COEUR D ALENE MINES CORP
10-K, 1995-03-29
SILVER ORES
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<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D. C.   20549

                                   FORM 10-K

(Mark One)
/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1994

                                      OR
/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 

For the transition period from ________ to ___________________________

                         Commission File Number 1-8641

                           COEUR D'ALENE MINES CORPORATION         
             -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                               <C>                            
             Idaho                                           82-0109423              
-------------------------------                     -----------------------------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                          Identification No.)

505 Front Ave., P. O. Box "I"
  Coeur d'Alene, Idaho                                          83816            
-------------------------------                     -----------------------------
     (Address of principal                                    (Zip Code)
       Executive Offices)
</TABLE>

Registrant's telephone number, including area code:  (208) 667-3511

Securities Registered pursuant to Section 12(b) of the Act:

                         COMMON STOCK, PAR VALUE $1.00
                7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002
              6 3/8% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
              ---------------------------------------------------
                                (Title of Class)

Securities registered pursuant to Section 12(g) of the Act:  None

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes    x     No         .
   ---------    --------

     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the  best of Registrant's knowledge, in definitive proxy or information
statements  incorporated by reference in Part III of this Form 10-K or any
amendment to this  Form 10-K. / X / 

     State the aggregate market value of the voting stock held by
non-affiliates of the registrant.  (The aggregate market value is computed by
reference to the last sale price of such stock, as of March 3,
1995.)$265,129,280

     Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of March 21, 1995.

               15,595,840 shares of Common Stock, Par Value $1.00

                      DOCUMENTS INCORPORATED BY REFERENCE
     The information called for by Part III of the Form 10-K is incorporated
byreference from the registrant's definitive proxy statement which will be
filed pursuant to Regulation 14A not later than 120 days after the end of the
fiscal year covered by this report.




                                      
<PAGE>   2



                                     PART I

ITEM 1. BUSINESS

     Coeur d'Alene Mines Corporation ("Coeur" or the "Company") is principally
engaged in the exploration, development, operation and/or ownership of gold and
silver mining properties located within the United States in Nevada, Idaho and
Alaska and abroad in New Zealand and Chile.  The Company's most significant
properties are: (i) the Rochester Mine, a silver and gold surface mining
operation located in northwestern Nevada, which is owned and operated by Coeur
and which is believed to be one of the largest and lowest cost of production
primary silver mines in the United States and is a significant gold producer as
well; (ii) the Golden Cross Mine, an underground and surface gold mining
operation located near Waihi, New Zealand, which is operated by Coeur and in
which it has an 80% operating interest acquired on April 30, 1993; (iii) the
Galena Mine and the Coeur Mine, underground silver mines in the Coeur d'Alene
Mining District in Northern Idaho at which mining operations were suspended in
July 1992 and April 1991, respectively, due to then prevailing silver prices,
and in which the Company has an indirect 50% ownership interest through its
ownership of 50% of the capital stock of Silver Valley Resources Corporation, a
Delaware corporation formed by the Company and ASARCO Incorporated ("Asarco")
in January 1995; (iv) the Kensington Property, located north of Juneau, Alaska,
which was acquired in 1987 and is being developed as an underground gold mine
jointly by Coeur and its 50% joint venture partner; (v) the Fachinal Property,
located in southern Chile, South America, which Coeur acquired in 1990, at
which construction commenced on an open pit and underground mine and processing
plant in November 1994, with completion scheduled for the fourth quarter of
1995; and (vi) the El Bronce Mine, a Chilean gold mine of which the Company
acquired operating control in October 1994.  In addition, in September 1994,
the Company entered into an agreement under which it has the right to acquire
up to a 51% operating interest in another Chilean gold mine, the Faride Mine.
Coeur also has interests in other properties which are the subject of silver or
gold exploration activities and on which no commercially mineable ore bodies
have been identified.

     Through The Flexaust Company ("Flexaust") division of the Company's
wholly-owned subsidiary Callahan Mining Corporation ("Callahan"), Coeur is also
engaged in the manufacture and sale of lightweight flexible hose and duct and
metal tubing.  Flexaust's products are used in a wide variety of industrial and
commercial applications for conveying air, dust, fumes and materials.

     The Rochester Mine, the Golden Cross Mine and the El Bronce Mine, which
are operated by the Company, currently constitute the Company's sources of
mining revenues.  The Rochester Mine accounted for approximately 67.9%, 56.2%
and 50.4% of the Company's total revenues in 1992, 1993 and 1994, respectively.
The Golden Cross Mine accounted for 23.9% of the Company's total revenues for
1993, 35.3% of total revenues for the eight-month period subsequent to its
acquisition on April 30, 1993 and 26.2% of total revenues in 1994.  Flexaust
revenues accounted





                                       2




<PAGE>   3



for approximately 17.9%, 12.2% and 11.0% of the Company's total revenues in
1992, 1993 and 1994, respectively.  The El Bronce Mine accounted for
approximately 1% of the Company's total revenues in 1994 and 4% of total
revenues for the three-month period subsequent to its acquisition on October 3,
1994.   The balance of revenues was attributable to interest, dividend and
other income.

     The following sets forth definitions of certain important mining terms
used in this report.  "Ore reserve" means that part of a mineral deposit which
could be economically and legally extracted or produced at the time of the
reserve determination.  "Proven reserves" means reserves for which (a) quantity
is computed from dimensions revealed in outcrops, trenches, workings or drill
holes; grade and/or quality are computed from the results of detailed sampling
and (b) the sites for inspections, sampling and measurement are spaced so
closely and the geologic character is so well defined that size, shape, depth
and mineral content of reserves are well-established.  "Probable reserves"
means reserves for which quantity and grade and/or quality are computed from
information similar to that used for proven reserves, but the sites for
inspection, sampling and measurement are farther apart or are otherwise less
adequately spaced.  The degree of assurance, although lower than that for
proven reserves, is high enough to assume continuity between points of
observation.  References herein to "silver" mean an alloy with a minimum
fineness of 999 parts per 1000 pure silver; references to "gold" mean an alloy
with a minimum fineness of 995 parts per 1000 pure gold; and references to an
"ounce" mean a troy ounce, which is 31.10348 grams.  References to "dore" mean
a bullion produced by smelting, containing gold, silver and minor amounts of
impurities.  "Mineralized material" is a mineralized underground body which has
been intersected by sufficient closely spaced drill holes and/or underground
sampling to support sufficient tonnage and average grade of metal(s) to warrant
further exploration-development work.  Such material does not qualify as an
"ore reserve" until a final and comprehensive economic, technical and legal
feasibility study based upon the test results is concluded.  References to a
"ton" mean a short ton, which is 2,000 pounds.

ROCHESTER MINE

     The Rochester Mine is a silver-gold, surface mine located in Pershing
County, Nevada, approximately 25 road miles northeast of Lovelock.  The
Rochester orebody consists of disseminated precious-metals mineralization
hosted in Triassic volcanic rocks.  The mine, which is accessible by road,
utilizes the heap-leaching process to extract both silver and gold from ore
mined using open-pit methods.  The property consists of 16 patented and 552
unpatented contiguous mining claims and 74 mill-site claims totaling
approximately 10,000 acres.  The Company owns 100% of the Rochester Mine by
virtue of its 100% ownership of its subsidiary, Coeur Rochester, Inc. Asarco,
the prior lessee, has a net smelter royalty interest which varies from 0 to 5%
provided the market price of silver equals or exceeds $17.00 per ounce.





                                       3




<PAGE>   4



     Based on the reserve-review report dated January 1995, of Independent
Mining Consultants, Inc., and accounting for production through December 31,
1994, in-place, proven and probable ore reserves, as of January 1, 1995, total
approximately 80.7 million tons averaging 1.259 ounces per ton silver and
0.0108 ounces per ton gold.  The reserve estimate is based on a 1.20 ounce per
ton silver-equivalent, breakeven-design cutoff grade and a silver and gold
price of $5.50 and $385, respectively.  The average grades do not reflect
losses in the recovery process nor any allowance for extractive dilution during
the mining process.  The amount of proven and probable reserves will vary
depending on the relative price of silver and gold.  A reserve estimate
calculated at various silver and gold prices are outlined as follows:

<TABLE>
<CAPTION>
$Per Troy Ounce           Ore           Silver         Gold           Strip
  Silver/Gold            Tons           Grade          Grade          Ratio

---------------        ------------   -------------  ------------     ------
                       (Thousands)    (Ounces/ton)   (Ounces/ton)
<S>                      <C>            <C>            <C>            <C>
$6.50/$455               91,200         1.210          0.0102         1.59
$6.00/$420               88,500         1.214          0.0103         1.49
$5.50/$385               80,700         1.259          0.0108         1.56
$5.00/$375               75,400         1.283          0.0112         1.58
$4.50/$350               69,900         1.299          0.0115         1.47
$4.00/$350               64,700         1.319          0.0120         1.48
</TABLE>

     Based upon its experience and certain metallurgical testing, the Company
estimates recovery rates at 55% for silver and 85% for gold.  Although, as
shown in the preceding table, the average strip ratio for the remaining life of
the mine will vary based primarily on future gold and silver prices.  The
actual strip ratio may vary significantly from year-to-year during the
remaining life of the mine.  The realization of the Company's production
estimates is subject to actual rates of recovery, continuity of ore grades,
mining rates, the levels of silver and gold prices and other uncertainties
inherent in any mining and processing operation.

     The following table sets forth information for the periods indicated
relating to Rochester Mine production.  Production may decrease during the
winter due to slower solution flow from the heaps.  Such conditions are not
expected to effect annual production levels since mining, crushing and heap
construction are expected to continue during those months at normal rates,
resulting in increased dore' production during warmer weather.  Also,
production will vary from time to time depending upon the area being mined.

<TABLE>
<CAPTION>
                                                      Year Ended December 31,
                          --------------------------------------------------------------------------------------
                             1990               1991               1992               1993               1994  
                          ---------          ---------          ---------          ---------          ----------
<S>                       <C>                <C>                <C>                <C>                 <C>
Ore mined (tons)          6,819,253          6,982,366          7,356,336          7,247,553           7,844,631
Silver (ounces)           4,779,518          5,707,700          5,431,369          5,943,894           5,937,770
Gold (ounces)                59,082             60,565             56,562             66,412              56,886
</TABLE>            





                                       4




<PAGE>   5



    The following table sets forth the costs of production per ounce of silver
and goldon a silver equivalent basis during the periods indicated at the
Rochester Mine.  Such costs include mining, processing and direct
administration costs, financing costs, royalties and exploration expenses.  To
obtain the silver equivalent, each ounce of gold produced is multiplied by the
same ratio as the then current ratio of the price of gold to the price of
silver.  This silver equivalent gold production is then added to actual silver
production to determine total silver equivalent production.


<TABLE>
<CAPTION>
                                            Year Ended December 31,             
                            -----------------------------------------------------
                              1990       1991        1992        1993       1994   
                            --------   --------    --------    --------   -------
<S>                         <C>        <C>         <C>         <C>        <C>
Cash costs per ounce        $  3.33    $  3.28     $  2.82     $  3.55       3.57

Depreciation, depletion
   and amortization
   per ounce                    .43        .48         .40         .54        .59 
                            --------   --------    --------    --------   -------
Total costs per ounce       $  3.76    $  3.76     $  3.22     $  4.09    $  4.16 
                            ========   ========    ========    =========  =======
</TABLE>


    A new life-of-mine leach pad and conveyor system commenced operations in
September, 1994.  Initially, the new pad is expected to permit faster metals
recovery than the previous pad.  The leach cycle at the Rochester Mine requires
approximately five years from the point ore is mined until all recoverable
metal is recovered.  The above costs are based upon actual operating experience
at the mine.  There can be no assurance that these costs will remain at the
same level for future operations.

GOLDEN CROSS MINE

    Effective April 30, 1993, a wholly-owned subsidiary of the Company acquired
from a wholly-owned subsidiary of Cyprus Minerals Company all of the
outstanding capital stock of Cyprus Gold New Zealand Limited ("Cyprus NZ"), the
name of which was changed by the Company to Coeur Gold New Zealand Limited
("Coeur NZ").  The principal asset of Coeur NZ is its undivided 80%
participating joint venture interest in the Golden Cross Mine located near
Waihi on the North Island of New Zealand, approximately 100 miles southeastof
Auckland, and certain other exploration properties in New Zealand.  The
remaining undivided 20% joint venture interest is owned by a subsidiary of The
Todd Company Limited, a New Zealand corporation.

    In addition to all the capital stock of Cyprus NZ, the Company also
acquired from the former parent of Cyprus NZ a term loan receivable from Cyprus
NZ in the principal amount of approximately $53.2 million which was owed by
Cyprus NZ to its former parent and is now owed by Coeur NZ to the Company.  A
cash purchase price of approximately $54 million was paid by the Company for
the Cyprus NZ capital stock and term loan.  The Company accounted for the
acquisition as a purchase transaction.

     The Golden Cross Mining License covers an area of approximately 961 acres
of which 274 acres are occupied by the current Golden Cross Mine operation.
The mine property includes the open-pit and underground mine facilities,
process plant, tailings pond, water treatment plant and mine





                                       5




<PAGE>   6



offices which are all accessible by road from the town of Waihi.  Construction
of the Golden Cross Mine began in April, 1990, and commercial production
commenced in December, 1991.  Ore is mined from an extensive precious-metals
bearing, epithermal vein system hosted in Tertiary volcanic rocks.

     Based upon reserve reports dated September 1, 1994 (open-pit reserve) and
December, 1994, (underground reserve) by Snowden Associates Pty Ltd, an
independent consulting firm, in-place, open-pit and underground, proven and
probable ore reserves less actual production through December 31, 1994, total
7.565 million tons averaging 0.079 ounces per ton gold.  The open-pit reserve
estimate, totaling 6.642 million tons averaging 0.065 ounces per ton gold, is
based on a 0.029 ounce per ton gold cutoff, $400 per ounce gold price and a
currency exchange rate of US$ = 0.58 NZ$.  The underground-reserve estimate,
totaling 924,000 tons averaging 0.182 ounces per ton gold, is based on a 0.117
ounce per ton cutoff, gold and silver prices of $385 and $5.50, respectively
and a currency exchange rate of $US = 0.61 NZ$.  The reserve estimate reflects
an allowance for extractive dilution during the mining process, but does not
reflect losses during the recovery process.  In addition, the reserve estimate
has identified 404,000 tons of mineralized material averaging 0.05 ounce per
ton gold which is insufficiently defined to be included in the reserve, but may
be mineable given additional definition or changes in economic parameters.

    Silver reserves are empirically estimated using past production/recovery
ratios for silver:gold.  Open pit and underground silver:gold ratios have
historically averaged 4:1 and 5:1, respectively.  Total contained silver ounces
are estimated at 2,572,000 ounces, with an average grade of 0.34 ounces of
silver per ton, for open pit and underground proven/probable reserves.  No
mineralized material grades for silver were estimated.

    The following table sets forth Golden Cross Mine production data.
Information relating to production prior to April 30, 1993 was obtained from
the former owner of Cyprus NZ.  Because the Company's acquisition of Cyprus NZ
was accounted for as a purchase, results of its operations prior to April 30,
1993 are not included in the Company's reported results of operations.  The
following data reflects the amount of production attributable to Cyprus NZ's
80% interest in the mine:


<TABLE>
<CAPTION>
                                   Four Months       Eight Months
                Year Ended            Ended              Ended             Year Ended
              December 31, 1992  April 30, 1993   December 31, 1993     December 31, 1994
              -----------------  --------------   -----------------     -----------------
<S>                   <C>             <C>                <C>                <C>
Ore mined (tons)      528,923         242,961            479,688             709,411
Gold (ounces)          69,899          26,360             56,898              67,400
Silver (ounces)       274,905         103,690            175,325             222,246
</TABLE>





                                       6




<PAGE>   7



    The following table sets forth the costs of production per ounce of gold
and silver on a gold equivalent basis during the periods indicated at the
Golden Cross Mine.  Such costs include mining, processing and direct
administration costs, royalties and exploration expenses, but do not include
financing costs associated with the term loan formerly owed by Coeur Gold NZ to
its parent.  The production costs per ounce of gold for any period is computed
on a gold equivalent basis.  Each ounce of silver produced is multiplied by the
same ratio as the then current silver-to-gold price ratio. This gold
equivalent silver production is then added to actual gold production to
determine the total gold equivalent production.

