7% of
the sum of each Participant's total Compensation and excess Compensation in
proportion to the ratio that the sum of each Participant's Compensation and
each Participant's excess Compensation bears to the sum of total Compensation
and total excess Compensation.

(D) Any balance remaining after
allocations have been made under this subparagraph (i) hereof shall be
allocated to the Employer Contribution Account of each Participant in
proportion to the ratio which each such Participant's total Compensation for
such year bears to the total Compensation of all such Participants for such
year.

(ii) If the Plan is not Top Heavy for a
Plan Year, then the allocation for that Plan Year shall be:

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<PAGE> 31

(A) Forfeitures and Employer
Contributions shall be allocated to the extent of 5.7% of the sum of each
Participant's total Compensation and excess Compensation in proportion to the
ratio that the sum of each Participant's Compensation and each Participant's
excess Compensation bears to the sum of total Compensation and total excess
Compensation.

(B) Any balance remaining after
allocations have been made under subparagraph (ii) hereof shall be allocated to
the Employer Contribution Account of each Participant in proportion to the
ratio which each such Participant's total Compensation for such year bears to
the total Compensation of all such Participants for such year.

7.2 Accrual of Contributions.

(a) Except as provided in Section 7.2(b) and
7.2(c), a Participant shall share in Discretionary Employer Contributions (and
forfeitures) and Employer Matching Contributions only if he has completed five
hundred one (501) Hours of Service with the Employer during the Plan Year for
which the contribution is made and is employed by the Employer on the
Anniversary Date of such Plan Year.

(b) A contribution shall be allocated to a
retired, deceased or disabled Participant, or a Participant on leave of
absence, for the year in which he attains his Normal Retirement Age (or, if he
continues to be employed by the Employer, the year in which he separates from
service after attainment of Normal Retirement Age), dies or becomes disabled,
or is on leave of absence, without regard to the requirement of subparagraph
(a) hereinabove.

(c) In the event the Plan is determined to be a
Top-Heavy Plan as defined in Section 10.2 for any Plan Year, a contribution of
up to three percent (3%) of a Participant's Compensation (for the year for
which the contribution is made) shall be allocated to a Participant for such
Plan Year, provided such Participant is employed on the Anniversary Date of
such Plan Year.

7.3 Accounts. The Administrator shall maintain for each
Participant a Discretionary (and Qualified Discretionary) Employer Contribution
Account, an Elective Deferral Account, and an Employer Matching (and Qualified
Employer Matching) Contribution Account. In the case of a Participant to whom
Section 9.4(c) is applicable, the Administrator shall divide the Participant's
Discretionary Employer Contribution Account and Employer Matching Contribution
Account into separate sub-accounts for pre-break Accrued Benefits and
post-break Accrued Benefits. Each account shall consist of contributions and
forfeitures allocable to such Participant and the earnings, losses, expenses,
and increases or decreases in the fair market value of the Trust Fund
attributable to the account.

7.4 Limitations on Annual Additions.

(a) Limitations. The maximum annual addition
that may be contributed or allocated to a Participant's Employer and Employee
Contribution Accounts in the Plan or any Qualified Plan of members of the
Controlled Group or Affiliated Service Group shall not exceed, for any Taxable
Year of the Plan, the lesser of (1) $30,000 (or, if greater, 1/4 of the dollar
limitation under Section 415(b)(1)(A) of the Code) or (2) twenty-five percent
(25%) of a Participant's "Section 415 Compensation." Any adjustments to the
sum of $30,000 above shall be effective commencing the first day of the Plan
Year for which the adjustment applies. The compensation limitation referred to
above shall not apply to any contribution for medical benefits (within the
meaning of Section 419A(f)(2) of the

25
<PAGE> 32

Code) after separation from service which is otherwise treated as an annual
addition under Section 415(l)(1) or 419A(d)(2) of the Code.

(b) Annual Additions. For purposes of this
Section, the term "annual addition" shall mean the sum for any such Taxable
Year of (1) Discretionary Employer Contributions, (2) Employer Matching
Contributions, (3) Elective Deferrals, (4) a Participant's non-deductible
employee contributions, if any, (5) forfeitures, if any, (6) any amount
attributable to post-retirement medical benefits allocated to an account
established pursuant to Section 419A(d) of the Code, and (7) any amounts
described in Section 415(l)(1) of the Code.

(c) Contributions do not fail to be annual
additions merely because they are excess deferrals, excess contributions or
excess aggregate contributions or merely because excess contributions or excess
aggregate contributions are corrected through distribution or
recharacterization. Excess deferrals that are distributed in accordance with
Section 6.3 hereinabove are not annual additions.

(d) Section 415 Compensation.

(i) Notwithstanding anything herein to
the contrary, "Section 415 Compensation" shall include wages, salaries, fees
for professional services, amounts received (without regard to whether or not
an amount is paid in cash) for personal services actually rendered in the
course of employment with the Employer to the extent that the amounts are
includible in gross income (including, but not limited to, commissions paid
salesmen, compensation for service on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a non-accountable plan (as
described in Section 1.62-2(c) of the Treasury regulations), amounts described
in Code Sections 104(a)(3), 105(a) and 105(h) to the extent such amounts are
included in the gross income of the Employee, IRC Section 911 earned income, if
any, moving expenses paid or reimbursed by the Employer to the extent not
deductible by the Employee under Section 217 of the Code, the value of
non-qualified stock options to the extent includible in gross income for the
taxable year in which granted, and the value of property transferred, in
accordance with Code Section 83(b), in connection with the performance of
services which an Employee elects to include in gross income.

(ii) "Section 415 Compensation" shall
exclude amounts contributed to a deferred compensation plan which are not
includible in the Employee's gross income for the taxable year in which
contributed, contributions to a simplified employee pension plan to the extent
deductible, any distribution from a deferred compensation plan, amounts
realized from the exercise of a non-qualified stock option or when restricted
stock or property held by the Employee becomes freely transferable, amounts
realized from disposition of stock acquired under a qualified stock option,
premiums for group term life insurance, or contributions toward the purchase of
a qualified annuity contract. For Limitation Years beginning after December
31, 1988, "Section 415 Compensation" shall be limited to $200,000, as adjusted
in the same manner permitted under Code Section 415(d).

(iii) For Limitation Years beginning after
December 31, 1991, for purposes of applying the limitations of this Section,
Compensation for a Limitation Year is the Compensation actually paid or
includible in gross income during such Limitation year.

(e) If the Employer maintains one or more defined
contribution plans, as defined in Section 414(i) of the Code, the amount of the
annual additions allocable under this Plan shall

26
<PAGE> 33

not exceed the maximum amount provided for in Section 7.4(a), reduced by the
sum of any allocations of annual additions made to the Participant's Accounts
under any such other Plan.

(f) For purposes of this Section, a Participant's
"Section 415 Compensation" shall include any amounts earned by such Participant
from the Employer or from any member of the Controlled Group or Affiliated
Service Group which maintains a plan which is qualified under Section 401(a) of
the Code.

(g) If, as a result of the allocation of
forfeitures, a reasonable error in estimating a Participant's "Section 415
Compensation," a reasonable error in determining the amount of elective
deferrals (within the meaning of Code Section 402(g)(3)) that may be made with
respect to any individual under limits of Section 415, or under other limited
facts and circumstances which the Commissioner may determine, the annual
additions exceed the maximum limitation, the excess amount will be reduced in
the following order of priority:

(i) Any Elective Deferrals and
nondeductible Employee Contributions, to the extent they would reduce the
excess amount, will be returned to the Participant. Such amounts shall be
disregarded for purposes of Code Section 402(g), the actual deferral percentage
test of Code Section 401(k)(3), and the actual contribution percentage test of
Code Section 401(m).

(ii) If an excess amount remains, and the
Participant is covered by the Plan at the end of the Limitation Year, the
excess amount in the Participant's account shall be used to reduce Employer
Contributions (including any allocation of forfeitures) for such Participant in
the next Limitation Year, and each succeeding Limitation Year if necessary. If
the Participant is not covered by the Plan at the end of a Limitation Year, the
excess amount shall be held unallocated in a suspense account. The suspense
account shall be applied to reduce future Employer Contributions for all
remaining Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary.

(iii) If a suspense account is in
existence at any time during a Limitation Year pursuant to this Section, it
will not participate in the allocation of the Trust's investment gains and
losses. If a suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be allocated and
reallocated to Participants' accounts before any Employer or any Employee
Contributions may be made to the Plan for that Limitation Year. Excess amounts
may not be distributed to Participants or former Participants.

(iv) In the event the Plan is terminated,
the Annual Addition Suspense Account shall be returned to the Employer to the
extent it may not then be allocated to any Participant's Account.

(v) In the event Employer has another
Qualified Plan in addition to the Plan, a Participant's Employer Contribution
Account in the other plan may first be reduced in accordance with said plan.

7.5 Contribution and Benefit Limits for Multiple Plans.
If an Employee is a Participant in this Plan and in a defined benefit pension
plan, as defined in Section 414(j) of the Code, maintained by the Employer, the
sum of such Participant's "defined contribution plan fraction" and his "defined
benefit plan fraction" shall not exceed 1.00. In the event the sum of such
fraction exceeds 1.00,

27
<PAGE> 34

the Administrator shall reduce the annual additions under this Plan in order
that neither plan shall be disqualified.

(a) For purposes of this Section, and except as
provided in subsections (d) and (e) of this Section, "defined contribution plan
fraction" shall mean the fraction a/b where (a) is equal to the aggregate
annual additions to all defined contribution plans maintained by the Employer
(whether or not terminated), determined as of each Anniversary Date, and (b) is
equal to the sum of the lesser of the following amounts determined for such
Limitation Year and for each prior year of service with the Employer:

(i) the product of 1.25, multiplied by
the dollar limitation under Section 415(c)(1)(A) of the Code) for such year, or

(ii) the product of:

(A) 1.4, multiplied by

(B) twenty-five percent (25%) of
such Participant's "Section 415 Compensation" for such Limitation Year.

(b) "Defined benefit plan fraction" shall mean
the fraction a/b where (a) is equal to the benefit payable under all defined
benefit plans maintained by the Employer (whether or not terminated), and (b)
is equal to the lesser of:

(i) the product of 1.25, multiplied by
the dollar limitation in effect under Section 415(b)(1)(A) of the Code for such
year, or

(ii) the product of:

(A) 1.4, multiplied by

(B) one hundred percent (100%) of
the Participant's average "Section 415 Compensation" for his high three (3)
Limitation Years.

(c) In determining the defined contribution
fraction in subsection (a) hereinabove with respect to Limitation Years
beginning before January 1, 1976:

(i) the aggregate amount taken into
account for purposes of determining the numerator (a), may not exceed the
aggregate amount taken into account for purposes of determining the denominator
(b); and

(ii) the amount taken into account under
subsection (a)(i) hereinabove for any Limitation Year in determining the annual
additions attributable to employee contributions in excess of six percent (6%)
is an amount equal to:

(A) the excess of the aggregate
amount of employee contributions for all Limitation Years beginning before
January 1, 1976, during which the employee was

28
<PAGE> 35

an active Participant in the Plan, over ten percent (10%) of the employee's
aggregate Compensation for all such Limitation Years, multiplied by:

(B) a fraction, the numerator of
which is 1 and the denominator of which is the number of Limitation Years
beginning before January 1, 1976, during which the employee was an active
Participant in the Plan.

(d) For Plans in existence on or before July 1,
1982, at the election of the Plan Administrator, in applying the provisions of
subsection (a) of this Section hereinabove with respect to any Limitation Year
ending after December 31, 1982, the amount taken into account in determining
the denominator, (b), of the defined benefit plan fraction with respect to each
Participant for all Limitation Years ending before January 1, 1983, shall be an
amount equal to the product of:

(i) the amount determined as the
denominator under subsection (a)(i) and (ii) for the Limitation Year ending in
1982, multiplied by:

(ii) the "transition fraction". For
purposes of this section, the term "transition fraction" shall mean a
fraction--

(A) the numerator of which is the
lesser of (1) $51,875, or (2) 1.4 multiplied by twenty-five percent (25%) of
the Compensation of the Participant for the Limitation Year ending in 1981, and

(B) the denominator of which is the
lesser of (1) $41,500, or (2) twenty-five percent (25%) of the compensation of
the Participant for the Limitation Year ending in 1981.

(e) Notwithstanding anything in this Section to
the contrary, and, except as provided in subsection (f) of this Section, for
any Plan Year in which the Plan is determined to be a Top-Heavy Plan, this
section shall be applied by:

(i) substituting the number "1.00" for
the number "1.25" wherever it appears herein, except that such substitution
shall not have the effect of reducing any benefit accrued under a defined
benefit plan prior to the first day of the Plan Year in which this subsection
(e) becomes applicable; and

(ii) substituting the figure $41,500 for
the figure $51,875 in determining the transition fraction of subsection
(d)(ii).

(f) The requirement of subsection (e)(i)
hereinabove shall not apply to the Plan if

(i) "Ninety percent (90%)" is
substituted for "sixty percent (60%)" in Section 10.2 hereof, and the Plan, if
after taking into account this modification, would not be a Top-Heavy Plan as
determined thereunder; and

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<PAGE> 36

(ii) The Plan provides a contribution not
less than 7 1/2% with respect to any Participant who is also a Participant in
the paired defined benefit plan and a contribution of not less than 4% for any
Participant who is not a Participant in the paired defined benefit plan.

(g) Transition Rules. If the Plan satisfied the
applicable requirements of Section 415 of the Code for its last Plan Year
beginning before January 1, 1987, an amount shall be subtracted from the
numerator of the defined contribution fraction (not exceeding the numerator) as
prescribed by the Secretary of the Treasury so that the sum of the defined
benefit plan fraction and defined contribution plan fraction computed under
Section 415(e)(1) of the Code does not exceed 1.00 for such Plan year. The
Annual Addition for any Plan Year beginning before January 1, 1987 shall not be
recomputed for purposes of Section 415(e) of the Code.

(h) Permitted Disparity for Multiple Plans. All
defined contribution excess plans maintained (or ever maintained) by the
Employer are treated as a single defined contribution excess plan subject to
one defined contribution maximum excess allowance. If the maximum disparity
permitted is less than 5.7% due to an integration level less than the Taxable
Wage Base, the sum of the two defined contribution plans' disparities shall not
exceed such adjusted rate. The maximum excess allowance in this Profit Sharing
Plan shall be reduced in the event this paragraph becomes applicable.

ARTICLE VIII

BENEFITS

8.1 Participant's Rights and General Rules.
Notwithstanding anything in this Plan to the contrary, a Participant shall not
have a right to receive his Accrued Benefit or any of the assets held in the
Trust Fund except in accordance with the terms and provisions of ARTICLE VIII.
The Accrued Benefit and assets of a Participant reflected in his Elective
Deferral Account, Qualified Discretionary Employer Contribution Account and
Qualified Employer Matching Contribution Account shall not be distributed to a
Participant or Beneficiary before one of the following events:

(a) The Employee's retirement, death, Disability
or separation from service.

(b) The termination of the Plan without the
establishment of a successor plan as described in Section 16.3 of the Plan and
as limited by such Section. Distributions due to the occurrence of this event
shall be made in a lump sum.

(c) The disposition by the Employer to an
unrelated corporation of substantially all of the assets (within the meaning of
Section 409(d)(3) of the Code) used in a trade or business of the Employer if
the Employer continues to maintain the Plan after the disposition, but only
with respect to Employees who continue employment with the corporation
acquiring such assets. Distributions due to the occurrence of this event shall
be made in a lump sum.

(d) The disposition by the Employer to an
unrelated entity of the Employer's interest in a subsidiary (within the meaning
of Section 409(d)(3) of the Code) if the Employer continues to maintain the
Plan, but only with respect to Employees who continue employment with such
subsidiary. Distributions due to the occurrence of this event shall be made in
a lump sum.

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<PAGE> 37

8.2 Normal Retirement Benefit. A Participant who attains
his Normal Retirement Age shall have a normal retirement benefit equal to his
Accrued Benefit. Subject to the provisions of Section 8.3 hereinbelow, payment
of his normal retirement benefit shall commence as soon as administratively
possible following the end of the Plan Year during which he attains his Normal
Retirement Age.

8.3 Deferred Retirement Benefits. If a Participant
continues to be employed by the Employer after he has attained his Normal
Retirement Age, such Participant shall continue to share in the allocation of
contributions and forfeitures in accordance with ARTICLE VII, and payment of
such Participant's normal retirement benefit shall be deferred until actual
termination of employment. Payment shall commence as soon as administratively
possible following such termination, provided the Participant may elect to
defer distribution until the end of the Plan Year during which such event
occurs. In no event shall benefit payments be delayed beyond a Participant's
required beginning date set forth in this ARTICLE, nor is this Section intended
to provide any Participant with a right to continue in the employ of Employer.

8.5 Death Benefit. A Participant who dies shall have a
benefit equal to his Accrued Benefit. Payment of such benefit shall be in
accordance with this Article and shall commence as soon as administratively
possible following the end of the Plan Year during which the death of the
Participant occurs.

(a) Unless otherwise elected as provided below,
the Beneficiary of a Participant's death benefit shall be the Participant's
spouse. The Participant may designate a Beneficiary other than his spouse if:

(i) the Participant and his spouse
validly waive the spouse's right to be the Participant's Beneficiary and the
spouse consents to the designated alternative beneficiary. Such waiver and
consent must be in writing and signed by both the Participant and the
Participant's spouse and witnessed by a Plan representative or notary public;
or

(ii) the Participant has no spouse and
can establish such fact to the satisfaction of a Plan representative; or

(iii) the spouse cannot be located and the
Participant can establish such fact to the satisfaction of a Plan
representative.

(b) Any consent by a spouse (or the establishment
that the consent of the spouse may not be obtained) under subparagraph (a)
above shall be effective only with respect to such spouse. Additionally, a
Participant may revoke a prior waiver without the consent of the spouse at any
time prior to the commencement of benefits. The number of revocations shall
not be limited.

8.6 Benefit Upon Other Termination of Employment. A
Participant who terminates employment, whether voluntarily or involuntarily,
for any reason other than attainment of Normal

31
<PAGE> 38

Retirement Age, Disability, death or deferred retirement, shall be entitled to
his Vested Accrued Benefit in accordance with Article IX hereof. Payment of
such Vested Accrued Benefit shall be in accordance with this Article and shall
commence as soon as administratively possible following the end of the Plan
Year during which the Participant separates from service.

8.7 Method of Distribution. Distributions made in the
event of termination of employment for any reason shall be made under one of
the following options as elected by the Participant:

(a) In one lump sum.

(b) In periodic payments of substantially equal
amounts for a specified number of years, not in excess of fifteen (15).

8.8 General Consent Rules.

(a) The Administrator will distribute the present
value of a Participant's Vested Accrued Benefit without the consent of the
Participant if such value does not exceed Three Thousand Five Hundred Dollars
($3,500.00). If such value exceeds $3,500 (or has ever exceeded $3,500 at the
time of any prior distribution), and such benefit is immediately distributable,
such benefit may not be distributed without the consent of the Participant.
Any written consent required under this Section shall be obtained at least 30
but not more than 90 days prior to the Participant's Annuity Starting Date. A
Participant's Vested Accrued Benefit is considered immediately distributable if
any part of the benefit could be distributed to the Participant (or surviving
spouse) before the Participant attains (or would have attained if not deceased)
the later of his Normal Retirement Age or age 62.

(b) If a distribution is one to which Sections
401(a)(11) and 417 of the Code do not apply, such distribution may commence
less than 30 days after the notice required under Section 1.411(a)-11(c) of the
Income Tax Regulations is given, provided that:

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

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

8.9 Statutory Commencement of Benefits. Payment of a
Participant's Accrued Benefit must commence not later than the sixtieth (60th)
day after the close of a Plan Year in which the latest of the following events
occurs:

(a) The attainment by the Participant of his
Normal Retirement Age;

(b) The tenth (10th) anniversary of the date on
which the Participant commenced participation in the Plan; or

32
<PAGE> 39

8.10 General Rules for Required Distributions.

(a) The following shall apply to any distribution
of a Participant's interest and shall take precedence over any inconsistent
provisions of the Plan. Unless otherwise specified, the provisions of this
Section apply to calendar years beginning after December 31, 1984.

(b) All distributions required under this Article
shall be determined and made in accordance with the Income Tax Regulations
under IRC 401(a)(9), including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the Regulations.

(c) Distributions shall be made in a form under
which the present value of the retirement benefit projected to be made to the
Participant, while living, is more than fifty percent (50%) of the present
value of the total payments projected to be made to the Participant and the
Participant's Beneficiary.

(d) Notwithstanding the requirements of this
Section, a Participant who duly and properly made an Election of the Time and
Distribution of Retirement Plan Benefits as provided for in Section 242(b)(2)
of the Tax Equity and Fiscal Responsibility Act of 1982 may receive his
distribution in accordance with such election, provided: (1) the distribution
is one which would not have disqualified the trust under Section 401(a)(9) of
the Code as in effect on December 31, 1983, (2) the election was in writing and
signed by the Participant or Beneficiary prior to January 1, 1984, (3) the
Participant had accrued a benefit under the Plan as of December 31, 1983, and
(4) the election satisfies IRC 401(a)(11) and 417, provided, however, that
payments pursuant to such election would not subject the distribution to the
annuity requirements of Sections 401(a)(11)(A) and 417 of the Code.

8.11 Required Beginning Date.

(a) General Rule. For Plan Years beginning after
December 31, 1987, payment of the Accrued Benefit of a Participant must
commence not later than the April 1 of the calendar year following the calendar
year in which the Participant attains age 70-1/2.

(b) Transitional Rules. The required beginning
date of a Participant who attains age 70-1/2 before January 1, 1988, shall be
determined in accordance with (i) or (ii) below:

(i) Non-Five Percent (5%) Owners. The
required beginning date of a Participant who is not a five percent (5%) owner
is the April 1 of the calendar year following the calendar year in which the
later of retirement or attainment of age 70-1/2 occurs.

(ii) Five Percent (5%) Owners. The
required beginning date of a Participant who is a five percent (5%) owner
during any year beginning after December 31, 1979, is the April 1 following the
later of:

(A) the calendar year in which the
Participant attains age 70-1/2; or

(B) the earlier of the calendar
year with or within which ends the Plan Year in which the Participant becomes a
5% owner, or the calendar year in which the Participant retires.

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<PAGE> 40

(iii) The required beginning date of a
Participant who is not a 5% owner who attains age 70-1/2 during 1988 and who
has not retired as of January 1, 1989, is April 1, 1990.

(iv) Once distributions have begun to a
5% owner under this Section, they must continue to be distributed, even if the
Participant ceases to be a 5% owner in a subsequent year.