<TABLE>
<CAPTION>
                                      Four Months     Eight Months
                     Year Ended         Ended           Ended             Year Ended
                 December 31, 1992  April 30, 1993  December 31, 1993  December 31, 1994
                 -----------------  --------------  -----------------  -----------------
<S>                    <C>             <C>                <C>                <C>
Cash costs
 per ounce             $261.00         $245.00            $220.00            $277.00

Depreciation,
 depletion
 and amortization
 per ounce              130.00          174.00             117.00             111.00
                       -------         -------            -------            -------
                       $391.00         $419.00            $337.00            $388.00
                       =======         =======            =======            =======
</TABLE>


    The above-reported Golden Cross Mine production and cost data relating to
operations subsequent to the commencement of commercial production in December
1991 reflect an initial under-utilization of the mine's productive capacity
associated with commencement of operations as well as other start-up costs
expected to be nonrecurring in nature.  The 1994 increase in the cash costs of
production per ounce of gold was primarily attributable to the presence of a
harder grinding ore in the open pit requiring more milling and chemicals in the
processing and a lower grade of ore being provided from the underground portion
of the mine.  The increase in ore reserves during 1994 enabled the Company to
lower the depletion at the mine, which had the effect of reducing non-cash
costs per ounce.

    The Company estimates the current waste-to-ore strip ratio to be
approximately 4.32 to 1.  Approximately 1550 tons per day of ore is currently
being mined at the open pit operation.  The underground mine is a trackless
operation with a declining access from the surface, currently mining
approximately 700 to 850 tons per day of ore and utilizing mechanized cut and
fill and long hole benching methods.  A 2,000 ton per day mill processes ore
from both the open pit and underground operations and Coeur NZ estimates that
approximately 89% of the gold and 60% of the silver contained in the ore mined
is recovered.  The production of gold and silver is subject to the risks of
actual rates of recovery, continuity of ore grades, mining rates, the levels of
gold and silver prices and other uncertainties inherent in any mining and
processing operation.  Tailings are treated by a proprietary process that
removes and recycles cyanide used in the milling process.





                                       7




<PAGE>   8




    The Company obtained favorable variances to the Golden Cross Mine's
effluent discharge permit by a decision from the Waikato Regional Council
issued in August 1993.  While this decision has been appealed to the Planning
Tribunal by environmental organizations, and while the environmental
organizations filed a petition for enforcement of the permit in November 1993
with the Planning Tribunal which raises issues related to the permit, the
Company nevertheless believes that environmental issues will not hamper
operations of the Golden Cross Mine and that the appeal and petition will be
resolved favorably to the Company.

    Coeur NZ expended approximately $579,313 during 1994 to explore properties
adjacent to the Golden Cross Mine and various other properties in the eastern
portion of the North Island of New Zealand.  Such exploratory activities
included drilling, sampling and assaying.  Coeur NZ plans during 1995 to expend
approximately $1.4 million to explore Waihi East, Waitekauri and three other
New Zealand licenses on the north island.

    In addition to significantly increasing the Company's total gold production
capability, the acquisition of Coeur NZ geographically diversified the
Company's operations, may contribute to further expansion in the Pacific Rim
and may widen the Company's potential investor base.

COEUR D'ALENE MINING DISTRICT - SILVER VALLEY RESOURCES CORPORATION

    In late 1994, the Company, Callahan and Asarco formed Silver Valley
Resources Corporation, a Delaware corporation ("Silver Valley"), and effective
January 1, 1995, the Company, Callahan and Asarco transferred certain assets,
including their interests in the Coeur Mine and the Galena Mine in the Coeur
d'Alene Mining District of northern Idaho, to Silver Valley.  Specifically,
Asarco contributed to Silver Valley Asarco's (i) ownership interest in the
Joint Venture Agreement, dated August 31, 1964, related to the Coeur Mine
property; (ii) interest in the lease, dated January 15, 1947, relating to the
Galena Mine property; (iii) ownership interest in the Osburn tailings pond;
(iv) 75% interest in the royalty deficit related to the Galena Mine property;
and (v) ownership interest in certain other assets located in the Coeur d'Alene
Mining District.  Coeur and Callahan contributed to Silver Valley Coeur's or
Callahan's (i) ownership and lease interest in the Coeur Mine property; (ii)
ownership and lease interest in the Galena Mine property; (iii) ownership
interest in the Caladay operating agreement; (iv) ownership interest in certain
properties surrounding the above properties; and (v) 25% interest in the
royalty deficit related to the Galena Mine property.

        The Board of Directors of Silver Valley consists of six directors,
three of whom, including the Chairman of the Board, are appointed by Asarco and
three of whom, including the President, are appointed by Coeur.  Pursuant to a
Shareholders' Agreement between the parties, certain specified corporate
actions may not be taken without the approval of at least 80% of the members of
Silver Valley's Board of Directors.  Such actions include certain major capital
expenditures and





                                       8




<PAGE>   9



asset sales, the commencement of mining operations and approvals of certain
operating plans and budgets, substantial borrowings, issuances of capital stock
and other specified significant actions.  Certain other specified matters
require approval by a majority of the members of the Board.  As to matters
requiring a majority vote, if the voting results in a tie at any Board Meeting,
the Chairman of the Board of Silver Valley, who also is the Chairman of the
Board of Asarco, will decide the issue. The President of Coeur also is the
President of Silver Valley and serves on its Executive Committee.  Certain
other officers of Silver Valley are officers of Coeur or Asarco, which
companies may provide management and other services to Silver Valley upon the
request of its Board of Directors.  Asarco and Coeur furnish certain management
and other services to Silver Valley pursuant to a Management Services Agreement
between them and Silver Valley.

    It is expected that under a two-year plan of development, improving
infrastructure and diamond drilling to extend reserves and mine life, Silver
Valley will invest approximately $25 million in the further development and
exploration at its properties.  The reopening of the Galena and Coeur Mines is
dependent upon the favorable action of the Board of Directors of Silver Valley,
which will base its decision on several factors, including silver prices.

    GALENA MINE

    Callahan, which became a wholly-owned subsidiary of the Company on December
31, 1991, owned the Galena Mine located in the Coeur d'Alene Mining District of
northern Idaho, prior to the transfer of such ownership to Silver Valley,
effective January 1, 1995.  The Galena Mine property consists of approximately
1,100 acres lying immediately west of the City of Wallace, Shoshone County,
Idaho adjoining the Coeur Mine's eastern boundary.  The property consists of 52
patented mining claims in which Callahan owns a fee title, and 25 unpatented
mining claims, paramount title to which is vested in the United States.  The
Galena Mine is an underground silver-copper mine which is served by two
vertical shafts.

    On July 26, 1992, Asarco, which was the Galena Mine operator, suspended
operations at the Galena Mine due to then prevailing silver prices and placed
the property on a care and maintenance basis to conserve ore reserves.  Silver
Valley has the power to make a decision as to the resumption of production at
the mine.  Coeur cannot predict whether or when operations will resume there.

    Operating losses were incurred at the Galena Mine throughout 1990, 1991 and
1992.  As a result, Callahan's revenues from the Galena Mine were limited to
minimum royalty payments of $87,000 in 1990, $91,418 in 1991 and $45,809 in
1992.

     Based on the ore-reserve estimate, dated July 1, 1992, of Asarco, proven
and probable ore reserves at the Galena Mine total 951,000 tons averaging 15.07
ounces per ton silver, 8.80% lead and 0.49% copper.  The Asarco reserve
estimate is based on a minimum diluted mining width of 5.0





                                       9




<PAGE>   10



feet for most silver-copper and silver-lead veins and 5.5 feet for lead-zone
veins.  Cutoff grade is based on the cost of breaking and producing ore from a
stope, but do not include development costs and administrative overhead.  The
cutoff grade varies from area-to-area within the mine due to changing
silver-copper ratios of the ore.

     The reserve estimate has also identified an additional 856,000 tons of
mineralized material which has not been included in the reserve, but given
additional definition drilling or more favorable silver prices, may become
mineable.  This material averages 8.84 ounce per ton silver, 5.73% lead and
0.43% copper.

    The following table sets forth information, for the periods indicated,
relating to total Galena Mine production:


<TABLE>
<CAPTION>
                                          Year Ended December 31,           
                        ----------------------------------------------------------
                           1988        1989        1990        1991        1992   
                        ---------   ---------   ---------   ---------   ----------
                                                                        (through
                                                                          July)
<S>                     <C>         <C>         <C>         <C>         <C>
Ore mined (tons)          202,097     201,494     173,687     182,836      91,617
Silver (ounces)         3,048,633   3,080,539   3,066,246   3,278,650   1,572,501
Copper (pounds)         1,996 045   2,058,393   1,808,408   1,993,649   1,064,085
Gold (ounces)                 459         323         337         332         143
</TABLE>

     The Company's previous ownership interest in the above production, giving
retroactive effect to Coeur's acquisition of Callahan on December 31, 1991,
amounted to 50% through June 11, 1992, and 62.5% thereafter until such
ownership was transferred to Silver Valley effective January 1, 1995.

    The total cost of production per ounce of silver (net of credit for copper
byproduct), including mining, processing, direct administrative costs and
exploration expenses, but not including financing costs, royalties and smelter
charges, amounted to $4.50 in 1988, $4.35 in 1989, $4.19 in 1990, $3.94 in 1991
and $4.23 in 1992 prior to the temporary discontinuation of operations at the
Galena Mine on July 26, 1992.  Such costs are not necessarily indicative of
actual costs that would be incurred if and when mining operations resume at the
mine.

    COEUR MINE

    The Coeur Mine is an underground silver mine located in the Coeur d'Alene
Mining District of Shoshone County in northern Idaho, and consists of
approximately 868 acres comprised of 38 patented mining claims, and four
unpatented mining claims paramount title to which is vested in the United
States.  Commercial production began in 1976, and total pre-production
expenditures of approximately $20 million were recovered by April 1979, at
which time the Company commenced receiving revenues from its  non-operating
joint venture interest in the mine. Asarco is the operator of the Coeur Mine
pursuant to a joint venture agreement with the Company, Callahan and, prior to
November 30, 1990, Hecla.  Until November 30, 1990, the Company owned 40% of
the ores





                                       10




<PAGE>   11



produced from the Coeur Mine and was obligated to pay 40% of the costs.  On
November 30, 1990, the Company purchased Hecla's 5% interest thereby increasing
the Company's interest to 45%.  Effective December 31, 1991, Coeur increased
its non-operating joint venture interest in the mine to 50% as a result of
Coeur's acquisition of Callahan, which had acquired a 5% interest in the mine
in March,1968.  Effective January 1, 1995, Coeur and Asarco transferred their
interests in the Coeur Mine to Silver Valley.

    Asarco suspended operations at the Coeur mine on April 3, 1991 due to then
prevailing silver prices and placed the property on a care and maintenance
basis to conserve ore reserves.  Silver Valley has the power to make a decision
as to the resumption of production at the mine.  Coeur cannot predict whether
or when operations will resume there.

    The following table sets forth information, for the periods indicated,
relating to total Coeur Mine production:

<TABLE>
<CAPTION>
                                         Year Ended December 31,                  
                         ---------------------------------------------------------
                            1988           1989              1990           1991  
                         ---------      ---------         ---------      ---------
                                                                         (through
                                                                         April 3)
<S>                      <C>            <C>                 <C>            <C>
Ore mined (tons)           144,386        159,045           147,883         37,165
Silver (ounces)          2,155,623      2,198,465           379,856        379,856
Copper (pounds)          1,893,318      2,002,864           335,865        335,865
Gold (ounces)                  313            313               433             80
</TABLE>

    The Company's ownership interest in the above production, giving
retroactive effect to Coeur's acquisition of Callahan's 5% interest on December
31, 1991, amounted to 45% prior to November 30, 1990 and 50% thereafter until
such ownership was transferred to Silver Valley Resources effective January 1,
1995.

    The total cost of production per ounce of silver (net of credit for copper
byproduct), including mining, processing, direct administration costs and
exploration expenses, but not including financing costs, royalties and smelter
charges, amounted to $4.71 in 1988, $4.36 in 1989, $4.68 in 1990 and $5.38 in
1991 prior to the suspension of operations at the Coeur Mine on April 3, 1991.
Such costs are not necessarily indicative of actual costs that would be
incurred if and when mining operations resume at the mine.

    Based on the ore-reserve estimate, dated January 1, 1991, of Asarco, proven
and probable ore reserves in the Coeur Mine total 377,000 tons averaging 17.33
ounces per ton silver and 0.80% copper.  The Asarco reserve estimate is based
on a minimum mining width of 4.5 to 5.0 feet with a minimum dilution of 1.0
foot from each margin of the vein.  Cutoff grades used in the reserve estimate
are estimated from costs based on the unit superintendent's forecast for 1991.
The reserve estimate has also identified an additional 172,000 tons of
mineralized material which has not been included in the reserve, but given
additional definition drilling or more favorable precious silver prices, may
become mineable. This material averages 14.21 ounce per ton silver and 0.64%
copper.





                                       11




<PAGE>   12



KENSINGTON PROPERTY JOINT VENTURE

    On August 5, 1987, Coeur purchased certain patented and unpatented claims
located approximately 50 miles north of Juneau, Alaska known as the Kensington
gold property (the "Kensington Property") from Placid Oil Company of Dallas,
Texas ("Placid").  The purchase price paid to Placid for the Kensington
Property was $20 million, of which $10 million was paid by Coeur and the $10
million balance was paid by Echo Bay Mines, Ltd., a Canadian corporation ("Echo
Bay Parent").  On the same date, Coeur conveyed an undivided 50% interest in
the Kensington Property to Echo Bay Exploration, Inc., a Delaware corporation
("Echo Bay") that is a wholly-owned subsidiary of Echo Bay Parent, and the
remaining undivided 50% interest in the Kensington Property to Coeur-Alaska,
Inc., a Delaware corporation ("Coeur-Alaska") that is a wholly-owned subsidiary
of the Company.

    Coeur-Alaska and Echo Bay entered into a joint venture agreement pursuant
to which the companies agreed to participate in the exploration, evaluation,
development and mining of the Kensington Property.  Echo Bay is the operator of
the Kensington Property under programs that must be approved by a management
committee composed of an equal number of members from both Echo Bay and
Coeur-Alaska.  The joint venture agreement permits either party, under certain
circumstances, to increase its ownership interest in the venture by paying the
other party's appropriate share of exploration and development costs in the
event the other party declines or is unable to fund its share.