8.12 Statutory Distributions Upon Death.

(a) If a Participant dies prior to the Annuity
Starting Date, the nonforfeitable portion of the Participant's Accrued Benefit
shall be distributed in its entirety prior to the December 31 of the calendar
year containing the fifth anniversary of the Participant's death, except to the
extent that an election is made to receive distributions in accordance with (i)
or (ii) below:

(i) If any portion of the Participant's
Vested Accrued Benefit is payable to (or for the benefit of) a specifically
designated Beneficiary, distributions may be made over the life of such
Beneficiary (or over a period not extending beyond the life expectancy of such
Beneficiary), commencing on or before the December 31 immediately following the
calendar year in which the Participant died (or such later date as may be
prescribed by regulations);

(ii) If the Beneficiary is the
Participant's spouse, distributions must commence on or before the later of (1)
the December 31 immediately following the calendar year in which the
Participant died and (2) December 31 of the calendar year in which the deceased
Participant would have attained age seventy and one-half (70- 1/2). If the
surviving spouse dies before the distribution begins, then the requirements of
this Section shall apply as if the spouse were the Participant.

(b) If the Participant has not made an election
pursuant to Subparagraph (a) above by the time of his death, the Participant's
designated beneficiary must elect the method of distribution no later than the
earlier of (1) December 31 of the calendar year in which distributions would be
required to begin under this Section, or (2) December 31 of the calendar year
which contains the fifth anniversary of the date of death of the Participant.
If the Participant has no designated beneficiary, or if the designated
beneficiary does not elect a method of distribution, distribution of the
Participant's entire interest must be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death.

(c) For purposes of this Section, the life
expectancy of the Participant and his spouse (other than in the case of a life
annuity) may be re-determined, but not more frequently than annually. In
addition, under regulations prescribed by the Secretary, for purposes of this
Section, any amount paid to a child of the Participant shall be treated as if
it had been paid to the surviving spouse, if such amount will become payable to
the surviving spouse upon such child reaching majority (or other designated
event permitted under regulations).

(d) Upon the death of a former Participant who
was receiving payments from the Trustee at the time of his death, payments may
continue in accordance with the option selected, or may be made to the
Beneficiary under any other option which provides for payments which are at
least as rapid as under the method of distribution as of the date of the
Participant's death.

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<PAGE> 41

8.13 Location of Participants and Beneficiaries.

(a) It is the duty of Participants who have
terminated employment, or Beneficiaries of Participants, to keep the
Administrator informed as to their correct address. If a participant or
Beneficiary fails to inform the Administrator in writing of a change of address
and if the Administrator is unable to locate such Participant or Beneficiary by
reasonable means, the Administrator shall notify the Participant or Beneficiary
of available benefits by registered mail at the last address noted on the
records of the Administrator. If the delivery of the notice by registered mail
is refused or returned with address unknown, any benefits due such Participant
or Beneficiary shall be segregated into a federally insured savings account for
the benefit of the Participant or Beneficiary. The segregated account shall
not share in the earnings and losses in the fair market value of the assets
held in the Trust Fund. The Administrator shall determine earnings and losses
in the fair market value of the assets held in the segregated account and shall
allocate such earnings and losses to the segregated account. Such benefit
shall remain in the segregated account until distributed in accordance with the
Lost or Unclaimed Property Laws of the State in which the Plan Sponsor is
domiciled.

(b) If the Plan has terminated and the
Administrator is unable to locate a Participant or Beneficiary using the means
described in (a) above, the Administrator shall establish a savings account for
the benefit of the Participant or Beneficiary at a federally insured banking
institution within the geographic vicinity in which the Employer is located.
Any benefits due such Participant or Beneficiary shall be deposited in said
savings account at the same time distributions are otherwise allowed under the
Plan termination procedures. Such benefit shall remain in the savings account
until distributed in accordance with the Lost or Unclaimed Property Laws of the
State where the account is maintained.

8.14 Payments for the Benefit of Incompetents. If the
Administrator receives evidence that (a) a Participant or Beneficiary entitled
to receive any payment under the Plan is a minor or is otherwise physically or
mentally incompetent to receive such payment and to give a valid release
therefor, and (b) another person or institution is then maintaining or has
custody of such person, and no guardian, committee or other representative of
the estate of such person has been duly appointed by a court of competent
jurisdiction, payment may be made to such other person or institution, and the
release of such other person or institution shall be valid in a complete
discharge for the payment.

ARTICLE IX

VESTING

9.1 Requirements.

(a) A Participant's Accrued Benefit derived from
Employer contributions shall be fully Vested upon the earlier of: (1)
attainment of Normal Retirement Age, (2) the later of age 65 or the 5th
anniversary of the time the Participant commenced participation in the Plan,
(3) total and permanent disability of such Participant, or (4) death of the
Participant.

(b) In the event the employment of a Participant
is terminated, whether voluntarily or involuntarily, with or without cause on
his part, prior to his Normal Retirement Age, for any reason other than death
or permanent and total disability, a Participant shall have a Vested interest
in his Accrued Benefit derived from Employer contributions in accordance with
the following schedule:

35
<PAGE> 42

<TABLE>
<CAPTION>
Years of Credited Service Vested Percentage
------------------------- -----------------
<S> <C>
less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
</TABLE>

(c) The Accrued Benefit derived from Elective
Deferrals, Qualified Discretionary Employer Contributions and Qualified
Employer Matching Contributions shall be fully Vested at all times.

(d) Notwithstanding the provisions of this
Section, Employer Matching Contributions and Qualified Employer Matching
Contributions (if accrued) shall be forfeited if the contributions to which
they relate are treated as Excess Deferrals, Excess Contributions or Excess
Aggregate Contributions.

(e) A Participant's Vested percentage in his
Accrued Benefit, derived from Employer contributions, as of the later of the
adoption date or Effective Date of this Amendment, shall not be reduced by this
or any Amendment to the Plan.

9.2 Cash-Out; Buy-Back.

(a) If a Participant terminates participation in
the Plan and thereafter is re-employed and again becomes eligible to
participate in the Plan, the following Years of Credited Service shall be
disregarded for purposes of determining the Accrued Benefit of such
Participant; but shall be taken into account for purposes of such Participant's
eligibility and vesting upon re-employment:

(i) Years of Credited Service with
respect to which he has received a distribution of the present value of his
Vested Accrued Benefit if such distribution does not exceed $3,500 (or any
lesser sum as may be established by regulations promulgated by the Secretary of
the Treasury as the maximum amount that may be paid out in such event without
the Participant's consent); or

(ii) Years of Credited Service with
respect to which he has received a distribution of his Vested Accrued Benefit
attributable to such Years of Credited Service, which he elected to receive.

(b) A Participant who has received a distribution
of his Vested Accrued Benefit, as described hereinabove in subparagraph (a) of
this Section, may repay the amount of such distribution to the Trust Fund,
provided

(i) such Participant is subsequently re-employed
by Employer; and

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<PAGE> 43

(ii) repayment is made before the earlier
of 5 years after the first date on which the Participant is subsequently
re-employed, or the close of the period in which the Employee incurs five (5)
consecutive 1-year Breaks In Service following the date of distribution.

(c) Upon such repayment, he shall be credited on
the vesting schedule with all Years of Credited Service prior to his Break In
Service, and the Employer shall make a contribution to his Employer
Contribution Account as required by Section 6.8. Immediately after such
repayment, his Accrued Benefit shall, in no event, be less than his Accrued
Benefit immediately prior to termination of employment.

(d) A Participant who has been deemed to receive
a zero cash-out distribution per Section 9.3 below and who is re-employed
before incurring five (5) consecutive 1-year Breaks In Service following the
date of distribution is deemed to have repaid the zero distribution and shall
be credited on the vesting schedule with all Years of Credited Service prior to
his Break In Service, and the non-vested portion of his Accrued Benefit shall
be restored immediately upon re-employment. Immediately after such deemed
repayment, his Accrued Benefit shall, in no event, be less than his Accrued
Benefit immediately prior to termination of employment.

9.3 Forfeitures. Notwithstanding the provisions of
Section 9.2 hereinabove, upon termination of employment, the portion of a
Participant's Accrued Benefit derived from Discretionary Employer Contributions
and Employer Matching Contributions which are not Vested shall be forfeited
upon the earlier of a cash-out distribution to the Participant or when such
Participant incurs five (5) consecutive Breaks-In-Service. Forfeitures shall
be used to reduce Employer Discretionary and Employer Matching contributions
during the Plan Year in which such forfeitable event occurs according to
Section 7.1(e). For purposes of this Section, a Participant who terminates
employment with a zero Vested Accrued Benefit shall be deemed to have received
a cash-out distribution as of the date on which he separates from service.

9.4 Computation of Years of Credited Service. For
purposes of computing Years of Credited Service under the Plan to determine the
Vested percentage under Section 9.1, all of an Employee's Years of Credited
Service shall be taken into account, except that the following Years of
Credited Service shall be excluded:

(a) In the case of any Participant who has a
Break In Service, Years of Credited Service before such Break shall not be
required to be taken into account until he has completed one (1) Year of
Credited Service after his return.

(b) In the case of a Participant who has 5 or
more consecutive 1-year Breaks In Service, the Participant's pre-break service
will count in vesting of his employer-derived Accrued Benefit only if either:

(i) such Participant has any Vested
interest in his or her employer-derived Accrued Benefit at the time of
separation from service; or

(ii) upon returning to service the number
of consecutive 1-year Breaks In Service is less than the number of Years of
Credited Service.

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<PAGE> 44

(c) In the case of a Participant who has 5
consecutive 1-year Breaks In Service, all Years of Credited Service after such
Breaks In Service will be disregarded for the purpose of vesting the
employer-derived Accrued Benefit that accrued before such Breaks, but both
pre-break and post-break service will count for the purposes of vesting the
employer-derived Accrued Benefit that accrues after such Breaks. Separate
accounts will be maintained for the Participant's pre-break and post-break
employer-derived Accrued Benefit pursuant to Section 7.3 hereof. Both accounts
will share in the earnings and losses of the Trust Fund.

(d) In the case of a Participant who does not
have 5 consecutive 1-year Breaks In Service, both the pre-break and post-break
service will count in vesting both the pre-break and post-break
employer-derived Accrued Benefit.

(e) Years of Credited Service before the
Participant attained age eighteen (18).

9.5 Hours of Service Requirement. A Participant who has
more than five hundred (500) Hours of Service but less than one thousand
(1,000) Hours of Service in any Plan Year and who has not separated from the
service of Employer shall not advance on the vesting schedule.

ARTICLE X

TOP-HEAVY PLAN

10.1 Top-Heavy Requirements. For any Plan Year in which
the Plan is determined to be a Top-Heavy Plan as determined in accordance with
Section 10.2 hereof, the allocable share of the Employer contribution for each
Participant who is a non-key employee shall not be less than the lesser of:
(i) three percent (3%) of such Participant's Compensation, or (ii) the largest
percentage of the Employer contribution made (or required to be made),
including salary deferrals, for any Key Employee for such Plan Year. For
purposes of this subparagraph, Compensation shall mean a Participant's
compensation which would be included on his Federal W-2 Form for the Plan Year
for which the contribution is made.

10.2 Top-Heavy Determination.

(a) The Plan shall be considered a Top-Heavy Plan
and shall be subject to the additional requirements of Section 10.1
hereinabove, with respect to any Plan Year, if, as of the Anniversary Date of
the preceding Plan Year or in the case of the first Plan Year, the Anniversary
Date of such Plan Year (hereinafter referred to as the "Determination Date")
either:

(i) the Sum of the Value of the
Aggregate Accounts of Key-Employees exceeds sixty percent (60%) of a similar
sum determined for all Employees, excluding former Key-Employees, (the "60%
Test"); or

(ii) the Plan is part of a Required
Aggregation Group, and the sum of the Present Value of Accrued Benefits and the
Value of the Aggregate Accounts of Key-Employees in all Plans in such Group
exceeds sixty percent (60%) of a similar sum determined for all Employees,
excluding former Key-Employees.

38
<PAGE> 45

(b) For purposes of this Section 10.2, the
Aggregate Account of an Employee as of the Determination Date is the sum of:

(i) a Participant's Accounts holding
contributions made by the Employer pursuant to Section 6.2 hereinabove as of
the Determination Date adjusted for any contributions due as of the
Determination Date, and further adjusted by including any Plan distributions
made within the Plan Year that includes the Determination Date or within the
preceding four (4) Plan Years; and

(ii) a Participant's non-deductible
Employee Contribution Account, if any; and

(iii) a Participant's Unrelated Pre-TEFRA
Rollover Account; and

(iv) a Participant's Related Rollover
Account.

(v) a Participant's Rollover Account -
Self-Employed, if any.

(vi) The aggregate of any Plan
distributions made within the Plan Year that includes the Determination Date or
within the preceding four (4) Plan Years from a Qualified Plan of the Employer
which has been terminated, which, if it had not been terminated, would have
been required to be included in a Required Aggregation Group.

(c) For purposes of this Section, Present Value
of Accrued Benefits shall be determined, in the case of a defined benefit
pension plan, under the provisions of such a plan or plans.

(d) Notwithstanding the provisions of subsection
(a) hereinabove, the Plan shall not be a Top-Heavy Plan, if the Administrator
elects to treat the Plan as part of a Permissive Aggregation Group, and the
Permissive Aggregation Group is not determined to be Top-Heavy using the
criteria of the "60% Test" hereinabove.

(e) Only those plans in which the Determination
Dates fall within the same calendar year shall be included in a Required or a
Permissive Aggregation Group in order to determine whether the Plan is a
Top-Heavy Plan.

(f) For Plan Years beginning after December 31,
1984, if a Participant or former Participant (a Participant who no longer
shares in contributions or forfeitures and/or no longer accrues a benefit for a
Plan Year) has not performed any services for the Employer maintaining the Plan
at any time during the five year period ending on the Determination Date, the
Aggregate Account and/or Present Value of Accrued Benefit for such Participant
shall not be taken into account for purposes of subsection (a) hereinabove.

(g) For Plan Years beginning after December 31,
1986, solely for the purpose of determining if the Plan, or any other plan
included in a required or permissive aggregation group of which this Plan is a
part, is top-heavy (within the meaning of Section 416(g) of the Code) the
Accrued Benefit of an Employee other than a key employee (within the meaning of
Section 416(i)(1) of the Code) shall be determined under (a) the method, if
any, that uniformly applies for accrual purposes under all plans maintained by
the Affiliated Employers, or (b) if there is no such method, as if such benefit
accrued

39
<PAGE> 46

not more rapidly than the slowest accrual rate permitted under the fractional
accrual rate of Section 411(b)(1)(C) of the Code.

ARTICLE XI

ROLLOVER CONTRIBUTIONS

11.1 Direct Rollovers by Employees. This Section 11.1
applies to distributions made on or after January 1, 1993. Notwithstanding any
provisions of the Plan to the contrary that would otherwise limit a
Distributee's election under this Section, a Distributee may elect, at the time
and in the manner prescribed by the Plan Administrator, to have any portion of
an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a direct rollover.

11.2 Definitions. For purposes of this ARTICLE XI, the
following definitions shall apply:

(a) "Eligible Rollover Distribution" shall mean
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 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 Section 401(a)(9) of the Code; and the portion
of any distribution that is not includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
Employer securities).

(b) "Eligible Retirement Plan" shall mean an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement annuity.

(c) "Distributee" shall mean an Employee or
former Employee. In addition, the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the Code, are Distributees with regard
to the interest of the spouse or former spouse.

(d) "Direct Rollover" shall mean a payment by the
Plan to the Eligible Retirement Plan specified by the Distributee.

11.3 Rollovers Other than Direct Rollover. An Employee
may transfer to the Plan all or any portion of the proceeds received from
another Qualified Plan (the "Other Plan"), including a plan in which the
Employee was an employee within the meaning of Section 401(c)(1) of the Code,
in accordance with procedures established by the Administrator, provided the
transfer occurs on or before the sixtieth (60th) day following receipt of the
distribution by the Employee from the Other Plan, and, if the proceeds received
from the Other Plan were received by the Employee as a partial distribution,
such distribution must qualify under Section 402(a)(5)(D) of the Code, or,
provided the transfer is directly made from an Individual Retirement Account
(as defined in Section 408(a) of the Code) which held only

40
<PAGE> 47

the proceeds from such Other Plan and which were transferred to the Individual
Retirement Account on or before the 60th day following receipt of the
distribution by the Employee from the Other Plan.

11.4 Direct Rollovers From Other Plan. If an Employee is
entitled to an Eligible Rollover Distribution of his accrued benefit in another
Qualified Plan (the "Other Plan) maintained by the Employer or by the
Employee's former employer, the Employee may effect a Direct Rollover of such
accrued benefit (or any portion thereof) to the Plan.

11.5 Procedures and Information. The Administrator shall
develop such procedures and may require such other information from an Employee
desiring to make (or to have made) such rollover or transfer as described in
this Article as it deems necessary or desirable to determine that the proposed
transfer will meet the requirements of this Article and of the Code.

11.6 Allocations to Rollover Account. Upon approval by
the Administrator, the amount transferred shall be deposited in the Trust Fund
and shall be allocated to the Employee's Rollover Account and invested together
with the assets of the Trust Fund as a whole, and allocations of earnings and
losses shall be determined in accordance with ARTICLE VII hereof.

11.7 Vesting of Rollover Account. An Employee's Rollover
Account shall be fully Vested at all times.

11.8 Distributions of Rollover Account. When a
Participant terminates his employment with the Employer upon retirement, death
or disability, or when the Plan is terminated, the total amount in his Rollover
Account shall be distributed to him in accordance with ARTICLE VIII.

11.9 Eligible Employees. An Employee shall be eligible
to make or direct the transfers permitted in this ARTICLE even though he is not
eligible to participate in the Plan as required by ARTICLE V.

ARTICLE XII

LOANS TO PARTICIPANTS

12.1 Requirements. The Plan Administrator is authorized
to establish and administer the loan program set forth in this Article and to
direct the Trustee to make loans to Participants and Beneficiaries, provided
the loan or loans are made according to a uniform and non-discriminatory policy
adopted by the Administrator and in accordance with all of the following
requirements:

(a) Loans are available to all Participants and
Beneficiaries on a reasonably equivalent basis, provided that loans shall not
be made available to highly compensated employees (as defined in Section 414(q)
of the Code) in an amount greater than the amount made available to other
Employees, and further provided that no loans shall be made to any
owner-employee (as defined in Section 4975(d) of the Code).

(b) The Participant shall request from the
Administrator a loan application form, such form to be completed by the
Participant and returned to the Administrator.

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<PAGE> 48

(c) The total amount of the loan (when added to
the outstanding balance of all other loans to the Participant from such Plan)
may not exceed the lesser of:

(i) $50,000, reduced by the excess of --
(I) the Participant's highest loan(s) balance during the 12-month period ending
on the day before the new loan is made, OVER (II) such Participant's
outstanding balance of loans on the date the new loan is made.

(ii) one-half (1/2) of the present value
of the Participant's non-forfeitable accrued benefits in the Plan.

(d) The loan shall be evidenced by a promissory
note which provides for a reasonable rate of interest. The rate of interest
shall be that charged under similar facts and circumstances by a local major
lending institution, such institution to be selected by the Administrator and
utilized consistently for purposes of determining Participant loan interest
rates.

(e) All loans shall be secured by collateral
which, in the sole judgment of the Trustee, is satisfactory. Up to fifty
percent (50%) of a Participant's Vested Accrued Benefit, on the date of the
loan, may serve as adequate security for a loan or loans. If Section
401(a)(11) of the Code applies to the Participant's account used as security,
the spouse of the Participant (if any) must consent in writing during the
ninety (90) day period ending on the date on which the loan is to be so
secured. A new consent shall be required if the account balance is used for
renegotiation, extension, renewal, or other revision of the loan.

(f) The period of repayment shall be determined
by the mutual agreement of the Trustee and Participant, but in no event shall
the total period of repayment exceed five (5) years, unless such loan is used
to acquire any dwelling unit which, within a reasonable time after acquisition,
is to be used (determined at the time the loan is made) as a principal
residence of the Participant.

(g) Substantially level payments (not less
frequently than quarterly) are required over the term of the loan.

(h) If any Participant desires to prepay any
payments of the principal, such prepayments shall be applied either to
eliminate the next maturing payments under the Note or such prepayments shall
be applied on the Note in the inverse order of maturity, as the Trustee shall
determine, on a non-discriminatory basis. Interest shall be adjusted at the
time the note is fully paid.

(i) The Administrator may, through a uniform and
non-discriminatory loan policy, establish additional requirements, including,
but not limited to, a minimum loan amount (not to exceed $1,000), a processing
fee charged to Participants, and the number of loans that may be outstanding at
one time.

12.2 Default. In the event a Participant should default
in the repayment of any part of the interest or principal which may be due
thereon, the Administrator may deduct the amount due and payable from his
Accrued Benefit at such time as the Participant may become entitled to the
Accrued Benefit, and any other security which is pledged shall be sold as soon
as practical after default by the Trustee at private or public sale. The
proceeds of such sale shall be applied first to pay the expenses of

42
<PAGE> 49

conducting the sale, including reasonable attorney's fees, and then to pay such
sums due from the Participant to the Trust Fund under the loan arrangement,
which such payment to apply first to accrued interest and then to principal.
The Participant shall remain liable for any deficiency and any surplus
remaining shall be paid to the Participant.

12.3 Loans as Directed Investments. All loans shall be
considered directed investments of a Participant's Accrued Benefit and any
interest earned thereon shall be considered interest earned by the directed
investment account to be allocated pursuant to the provisions of Section 7.1(b)
hereinabove.

ARTICLE XIII

DESIGNATED INVESTMENTS

13.1 Written Direction. The Trustee shall establish
separate investment pools within the Trust Fund. Each pool will have a
different investment strategy and philosophy. The Trustee may, from time to
time, modify the investment strategy and philosophy of the pools and create
additional pools or eliminate existing pools. Subject to the limitation of
this Section, each Participant must direct the Trustee, in writing, to invest
his Accrued Benefit into one or more pools. The Administrator shall establish
procedures and provide forms and information as may be necessary to implement
the provisions of this ARTICLE.

13.2 Information Provided to Participants. The
Administrator shall establish procedures to provide periodic information, not
less frequently than annually, to a Participant which reflects the portion of
his Accrued Benefit invested in each pool according to the Participant's
direction.