     The Kensington orebody consists of an extensive, precious-metals bearing,
mesothermal, quartz-stockwork vein system hosted in Cretaceous intrusive rocks.
Based on Echo Bay's ore-reserve study, as audited during January 1995, by
Woollett Consulting Ltd., independent consulting geologists, Kensington
Property proven and probable ore reserves, as of December 31, 1994, are
estimated to be 13.641 million tons averaging 0.143 ounce of gold per ton
totaling 1.946 million ounces of gold.  An additional 3.188 million tons of
mineralized material averaging 0.147 ounce per ton gold has been identified,
but is insufficiently defined to be included in the reserve.  The Kensington
ore zone has not been fully defined and several peripheral veins remain to be
explored.  The reserve estimate reflects the effects of extractive dilution
during the mining process, but not losses during the recovery process.  A gold
price of $375 per ounce was used in calculating the reserve estimate.  Based
upon metallurgical testing work, the Company expects that 92% of the gold
contained in ores milled will be recovered.  The joint venture has completed
metallurgical testing primarily consisting of bench-scale test work, including
grinding, flotation, cyanide leaching, carbon recovery and other tests, and a
subsequent pilot scale test conducted on a bulk ore sample to simulate
full-scale plant operations and to confirm selected operating parameters.

    During 1994, the activities at Kensington were directed toward the
permitting process.  As of December 31, 1994, the Company had invested a total
of $52,139,488 (including capitalized interest of $11,796,897) in the
Kensington Property.





                                       12




<PAGE>   13



    Based on a comprehensive feasibility study prepared by an independent
engineering firm engaged to perform detailed design and engineering at the
Kensington Property, Coeur estimates that in the event it is decided to proceed
with the construction of the Kensington facility, approximately $180 million
(in addition to monies previously expended), 50% of which will be the
responsibility of Coeur, will be required in order to place the property into
commercial production.  That estimate is based upon the engineering firm's
completion of 30% of the engineering upon the project to date.

    Further development of the Kensington Property is contingent upon several
factors, including gold prices and the ability of the joint venture to obtain
valid permits.  The Kensington feasibility study contemplates a gold price of
$400 per ounce and it is unlikely that the project facility will be constructed
unless the venturers are able to satisfy themselves that this gold price is
reasonably achievable.  The construction of the project cannot commence until
all necessary permits are obtained.  The major permits necessary for the
construction and operation of the facility have been obtained with the
exception of two, the Army Corps of Engineers Section 404 Permit and the
Environmental Protection Agency National Pollutant Discharge Elimination System
Permit. Kensington is intensively regulated under various local laws and
regulations.  Numerous permits are required by government agencies which
authorize construction and operations.

    The  United States Forest Service ("USFS") approved the environmental
impact statement ("EIS") in February 1992.  Thereafter, administrative appeals
were filed by parties opposed to the project.  The appeals alleged that the EIS
did not satisfy the requirements of the National Environmental Policy Act due
to, among other alleged reasons, inadequacy of baseline data used to analyze
environmental impacts and failure to adequately consider alternative methods of
mining and waste disposal. The appellants sought to prevent USFS approval of an
operating plan for the project pending completion of EIS meeting all legal
requirements.  On July 7, 1992, the USFS approved the Company's proposed Plan
of Operations for the project.  On July 28, 1992, the USFS ruled against the
appellants upon their appeal.  While Coeur believes a court would uphold the
USFS determination in the event it were to be further appealed, no assurance
can be given as to the outcome of any such appeal if filed.  On September 16,
1992, parties opposed to the project requested that the USFS withdraw its
decision to approve the operating plan on the grounds that the plan was not
complete at the time it was approved.  The USFS decided not to withdraw the
July 7, 1992 approval of the Plan of Operations on November 10, 1992.

    In addition to the USFS decision to permit operation, other key permits are
required by the U.S. Environmental Protection Agency (the "EPA"), the U.S. Army
Corps of Engineers, the State of Alaska and the City and Borough of Juneau.  In
November 1992, the project's Large Mine Permit was approved bythe City and
Borough of Juneau.  On April 30, 1993, a group opposed to the project filed an
appeal in state court to that approval, which has been denied.  The motion is
now pending before





                                       13




<PAGE>   14



the Alaska Supreme Court.  Additional permitting requirements include the EPA
National Pollutant Discharge Elimination System ("NPDES") permit for discharge
of effluent from the tailings impoundment and the U.S. Army Corps of Engineers
"fill" permit.

    In November 1994, the EPA issued a draft of its Technical Assistance Report
("TAR") calling for the redesign of portions of the project and certain
additional data and recommending that certain specific actions should be taken
in order for the Kensington project to meet environmental requirements and
comply with the Clean Water Act.  These actions include providing additional
waste water treatment, a redesign to address peak flow information, further
analysis of avalanche hazard, a movement of the outfall into deeper water to
assure adequate mixing, additional testing for potential acid generation and
the performance of additional analysis on ore samples to project effluent
quality.  Compliance with the TAR should enable the U.S. Army Corps of
Engineers to complete its work for issuance of a federal permit for
construction of a water treatment facility at the Kensington property pursuant
to Section 404 of the Clean Water Act. If, in the final TAR, the EPA adheres to
the recommendations in the draft, the Company believes it is feasible to make
design changes and furnish necessary data.  It is anticipated that a final TAR
will be furnished by the EPA to the Army Corps of Engineers in the second
quarter of 1995.  However, no assurance can be given as to when or whether the
required federal permit will be issued.

    December 20, 1993, a coalition of environmental and citizen groups,
including the National Wildlife Federation and the Sierra Club, filed a
complaint in the Federal District Court of Alaska against the EPA and the U.S.
Army Corps of Engineers challenging the two federal agencies' interpretation of
the Clean Water Act regulations as they relate to the Kensington Property and
another mining project near Juneau, Alaska. Under that interpretation,
announced in October 1992, NPDES permits would not be required for discharge of
tailings from process facilities into proposed tailings impoundment ponds
constructed in "waters of the United States."  The suit was dismissed by the
court on July 15, 1994, on the grounds that it was not ripe for decision.

    On July 15, 1993, the Company acquired a 66 2/3% interest, and in August,
1994 the Company acquired the remaining 33 1/3% interest in the Jualin
property, an exploratory property located adjacent to the Kensington Property,
and an exploratory property in Mexico.  The Jualin property consists of
approximately 9,400 acres, of which approximately 345 acres of patented claims.
The Company's initial 66 2/3% interest in the Jualin property was acquired in
connection with the Company's purchase of 26% of its capital stock of
International Curator Resources, Ltd.(ICR), a Canadian corporation.  The 33
1/3% interest in the property was acquired by the Company from ICR in
connection with the Company's sale of ICR shares between August 1994 and
February 1995.

FACHINAL PROPERTY

    In January 1990, the Company acquired, through its wholly-owned subsidiary,
CDE Chilean Mining Corporation, ownership of the Fachinal





                                       14




<PAGE>   15



gold and silver project (the "Fachinal Property") and six exploration projects
located in Chile.  Coeur acquired these properties for $5 million by purchasing
a wholly-owned subsidiary of Freeport Minerals Company, which held the
exploitation and exploration concessions for this area of known mineralization.

    The Fachinal property covers about 90 square miles and is located south of
Coihaique, the capital of Region XI in southern Chile, and approximately 10
miles west of the town of Chile Chico.  The project lies on the east side of
the Andes at an elevation from 600 to 4,500 feet and is serviced by a gravel
road from Chile Chico.  The Fachinal property is believed to contain at least
67 veins containing gold and silver and at least five zones of mineralization.
The Company has been granted exploitation concessions (the Chilean equivalent
to a patented claim except that the owner does not have title to the surface
which must be separately acquired from the surface owner) covering the
mineralized areas of Fachinal property as well as the necessary surface rights
to permit mining there.

    As of December 31, 1994, the Company had expended a total of $35,945,229
(including capitalized interest of $4,596,960) on the Fachinal Property.
Currently, three mineral systems are the primary development targets, namely
Laguna Verde, Temer, and Guanaco.  To date, the work program at the Fachinal
Property has included diamond drilling, underground drifting and cross-cutting
at Laguna Verde, Temer and Guanaco, initiation of metallurgical testing, mine
modeling, mine planning and cost estimating.

    Following the completion by an independent engineering firm of a final
feasibility study, the Company announced in July 1994 its decision to proceed
with the construction of mining facilities on the Fachinal property.  The
Company expects that the new mining facilities will be completed in the fourth
quarter of 1995 and will include both underground and open pit mining
operations, with an estimated 1,650 per ton day throughput.  The milling
facility will use conventional crush/grind/floatation methods to produce a
gold/silver concentrate, which will then be shipped to off site smelters for
processing.  The total project construction cost is expected to approximate
$41.8 million. When completed, the Fachinal Mine will be one of the southern
most mining operations in the world, employing approximately 225 workers near
the town of Chile Chico, located 800 miles south Santiago at an elevation of
approximately 1,200 feet.  The Company estimates that the Fachinal Mine will
produce approximately 41,000 ounces of gold and 2.6 million ounces of silver
during its first full year of production.

    Economic, precious metals bearing mineralization at Fachinal occurs in an
extensive epithermal, quartz-veins system hosted in Jurassic volcanic rocks.
Based on a reserve-review report dated April 1994, by Micon International
Limited, total, in-place, open-pit and underground, proven and probable
reserves at the Fachinal property are approximately 4.547 million tons
averaging 0.07 ounces per ton gold and 3.219 ounces per ton silver.  The
Fachinal open-pit reserve estimate, totaling 3.562 million tons averaging 0.057
ounces per ton gold and 2.55 ounces per ton





                                       15




<PAGE>   16



silver, is based on an internal cutoff grade of 0.04 ounces per ton equivalent
gold.  The underground reserve is based on internal cutoff grades ranging form
0.088 to 0.102 ounces per ton equivalent gold.  Both reserve estimates are
based on gold and silver prices of $375 per ounce and $5.00 per ounce,
respectively.  Average grades reflect extractive dilution, but not losses
during the recovery process.  The Company estimates, based upon thorough
metallurgical testing, recovery rates between 86.8 - 94.6% for gold and 82.2 -
92.3% for silver. The open-pit reserve estimate has also identified 872,000
tons of mineralized material, averaging 0.05 ounce per ton gold and 1.14 ounce
per ton silver.  Likewise, the underground resource estimate has identified an
additional 656,000 tons of mineralized material averaging 0.11 ounce per ton
gold and 6.01 ounces per ton silver.  Confidence in these additional tonnages
is insufficient for them to be included in the Fachinal reserve. Numerous other
attractive exploration targets with known precious-metals mineralization remain
to be evaluated.

    Although the government and economy of Chile has been relatively stable in
recent years, the ownership of property in a foreign country is always subject
to the risk of expropriation or nationalization with inadequate compensation.
Any foreign operation or investment may also be adversely affected by exchange
controls, currency fluctuations, taxation and laws or policies of particular
countries as well as laws and policies of the United States affecting foreign
trade, investment and taxation.

EL BRONCE MINE

    In July 1994, the Company entered into an agreement with Compania Minera El
Bronce de Petorca, a Chilean corporation ("CMEB"), pursuant to which the
Company acquired an option exercisable through July 1997 to purchase from CMEB
a 51% equity interest  in  the producing El Bronce Mine.  The El Bronce Mine is
an underground, gold-silver mine located on approximately 33,000 acres in the
Andean foothills about 90 miles north of Santiago, Chile and is accessible by
road.  The property consists of 64 exploitation concessions and 10 exploration
concessions.  Surface rights to permit mining on the property are leased from
private owners. Ore is produced from an extensive, precious-metals bearing,
epithermal, quartz-vein system hosted in Cretaceous volcanic rocks.  Pursuant
to the agreement, the Company made an initial payment to CMEB of $750,000 on
July 25, 1994, an option payment of $4,050,000 on October 14, 1994 and expended
$1.2 million during the balance of 1994 for exploration and mine development
activities.  In order to exercise its option to acquire a 51% equity interest
in the mine, the Company will be required to invest an  additional $20.4
million and also to invest at least $5 million (including 1994 s expenditures)
prior to July 1996 for exploratory and developmental activities designed to
increase ore reserves and increased annual gold production to 65,000 ounces
from the present level of 40,000 ounces of gold.

    In October 1994, the Company assumed operating control of the El Bronce
Mine, in which the Company has 51% interest in any operating profits.  The
Company plans to maintain the 500 to 600 ton per day milling rate at the mine,
improve the mining method to increase ore





                                       16




<PAGE>   17



reserves and to restructure the work force.  The mill currently has a 1,200 ton
per day capacity.  In addition, the Company has commenced exploratory
activities at three main exploration sites within the 17,800 acre area
surrounding the mine.

     Based on a reserve-report review dated January, 1995 by Compania Minera
CDE El Bronce, in-place, proven and probable ore reserves on the El Bronce
property total 393,000 tons averaging 0.172 ounces per ton gold.  An additional
627,000 tons of mineralized material, averaging 0.18 ounce per ton gold, has
been identified, but is currently insufficiently defined to be included in the
reserve.  The reserve is based on an internal cutoff of 0.058 ounce per ton
gold.  The Company estimates, based on past experience and metallurgical
testing, mill recovery rates are 91.5% for gold and 90% for silver.  The
mineralized system remains geologically open both along strike and down-dip.

    The following table sets forth El Bronce Mine production data subsequent to
its acquisition on October 3, 1994.  As stated above, the Company has a 51%
interest in any operating profits from the mine.  The Company's 5l% interest in
the mine's operating profits from October 3, 1994 through December 31, 1994
amounted to $1,023,537.


<TABLE>
<CAPTION>
                                  Three Months
                                     Ended
                                December 31, 1994
                                -----------------
    <S>                              <C>
    Ore mined (tons)                 47,462
    Gold (ounces)                     9,712
    Silver (ounces)                  39,605
</TABLE>

    The following sets forth the costs of production per ounce of gold and
silver on a gold equivalent basis during the period subsequent to October 3,
1994 at the El Bronce Mine.  Such costs include mining, processing and direct
administration costs, royalties and exploration expenses.  The production costs
per ounce of gold for the period is computed on a gold equivalent basis.  Each
ounce of silver produced is multiplied by the same ratio as the then current
silver-to-gold price ratio.  This gold equivalent silver production is then
added to actual gold production to determine the total gold equivalent
production.


<TABLE>
<CAPTION>
                                   Three Months
                                      Ended
                                December 31, 1994
                                -----------------
    <S>                              <C>
    Cash costs per ounce             $ 174.67
    Depreciation,
      depletion and
      amortization per ounce            20.40
                                     --------
                                     $ 195.07
                                     ========
</TABLE>





                                       17




<PAGE>   18




    The Company plans to spend expend approximately $3.9 million during 1995 on
exploratory anddevelopmental activities at the El Bronce Mine and surrounding
areas.


THE FARIDE MINE

    In September 1994, the Company entered into an agreement with Minera Cerro
Dominador, a Chilean corporation ("MCD") pursuant to which the Company acquired
an option, exercisable through January 15, 1998, to purchase from MCD a 51%
operating interest in the fully-developed Faride Mine. The Faride property is
located in northern Chile approximately 800 miles north of Santiago in the
Andean foot-hills of Region II and is accessible by road.  It consists of 36
exploitation concessions covering approximately 7,000 acres.  Surface rights to
permit mining are under lease from the Chilean government. Mineralization at
Faride occurs in an extensive, precious and base-metal bearing, epithermal,
quartz-vein system hosted in Tertiary granitic-intrusive rocks.

    The Company can acquire its 51% operating interest by paying MCD $4 million
over a four-year period and investing $3.5 million in exploration.  Upon
exercise of that option, the Company also has the right to purchase 51% of the
crushing and milling facility at the mine for an additional $8 million.

    The Faride property includes the fully-developed, underground Faride Mine,
which was built to produce 660 tons of ore per day, and a 46,200 ton per month
floatation mill, which is undergoing expansion to 77,000 tons per month
capacity.  The mine has not been operational since 1988.

    The Company expended approximately $542,873 during 1994 to conduct surface
and underground drilling in order to define reserves and to increase the
resource base at the mine.

    Based on a reserve-review report dated July 1990 by Minera Cerro Dominador,
in-place, proven and probable ore reserves on the Faride property total
approximately 1.075 million tons averaging 0.078 ounce per ton gold, 3.82 ounce
per ton silver and 0.88% copper.  An additional 566,000 tons of mineralized
material, averaging 0.04 ounce per ton gold and 4.5 ounces per ton silver, has
been identified during the reserve estimation.  This material is insufficiently
defined to be included in the reserve.  The reserve estimate is based on gold,
silver and copper prices of $400 per ounce, $6.20 per ounce and $0.80 per
pound, respectively.  Average grades reported in the reserve estimate do not
reflect losses during the recovery process nor allowance for extractive
dilution.  Estimated recovery rates based on using a traditional milling
process are approximately 80% gold, 75% silver and 25% copper.  The vein system
remains geologically open both down-dip and along strike.

    The mill currently processes copper slag from Chuquicamata on a contract
that is expected to terminate between 1996 and 1998.  During





                                       18




<PAGE>   19



late 1994, the Company conducted extensive sampling and completed approximately
3,000 meters of surface and underground drilling to develop and define
sufficient reserves.

    The Company s work program consists of additional drilling to further
delineate the ore body to enable the commencement of a feasibility study late
in 1995.

SILVER AND GOLD PRICES

    The Company's operating results are substantially dependent upon the world
market prices of silver and gold.  The Company has no control over silver and
gold prices, which can fluctuate widely.  The volatility of such prices is
illustrated by the following table, which sets forth the high and low prices of
silver (as reported by Handy and Harman) and gold (London final) per ounce
during the periods indicated:



<TABLE>
<CAPTION>
                                    Year Ended December 31,                         
          -------------------------------------------------------------------------
                1991                1992             1993                 1994     
          ----------------   ----------------  -----------------    ---------------
            High     Low       High    Low       High     Low         High     Low 
          -------  -------   ------- -------   -------  -------     -------  ------
<S>       <C>     <C>        <C>               <C>     <C>         <C>      <C>
Silver    $  4.53  $  3.58   $  4.32 $  3.63   $  5.37  $  3.55    $  5.76  $  4.63
Gold      $403.00  $344.25   $359.60 $330.35   $405.60  $326.10    $396.25  $369.65
</TABLE>


MARKETING

    Coeur has historically sold its gold and silver from its mines both
pursuant to forward contracts and at spot prices prevailing at the time of sale
to various precious metals firms.  As of December 31, 1994, the Company has
entered into forward contracts to deliver a total of 115,000 ounces of gold at
an average price of $416.20 per ounce through 1996.

EXPLORATORY MINING PROPERTIES

    Coeur, either directly or through its wholly-owned subsidiaries, owns,
leases and has interests in certain exploration-stage mining properties located
in the United States, Mexico, Chile, and New Zealand.  Giving retroactive
effect to the Company's acquisition of Callahan, exploration expenses of
approximately $2.3 million, $2.5 million and $3.9 million were incurred by the
Company in connection with exploration activities in 1992, 1993 and 1994,
respectively.

MANUFACTURING -- THE FLEXAUST COMPANY

    Flexaust manufactures several lines of lightweight flexible hose and duct
and metal tubing at plants located in Warsaw, Indiana and Ontario, California.
In September 1992, the manufacturing operations previously located in Amesbury,
Massachusetts were consolidated at the Flexaust facilities located in Warsaw,
Indiana and Ontario, California in order to achieve efficiencies and economies
of scale.  Flexaust's





                                       19




<PAGE>   20



major product line consists of Flexaust  close-pitch hose for low pressure and
suction use as well as severe flexing conditions.  A second line consists of
Springflex  wide-pitch retractable duct.  Both lines are made primarily of
neoprene-coated synthetic fabrics, wire-reinforced and are approximately
one-third the weight of metal duct work of comparable load-carrying capacity.
They are used in a wide variety of industrial and commercial applications for
conveying air, dust, fumes and other materials.

    Flexaust also produces Genesis , which is plastic hose used in industrial
markets as well as commercial cleaning and vacuum applications; and Bendway
duct, a line of metal tubing made of aluminum or stainless steel which also has
a wide variety of industrial applications.

    In addition, Flexaust participates in two joint ventures: Flexadux,
Incorporated, a 50%-owned U.S. company, formed in partnership with a European
producer, which makes and sells plastic industrial hose in the United States
and Canada; and Flexaust GmbH, also 50%-owned, located in West Germany, which
produces and markets Flexaust's regular line of wire-reinforced neoprene-coated
fabric hose in Europe.  In both joint ventures, Flexaust and its partner share
equally in costs and profits. Each of the joint ventures has an exclusive
license to produce and market the respective joint venture's products.  These
licenses are terminable upon one year's prior notice.

    Flexaust's products are sold principally for industrial use through
distributors, dealers and Flexaust's own sales force.  Approximately 850
stocking distributors and dealers market Flexaust's products, and sales to
distributors and dealers have averaged approximately 80% of total sales in the
last three years.  There are no continuing contracts for the sale of products.
Approximately 80% of the products sold are standard while the remaining 20% are
made to order or contain variations from standard.  U.S. government sales and
foreign sales are not material.  There are no seasonal aspects to Flexaust's
operations. Pre-tax income contributed by Flexaust in 1992, 1993 and 1994
amounted to approximately $1.1 million, $1.1 million and $1.2 million,
respectively.


GOVERNMENT REGULATION AND LEGAL PROCEEDINGS

    The Company's mining and mineral processing operations and property
exploration and development activities are subject to extensive federal, state
and local laws governing the protection of the environment, prospecting,
development, production, taxes, labor standards, occupational health, mine
safety, toxic substances and other matters. Coeur believes it is in substantial
compliance with all applicable laws and regulations.

    For the years ended December 31, 1992, 1993 and 1994, the Company expended
$1,050,015, $2,404,698 and $2,974,438 respectively, in connection with
environmental compliance activities at its operating





                                       20




<PAGE>   21



properties.  Furthermore, as discussed under "Bunker Hill Superfund Site"
below, the Company agreed in October 1993 to settle an environmental matter for
$1,230,000.  In addition, as of December 31, 1994, the Company had expended
approximately $4.6 million on environmental and permitting activities at the
Kensington Property, which expenditures have been capitalized as part of its
development cost.  Future environmental expenditures will be determined by
governmental regulations and the overall scope of the Company's operating and
development activities.

    Federal Environmental Laws

    Among the numerous federal environmental laws to which the Company is
subject is the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("Superfund" or "CERCLA"), which is the most important federal
program for remediating environmental dangers caused by hazardous substances.
CERCLA provides for the possible imposition of joint and several liability upon
potentially responsible parties ("PRPs"), including current and past owners and
operators at the site involved, persons who generated or otherwise arranged for
the disposal of hazardous substances released at the site, and persons who were
involved in the transport, treatment or disposal of hazardous substances
released at the site.  The Resource Conservation and Recovery Act of 1976
("RCRA") established a comprehensive regulatory framework for the management of
hazardous waste at active facilities, complementing the Superfund Program which
more often addresses inactive waste sites.  RCRA sets up a system for the
management of hazardous wastes (including leach spoil waste containing cyanide
such as the waste generated by the Rochester Mine), imposing requirements for
performance, testing and record keeping upon parties who generate, transport,
treat, store or dispose of waste.

    The Company's commitment to environmental responsibility has been
recognized in eight awards received since 1987, which included the
Dupont/Conoco Environmental Leadership Award, awarded to the Company on October
1, 1991 by a judging panel that included representatives from environmental
organizations and the federal government and the "Star" award granted on June
23, 1993 by the National Environmental Development Association.  The receipt of
such awards does not relieve the Company of its obligations to comply with all
applicable environmental laws.

    Bunker Hill Superfund Site.

    The Company knows of no material environmental liabilities to which it
currently is subject.  During October 1993, the Company and Callahan negotiated
a tentative settlement agreement with the U.S. Environmental Protection Agency
(the "EPA") and a group of other companies that are potentially responsible
parties ("PRPs") in connection with the Bunker Hill Superfund site.  The
Company and Callahan were notified in February 1990 by the EPA that they were
PRPs in connection with that site, where the EPA claims there is a need for
cleanup action under CERCLA.  The negotiated settlement agreement called for
the Company and





                                       21




<PAGE>   22



Callahan to pay a total of $1,230,000 to a group of other PRPs in order to
remove the Company and Callahan from any additional cleanup liability relating
to the site.  Accordingly, the Company recorded a non-recurring environmental
settlement expense of $1,230,000 during the third quarter of 1993.  An order
approving the settlement was issued by the Unites States District Court for the
District of Idaho on November 17, 1994 and the settlement amount was paid on
December 16, 1994.

    Mining Act of 1872.

    Legislation is presently pending in the U.S. Congress to change the Mining
Law of 1872 (the "Mining Act") under which the Company holds mining claims on
public lands.  It is considered possible that the Mining Act will be amended or
be replaced by stricter legislation in 1995.  Some of the legislation being
discussed contains strict new environmental standards and conditions,
additional reclamation requirements and extensive new procedural steps which
would likely result in delays in permitting.  The legislation may also impose
an 8% gross royalty on the value of minerals mined on public lands, payable to
the U.S. Government.  Whether changes will be enacted or the extent of any
changes is not presently known and the potential impact on the Company's United
States activities is difficult to predict.

    New Zealand and Chile Government Regulations

    The mining properties located in New Zealand and Chile are subject to
various government laws and regulations pertaining to the protection of the
air, surface water, ground water and the environment in general, as well as the
health of the work force, labor standards and the socioeconomic impacts of
mining facilities upon the communities.  The Company believes it is in
substantial compliance with all applicable laws and regulations in both Chile
and New Zealand, and believes that it can comply with the laws in Chile which
will govern operations at Fachinal.

EMPLOYEES

    At March 1, 1995, the Company employed a total of 1,007 full-time
employees, of which 46 are located at the Company's executive offices in Coeur
d'Alene, Idaho, 307 are employed at the Rochester Mine, 169 are employed at the
Golden Cross Mine in New Zealand, 82 are employed by Flexaust, 400 are employed
in Chile and 3 are employed in other various activities.  The Company maintains
labor agreements under country statutes in New Zealand at the Coeur Golden
Cross Mine and in Chile at the El Bronce Mine.  Both agreements are for three
years and currently are being proactively administered. In the opinion of the
Company, its labor relations have been satisfactory.  The personnel developing
the Kensington property are employees of Echo Bay Mines Alaska, Inc. and the
employees of Silver Valley Resources are employees of that company.





                                       22




<PAGE>   23



ITEM 2.  PROPERTIES.

    Information regarding the Company's properties is set forth under Item 1
above.


ITEM 3.  LEGAL PROCEEDINGS.


    Promissory Note Suit

    On September 22, 1994, a judgment was entered against the Company in the
United States District Court for the District of Idaho in a case entitled
Goldberg v. Coeur d'Alene Mines Corporation in the amount of $725,688.  The
action involves an alleged claim by the plaintiff to recover on four promissory
notes made by a predecessor of the Company.  The notes are claimed to be the
obligation of the Company by virtue of successive mergers which occurred in
1974 and 1988.  The plaintiff filed with the court a cost bill in the
approximate amount of $225,000. The claim was settled on January 11, 1995 by
the payout of $800,000.

    Internal Revenue Service Audit

    In December 1993, the IRS completed an audit of the Company for the years
1990 and 1991.  In November 1994, the IRS also initiated their audit of the
Company for the years 1992 and 1993.  For all such years, the IRS has advised
the Company that three material issues remain unresolved.  All issues involve
the deductibility of costs previously claimed by the Company.

    On February 7, 1995, the IRS issued its thirty-day letter assessing tax
deficiencies of $738,806.  If resolved in favor of the IRS, the Company would
be subject to the deficiency, net operating loss carryforwards would be
decreased by $28.2 million, and approximately $2 million of pending tax refunds
would be forfeited.  The Company believes it has treated each issue in question
in a manner that is consistent with applicable law and prevailing industry
practice and is in the process of filing a petition with the United States Tax
Court to contest the assessment.


 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

    Not applicable.





                                       23




<PAGE>   24



 ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT.

    The following table sets forth certain information regarding the Company's
current executive officers:
<TABLE>
<CAPTION>
                                  Office with                  Appointed
Name                     Age      the Company                  to Office
----                     ---    ---------------                ---------
<S>                      <C>    <C>                               <C>
Dennis E. Wheeler        52     Chairman of the Board             1992
                                President                         1980
                                Chief Executive Officer           1986

James A. Sabala          40     Senior Vice President             1987
                                Chief Financial Officer
                                Treasurer                         1982

Michael L. Clark         50     Senior Vice President             1992
                                Chief Operating Officer

Alan L. Wilder           46     Vice President-Engineering        1992

William F. Boyd          56     Corporate Counsel & Secretary     1990

Tom T. Angelos           39     Controller                        1987
</TABLE>

    Messrs. Wheeler, Sabala and Angelos have been principally employed by the
Company for more than the past five years.  Prior to his employment with the
Company in October 1992, Mr. Clark had served as the Executive Vice President
and Chief Operating Officer of Pegasus Gold, Inc. since 1990 and as the Vice
President-Operations and Chief Operating Officer of that company since 1986.
Mr. Boyd was a partner in the law firm of Evans, Keane, Koontz, Boyd, Simko &
Ripley for more than five years prior to his employment with the Company in
April 1990.  Mr. Alan L.  Wilder was Process Plant Superintendent at Coeur
Rochester in 1986, Project Manager for Newmont Mining Corporation until 1989, a
consultant in 1990 and 1991, and Manager of Engineering and Construction for
the Company in 1991 until his appointment as an executive officer effective
January 1, 1992.





                                       24




<PAGE>   25



                                    Part II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY
        HOLDER MATTERS.                                           

    The Company's Common Stock is listed on the New York Stock Exchange
("NYSE") and the Pacific Coast Exchange.  The following table sets forth, for
the periods indicated, the high and low closing sales prices of the Common
Stock as reported by the NYSE:

<TABLE>
<CAPTION>
                                     High                 Low  
                                   -------              -------
    <S>    <C>                     <C>                  <C>
    1993:  First Quarter           $16.000              $10.000
           Second Quarter          $20.875              $15.375
           Third Quarter           $23.750              $15.750
           Fourth Quarter          $22.000              $17.500

    1994:  First Quarter           $23.500              $18.250
           Second Quarter          $22.625              $16.500
           Third Quarter           $22.125              $17.125
           Fourth Quarter          $21.500              $14.375
</TABLE>

    The Company paid per share cash dividends of $.15, $.15, $.15, $.12, $.11,
and $.11 on its Common Stock on April 15, 1994, April 16, 1993, April 15, 1992,
April 12, 1991, April 20, 1990 and April 21, 1989 respectively.  Future
dividends on the Common Stock, if any, will be determined by the Company's
Board of Directors and will depend upon the Company's results of operations,
financial conditions, capital requirements and other factors.

    At March 21, 1995, there were 8,859 record holders of the Company's
outstanding Common Stock.