ARTICLE XIV

ADOPTION OF PLAN BY PARTICIPATING EMPLOYERS

14.1 Right of Participating Employers to Participate.

(a) A corporation, partnership or proprietorship
(hereinafter referred to as a "Participating Employer"), may adopt and
participate in the Plan if such corporation, partnership or proprietorship is a
controlled group of corporations (as defined in Code Section 414(b)), trades or
businesses (whether or not incorporated) which are under common control (as
defined in Code Section 414(c)), an affiliated service group (as defined in
Code Section 414(m) or (o)) or any recipient (as defined in Code Section
414(n)) to whom Employer leases employees, and the Plan Administrator approves
such adoption and participation.

(b) Adoption of the Plan by a Participating
Employer shall be evidenced by written action of the Participating Employer
either in the form of a written resolution of such Board or a separate
agreement executed by a duly authorized officer of such Participating Employer
(or in the case of a partnership or proprietorship written authorization of a
general partner or the proprietor) wherein it is agreed that the Participating
Employer adopts the Plan and agrees to be bound by all the terms and provisions
of the Plan. In addition, such Participating Employer shall give written
notice of such adoption to the Administrator of the Plan.

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<PAGE> 50

(c) Approval of the adoption of the Plan by a
Participating Employer shall be evidenced by written action of the
Administrator and Named Fiduciary wherein they approve adoption of the Plan by
the Participating Employer.

14.2 Participant Accounts. A Participant who is employed
or has been employed by Employer and/or Participating Employer shall have a
separate Employer Contribution Account for Employer and each Participating
Employer to which shall be allocated contributions and forfeitures from
Employer and each Participating Employer together with earnings and losses
thereon.

14.3 Administrative Powers of Plan Administrator. The
administrative powers and control of the Administrator shall not be diminished
under the Plan by reason of the participation of any Participating Employer in
the Plan and such administrative powers and controls specifically granted
herein to the Administrator shall apply only to the Administrator. The right
to amend the Plan shall apply only to the Named Fiduciary.

14.4 Creation of Trust. A Participating Employer shall be
required to appoint the Trustee which has been appointed by the Named Fiduciary
to serve as Trustee of any funds contributed for its Employees and shall
authorize the Named Fiduciary to appoint such successor or co-Trustees as it
deems necessary and advisable. A Participating Employer shall also be required
to make contributions on behalf of its Employees to such Trustee to hold,
invest and maintain pursuant to the terms and provisions of the Trust Agreement
entered into between the Trustee and Employer.

14.5 Transfer of Employment.

(a) For purposes of determining a Year of
Credited Service, a Break in Service and an Hour of Service, the transfer of a
Participant between Employer and any Participating Employer shall not be deemed
a termination of employment.

(b) For purposes of determining participation in
the Plan, all service with Employer and with each Participating Employer shall
be taken into account.

(c) For purposes of determining an Employee's
Years of Credited Service under the Plan, all Years of Credited Service with
Employer and each Participating Employer shall be taken into account.

14.6 Withdrawal of Participating Employers.

(a) A Participating Employer may withdraw from
the Plan by giving written notice of such withdrawal to the Administrator.
Such notice shall contain: (1) the effective date of withdrawal; (2) a
statement whether the withdrawal constitutes a termination of the Plan as to
its Employees; and (3) the disposition to be made of assets held by the Trustee
for the Employees of such Participating Employer.

(b) Employer may require a Participating Employer
to withdraw from the Plan by giving sixty (60) days written notice thereof to
the Administrator and to the President of such Participating Employer (or in
the case of a partnership or proprietorship to a general partner or the
proprietor). Such notice shall contain: (1) the effective date of withdrawal,
and (2) the date the Trustee will release assets held by it for the Employees
of such Participating Employer. Upon receipt of such

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<PAGE> 51

notice, the Participating Employer shall, within thirty (30) days thereafter,
notify the Administrator, in writing, (1) whether it intends to create its own
plan, intends to terminate the Plan for its Employees, or intends to adopt the
plan of another company; and (2) the name and address of the trustee or other
party who is to receive the assets held by the Trustee for the Employees of the
Participating Employer.

(c) Upon withdrawal of a Participating Employer
from the Plan, either under subsection (a) or (b) hereinabove, the
Administrator shall give written notification to the Trustee of such withdrawal
and shall direct the Trustee to transfer and pay over the assets held by the
Trustee for the Employees of the Participating Employer to a successor Trustee
or another party or to the Employees. For purposes of this Section, if the
Employees of the withdrawing Participating Employer cease participation in the
Plan as a result of the withdrawal, the employment of such Employees shall be
terminated. Distribution of the vested account balance of each such Employee
shall be made in the same manner and at the same time as provided in Section
8.6. The non-vested account balance of each such Employee shall be forfeited
in accordance with the provisions of Section 9.3.

(d) If the Participating Employer, which is
required to withdraw under subsection (b) hereinabove, does not cooperate or
fully comply with the terms of subsection (b), then the Administrator may
direct the Trustee to distribute to each Employee of the Participating Employer
his Accrued Benefit in the same manner and at the same time as provided in
Section 8.6. Upon such distribution, the duties, obligations and
responsibilities of the Administrator and Trustee to the Employees of the
Participating Employer shall terminate.

(e) Upon withdrawal by such Participating
Employer, all administration and control which the Employer and the
Administrator had heretofore exercised with respect to such Participating
Employer shall cease and all administration and controls shall be the
responsibility of such withdrawing Participating Employer or the Administrator
appointed by it. The Named Fiduciary and the Administrator shall be relieved
of any further liability therefor.

14.7 Internal Revenue Service Approval of Plan for a
Participating Employer. Promptly upon becoming a Participating Employer, such
Participating Employer may make initial application to the Internal Revenue
Service for approval of the Plan as it pertains to such Participating Employer.
In the event the Internal Revenue Service issues an adverse letter with respect
to such application and determines that the Plan as it pertains to such
Participating Employer fails to qualify under Section 401 of the Code, then the
adoption of the Plan by the Participating Employer shall become null and void,
ab initio. Upon a failure to obtain initial qualification of the Plan, any
contributions made by the Participating Employer to the Trustee shall be
returned to the Participating Employer, to the extent allowed under Section
18.6. If application is not made to the Internal Revenue Service, then, at a
minimum the Participating Employer shall notify the Internal Revenue Service
that its Employees are participating in the Plan.

14.8 Commingled Assets. Notwithstanding anything to the
contrary, it is the intention of the Employer and the Participating Employer
that the Trust Fund shall be available to pay benefits to all of the employees
who are participating in the Plan and their beneficiaries.

14.9 Joint Venture Restriction. Neither the adoption of
this Plan by a Participating Employer nor the act performed by it in relation
to this Plan shall ever create a joint venture or partnership between Employer
and any Participating Employer.

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<PAGE> 52

ARTICLE XV

FIDUCIARY RESPONSIBILITIES

15.1 Allocation of Responsibilities Among Fiduciaries.

(a) Trustee: The Trustee shall have exclusive
responsibility for the control and management of the Trust Fund as provided in
the Trust Agreement and specifically, but not in limitation of its general
authority, investment and reinvestment of the Trust Fund.

(b) Administrator: The Administrator shall have
responsibility and authority to control the operation and administration of the
Plan as specifically set forth in ARTICLE IV of the Plan.

(i) The Employer shall have the
authority and responsibility for (i) the design of the Plan, including the
right to amend the Plan; (ii) the qualification under applicable law of the
Plan, any amendments to the Plan, and any document relating to the Plan; (iii)
the funding of the Plan; (iv) the designation of the Named Fiduciary; (v)
review of disallowed claims of Participants; (vi) appointment of an Investment
Manager; and (vii) the exercise of all fiduciary functions provided in the Plan
or in the Trust Agreement or necessary to the operation of the Plan except such
functions as are assigned to other fiduciaries pursuant to the Plan or Trust
Agreement, including the authority to allocate or delegate fiduciary
responsibilities which do not involve the management and control of the Trust
Fund.

(ii) Any authority assigned or reserved
to the Employer under the Plan and Trust Agreement shall be exercised by
resolution of the Employer's Board and shall become effective, with respect to
the Trustee, upon written notice to the Trustee signed by the President,
Treasurer or Secretary of the Employer advising the Trustee of such exercise.

(iii) The Employer as Named Fiduciary
shall allocate and delegate fiduciary responsibilities by giving written notice
thereof to the Plan Administrator and the Trustee of the responsibilities to be
allocated and the person or persons to whom the responsibilities are to be
allocated. In implementing the procedure for the allocation and delegation of
fiduciary responsibilities, the Employer shall discharge its duties with
respect to such allocation and delegation with the care, prudence and diligence
under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of like character with like aims; and it shall discharge its duties
solely in the interest of the Participants and their Beneficiaries. The
Employer shall make a formal periodic review of the performance of any
fiduciary to whom it allocates or delegates fiduciary responsibilities and of
any person which it employs to render advice in regard to any fiduciary
responsibility which it has under the Plan and Trust Agreement.

15.2 No Joint Fiduciary Responsibilities.

(a) It is intended under the Plan and Trust
Agreement, that the Plan Administrator, Named Fiduciary, Employer and Trustee,
shall be responsible for the proper exercise of their respective powers,
duties, responsibilities and obligations and they shall not be responsible for
any act or failure to act of each other.

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<PAGE> 53

(b) This ARTICLE is intended to allocate to each
fiduciary individual responsibility for the prudent execution of the functions
assigned to him, and none of such responsibilities or any other responsibility
shall be shared by two or more of such fiduciaries unless such sharing shall be
provided by a specific provision of the Plan or Trust Agreement. Whenever one
fiduciary is required by the Plan or Trust Agreement to follow the directions
of another fiduciary, the two fiduciaries shall not be deemed to have been
assigned a shared responsibility, but the responsibility of the fiduciary
giving the directions shall be deemed his sole responsibility, and the
responsibility of the fiduciary receiving those directions shall be to follow
them insofar as such instructions are on their face proper under applicable
law. Each fiduciary, other than the Trustee, may rely upon any direction,
information or action with respect to the investment and reinvestment of the
Trust Fund as being proper under the Plan and Trust Agreement and they are not
required by the terms of the Plan and Trust Agreement to inquire into the
propriety of any investment or reinvestment of the Trust Fund. Nothing in the
Plan or Trust Agreement shall be deemed to enlarge the responsibilities or
liabilities of any fiduciary with respect to the Plan and Trust Agreement
beyond those imposed by ERISA.

15.3 Advisor to Named Fiduciary. The Named Fiduciary may
employ one or more persons to render advice concerning any responsibility of
the Named Fiduciary under the Plan or Trust Agreement, and all other
fiduciaries may rely on such advice, any written opinions or certificates
without further investigation.

ARTICLE XVI

AMENDMENT AND TERMINATION

16.1 Amendments. The Employer shall have the right at any
time and from time to time, to amend, in whole or in part, any or all of the
provisions of this Plan, so long as such amendment or amendments in no way
reduce the value of a Participant's Accrued Benefit or eliminate an optional
form of distribution. No such amendment shall authorize or permit any part of
the Trust Fund to be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries. Any such
amendment shall become effective upon delivery of a written instrument executed
by order of the Board to the Plan Administrator and Trustee. The provisions of
this Section shall be deemed a procedure for amending the Plan and for
identifying the persons who have authority to amend the Plan and is intended to
satisfy the requirements of Section 402(b)(3) of ERISA.