                                       25




<PAGE>   26



ITEM 6.  SELECTED FINANCIAL DATA

    The following table summarizes certain selected consolidated financial data
with respect to the Company and its subsidiaries and should be read in
conjunction with the Consolidated Financial Statements and Notes thereto
appearing elsewhere in this report.  The information has been restated to give
effect to a business combination with Callahan Mining Corporation.  (See Note C
to the consolidated financial statements.)
<TABLE>
<CAPTION>
                                                                   Year Ended December 31,                                 
                                    ------------------------------------------------------------------------------------
                                        1990             1991                1992             1993               1994   
                                    -----------       ----------         ----------        ---------          ----------
                                    (Restated)
                                                            (Thousands Except Per Share Information)
<S>                                 <C>               <C>                <C>               <C>                <C>
INCOME STATEMENT DATA:
Income:
      Sale of concentrates
           and dore'                $ 53,125          $ 49,035           $ 41,414          $ 67,990           $ 79,606
      Less cost of mine
           operations                 45,375            44,072             37,829            59,804             67,802
                                    ---------         ---------          ---------         ---------          --------
      Gross profits                    7,750             4,963              3,585             8,186             11,804
      Sale of industrial
           products                   11,264            10,187             10,108            10,192             11,417
      Less cost of
           manufacturing              10,202             8,791              8,987             9,088             10,264  
                                    ---------         ---------          ---------         ---------          ----------
      Gross profits                    1,062             1,396              1,121             1,104              1,153
      Other income                     9,062             7,824              4,906             5,537             12,857  
                                    ---------         ---------          ---------         ---------          ----------
      Total income                    17,874            14,183              9,612            14,827             25,814
Expenses                              23,118            29,178             14,118            31,548             29,493  
                                    ---------         ----------         ---------         ---------          ----------
Loss before income
      taxes and
      cumulative effect
      of change in
      accounting method               (5,244)          (14,995)            (4,506)          (16,721)            (3,679)
Income taxes (benefit)                (1,054)             (596)            (3,747)           (3,431)               264  
                                    ---------         ---------          ---------         ---------          ----------

Loss before cumulative
      effect of change in
      accounting method               (4,190)          (14,399)              (759)          (13,290)            (3,943)
Cumulative effect of
      change in accounting
      method(1)                                                                               5,181                     
                                    ---------         ---------          ---------         ---------          ----------
Net loss                            $ (4,190)         $(14,399)          $   (759)         $ (8,109)          $ (3,943) 
                                    =========         =========          =========         =========          ==========

Per Share Data: (2)
Earnings per share data:
      Loss per share
           before cumulative
           effect of change in
           accounting method        $  (0.30)         $  (0.94)          $  (0.05)         $   (.87)              (.26)
      Cumulative effect of
           change in account-
           ing method                                                                           .34                   
                                    ---------         ---------          ---------         ---------          --------
           Net loss per share       $  (0.30)         $  (0.94)          $  (0.05)         $   (.53)          $   (.26)
                                    =========         =========          =========         =========          =========
           Cash dividends
             per share              $   0.11          $   0.12           $   0.15          $    .15           $    .15  
                                    =========         =========          =========         =========          ==========
Weighted average
      number of shares of
      Common Stock and
      equivalents used in
      calculation                     13,792            15,308             15,317            15,328             15,388  
                                    =========         =========          =========         ==========         ==========

BALANCE SHEET DATA:
      Total Assets                  $276,402          $261,600           $325,256          $325,708           $412,843
      Working capital                153,768           132,126            181,775           107,633            173,546
      Long-term debt                  59,548            57,902            131,134           129,234            227,193
      Shareholders' equity           200,040           183,938            180,991           170,849            160,292
</TABLE>





                                       26




<PAGE>   27



(1)   Effective January 1, 1993, the Company changed its method of accounting
      for income taxes by adopting Statement of Financial Accounting Standards
      (FAS) 109, "Accounting for Income Taxes."  FAS 109 requires an asset and
      liability approach to accounting for income taxes and establishes
      criteria for recognizing deferred tax assets.  Accordingly, the Company
      adjusted its existing deferred income tax assets and liabilities to
      reflect current statutory income tax rates and previously unrecognized
      tax benefits related to federal and certain state net operating loss
      carryforwards.  FAS 109 also contains new requirements regarding balance
      sheet classification and prior business combinations.  Hence, the Company
      adjusted the carrying values of an incremental interest in the Rochester
      Property acquired in 1988 and CDE Chilean Mining Corp. acquired in 1990
      to reflect the gross purchase value previously reported net-of-tax.  The
      cumulative effect of the accounting change on prior years at January 1,
      1993 is a nonrecurring gain of $5,181,188, or $.34 per share, and is
      included in the Consolidated Statement of Operations for the year ended
      December 31, 1993.  Other than the cumulative effect, the accounting
      change had no material effect on the results of operations for the year
      ended December 31, 1993.

      As of January 1, 1993, after giving effect to the implementation of FAS
      109, the significant components of the Company's net deferred tax
      liability were as follows:

<TABLE>
<CAPTION>
                                              Deferred Income Taxes         
                                           --------------------------
                                              Assets      Liabilities
                                           -----------    -----------
       <S>                                 <C>            <C>
       Property, plant and equipment                      $16,756,918
       AMT credit carryforwards            $   938,672
       Business credit carryforwards           628,933
       Net operating loss carryforwards     17,721,115               
                                           ------------   -----------
            Total                           19,288,720     16,756,918
       Less--valuation allowance            (7,927,904)              
                                           ------------   -----------
            Net                            $11,360,816    $16,756,918
                                           ============   ===========
</TABLE>


       As permitted by FAS 109, prior year financial statements have not been
       restated to reflect the change in accounting method.

(2)    Earnings per share are calculated based on the weighted average number
       of common shares outstanding and those Common Stock equivalents that are
       deemed to be dilutive.  The 6% Convertible Subordinated Debentures Due
       2002 are considered to be Common Stock equivalents.  Accordingly, such
       debentures are assumed to be converted, and interest expense on such
       debentures, net of tax expense, has been considered in the computation
       of earnings per share, except in those instances where the effects of
       conversion would be antidilutive.





                                       27




<PAGE>   28


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS.              

GENERAL

    The results of the Company's operations are significantly affected by the
market prices of gold and silver which may fluctuate widely and are affected by
many factors beyond the Company's control, including interest rates,
expectations regarding inflation, currency values, governmental decisions
regarding the disposal of precious metals stockpiles, global and regional
political and economic conditions, and other factors.  The Company's currently
operating mines are the Rochester Mine in Nevada, which it wholly owns and
operates; the Golden Cross Mine in New Zealand, in which the Company has an 80%
operating interest; and the El Bronce Mine, a Chilean gold mine of which the
Company acquired operating control in October 1994.  In addition, in September
1994, the Company entered into an agreement under which it has the right to
acquire up to a 51% operating interest in another Chilean gold mine, the Faride
Mine.

    Effective January 1, 1995, the Company, Callahan and Asarco contributed to
Silver Valley their interests in and relating to the Galena and Coeur Mines in
Idaho, at which mining activities were suspended in July 1992 and April 1991,
respectively, due to then prevailing silver prices, and the adjoining Caladay
property, a silver exploration property.  It is contemplated that Silver
Valley, of which Asarco owns 50% and the Company and Callahan own 50%, will
invest approximately $25 million in development and exploration at the
properties under a two-year plan of lengthening the existing workings,
improving infrastructure and diamond drilling to increase reserves and mine
life.  The reopening of the Galena and Coeur Mines is dependent upon the
favorable action of the Board of Directors of Silver Valley, which will base
its decision upon several factors, including silver prices.

    The Company has an option until July 1997 to increase its ownership
interest in the El Bronce Mine to 51% if it invests $20.4 million and also
invests a minimum of $5 million over a two-year period for exploration and mine
development designed to expand ore reserves and increase annual gold production
above the current level of 40,000 ounces per year.  The Company also has an
option until January 15, 1998 to acquire up to a 51% operating interest in the
Faride Mine by paying the current owner $4 million over a four-year period and
investing $3.5 million in exploratory activities.

    In July 1994, the Company's Board of Director's approved construction of
the Fachinal Project.  Construction of the new mine is expected to be completed
in the fourth quarter of 1995 at a total estimated cost of approximately $41.8
million.  The mine presently is expected to produce approximately 41,000 ounces
of gold and 2.6 million ounces of silver in its first year.

    A production decision at the Kensington Property is subject to the approval
by the Company and its joint venture partner, a market price of gold of at
least $400 per ounce and the receipt of certain required permits.  The market
price of gold (London final) on March 9, 1995 was $381.50 per ounce.  With
respect to the permits, the Company is unable to





                                       28




<PAGE>   29


control the timing of their issuance.  On November 8, 1994 EPA issued a draft
of its Technical Assistance Report which calls for the Kensington venture to
redesign portions of its project and furnish additional data, in order to
satisfy certain environmental requirements.  If, in its final report, the EPA
adheres to the recommendations in the draft, the Company believes it is
feasible to make design changes and furnish necessary data.  It is anticipated
that a final EPA Technical Assistance Report will be furnished by the EPA to
the Army Corps of Engineers in the second quarter of 1995, which should lead to
the issuance by the Corps of its Section 404 permit in due course.  However,
the Company is not able to control the timing of such regulatory issues.

    The Company's business plan is to continue to acquire mining properties
and/or businesses that are operational or expected to become operational in the
near future so that they can reasonably be expected to contribute to the
Company's near-term cash flow from operations and expand the Company's gold
and/or silver production.


                             RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

SALES AND GROSS PROFITS

    Sales of concentrates and dore' in 1994 increased by $11,616,272, or 17%,
over 1993.  The increase is primarily attributable to an increase in gold
production and increases in metal prices.  Silver and gold prices averaged
$5.28 and $384.01 per ounce, respectively, in 1994 compared to $4.30  and
$359.77 per ounce, respectively, in 1993.  During 1994, the Company produced
6,180,215 ounces of silver and 129,239 ounces of gold compared to 6,119,219
ounces of silver and 123,310 ounces of gold in 1993.  The increase in gold
production is due to the Company's acquisition of an 80% interest in the Golden
Cross Mine effective April 30, 1993.  The Company's 80% interest in Golden
Cross production in 1994 amounted to 67,400 ounces of gold and 222,246 ounces
of silver compared to 56,898 ounces of gold and 175,325 ounces of silver in
1993.

    The cost of mine operations in 1994 increased by $7,998,962, or 13%, over
1993.  Gross profit from mine operations increased by   $3,617,310, or 44%,
over 1993.  Mine operations gross profit as a percent of sales increased to 15%
in 1994 compared to 12% in 1993.  The increase was primarily attributable to
the increases in silver and gold prices in 1994 over the prior year.

    The cash costs of production per ounce of gold at the Golden Cross Mine
amounted to $277 per ounce in 1994, compared to $245 per ounce during the four
months ended April 30, 1993 and $220 per ounce during the eight months ended
December 31, 1993.  The increase was primarily attributable to the presence of
a harder grinding ore in the open pit requiring more milling and chemicals in
the processing and lower grade of ore being provided from the underground
portion of the mine.  The cash costs of production per ounce of silver on a
silver equivalent basis at the Rochester Mine amounted to $3.57 per ounce in
1994, compared to $3.55 per ounce in 1993.





                                       29




<PAGE>   30


    Sales of industrial products in 1994 increased by $1,224,646, or 12%,
compared to 1993.  Cost of manufacturing increased by $1,175,157, or 13%, in
1994 compared to 1993.  As a result, gross profit from manufacturing in 1994
increased by $49,489, or 4%, compared to 1993.

OTHER INCOME

    Interest and other income in 1994 increased by $7,320,550, or 132%, over
1993.  The increase is primarily due to an increase in the level of the
Company's cash and securities portfolio and a gain of $2.7 million arising from
the sale by the Company of common shares of International Curator in the third
quarter of 1994.


EXPENSES

    Total expenses in 1994 decreased by $2,054,213, or 7%, from 1993. The
decrease is primarily due to the non-recurring write-offs of $9,374,000, or
$.61 per share, effected in the third quarter of 1993.  Those write-offs are
discussed below and included one-time provisions for litigation settlement of
$5,875,000, environmental settlement of $1,230,000 and the write-off of
uncollectible notes receivable of $2,268,564.  A non-recurring write-off of
$800,000 was recorded in 1994 as a result of an adverse judgment in a lawsuit
described below relating to four promissory notes made by a predecessor of the
Company.

    On September 22, 1994, a judgment was entered against the Company in the
United States District Court for the District of Idaho in a case entitled
Goldberg v. Coeur d'Alene Mines Corporation in the amount of $725,688 plus
attorney fees.  The action involves an alleged claim by the plaintiff to
recover on four promissory notes made by a predecessor of the Company.  The
notes are claimed to be the obligation of the Company by virtue of successive
mergers which occurred in 1974 and in 1988. Plaintiff filed with the court a
cost bill in the approximate amount of $225,000.  The claim was settled on
January 11, 1995 by payout of $800,000.

    On November 12, 1993, the Company's Board of Directors approved the
proposed settlement of Kassover v. Coeur d'Alene Mines Corporation, the class
action originally filed in November 1990 and amended in March 1991 alleging
violations of the federal securities laws and common law primarily in
connection with the Company's public offering of Common Stock in September
1990.  The proposed settlement called for the Company to (i) issue to the class
members Common Stock of the Company having a fair market value of $4 million
based on the average closing sale price of the Common Stock on the New York
Stock Exchange during the five trading days immediately preceding the court
hearing to be held in connection with the settlement and (ii) pay $1,875,000 in
cash.  On June 24, 1994, the U.S. District Court for the District of Idaho
approved the settlement and prior to the end of 1994, a total of 220,083 shares
of Common Stock were issued in connection with the settlement.  The Board's
decision reflected its desire to avoid the continuing substantial costs and
expenses associated with the lawsuit and the inherent uncertainties





                                       30




<PAGE>   31


of litigation.  The Company recorded a litigation settlement expense of
$5,875,000 in the third quarter of 1993.

    During October 1993, the Company and Callahan negotiated a tentative
settlement agreement with the U.S. Environmental Protection Agency (the "EPA")
and a group of other companies that are potentially responsible parties
("PRPs") in connection with the Bunker Hill Superfund site.  The Company and
Callahan had been notified in February 1990 by the EPA that they were PRPs in
connection with that site, where the EPA claimed there was a need for cleanup
action under the Comprehensive Environmental Response Compensation and
Liability Act of 1980.  The negotiated settlement agreement called for the
Company and Callahan to pay a total of $1,230,000 to a group of other PRPs in
order to remove the Company and Callahan from any additional cleanup liability
relating to the site. Accordingly, the Company recorded a non-recurring
environmental settlement expense of $1,230,000 during the third quarter of
1993.  An order approving the settlement was issued by the United States
District Court for the District of Idaho on November 17, 1994, and the
settlement amount was paid on December 16, 1994.

    During September 1993, the Company commenced foreclosure proceedings upon
the collateral underlying two delinquent collateralized promissory notes, the
recorded principal and accrued interest on which amounted to $2,268,564.  The
notes originally were acquired by a corporation that merged with the Company in
1988.  Demand for payment had been made without satisfaction and the Company
discontinued accruing interest on the notes in October 1991.  As a result of
the institution of the foreclosure proceedings and the Company's inability to
ascertain what amounts, if any, could be realized therefrom, the Company
effected a non-recurring write-off of uncollectible notes receivable of
$2,268,564 in the third quarter of 1993.

    The above-described decrease in non-recurring expenses in 1994 from 1993
was partially offset by an increase in  interest  expense of approximately $6.0
million in 1994, which was related to the issuance of $100 million principal
amount of 6-3/8% Convertible Subordinated Debentures in the first quarter of
1994, and increases in administrative expenses  of  approximately $.2 million
and mining exploration of approximately $1.3 million.


INCOME (LOSS) BEFORE TAXES AND ACCOUNTING CHANGE

    As a result of the above, the Company's loss before income taxes and the
cumulative effect of a change in accounting amounted to $3,679,258 in 1994
compared to $16,720,820 in 1993.  The provision for income taxes amounted to
$263,306 in 1994, compared to a benefit of $3,430,760 in 1993.  As a result,
the Company reported a net loss before the cumulative effect of a change in
accounting of $3,942,564, or $ .26 per share, in 1994, compared to a net loss
of  $13,290,060, or $.87 per share, in 1993.