16.2 Election of Pre-Amendment Vesting Schedule. In the
event the Plan is amended to change or modify Section 9.1, a Participant with
at least three (3) Years of Credited Service, as defined for purposes of
ARTICLE IX, as of the expiration of the election period described below, may
elect to be subject to the pre-amendment vesting schedule. If a Participant
fails to make such an election, then such Participant shall be subject to the
new vesting schedule. The election of the pre-amendment vesting schedule shall
be made by giving written notice to the Plan Administrator during the election
period. The election period shall begin on the date such amendment is adopted
and shall end no earlier than the latest of the following dates:

(a) The date which is sixty (60) days after the
date the amendment is adopted;

(b) The date which is sixty (60) days after the
date the Plan amendment becomes effective; or

47
<PAGE> 54

(c) The date which is sixty (60) days after the
date the Participant is issued written notice of the amendment by the Employer
or Administrator.

Such election shall be made only by an individual who is a Participant at the
time such election is made and such election shall be irrevocable. Such
amendment shall not reduce the Vested percentage of a Participant's Accrued
Benefit as of the later of the date on which such amendment is adopted or the
effective date of such amendment.

16.3 Termination.

(a) General. The Employer shall have the right
at any time to terminate this Plan, by delivering to the Trustee written notice
of such termination. This Plan shall also terminate in the event the Employer
is legally adjudicated as bankrupt, or makes a general assignment for the
benefit of creditors, or is dissolved, except a dissolution in connection with
the reorganization of the Employer. Upon any such termination or upon a
partial termination, or upon a complete discontinuance of contributions to the
Trust Fund, the rights of all affected Participants or their Beneficiaries to
benefits accrued to the date of such termination, partial termination or
discontinuance, shall be fully Vested in accordance with the terms and
provisions of the Plan. At such time that the Trust is liquidated and
distributions are to be made, the Trustee may distribute a Participant's
accrued benefit without the Participant's consent, provided: (1) the Plan does
not offer an annuity option, purchased from a commercial provider, and (2) the
Employer or any entity within the same Controlled Group as the Employer does
not maintain another defined contribution plan, other than an employee stock
ownership plan defined in Code Section 4975(e)(7). If another such plan is
maintained, the Participant's accrued benefit may be transferred without
consent to the other plan if the Participant does not consent to an immediate
distribution from the terminating plan.

(b) Distribution Limitation for Elective
Deferrals. A distribution of a Participant's Elective Deferrals may not be
made under subparagraph (a) above if the Employer establishes or maintains a
"successor plan." For purposes of this rule, a successor plan is any other
defined contribution plan maintained by the Employer. However, if fewer than
two percent of the Employees who are eligible under the Plan at the time of its
termination are or were eligible under another defined contribution plan at any
time during the 24-month period beginning 12 months before the time of the
termination, the other plan is not a successor plan. The term "defined
contribution plan" means a plan that is a defined contribution plan as defined
in Code Section 414(i), but does not include an employee stock ownership plan
as defined in section 4975(e) or 409 or a simplified employee pension as
defined in Section 408(k) of the Code. A plan is a successor plan only if it
exists at the time the Plan is terminated or within the period ending 12 months
after distribution of all assets from the Plan.

ARTICLE XVII

CLAIMS PROCEDURE

17.1 Initial Filing. Claims for benefits under the Plan
may be filed with the Administrator on forms supplied by the Administrator.
The Administrator, within sixty (60) days after receipt of a duly and properly
filed claim, shall render a written decision on the claim. If the claim shall
be denied, either in whole or in part, the decision shall include the reason or
reasons for the denial; the reference to the Plan provision or provisions which
are the basis for the denial; a description of any

48
<PAGE> 55

additional material or information necessary for the claimant to effect the
claim; an explanation why the information or material is necessary; and an
explanation of the Plan claim review procedure.

17.2 Review Procedure for Disallowed Claims. Within sixty
(60) days after receiving notification from the Administrator denying, in whole
or in part, the claim, the claimant may file with the Named Fiduciary: (a) a
written notice of request for review of the Administrator's decision, (b) a
written notice of request for review of any pertinent documents, and (c) a
written notice of request to submit issues and comments in writing. Within
sixty (60) days after receipt of the request for review, the Named Fiduciary
shall render a written decision on the claim containing specific reasons for
the decision and specific reference to the pertinent Plan provisions on which
the decision is based, all in a manner calculated to be understood by the
claimant.

ARTICLE XVIII

MISCELLANEOUS

18.1 Participant's Rights; Acquittance. Neither the
establishment of the Plan hereby created, nor any modification thereof, nor the
creation of any fund or account, nor the payment of any benefits, shall be
construed as giving to any Participant or other person any legal or equitable
right against the Employer, or any officer or employee thereof, or the Trustee,
except as provided herein. Under no circumstances shall the terms of
employment of any Participant be modified or in any way affected hereby.

Nothing contained in this Plan shall be construed to add
directly or indirectly to the rights of the Employees against the Employer.
The action of the Employer in creating this Plan or any other action
contemplated by either the Employer or its Employees, shall not be construed to
constitute or evidence any contractual relationship between the Employer and
any Employee, or as a right of any Employee to continue in the employment of
the Employer, or as a limitation of the right of the Employer to discharge any
of its Employees, with or without cause. The Employer shall have the absolute
right to deal with any Employee who may be a Participant hereunder at any time
as if the Plan had never been created. Nothing herein contained shall be
construed as placing any obligation whatever upon the Employer to see that any
distribution to a Participant is made at any time from the Trust Fund herein
created, and the Employer shall not be liable to any person whatever in respect
to payments from the Trust Fund.

18.2 Board Authorization. Whenever the Employer, under
the terms of this Plan, is permitted or required to do or perform any act or
matter or thing, it shall be done and performed by any officer thereunto duly
authorized by the Board.

18.3 ERISA Preemption. This Plan shall be administered in
the United States of America, and its validity, construction and all rights
hereunder shall be governed by the laws of the United States under ERISA. To
the extent the ERISA shall not be held to have preempted local law, the Plan
shall be administered and construed under and governed by the laws of the State
of Alabama.

18.4 Indemnification By Employer. The Employer does
hereby indemnify and hold harmless any person, other than a corporation, who
may be named as Trustee under the Trust Agreement against any and all losses,
claims, damages, expense (including court costs and attorney's fees) and
liabilities arising from his or its duties and responsibilities in connection
with the Plan and Trust

49
<PAGE> 56

Agreement unless the same is determined to be due to criminal acts or acts
involving fraud or wanton conduct.

18.5 Exclusive Benefit Rule. The Trust Fund shall never
inure to the benefit of any Employer and shall be held for the exclusive
purpose of providing benefits to Participants in the Plan and their
Beneficiaries and for any reasonable expenses of administering the Plan, except
that:

(a) Contributions made by the Employer under a
mistake of fact shall be returned to the Employer within one (1) calendar year
of the payment of such contribution.

(b) If a contribution is conditioned upon the
deductibility of such contribution under Section 404 of the Internal Revenue
Code of 1986, as amended, then, to the extent the deduction is disallowed, the
contribution shall be returned to the Employer within one (1) calendar year
after the disallowance of the deduction.

18.6 Employer Reversion Upon Initial Disqualification.
Notwithstanding any contrary provisions contained in any portion of this Plan,
in the event the Commissioner of Internal Revenue determines that the Plan is
not initially qualified under the Code, any contribution made incident to that
initial qualification by the Employer must be returned to the Employer within
one year after the date the initial qualification is denied, but only if the
application for the qualification is made by the time prescribed by law for
filing the Employer's return for the taxable year in which the Plan is adopted,
or such later date as the Secretary of the Treasury may prescribe.

18.7 Merger or Consolidation. In the case of any merger
or consolidation with, or transfer of assets or liabilities to, any other plan,
each Participant shall, if the Plan is terminated, receive a benefit
immediately after the merger, consolidation, or transfer which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation, or transfer, if the Plan had been terminated.

18.8 Non-Alienation Provision.

(a) In General. Except as may be provided in
this Section, neither the Trust nor any of the assets, nor any interest herein
shall be subject to any conveyance, transfer, assignment, sequestration,
garnishment, attachment, levy, encumbrance, or other judicial process or order
of any kind to satisfy the claims of creditors, and the Trustee shall not give
any effect to such conveyance, transfer, assignment, sequestration,
garnishment, attachment, levy, encumbrance, or other judicial process or order.
The interests of Participants and their Beneficiaries under the Plan and Trust
shall not be subject to the claims of any creditors and shall not be liable for
their debts, contracts or torts. Participants and their Beneficiaries shall
not in any way convey, transfer, assign, sequester, garnish, attach, levy, or
otherwise encumber their interests in the Plan in law or in equity, and any
such conveyance, transfer, assignment, sequestration, garnishment, attachment,
levy, or encumbrance shall be void.

(b) Domestic Relations Orders.

(i) The Plan Administrator shall comply
with the terms of a Qualified Domestic Relations Order as defined in Section
414(p) of the Code.

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<PAGE> 57

(ii) Any such domestic relations order
shall not require the Plan to provide any type or form of benefit, or any
option not otherwise provided under the Plan, nor to provide increased benefits
(determined on the basis of actuarial value) or the payment of benefits to an
alternate payee which are required to be paid to another alternate payee under
another order previously determined to be a qualified domestic relations order.

(iii) The Plan Administrator shall
promptly notify the Participant and each alternate payee of the receipt of a
domestic relations order by the Plan and the Plan's procedures for determining
the qualified status of domestic relations orders. Within a reasonable period
after receipt of a domestic relations order, the Plan Administrator shall
determine whether such order is a qualified domestic relations order and shall
notify the Participant and each alternate payee of such determination. If the
Participant or any affected alternate payee disagrees with the determinations
of the Plan Administrator, the disagreeing party shall be treated as a claimant
and the claims procedure of the Plan shall be followed. The Plan Administrator
may bring an action for a declaratory judgment in a court of competent
jurisdiction to determine the proper recipient of the benefits to be paid by
the Plan.

(iv) During any period in which the issue
of whether a domestic relations order is a qualified domestic relations order
is being determined (by the Plan Administrator, by a court of competent
jurisdiction or otherwise), the Plan Administrator shall separately account for
the amounts which would have been payable to the alternate payee during such
period if the order had been determined to be a qualified domestic relations
order. If, within the eighteen (18) month period beginning on the date on
which the first payment would be required to be made under the domestic
relations order, the order (or modification thereof) is determined to be a
qualified domestic relations order, the Plan Administrator shall pay the
segregated amounts, including any interest thereon, to the person or persons
entitled thereto. If within such eighteen (18) month period it is determined
that the order is not a qualified domestic relations order or the issue as to
whether such order is a qualified domestic relations order is not resolved,
then the Plan Administrator shall pay the segregated amounts, including any
interest thereon, to the person or persons who would have been entitled to such
amounts if there had been no order. Any determination that an order is a
qualified domestic relations order which is made after the close of the
eighteen (18) month period shall be applied prospectively only.

(v) The Plan Administrator shall
establish reasonable procedures to determine the status of domestic relations
orders and to administer distributions under qualified orders.

(c) If any Employee's participation in the Plan
terminates at a time when he owes money to the Trust as a result of loans made
to him pursuant to ARTICLE XII, the Administrator shall direct payment to the
Trust from the vested portion of his Account Balance, and, if necessary, the
Administrator may direct payment from other collateral on any amount so owing.

18.9 Delegation of Responsibilities by Named Fiduciary.
The Named Fiduciary may designate any other person or persons, including the
Trustee, to perform and carry out the responsibilities and duties herein
imposed on the Administrator, and the Named Fiduciary may revoke any such
delegation of responsibility. Any action of such person or persons in the
exercise of such delegated responsibility shall have the same force and effect
for all purposes as if such action had been taken by the Administrator.