                                       31




<PAGE>   32


CHANGE IN ACCOUNTING

    Effective January 1, 1993, the Company changed its method of accounting for
income taxes by adopting the mandatory Statement of Financial Accounting
Standards (FAS) 109, "Accounting for Income Taxes." FAS 109 requires an asset
and liability approach to accounting for income taxes and establishes criteria
for recognizing deferred tax assets.  Accordingly, the Company adjusted its
existing deferred income tax assets and liabilities to reflect current
statutory income tax rates and previously unrecognized tax benefits related to
federal and certain state net operating loss carry forwards.  The cumulative
effect of the accounting change on prior years at January 1, 1993, resulted in
a non-recurring gain of $5,181,188, or $.34 per share, and is included in the
results of operations for 1993.


NET INCOME (LOSS)

    As a result of the above, the Company reported a net loss of $3,942,564, or
$.26 per share, in 1994, compared to a net loss of $8,108,872, or $.53 per
share, in 1993.




RESULTS OF OPERATIONS - 1993 COMPARED TO 1992

  SALES AND GROSS PROFIT

     Sales of concentrates and dore in 1993 increased by $26,575,500, or 64%,
over 1992.  The increase is primarily attributable to an increase in gold
production and increases in metal prices.  Silver and gold prices averaged
$4.30 and $359.77 per ounce, respectively, in 1993 compared to $3.94 and
$343.73 per ounce, respectively, in 1992.  During 1993, the Company produced
6,119,219 ounces of silver and 123,310 ounces of gold compared to 6,254,273
ounces of silver and 56,638 ounces of gold in 1992.  The decrease in silver
production is due to the temporary closure of the Galena Mine in July 1992.
The Galena Mine contributed 822,904 ounces of silver production during 1992.
The increase in gold production is due to the Company's acquisition of an 80%
interest in the Golden Cross Mine effective April 30, 1993.  The Company's 80%
interest in Golden Cross Mine production in 1993 amounted to 56,898 ounces of
gold and 175,325 ounces of silver.

  The cost of mine operations in 1993 increased by $21,974,182, or 58%, over
1992 and is primarily due to the acquisition of the Golden Cross Mine in 1993.
Gross profit from mine operations increased by $4,601,318, or 128%, in 1993
from 1992.  Mine operations gross profit as a percent of sales increased to
12.0% in 1993 compared to 8.7% in 1992.  The increase was primarily
attributable to the increases in silver and gold prices in 1993 from the prior
year.





                                       32




<PAGE>   33


  Sales of industrial products in 1993 increased by $84,116, or .8%, compared
to 1992.  Cost of manufacturing increased by $101,134, or 1.1%, in 1993,
compared to the prior year.  As a result, gross profit from manufacturing for
1993 decreased by $17,018, or 1.5%, compared to 1992.


  EXPENSES

     Total expenses in 1993 increased by $17,429,334, or 123%, over the prior
year.  The increase is primarily due to non-recurring write-offs of $9,373,564,
or $.61 per share ($.49 per share net of taxes), effected in the third quarter
of 1993.  The write-offs include a one time provision for litigation settlement
of $5,875,000, resolution of an environmental matter of $1,230,000 and the
write-off of uncollectible notes receivable of $2,268,564.  The increase is
also attributable to an increase in interest expense of $4,267,802, which is
related to the issuance of $75 million principal amount of 7% Convertible
Subordinated Debentures in December 1992, and increases in accounting and legal
expenses of $1,641,235, idle facilities expense of $769,902, corporate expenses
of $617,067 and administrative expenses of $485,501.


  NON-RECURRING CHARGES

     As described above, non-recurring expenses recorded by the Company during
1993 included (i) a litigation settlement expense of $5,875,000 in connection
with the settlement of the Kassover class action lawsuit, (ii) an environmental
expense of $1,230,000 in connection with the settlement relating to the Bunker
Hill Superfund site and (iii) a write-off of uncollectible notes receivable of
$2,268,564.


  INCOME (LOSS) BEFORE TAXES AND ACCOUNTING CHANGE

     As a result of the above, the Company's loss before income taxes and the
cumulative effect of a change in accounting amounted to $16,720,820 in 1993,
compared to $4,506,391 in 1992.  The benefit for income taxes amounted to
$3,430,760 in 1993, compared to $3,747,136 in 1992.  The Company reported a net
loss before the cumulative effect of a change in accounting of $13,290,060, or
$.87 per share, in 1993, compared to $759,255, or $.05 per share, in 1992.


  CHANGE IN ACCOUNTING

     Effective January 1, 1993, the Company changed its method of accounting
for income taxes by adopting the mandatory Statement of Financial Accounting
Standards (FAS) 109, "Accounting for Income Taxes." FAS 109 requires an asset
and liability approach to accounting for income taxes and establishes criteria
for recognizing deferred tax assets.  Accordingly, the Company adjusted its
existing deferred income tax assets and liabilities to reflect current
statutory income tax rates and previously unrecognized tax benefits related to
federal and certain state net operating loss carry forwards.  The cumulative
effect of the





                                       33




<PAGE>   34


accounting change on prior years at January 1, 1993, results in a non-recurring
gain of $5,181,188, or $.34 per share, and is included in the results of
operations for 1993.

  NET INCOME (LOSS)

     The Company reported a net loss of $8,108,872, or $.53 per share, in 1993,
compared to a net loss of $759,255, or $.05 per share, in 1992.


LIQUIDITY AND CAPITAL RESOURCES

  Working Capital; Cash and Cash Equivalents

     The Company's working capital at December 31, 1994 was approximately
$173.5 million compared to $107.6 million at December 31, 1993.  The ratio of
current assets to current liabilities was 10.4 to one at December 31, 1994
compared to 6.0 to one at December 31, 1993.

  The increase in the Company's working capital at December 31, 1994 compared
to December 31, 1993 is primarily attributable to the Company's sale in January
and February 1994 of an aggregate of $100,000,000 principal amount of 6-3/8%
Convertible Subordinated Debentures Due 2004 (the "6 3/8% Debentures").  The 6
3/8% Debentures were sold by the Company to Kidder, Peabody & Co. Incorporated
("Kidder") pursuant to a Purchase Agreement, dated January 18, 1994, at a price
equal to 96.75% of the principal amount sold and were issued by the Company in
connection with an offering to "qualified institutional buyers" as defined in
Rule 144A under the Securities Act and to certain non-U.S. persons in reliance
upon Regulation S under the Securities Act of 1933 (the "Securities Act").  The
6 3/8% Debentures were issued pursuant to an Indenture, dated as of January 26,
1994 (the "Indenture"), between the Company and Bankers Trust Company, as
trustee.  The 6 3/8% Debentures are convertible into shares of Common Stock on
or before January 31, 2004, unless previously redeemed, at a conversion price
of $26.20 per share, subject to adjustment in certain events.  The 6 3/8%
Debentures are redeemable, in whole or in part, at any time on or after January
31, 1997, at redemption prices declining from 103.643% of the principal amount
during the year beginning January 31, 1997, to 100% of the principal amount
during the year beginning January 31, 2001 and thereafter.  The 6 3/8%
Debentures are required to be repurchased at the option of the holder if a
Designated Event (as defined in the Indenture) occurs, at 100% of the principal
amount thereof plus accrued interest.  The Debentures are unsecured and
subordinate in right of payment to all Senior Debt (as defined in the
Indenture).  The Indenture, Purchase Agreement and Registration Rights
Agreement are filed as exhibits to this Report.

     Pursuant to a Registration Rights Agreement, dated January 26, 1994,
("Registration Rights Agreement") between the Company and Kidder, the Company
filed a shelf registration statement under the Securities Act in April 1994 for
the purpose of registering the 6 3/8% Debentures and underlying shares of
Common Stock issuable upon the conversion thereof under the Securities Act.
The Company plans to use the approximately $95.5 million net proceeds from such
offering for general corporate purposes, including the possible acquisition of,
or investment in,





                                       34




<PAGE>   35


additional precious metals mines, properties or businesses, and for possible
developmental activities on new or existing mining properties.  The Company's
acquisition efforts are primarily focused upon operating precious metals mines
and precious metals properties or businesses that are expected to become
operational in the near future.  The Company currently is engaged in the review
and investigation of opportunities for expansion of its business through
acquisitions, investments or other transactions.  While preliminary agreements
have been entered into with respect to certain proposed acquisitions, the
consummation of such acquisitions is subject to significant contingencies.  The
Company invested the proceeds of the above offering in interest-bearing
marketable securities and money market obligations, and plans to continue such
investments pending the use of the proceeds of that offering as discussed
above.

     Net cash provided by operating activities in 1994 was $6,403,007 compared
to $4,202,377 in 1993.  Net cash used in investing activities in 1994 was
$97,244,073 compared to $119,558,375 in 1993.  Net cash provided by financing
activities in 1994 was $91,310,877 compared to$4,072,853 net cash used in
financing activities in 1993.  As a result of the above, cash and cash
equivalents increased by $469,811 in 1994 compared to a $119,428,851 decrease
in 1993.

Construction of Fachinal Mine

     In July 1994, following completion by an independent engineering firm of a
detailed feasibility study regarding the Company's Fachinal property, the
Company's Board of Directors approved the construction of the project.  Based
on that study, the Company estimates that the cost to complete the Fachinal
mining facilities will be approximately $41.8 million.  The Company is funding
that construction on a project financing basis.  The Company expects to enter
into a financing agreement with N.M. Rothschild and Sons, Ltd. under which the
bank will provide $24 million for project development.  The agreement requires
Coeur d Alene Mines to guarantee repayment of the facility until the project
reaches a defined completion after which the project alone is liable for
repayment.  The agreement has numerous financial covenants. The interest rate
prior to completion is equal to LIBOR plus 1.5% and increases to LIBOR plus
2.75% after completion.  The facility is repayable in eight equal semiannual
installments after project completion.

  Environmental Compliance Expenditures

     For the years ended December 31, 1994, 1993 and 1992, the Company expended
$2,974,438, $2,404,698, and $1,050,015, respectively, in connection with
environmental compliance activities at its operating properties.  At December
31, 1994, the Company had expended a total of approximately $4.6 million on
environmental and permitting activities at the Kensington Property, which
expenditures have been capitalized as part of its development cost.





                                       35




<PAGE>   36


     The Company estimates that its environmental compliance expenditures at
its operating properties during 1995 will approximate $2,071,000.  Such
activities at the Rochester and Golden Cross Mines include monitoring, bonding,
earth moving, water treatment and revegetation activities.  The Company
estimates that environmental compliance expenditures at its Kensington and
Fachinal developmental properties during 1995 will approximate $542,904 and
relate to  activities associated with obtaining permits required for
construction.  Such expenditures would significantly increase in the event a
decision is made to proceed with the construction of production facilities at
the Kensington property.  The Company established a $585,000 reserve in 1991
for future costs relating to the closure of the Ropes Mine previously owned by
Callahan;  the Company is currently reviewing the adequacy of that reserve to
cover expenditures required to comply with environmental regulations.  Future
environmental expenditures will be determined by governmental regulations and
the overall scope of the Company's operating and development activities.  The
Company places a very high priority on its compliance with environmental
regulations.

  Exploration and Development Expenditures

     During 1994, the Company expended approximately $2.2 million (excluding
capitalized interest) for its share of the developmental costs at the
Kensington Property, approximately $5.8 million for leach pad construction at
the Rochester Mine, $7.5 million (excluding capitalized interest) for the
development of the Fachinal Property, $4.8 million representing investment in
the El Bronce Mine and $1.2 million to continue its planned development
exploration programs.  During 1995, the Company presently plans to expend
approximately $1.7 million (excluding capitalized interest) for its share of
Kensington Property development costs, approximately $38.3 million (excluding
capitalized interest) for development at the Fachinal Property, and $3.9
million for developmental and exploration activities at the El Bronce Mine.
Construction of the new Fachinal mining facilities is expected to be completed
in the fourth quarter of 1995.  No decision has been made as to when or whether
the Kensington Property will be placed into commercial production.

  Internal Revenue Service Audit

     In December 1993, the IRS completed an audit of the Company for the years
1990 and 1991.  The IRS has advised the Company that two issues remain
unresolved, and that the IRS will issue a proposed assessment. One issue
involves the alternative minimum tax, which, if resolved in favor of the IRS,
would require payment by the Company of approximately $1.2 million.  The other
issue involves the deductibility of costs previously claimed by the Company.
If resolved in favor of the IRS, the Company's net operating loss carryforward
would be decreased by $8.2 million.  The Company believes it has treated both
issues in a manner that is consistent with applicable law and prevailing
industry practice and will contest any such assessment.





                                       36




<PAGE>   37


                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Pursuant to General Instruction G(3) of Form 10-K, the information called
for by this item regarding directors is hereby incorporated by reference from
the Company's definitive proxy statement to be filed pursuant to Regulation 14A
not later than 120 days after the end of the fiscal year covered by this
report.  Information regarding the Company's executive officers is set forth
above under Item 4A of this Form 10-K.


ITEM 11. EXECUTIVE COMPENSATION

     Pursuant to General Instruction G(3) of Form 10-K, the information called
for by this item is hereby incorporated by reference from the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after the end of the fiscal year covered by this report.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT                                           

     Pursuant to General Instruction G(3) of Form 10-K, the information called
for by this item is hereby incorporated by reference from the Company's
definitive proxy statement to be filed pursuant to  Regulation 14A not later
than 120 days after the end of the fiscal year covered by this report.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Pursuant to General Instruction G(3) of Form 10-K, the information called
for by this item is hereby incorporated by reference from the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after the end of the fiscal year covered by this report.





                                       37




<PAGE>   38


                                    Part IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
         FORM 8-K                                               

(a) Financial Statements and Financial Statement Schedules:

    (1) The following consolidated financial statements of Coeur d'Alene Mines
        Corporation and subsidiaries are included in Item 8.

        Consolidated Balance Sheets-December 31, 1993 and 1994.

        Consolidated Statements of Operations--Years Ended December 31, 1992,
        1993 and 1994.

        Consolidated Statements of Changes in Shareholders' Equity--Years Ended
        December 31, 1992, 1993 and 1994.

        Consolidated Statements of Cash Flows--Years Ended December 31, 1992,
        1993 and 1994.

        Notes to Consolidated Financial Statements.


(b) Reports on Form 8-K:  No Form 8-K was filed by the Company during 1994.  On
    January 17, 1995, the Company filed a Form 8-K reporting the transfer,
    effective as of January 1, 1995, of certain assets to Silver Valley.


(c) Exhibits:  The following listed documents are filed as Exhibits to this
    report:

<TABLE>
    <S>             <C>
    3(a)    -       Articles of Incorporation of the Registrant and amendments
                    thereto. (Incorporated herein by reference to Exhibit 3(a) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1988.)

    3(b)    -       Bylaws of the Registrant and amendments thereto.  (Incorporated
                    herein by reference to Exhibit 3(b) to the Registrant's Annual
                    Report on Form 10-K for the year ended December 31, 1988.)

    3(c)    -       Certificate of Designations, Powers and Preferences of the Series
                    A Junior Preferred Stock of the Registrant, as filed with Idaho
                    Secretary of State on May 25, 1989 (Incorporated by reference to
                    Exhibit 4(a) of the Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended June 30, 1989.)

    4       -       Specimen certificate of the Registrant's stock.  (Incorporated
                    herein by reference to Exhibit 4 to the Registrant's Registration
                    Statement on Form S-2 (File No. 2-84174).)
</TABLE>





                                       38




<PAGE>   39



<TABLE>
    <S>             <C>
    10(a)   -       Agreement, dated August 31, 1964, between the Registrant, Rainbow
                    Mining and Milling Company Ltd. and American Smelting and
                    Refining Company, and amendments thereto.  (Incorporated herein
                    by reference to Exhibit H to the Registrant's Registration
                    Statement on Form 10 dated April 25, 1977.)