18.10 Trust. The Employer and the Trustee have entered
into a Trust Agreement which provides for the holding of funds necessary to
fund the benefits set forth in this Plan. The Trust Fund

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<PAGE> 58

shall be received, held and disbursed in accordance with the provisions of the
Trust Agreement and the Plan. No part of the Trust Fund shall be used for or
diverted to purposes other than for the exclusive benefit of the Participants,
former Participants and their Beneficiaries.

18.11 Non-Contractual Obligation of Employer. Although it
is the intention of the Employer that this Plan continue from year to year and
contributions be made regularly, continuation of the Plan is entirely voluntary
and the payments thereunder are not assumed as a contractual obligation of the
Employer.

18.12 Basis for Payments From the Plan. The basis for
making payments from the Plan is contained in ARTICLE VIII which are intended
to satisfy the requirements of ERISA.

18.13 Funding Policy. ARTICLE VI shall be deemed the
procedure for establishing and carrying out the funding policy and method of
this Plan. The Named Fiduciary shall be authorized to adopt such additional
procedures and methods as necessary, which shall be communicated in writing to
the Administrator and Trustee. Such funding policy and method shall be
consistent with the objectives of this Plan and with the requirements of Title
I of ERISA. As part of such funding policy, the Named Fiduciary may, from time
to time, direct the Trustee to exercise its investment discretion so as to
provide sufficient cash, in an amount determined by the Named Fiduciary under
the funding policy then in effect, necessary to meet the liquidity requirements
for the administration of the Plan. In addition, the provisions of ARTICLE VI
shall be deemed the basis on which payments are made to this Plan.

THE EMPLOYER has caused this Plan to be executed by its duly
authorized officer and duly attested, and its corporate seal to be hereunto
affixed, on this, the 14th day of July, 1995.

MEDPARTNERS, INC.

By /s/ Larry R. House
--------------------------------
Larry R. House,
President

Attest: (EMPLOYER)

/s/ Tracy P. Thrasher
- -------------------------
Tracy P. Thrasher,
Secretary

[CORPORATE SEAL]

<PAGE> 1
EXHIBIT (4)-4
STATE OF ALABAMA

JEFFERSON COUNTY

FIRST AMENDMENT

MEDPARTNERS, INC. AND SUBSIDIARIES
EMPLOYEE RETIREMENT SAVINGS PLAN

MEDPARTNERS, INC., a Corporation organized and existing under
the laws of the State of Delaware, (hereinafter called the "Employer"), hereby
adopts and publishes on this the 28th day of May, 1996 this Amendment to the
MedPartners, Inc. and Subsidiaries Employee Retirement Savings Plan, as follows:

W I T N E S S E T H:

WHEREAS, Employer, effective on April 1, 1994, established an
Employee Retirement Savings Plan and Trust, which have been submitted to the
Internal Revenue Service for approval; and

WHEREAS, said Plan provides that Employer reserves the right
at any time and from time to time, by action of its Board to amend in whole or
in part, any and all provisions of the Plan; and

WHEREAS, Employer desires to amend said Plan in the following
respects; and

WHEREAS, by written unanimous consent of the Board of
Directors of the Corporation, said Board did specifically approve and adopt by
resolution the amendment hereinafter set forth;

NOW, THEREFORE, in consideration of the premises hereinabove
set forth, Employer hereby amends said Plan, as follows:

FIRST: Subparagraph (a) of Section 3.14 shall be amended to
read as follows, and there shall be added to Section 3.14 the following a new
subparagraph (h):

(a) Except as provided hereinbelow, the total of
all amounts paid by the Employer as wages, salaries, fees for professional
services, amounts received (without regard to whether or not an amount is paid
in cash) for personal services actually rendered in the course of employment
with the Employer to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen, compensation for
service on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses and termination pay) during the taxable year of the
Employer for which a contribution is made, but excluding contributions to any
Qualified Plan or any non-qualified deferred compensation plan.
<PAGE> 2

(h) If, prior to the application of subparagraph (g)
above, Compensation of a Participant is based on less than a full year, such
Compensation shall be annualized, and the provisions of subparagraph (g) shall
be applied to the annualized amount.

SECOND: Section 3.23 shall be amended to read as follows:

3.23 "Eligibility Date" shall mean January 1, April 1,
July 1, or October 1 of a Plan Year; provided, however, that with respect to an
employee of an employer whose plan merges into the MedPartners, Inc. and
Subsidiaries Employee Retirement Savings Plan, Eligibility Date shall mean the
date of such plan merger.

THIRD: Section 3.39 of said Plan shall be deleted in its
entirety and there shall be substituted in lieu thereof the following:

3.39 "Normal Retirement Age" shall mean the Anniversary
Date of the Plan Year during which a Participant attains age sixty (60), or the
fifth Anniversary Date next following the Participant's first Eligibility Date,
whichever shall occur later.

FOURTH: Effective January 1, 1995, Section 3.60 of said Plan
shall be deleted in its entirety and there shall be substituted in lieu thereof
the following:

3.60 "Year of Credited Service" shall mean:

(a) with respect to any contributions made by
MedPartners, Inc. or a member of the MedPartners Controlled Group, each Vesting
Computation Period during which an Employee has completed not less than one
thousand (1,000) Hours of Service with MedPartners, Inc. or a member of the
MedPartners Controlled Group, except service with Partners in Women's Health
(PWH) (an employer affiliated with Vanguard Healthcare Group, Inc.), which
service was performed prior to January 1, 1995, shall not be counted. Service
performed by an employee of an entity of which MedPartners, Inc. or a member of
the MedPartners Controlled Group has acquired assets and who subsequently
becomes an Employee of the Employer shall not be counted.

(b) with respect to any contributions made directly
by a Participating Employer who is not a member of the MedPartners Controlled
Group, each Vesting Computation Period during which an Employee has completed
not less than one thousand (1,000) Hours of Service with such Participating
Employer. For purposes of this subparagraph, contributions provided by
MedPartners, Inc. or a member of the MedPartners Controlled Group which are
attributable to services performed for a Participating Employer shall not be
treated as provided by such Participating Employer.

FIFTH: Effective January 1, 1995, Section 3.61 of said Plan
shall be deleted in its entirety and there shall be substituted in lieu thereof
the following:

3.61 "Year of Service" shall mean each Eligibility
Computation Period during which an Employee has completed not less than one
thousand (1,000) Hours of Service with the Employer. Service with Partners in
Women's Health (PWH) (an employer affiliated with Vanguard Healthcare Group,
Inc.) shall be counted. Service performed by an employee of an entity of which
MedPartners, Inc. or a member of the MedPartners Controlled Group has acquired
assets, stock interests or capital interests and who subsequently becomes an
Employee of the Employer shall be counted.

-2-
<PAGE> 3

SIXTH: There shall be added to ARTICLE III the following new
Sections:

3.62 "Early Retirement Age" shall mean the date a
Participant attains age fifty-five (55), provided such Participant has
completed seven (7) Years of Service.

3.63 "MedPartners Controlled Group" shall mean any group
of corporations which, together with MedPartners, Inc., are members of a
Controlled Group within the meaning of Section 1563(a) of the Code, determined
without regard to Section 1563(a)(4) or (e)(3)(c) or would be a part of such a
group if Section 1563(a) applied to partnerships or proprietorships.

3.64 "Qualified Joint and Survivor Annuity" shall mean an
immediate annuity for the life of the Participant with a survivor annuity for
the life of the spouse which is fifty percent (50%) of the amount of the
annuity which is payable during the joint lives of the Participant and the
spouse and which is the amount of benefit which can be purchased with the
Participant's Vested Accrued Benefit.

SEVENTH: There shall be added to Section 5.1 the following
new subparagraph:

(d) Effective January 1, 1995, if an Employee of
MedPartners, Inc. participates in another plan sponsored by MedPartners, Inc.,
by a member of the MedPartners Controlled Group, or by an entity controlled by
or affiliated with MedPartners, Inc. under IRC Sections 414(b), (c) or (m),
such Employee shall not be eligible to participate in the Plan.

EIGHTH: Section 6.4 said Plan shall be deleted in its
entirety and there shall be substituted in lieu thereof the following:

6.4 Restrictions Against Employee Contributions.

(a) A Participant shall not be required nor
permitted to make non-deductible contributions to the Trust Fund.

(b) In the event Employee contributions are
transferred to the Plan from a prior Plan in which an Employee was a
participant, a separate account will be maintained by the Trustee for the
nondeductible Employee contributions of each such Employee. Employee
contributions and earnings thereon will be nonforfeitable at all times. An
Employee with a separate account holding prior Employee contributions may
withdraw any or all of such account at any time.

NINTH: There shall be added to Section 8.1 the following new
subparagraphs:

(e) The Participant's attainment of age 59-1/2.

(f) The Participant's hardship as described and
in accordance with Section 8.16 of the Plan.

TENTH: Sections 8.2, 8.4, 8.5 and 8.6 of said Plan shall be
deleted in their entirety and there shall be substituted in lieu thereof the
following:

8.2 Retirement Benefits.

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(a) Normal Retirement Benefits. A Participant
who attains his Normal Retirement Age shall have a normal retirement benefit
equal to his Accrued Benefit. Subject to the provisions of Section 8.3
hereinbelow, payment of his normal retirement benefit shall commence as soon as
administratively possible after the quarterly valuation next following the date
on which he attains his Normal Retirement Age. However, with respect to a
Participant who formerly participated in the Texas Back Institute, Inc. 401(k)
Savings and Retirement Plan and whose account balance under such plan was
transferred to this Plan, payment of such Participant's normal retirement
benefit shall commence as soon as administratively possible following the end
of the month during which he attains his Normal Retirement Age, based on the
immediately preceding valuation.

(b) Early Retirement. A Participant who attains
his Early Retirement Age shall have a benefit equal to his Accrued Benefit,
which is Vested only to the extent provided in ARTICLE IX. Upon termination of
employment due to the attainment of his Early Retirement Age, payment of such
Participant's Vested Accrued Benefit shall commence as soon as administratively
possible after the quarterly valuation next following the date on which he
terminates employment due to attainment of his Early Retirement Age. However,
with respect to a Participant who formerly participated in the Texas Back
Institute, Inc. 401(k) Savings and Retirement Plan and whose account balance
under such plan was transferred to this Plan, payment of such Participant's
Vested Accrued Benefit shall commence as soon as administratively possible
following the end of the month during which he terminates employment due to
attainment of his Early Retirement Age, based on the immediately preceding
valuation.

8.4 Disability Benefit. A Participant who, while an
Employee, incurs a total and permanent Disability prior to his Normal
Retirement Age shall have a benefit equal to his Accrued Benefit. Upon
termination of employment due to such Disability, payment of such benefit shall
commence as soon as administratively possible after the quarterly valuation
next following the date on which the Disability occurs. However, with respect
to a Participant who formerly participated in the Texas Back Institute, Inc.
401(k) Savings and Retirement Plan and whose account balance under such plan
was transferred to this Plan, payment of such Participant's Vested Accrued
Benefit shall commence as soon as administratively possible following the end
of the month during which he terminates employment due to Disability, based on
the immediately preceding valuation.

8.5 Death Benefit. A Participant who dies shall have a
benefit equal to his Accrued Benefit. Payment of such benefit shall commence
as soon as administratively possible after the quarterly valuation next
following the date on which the death of the Participant occurs. However, with
respect to a Participant who formerly participated in the Texas Back Institute,
Inc. 401(k) Savings and Retirement Plan and whose account balance under such
plan was transferred to this Plan, payment of such Participant's Vested Accrued
Benefit shall commence as soon as administratively possible following the end
of the month during which the death of the Participant occurs, based on the
immediately preceding valuation.

(i) the Participant and his spouse
validly waive the spouse's right to be the Participant's Beneficiary and the
spouse consents to the designated alternative beneficiary. Such

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<PAGE> 5

waiver and consent must be in writing and signed by both the Participant and
the Participant's spouse and witnessed by a Plan representative or notary
public; or

(ii) the Participant has no spouse and
can establish such fact to the satisfaction of a Plan representative; or

(iii) the spouse cannot be located and the
Participant can establish such fact to the satisfaction of a Plan
representative.

8.6 Benefit Upon Other Termination of Employment. A
Participant who terminates employment, whether voluntarily or involuntarily,
for any reason other than attainment of Normal Retirement Age, Early
Retirement, Disability, death or deferred retirement, shall be entitled to his
Vested Accrued Benefit in accordance with Article IX hereof. Payment of such
Vested Accrued Benefit shall be in accordance with this Article and shall
commence as soon as administratively possible after the quarterly valuation
next following the date on which the Participant terminates employment.
However, with respect to a Participant who formerly participated in the Texas
Back Institute, Inc. 401(k) Savings and Retirement Plan and whose account
balance under such plan was transferred to this Plan, payment of such
Participant's Vested Accrued Benefit shall commence as soon as administratively
possible following the end of the month during which the Participant terminates
employment, based on the immediately preceding valuation.

ELEVENTH: There shall be added to Section 8.7 the following
new subparagraphs:

(d) Qualified Joint and 100% Survivor Annuity.

(e) Life annuity.

TWELFTH: There shall be added to ARTICLE VIII the following
new Sections:

8.15 In-Service Withdrawals. In addition to the
distributions described in ARTICLE VI and the hardship withdrawals described
hereinbelow, a Participant who has attained age 59 1/2 may elect, by written
instrument delivered to the Administrator, to withdraw all or any portion of
his Vested Accrued Benefit, except that benefits to which Qualified Joint and
Survivor and Pre-Retirement Survivor Annuities apply shall not be available for
withdrawal under this Section. The Administrator shall establish procedures
and provide forms to implement this Section.

8.16 Pre-Termination Distributions (Hardship Withdrawals).
Effective January 1, 1995, and subject to the limitations and requirements of
this Section, the Administrator may, upon the request of a Participant, make a
lump sum distribution to the Participant from his Elective Deferral Accounts
(excluding earnings from such Account effective January 1, 1989) as of the
Anniversary Date

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coinciding with or immediately preceding the date a request is made hereunder,
for the purposes set forth below, subject to the following:

(a) IMMEDIATE AND HEAVY FINANCIAL NEED. Any
distribution under this Section must be on account of an immediate and heavy
financial need. A distribution will be deemed to be made on account of an
immediate and heavy financial need of the Participant if the distribution is on
account of:

(i) Medical expenses described in IRC
Section 213(d) incurred by the Participant, the Participant's spouse, or any
dependents of the Participant (as defined in Section 152) or necessary for
these persons to obtain medical care described in Section 213(d);

(ii) Purchase (excluding mortgage
payments) of a principal residence for the Participant;

(iii) Payment of tuition, room and board
for the next 12 months of post-secondary education for the Participant, his or
her spouse, children, or dependents; or

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

(b) DISTRIBUTION NECESSARY TO SATISFY FINANCIAL
NEED. Once the distribution is determined to be for an immediate and heavy
financial need, it must be determined that the distribution is necessary to
satisfy the need. A distribution is deemed to be necessary to satisfy an
immediate and heavy financial need of a Participant if all of the following
requirements are satisfied:

(i) The distribution is not in excess of
the amount of the immediate and heavy financial need of the Participant. The
amount may include any amounts necessary to pay any federal, state, or local
income taxes or penalties reasonably anticipated to result from the
distribution.

(ii) The Participant has obtained all
distributions, other than hardship distributions, and all nontaxable loans
currently available under all plans maintained by the Employer;

(iii) The Participant is prohibited, under
the terms of the Plan or an otherwise legally enforceable agreement, from
making elective contributions and employee contributions to the Plan and all
other plans maintained by the Employer for at least 12 months after receipt of
the hardship distribution. For this purpose, the phrase "all other plans
maintained by the Employer" means all qualified and nonqualified plans of
deferred compensation maintained by the Employer. The phrase includes a stock
option, stock purchase, or similar plan, or a cash or deferred arrangement that
is part of a cafeteria plan within the meaning of Section 125. However, it
does not include the mandatory employee contribution portion of a defined
benefit plan. It also does not include a health or welfare benefit plan,
including one that is part of a cafeteria plan within the meaning of Section
125.

(iv) For this Plan, and all other plans
maintained by the Employer, the Participant may not make elective contributions
for the Participant's taxable year immediately following the taxable year of
the hardship distribution in excess of the applicable limit under Section
402(g) for such next taxable year less the amount of such Participant's
elective contributions for the taxable year of the hardship distribution.

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<PAGE> 7

(c) Each request for a distribution must be made
by written application to the Administrator supported by such evidence as the
Administrator may require.

(d) If a Participant's termination of employment
occurs after a request is approved in accordance with this Section but prior to
distribution of the full amount approved, the approval of his request shall be
automatically void and the benefits he or his Beneficiary are entitled to
receive under the Plan shall be distributed in accordance with the preceding
provisions of this Article.

(e) A request for a distribution pursuant to this
Section shall be approved or denied by written instrument given by the
Administrator to the Participant within sixty (60) days after the date the
written request is given to the Administrator by the Participant. In the event
that such request is approved, the distribution shall be made within thirty
(30) days after notice of approval is given by the Administrator to the
Participant.

8.17 Distributions to which Qualified Joint and Survivor
Annuities Apply. Notwithstanding anything herein to the contrary, with respect
to any Participant who elects a Qualified Joint and Survivor Annuity as
provided in Section 8.7 hereinabove, the following additional requirements
shall apply:

(a) No less than 30 days and no more than 90 days
before the Annuity Starting Date, the Administrator shall provide the
Participant within a reasonable period of time before the Annuity Starting Date
(and consistent with Treasury regulations), a written explanation of: (i) the
terms and conditions of a Qualified Joint and Survivor Annuity, (ii) the
Participant's right to make and the effect of an election to waive the
Qualified Joint and Survivor Annuity form of benefit, (iii) the rights of the
Participant's spouse concerning the Qualified Joint and Survivor Annuity, and
(iv) the right of the Participant to revoke such an election, and the effect of
a revocation.

(b) A waiver of a Qualified Joint and Survivor
Annuity shall not be effective unless:

(i) the Participant's spouse consents
in writing to the election;

(ii) the election designates a specific
beneficiary, including any class of beneficiaries or any contingent
beneficiaries, which may not be changed without spousal consent (or the spouse
expressly permits designations by the Participant without any further consent);

(iii) the spouse's consent acknowledges
the effect of the election; and

(iv) the spouse's consent is witnessed by
a Plan representative or notary public.

(c) In addition to the requirements in (a) above,
a Participant's waiver of the Qualified Joint and Survivor Annuity shall not be
effective unless the election designates a form of benefit payment which may
not be changed without spousal consent (or the spouse expressly permits
designations by the Participant without any further spousal consent).

(d) The Participant's waiver will be deemed a
qualified election if it is established to the satisfaction of the
Administrator that the required consent cannot be obtained because

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<PAGE> 8

there is no spouse or the spouse cannot be located, or other circumstances that
may be prescribed by Treasury Regulations.

(e) Any consent by a spouse obtained under this
Section shall be effective only with respect to such spouse. A consent that
permits designations by the Participant without any requirement of further
consent by such spouse must acknowledge that the spouse has the right to limit
consent to a specific beneficiary, and a specific form of benefit where
applicable, and that the spouse voluntarily elects to relinquish either or both
of such rights. A revocation of a prior waiver may be made in writing by a
Participant without the consent of the spouse at any time before commencement
of benefits. The number of such revocations shall not be limited. However,
any new election must comply with the requirements of this Section. A former
spouse's waiver shall not be binding on a new spouse.

(f) The terms of any annuity contract purchased
and distributed by the Plan to a Participant or spouse shall comply with the
requirements of this Article. If the Participant's benefit is distributed in
the form of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of Section
401(a)(9) of the Code and the proposed regulations thereunder. Furthermore,
any annuity contract distributed herefrom must be nontransferable.

THIRTEENTH: There shall be added to ARTICLE XI the following
new Sections:

11.10 Withdrawal of Rollover Account. A
Participant may withdraw any or all of his Rollover Account at any time.

11.11 Rollover of Qualifying Employer Securities.
If an Employee makes a transfer from another Plan in accordance with Sections
11.3 or 11.4 hereinabove, the amount transferred to the Plan may include
Qualifying Employer Securities, as defined in Section 13.3 hereinbelow,
provided that such Qualifying Employer Securities shall not constitute more
than twenty-five percent (25%) of the Employee's Accrued Benefit after the
transfer.

FOURTEENTH: There shall be added to ARTICLE XIII the
following new Section:

13.3 Investment in Employer Stock. A Participant may
direct the Trustee to invest up to 25% of his combined Elective Deferral
Account, Discretionary (and Qualified Discretionary) Employer Contribution
Account, Employer Matching (and Qualified Employer Matching) Contribution
Account and Rollover Account in Qualifying Employer Securities. In the event
the value of such Qualifying Employer Securities exceeds 25% of the Fair Market
Value of all asssets in the Participant's Accrued Benefit at any time after
such investment, the Trustee shall not be required to sell any part of such
Qualifying Employer Securities in order that such Qualifying Employer
Securities not exceed 25% of the Fair Market Value of the assets in the
Participant's Accrued Benefit. Qualifying Employer Securities shall mean stock
or marketable securities of the Employer or of MedPartners/Mullikin, Inc., the
parent company of MedPartners, Inc. An Employer Stock Account shall be
established for a Participant to record his share of Qualifying Employer
Securities purchased under this ARTICLE.

FIFTEENTH: Effective January 1, 1995, Subparagraph (c) of
Section 14.5 shall be amended to read as follows:

(c) For purposes of determining an Employee's
Years of Credited Service under the Plan, such Years shall be determined in
accordance with Section 3.60 hereinabove.

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<PAGE> 9

SIXTEENTH: Unless stated otherwise to the contrary, this
Amendment shall be effective commencing January 1, 1996, and for each year
thereafter until further amended.

SEVENTEENTH: In all other respects, said Plan is hereby
ratified, confirmed and approved.

The Employer has caused this Amendment to be executed by its
duly authorized officer and duly attested, and its corporate seal to be
hereunto affixed on the day and year first above written.

MEDPARTNERS, INC.

By /s/ Larry R. House
----------------------
Larry R. House,
President

ATTEST: (EMPLOYER)

/s/ Tracy P. Thrasher
- -------------------------------
Tracy P. Thrasher,
Secretary

(CORPORATE SEAL)

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<PAGE> 1

EXHIBIT (23)-1

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the MedPartners, Inc. and Subsidiaries Employee
Retirement Savings Plan of our report dated February 22, 1996, with respect to
the consolidated financial statements of MedPartners/Mullikin, Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 1995, filed with
the Securities and Exchange Commission.

ERNST & YOUNG LLP

Birmingham, Alabama
June 10, 1996