    10(b)   -       Agreement, dated August 1, 1979, between the Registrant, Callahan
                    Mining Corporation, Day Mines Incorporated and ASARCO
                    Incorporated.  (Incorporated herein by reference to Exhibit (a)
                    to the Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1979.)

    10(c)   -       Agreement, dated January 1, 1982, between the Registrant,
                    Callahan Mining Corporation and ASARCO Incorporated.
                    (Incorporated herein by reference to Exhibit 10(c) of the
                    Registrant's Registration Statement on Form S-2 [File No. 2-
                    84174].)

    10(d)   -       Executive Compensation Program.  (Incorporated herein by
                    reference to Exhibit 10(e) to the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1989.) *

    10(e)   -       Employment Agreement, dated March 30, 1989 between the Registrant
                    and Dennis E. Wheeler.  (Incorporated herein by reference to
                    Exhibit 10(g) to Registrant's Annual Report on Form 10-K for the
                    year ended December 31, 1989.) *

    10(f)   -       Severance Agreements, dated March 30, 1989, between the
                    Registrant and James Sabala, Robert Richins, and Tom Angelos.
                    (Incorporated herein by reference to Exhibit 10(h) to
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1989.) *

    10(g)   -       Profit Sharing Retirement Plan of the Registrant. (Incorporated
                    herein by reference to Exhibit (q) to Registrant's Registration
                    Statement on Form S-2 (File No. 2-98631).) *

    10(h)   -       Lease agreement, dated as of October 10, 1986, between
                    Manufacturers Hanover Commercial Corporation and Coeur-Rochester,
                    Inc.  (Incorporated herein by reference to Exhibit 10(a) to
                    Registrant's Current Report on Form 8-K, dated October 10, 1986.)
</TABLE>

--------------------------------
* Management contract or compensatory plan





                                       39




<PAGE>   40




<TABLE>
    <S>             <C>
    10(i)   -       Indenture, dated as of June 10, 1987, between the Registrant and
                    Citibank, N.A., as Trustee, relating to the Registrant's 6%
                    Convertible Subordinated Debentures Due 2002.  (Incorporated
                    herein by reference to Exhibit 4 to the Registrant's Current
                    Report on Form 8-K dated June 10, 1987.)

    10(j)   -       Venture Agreement, dated as of August 5, 1987, between Coeur
                    Alaska, Inc. and Echo Bay Exploration Inc.  (Incorporated herein
                    by reference to Exhibit 10(a) of the Registrant's Current Report
                    on Form 8-K dated August 5, 1987.)

    10(k)   -       Venture Agreement, dated as of August 5, 1987, among the
                    Registrant, Echo Bay Exploration Inc. and Echo Bay Minerals
                    Company.  (Incorporated herein by reference to Exhibit 10(b) of
                    the Registrant's Current Report on Form 8-K dated August 5,
                    1987.)

    10(l)   -       Amended Venture Agreement, dated November 1, 1990 between Coeur
                    Alaska, Inc. and Echo Bay Exploration, Inc.  (Incorporated herein
                    by reference to Exhibit 10(l) of the Registrant's Annual Report
                    on Form 10-K for the year ended December 31, 1991.)

    10(m)   -       Agreement, dated January 1, 1994, between Coeur-Rochester, Inc.
                    and Johnson Matthey Inc. (Incorporated herein by reference to
                    Exhibit 10(m) of the Registrant's Annual Report on Form 10-K for
                    the year ended December 31, 1993.)

    10(n)   -       Refining Agreement, dated January 24, 1994, between the
                    Registrant and Handy & Harman.  (Incorporated herein by reference
                    to Exhibit 10(n) of the Registrant's Annual Report on Form 10-K
                    for the year ended December 31, 1993.)

    10(o)   -       Master Equipment Lease No. 099-03566-01, dated as of December 28,
                    1988, between Idaho First National Bank and the Registrant.
                    (Incorporated herein by reference to Exhibit 10(w) of the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1988.)

    10(p)   -       Master Equipment Lease No. 01893, dated as of December 28, 1988,
                    between Cargill Leasing Corporation and the Registrant.
                    (Incorporated herein by reference to Exhibit 10(x) of the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1988.)
</TABLE>


--------------------------------
* Management contract or compensatory plan





                                       40




<PAGE>   41



<TABLE>
    <S>             <C>
    10(q)   -       Rights Agreement, dated as of May 24, 1989, between the
                    Registrant and First Interstate Bank of Oregon, N.A., as Rights
                    Agent.  (Incorporated herein by reference to Exhibit 2 to the
                    Registrant's Form 8-A relating to the registration of the Rights
                    on the American and Spokane Stock Exchanges.)

    10(r)   -       Participation Agreement, dated as of November 1, 1988, between
                    the Registrant and ASARCO, Incorporated.  (Incorporated herein by
                    reference to Exhibit 10(y) to the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1989.)

    10(s)   -       Form of letter, dated May 10, 1991, extending the term of
                    Severance Agreement, dated March 30, 1989 between the Registrant
                    and Dennis Wheeler,James Sabala, Robert Richins and Tom Angelos.
                    (Incorporated herein by reference to Exhibit 10(u) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.) *

    10(t)   -       Lease dated January 15, 1947 between Vulcan Silver-Lead
                    Corporation and American Smelting and Refining Company.
                    (Incorporated herein by reference to Exhibit 10(v) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.)

    10(u)   -       Supplemental Agreement dated June 4, 1959 between Callahan Mining
                    Corporation, American Smelting and Refining Company and Day
                    Mines, Inc., amending lease dated January 15, 1947.
                    (Incorporated herein by reference to Exhibit 10(w) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.)

    10(v)   -       Operating Agreement dated as of March 18, 1970 between Callahan
                    Mining Corporation, American Smelting and Refining Company and
                    Day Mines, Inc. with respect to the Caladay Project.
                    (Incorporated herein by reference to Exhibit 10(x) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.)

    10(w)   -       Lease dated September 20, 1982 between Callahan Mining
                    Corporation and Hecla Mining Company for the Hornsilver-Peerless
                    properties (Incorporated herein by reference to Exhibit 10(y) to
                    the Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.)
</TABLE>


--------------------------------
* Management contract or compensatory plan





                                       41




<PAGE>   42


<TABLE>
    <S>           <C>
    10(x)   -       Agreement and Plan of Merger, dated as of September 16, 1991, by
                    and among the Registrant, CMC Acquisition Corporation and
                    Callahan Mining Corporation.  (Incorporated herein by reference
                    to Exhibit A to the Prospectus, dated November 22, 1991,
                    contained in the Registrant's Registration Statement on Form S-4
                    (File No. 33-44096).

    10(y)   -       Agreement, dated June 11, 1992, between Callahan Mining
                    Corporation and Hecla Mining Company  (Incorporated herein by
                    reference to Exhibit 10(z) to the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1992.)

    10(z)   -       Indenture, dated as of December 1, 1992, between the Registrant
                    and Bankers Trust Company, as Trustee, relating to the Company's
                    7% Convertible Subordinated Debentures Due 2002.  (Incorporated
                    herein by reference to Exhibit 10(aa) to the Registrant's Annual
                    Report on Form 10-K for the year ended December 31, 1992.)

    10(aa)  -       Severance Agreement, dated October 1, 1992, between Registrant
                    and Michael L. Clark.  (Incorporated herein by reference to
                    Exhibit 10(bb) to the Registrant's Annual Report on Form 10-K for
                    the year ended December 31, 1992.) *

    10(bb)  -       Form of letter, dated June 28, 1993, extending the term of
                    Severance Agreement dated March 30, 1989 between the Registrant
                    and James Sabala, Robert Richins, Tom Angelos, William Boyd, Al
                    Wilder and Michael L. Clark.  (Incorporated herein by reference
                    to Exhibit 10(cc) of the Registrant's Annual Report on Form 10-K
                    for the year ended December 31, 1993.)*

    10(cc)  -       Employment Agreement, dated June 28, 1993, extending the
                    agreement dated March 30, 1989 between the Registrant and Dennis
                    E. Wheeler. (Incorporated herein by reference to Exhibit 10(cc)
                    of the Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1993.) *

    10(dd)  -       Stock Purchase Agreement, dated as of April 30, 1993, among Coeur
                    New Zealand, Inc., the Registrant, Cyprus gold New Zealand
                    Limited, Cyprus Exploration and Development Corporation and
                    Cyprus Minerals Company.  (Incorporated herein by reference to
                    Exhibit 2 of the Registrant's Current Report on Form 8K dated
                    April 30, 1993.)
</TABLE>


--------------------------------
* Management contract or compensatory plan





                                       42




<PAGE>   43


<TABLE>
    <S>             <C>
    10(ee)  -       Amended and Restated Profit Sharing Retirement Plan of the
                    Registrant.  (Incorporated herein by reference to Exhibit 10(ff)
                    of the Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1993.) *

    10(ff)  -       Indenture, dated as of January 26, 1994, between the Registrant
                    and Bankers Trust Company relating to the Registrant's 6 3/8%
                    Convertible Subordinated Debentures Due 2004.  (Incorporated
                    herein by reference to Exhibit 10(gg) of the Registrant's Annual
                    Report on Form 10-K for the year ended December 31, 1993.)

    10(gg)  -       Purchase Agreement, dated January 18, 1994, between the
                    Registrant and Kidder, Peabody & Co. Incorporated relating to the
                    6 3/8% Convertible Subordinated Debentures Due 2004.
                    (Incorporated herein by reference to Exhibit 10(hh) of the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1993.)

    10(hh)  -       Registration Rights Agreement, dated January 26, 1994, between
                    the Registrant and Kidder, Peabody & Co., Incorporated relating
                    to the 6 3/8% Convertible Subordinated Debentures Due 2004.
                    (Incorporated herein by reference to Exhibit 10(ii) of the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1993.)

    10(ii)  -       1993 Annual Incentive Plan and Long-Term Performance Share Plan
                    of the Registrant.  (Incorporated herein by reference to Exhibit
                    10(jj) of the Registrant's Annual Report on Form 10-K for the
                    year ended December 31, 1993.) *

    10(jj)  -       Supplemental Retirement and Deferred Compensation Plan, dated
                    January 1, 1993, of the Registrant. (Incorporated herein by
                    reference to Exhibit 10(kk) of the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1993.) *

    10(kk)  -       Lease Agreement, dated January 12, 1994, between First Security
                    Bank of Idaho and Coeur Rochester, Inc. (Incorporated herein by
                    reference to Exhibit 10(mm) of the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1993.)

    10(ll)  -       Agreement, dated January 1, 1994, between Coeur Gold New Zealand
                    Limited and Johnson Matthey (Aust.) Ltd.  (Incorporated herein by
                    reference to Exhibit 10(mm) of the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1993.)
</TABLE>

    --------------------------------                                
    * Management contract or compensatory plan





                                       43




<PAGE>   44


<TABLE>
    <S>             <C>
    10(mm)  -       Nonemployee Directors' Retirement Plan effective as of March 19,
                    1993, of the Registrant.  (Incorporated herein by reference to
                    Exhibit 10(oo) of the Registrant's Annual Report on Form 10-K for
                    the year ended December 31, 1993.) *

    10(nn)  -       Extension of Employment and Severance Agreement
                    between the Registrant and Dennis E. Wheeler which
                    extension is dated June 28, 1994. (Filed herewith.)*

    10(oo)  -       Form of letter, dated June 28, 1994, extending the
                    terms of the Severance Agreements dated march 30,
                    1989 between the Registrant and James Sabala, Tom
                    Angelos, Michael Clark, Al Wilder and William Boyd.
                    (Filed herewith.)*

    10(pp)  -       401k Plan of the Registrant.  (Filed herewith.)*

    10(qq)  -       Option Agreement of October 24, 1994 between
                    Compania Minera El Bronce and CDE Chilean Mining
                    Corporation.  (Filed herewith.)


    21      -       List of subsidiaries of the Registrant.
                    (Filed herewith.)

    23      -       Consent of Ernst & Young.  (Filed herewith.)

    27      -       Financial Data Schedule
</TABLE>



--------------------------------
* Management contract or compensatory plan




(d) Independent auditors' reports are included herein as follows:

    Coeur d'Alene Mines Corporation

    Report of Ernst & Young at December 31, 1993, and 1994, and for
    each of the three years in the period ended December 31, 1994.





                                       44




<PAGE>   45


SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


<TABLE>
<S>                                                   <C>
                                                      Coeur d'Alene Mines Corporation
                                                                 (Registrant)


Date: March 28, 1995                                  By: /s/ DENNIS E. WHEELER      
      -----------------                                   ---------------------------                 
                                                          Dennis E. Wheeler
                                                             (Chairman, President and
                                                             Chief Executive Officer)
</TABLE>


    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
    Signature
    ---------
<S>                     <C>                            <C>     
/s/ DENNIS E. WHEELER   Chairman, President,           March 28, 1995
----------------------  Chief Executive Officer
Dennis E. Wheeler       and Director


/s/ JAMES A. SABALA     Senior Vice President-Finance  March 28, 1995
----------------------  Treasurer (Principal Financial    
James A. Sabala         and Accounting Officer)
                        and Director


/s/JOSEPH C. BENNETT    Director                       March 28, 1995
----------------------                                               
Joseph C. Bennett

/s/ JAMES J. CURRAN     Director                       March 28, 1995
----------------------                                               
James J. Curran


/s/ DUANE B. HAGADONE   Director                       March 28, 1995
----------------------                                               
Duane B. Hagadone


/s/ JAMES A. McCLURE    Director                       March 28, 1995
----------------------                                               
James A. McClure

/s/ JEFFERY T. GRADE    Director                       March 28, 1995
----------------------                                                  
Jeffery T. Grade
</TABLE>





                                       45




<PAGE>   46


                           ANNUAL REPORT ON FORM 10-K

                       Item 8, Item 14(a), and Item 14(d)

             FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

                          YEAR ENDED DECEMBER 31, 1994

                        COEUR D'ALENE MINES CORPORATION

                              COEUR D'ALENE, IDAHO
<PAGE>   47
                         REPORT OF INDEPENDENT AUDITORS


Shareholders and Board of Directors
Coeur d'Alene Mines Corporation

We have audited the accompanying consolidated balance sheets of Coeur d'Alene
Mines Corporation and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of operations, changes in shareholders' equity,
and  cash flows for each of the three years in the period ended December 31,
1994.  These financial statements and schedules are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Coeur
d'Alene Mines Corporation and subsidiaries at December 31, 1994 and 1993, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles.

As discussed in Note I to the financial statements, in 1993, the Company
changed its method of accounting for income taxes.


February 10, 1995                                           ERNST YOUNG





                                      F-1
<PAGE>   48
                          CONSOLIDATED BALANCE SHEETS
                COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES



<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                                  1994                  1993    
                                                                             -------------         -------------
ASSETS
<S>                                                                          <C>                   <C>
CURRENT ASSETS
    Cash and cash equivalents                                                $ 15,147,908          $ 14,678,097
    Short-term investments                                                    128,112,407            70,221,106
    Receivables                                                                 9,468,112             7,757,910
    Refundable income taxes                                                     3,413,344             1,924,065
    Inventories                                                                35,946,125            34,670,469 
                                                                             -------------         -------------
             TOTAL CURRENT ASSETS                                             192,087,896           129,251,647

PROPERTY, PLANT AND EQUIPMENT
    Property, plant and equipment                                              88,468,531            81,007,505
    Less accumulated depreciation                                              39,947,983            35,310,111 
                                                                             -------------         -------------
                                                                               48,520,548            45,697,394

MINING PROPERTIES
    Operational mining properties                                             100,833,487            90,120,998
    Less accumulated depletion                                                 38,162,432            33,125,461 
                                                                             -------------         -------------
                                                                               62,671,055            56,995,537
    Developmental properties                                                   95,896,774            83,536,738 
                                                                             -------------         -------------
                                                                              158,567,829           140,532,275

OTHER ASSETS
    Funds held in escrow                                                        2,270,695             2,270,695
    Debt issuance costs, net of accumulated
         amortization of $2,416,963 and                                         8,240,209             4,708,372
         $1,462,643
    Marketable equity securities                                                  418,052             2,422,416
    Other                                                                       2,737,454               825,538 
                                                                             -------------         -------------
                                                                               13,666,410            10,227,021 
                                                                             -------------         -------------

                                                                             $412,842,683          $325,708,337 
                                                                             =============         =============
</TABLE>





                                      F-2
<PAGE>   49
                          CONSOLIDATED BALANCE SHEETS
               COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES



<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                                 1994                   1993    
                                                                            -------------          -------------
<S>                                                                         <C>                    <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
    Accounts payable                                                        $  2,458,605           $  1,946,273
    Accrued liabilities                                                        4,158,792              5,265,232
    Accrued interest payable                                                   4,634,961              2,008,851
    Accrued salaries and wages                                                 4,164,061              2,898,486
    Accrued litigation settlement                                                800,000              5,875,000
    Accrued environmental settlement                                                                  1,230,000
    Reserve for mine closure                                                     284,366                494,800
    Current portion of obligations under
        capital leases                                                         2,041,057              1,899,771 
                                                                            -------------          -------------
            TOTAL CURRENT LIABILITIES                                         18,541,842             21,618,413

LONG-TERM LIABILITIES
    6% subordinated convertible debentures                                    50,000,000             50,000,000
    7% subordinated convertible debentures                                    75,000,000             75,000,000
    6 3/8% subordinated convertible debentures                               100,000,000
    Obligations under capital leases                                           2,192,856              4,233,913
    Other long-term liabilities                                                5,234,899              2,325,764
    Deferred income taxes                                                      1,580,804              1,681,542 
                                                                            -------------          -------------
            TOTAL LONG-TERM LIABILITIES                                      234,008,559            133,241,219

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
    Preferred Stock, par value $1.00 per share--
        authorized 10,000,000 shares, none outstanding
    Common Stock, par value $1.00 per share--
        authorized 60,000,000 shares, issued 16,633,163
        nd 16,394,302 shares (including 1,059,211
        and 1,058,453 shares held in treasury)                                16,633,163             16,394,302
    Capital surplus                                                          182,881,071            181,038,631
    Accumulated deficit                                                      (17,043,506)           (13,100,942)
    Unrealized losses on short-term investments                               (8,820,137)
    Repurchased and nonvested shares                                         (13,358,309)           (13,483,286)
                                                                            -------------          -------------
                                                                             160,292,282            170,848,705 
                                                                            -------------          -------------
                                                                            $412,842,683           $325,708,337 
                                                                            =============          =============
</TABLE>
See notes to consolidated financial statements.





                                      F-3
<PAGE>   50
                     CONSOLIDATED STATEMENTS OF OPERATIONS
               COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES



<TABLE>
<CAPTION>
                                                                         Year Ended December 31,
                                                          1994                     1993                   1992    
                                                     -------------             -------------          ------------
<S>                                                  <C>                       <C>                   <C>
INCOME
  From mine operations:
     Sale of concentrates and dore'                  $ 79,605,938              $ 67,989,666          $ 41,414,166
     Less cost of mine operations                      67,802,368                59,803,406            37,829,224  
                                                     -------------             -------------         --------------
                 GROSS PROFITS                         11,803,570                 8,186,260             3,584,942

  From manufacturing operations:
     Sale of industrial products                       11,416,654                10,192,008            10,107,892
     Less cost of manufacturing                        10,263,476                 9,088,319             8,987,185 
                                                     -------------             -------------         -------------
                 GROSS PROFITS                          1,153,178                 1,103,689             1,120,707

OTHER INCOME--interest, dividends,
  and other                                            12,857,321                 5,536,771             4,906,166  
                                                     -------------             -------------         --------------
                 TOTAL INCOME                          25,814,069                14,826,720             9,611,815

EXPENSES
  Administration                                        3,824,946                 3,618,772             3,133,271
  Accounting and legal                                  1,673,223                 3,108,705             1,467,470
  General corporate                                     6,359,710                 5,089,224             4,472,157
  Mining exploration                                    3,877,614                 2,533,542             2,259,279
  Idle facilities                                       1,558,752                 2,459,159             1,689,257
  Interest                                             11,399,082                 5,364,574             1,096,772
  Nonrecurring charges                                    800,000                 9,373,564 
                                                     -------------             -------------         --------------
                 TOTAL EXPENSES                        29,493,327                31,547,540            14,118,206  
                                                     -------------             -------------         --------------

LOSS BEFORE INCOME TAXES AND
  CUMULATIVE EFFECT OF CHANGE
  IN ACCOUNTING METHOD                                 (3,679,258)              (16,720,820)           (4,506,391)
  Income tax provision (benefit)                          263,306                (3,430,760)           (3,747,136)
                                                     -------------             -------------         -------------

LOSS BEFORE CUMULATIVE EFFECT OF
  CHANGE IN ACCOUNTING METHOD                          (3,942,564)              (13,290,060)             (759,255)
  Cumulative effect of change in
     accounting method                                                            5,181,188                       
                                                     -------------             -------------         -------------
     NET LOSS                                         $(3,942,564)             $ (8,108,872)         $   (759,255)
                                                     =============             =============         =============

LOSS PER SHARE DATA
  Weighted average number of shares
     of Common Stock outstanding                       15,387,889                15,327,862            15,317,405 
                                                     =============             =============         =============

Net loss per share before cumulative
  effect of change in accounting
  method                                             $      ( .26)             $       (.87)         $       (.05)
  Cumulative effect of change in
     accounting method                                                                  .34                       
                                                     -------------             -------------         -------------
     NET LOSS PER SHARE                              $      ( .26)             $       (.53)         $       (.05)
                                                     =============             =============         =============

     CASH DIVIDENDS PER SHARE                        $        .15              $        .15          $        .15 
                                                     =============             =============         =============
</TABLE>

See notes to consolidated financial statements.





                                      F-4
<PAGE>   51
          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
               For Years Ended December 31, 1994, 1993, and 1992



<TABLE>
<CAPTION>
                                     Common Stock                                                      
                               -----------------------                               Unrealized Losses 
                                               Par         Capital       Accumulated    on Short Term  
                                 Shares       Value        Surplus         Deficit       Investements 
                               -----------------------------------------------------------------------
<S>                            <C>          <C>           <C>            <C>             <C>          
Balance at January 1, 1992     16,368,403   $16,368,403   $185,229,686   $ (4,232,815)                
Net Loss                                                                   (759,255)                  
Cash dividends                                              (2,296,493)                               
Issuance of shares under                         
  Long-Term Incentive 
  Plan (net)                       12,000        12,000        169,500                                
Other                              (3,175)       (3,175)       (52,081)                               
                               -----------------------------------------------------------------------

Balance at December 31, 1992   16,377,228    16,377,228    183,050,612     (4,992,070)                

Net Loss                                                                   (8,108,872)                
Sale of Common Stock for                                                                              
  cash                              8,675         8,675        139,535                                
Cash Dividends                                              (2,297,520)
Issuance of shares under 
  Long-Term Incentive 
  Plan (net)                       10,374        10,374        181,545                                
Other                              (1,975)       (1,975)       (35,541)                               
                               -----------------------------------------------------------------------

Balance at December 31, 1993   16,394,302    16,394,302    181,038,631    (13,100,942)                
Net Loss                                                                   (3,942,564)                
Cash Dividends                                              (2,303,194)                               
Issuance of shares under 
  Long-Term Incentive              
  Plan (net)                       18,778        18,778        365,717                                
Unrealized Gains (Losses)                                                                $(8,820,137) 
Other                             220,083       220,083      3,779,917                                
                               -----------------------------------------------------------------------

Balance at December 31, 1994   16,633,163   $16,633,163   $182,881,071   $(17,043,506)   $(8,802,137) 
                               =======================================================================
</TABLE>
<TABLE>
<CAPTION>
                                    Repurchased and   
                                    Nonvested Shares  
                                -------------------------
                                  Shares         Amount        Total  
                               ------------------------------------------
<S>                            <C>           <C>             <C>
Balance at January 1, 1992     (1,058,453)   $(13,427,556)   $183,937,718
Net Loss                                                         (759,255)
Cash dividends                                                 (2,296,493)
Issuance of shares under       
  Long-Term Incentive          
  Plan (net)                                      (16,714)        164,786
Other                                                             (55,256)
                               ------------------------------------------
                               
Balance at December 31, 1992   (1,058,453)    (13,444,270)    180,991,500
                               
Net Loss                                                       (8,108,872)
Sale of Common Stock for                                          148,210
  cash                                                         (2,297,520)
Cash Dividends                 
Issuance of shares under       
  Long-Term Incentive          
  Plan (net)                                      (39,016)        152,903
Other                                                             (37,516)
                               ------------------------------------------
                               
Balance at December 31, 1993   (1,058,453)    (13,483,286)    170,848,705
Net Loss                                                       (3,942,564)
Cash Dividends                                                 (2,303,194)
Issuance of shares under       
  Long-Term Incentive          
  Plan (net)                                      124,977         509,472
Unrealized Gains (Losses)                                      (8,820,137)
Other                                (758)                      4,000,000
                               ------------------------------------------
                               
Balance at December 31, 1994   (1,059,211)   $(13,358,309)   $160,292,282
                               ==========================================
</TABLE>                       


See notes to consolidated financial statements.


                                      F-5
<PAGE>   52
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES



<TABLE>
<CAPTION>
                                                                                  Year Ended December 31,
                                                                 1994                   1993                       1992     
                                                           --------------           -------------             --------------
<S>                                                        <C>                      <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                $  (3,942,564)           $ (8,108,872)              $  (759,255)
   Adjustments to reconcile net
        loss to net cash provided by
        (used in) operating activities:
     Depreciation, depletion, and
        amortization                                          17,826,021              13,852,762                 5,799,590
     Cumulative effect of change
        in accounting method                                                          (5,181,188)
     Deferred income taxes                                      (100,738)             (3,716,180)               (1,684,209)
        Deferred Stripping                                    (1,494,716)
     (Gain) loss on disposition of assets                        133,627                 444,950                   (11,647)
     Foreign currency transaction gain                          (783,894)
     Gain on sale of short term investments                   (1,541,735)
     Nonrecurring charges                                                              9,373,564
   Change in Operating Assets and Liabilities:
     Accounts receivable                                      (3,199,481)             (3,427,588)               (1,073,926)
     Inventories                                              (1,275,656)             (2,298,051)                 (213,639)
     Accounts payable and
        accrued liabilities                                      782,143               3,262,980                (2,491,745)
     Accrued merger liabilities                                                                                 (2,572,642)
                                                           --------------           --------------            -------------
          NET CASH PROVIDED BY
          (USED IN) OPERATING ACTIVITIES                       6,403,007               4,202,377                (3,007,473)

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of Cyprus Gold New Zealand,
     Ltd. (net of cash received)                                                     (52,818,247)
   Purchases of short-term investments                      (107,900,947)            (85,387,368)              (21,689,084)
   Sales of short-term investments                            43,349,371              34,548,248
   Purchases of property, plant and
     equipment                                                (9,248,331)             (4,563,607)               (3,602,580)
   Proceeds from sale of assets                                  488,353                 680,873                   557,081
   Expenditures on operational mining
     properties                                              (11,241,937)             (2,524,454)               (4,155,600)
   Expenditures on developmental
     properties                                              (12,760,036)             (8,926,809)              (13,788,514)
   Other                                                          69,454                (567,011)                  554,259 
                                                           --------------           -------------             -------------
          NET CASH USED IN
          INVESTING ACTIVITIES                               (97,244,073)           (119,558,375)              (42,124,438)
CASH FLOWS FROM FINANCING ACTIVITIES
   Retirement of obligations under
     capital leases                                           (1,899,771)             (1,775,333)               (1,649,006)
   Payment of cash dividends                                  (2,303,194)             (2,297,520)               (2,296,493)
   Proceeds from bond issuance                                95,513,842                                        71,416,034 
                                                           --------------           --------------            -------------
        NET CASH PROVIDED BY
        (USED IN) FINANCING ACTIVITIES                        91,310,877              (4,072,853)               67,470,535  
                                                           --------------           -------------             --------------

        INCREASE (DECREASE) IN CASH
        AND CASH EQUIVALENTS                                     469,811            (119,428,851)               22,338,624
Cash and cash equivalents at beginning
   of year                                                    14,678,097             134,106,948               111,768,324 
                                                           --------------           -------------             -------------
Cash and cash equivalents at end
   of year                                                  $ 15,147,908            $ 14,678,097              $134,106,948 
                                                            =============           =============             =============
</TABLE>

See notes to consolidated financial statements.





                                      F-6
<PAGE>   53



NOTE A--BUSINESS OF COEUR D'ALENE MINES CORPORATION

            Coeur d'Alene Mines Corporation (Coeur or the Company) is
principally engaged in the exploration, development and operation of silver and
gold mining properties located in the United States (Nevada, Idaho and Alaska),
New Zealand and Chile.  Coeur is also engaged in the manufacture and sale of
lightweight flexible hose and duct and metal tubing.


NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Principles of Consolidation:  The consolidated financial statements
include the wholly-owned subsidiaries of the Company, the most significant of
which are Coeur Rochester, Callahan Mining Corporation, including Coeur New
Zealand, Inc., Coeur-Alaska, Inc. and CDE Chilean Mining Corporation. The
consolidated financial statements also include all non-wholly owned entities in
which voting control of more than 50% is held by the Company.  Related minority
interests are not material and are included in other assets.  Intercompany
balances and transactions have been eliminated in consolidation.  Investments
in unincorporated joint ventures are accounted for on a proportionate
consolidation basis, the most significant of which are the Golden Cross Mine,
Kensington Property, Coeur Mine and Galena Mine.

            Revenue Recognition:  Revenue is recognized when title to gold and
silver passes to the buyer.  The effects of forward sales are reflected in
revenue at the date the related precious metals are delivered or the contracts
expire.

            Inventories:  Inventories of ores on leach pads and in the milling
process are valued based on actual costs incurred to place such ores into
production, less costs allocated to minerals recovered through the leaching and
milling processes.  Inherent in this valuation is an estimate of the percentage
of the minerals on leach pads and in process that will ultimately be recovered.
Management evaluates this estimate on an ongoing basis.  Adjustments to the
recovery rate are accounted for prospectively.  All other inventories are
stated at the lower of cost or market, cost being determined using the
first-in, first-out and weighted average cost methods.

            Property, Plant, and Equipment:  Property, plant, and equipment are
recorded at cost.  Depreciation, using the straight-line method, is provided
over the estimated useful lives of the assets.  Certain mining equipment is
depreciated using the units of production method based upon proven and probable
reserves.  Maintenance and repairs are charged to operations as incurred.

            Mining Properties:  Values for mining properties represent
acquisition costs or fair market value of Common Stock issued for properties
plus developmental costs.  Cost depletion has been recorded based on the
units-of-production method over the estimated total reserves.  Management
evaluates the net carrying value of all operations, property by property, on a
regular basis to reach a judgment concerning possible permanent impairment of
value and the need for a write-down in asset value to net realizable value.
These





                                      F-7
<PAGE>   54
reviews require significant judgment and the use of estimates, and are affected
by the risks and uncertainties inherent in normal operations.  Considerations
include the level of maintenance and standby costs, current projections of
metal prices and other nonoperating alternatives.

            Reclamation Costs:  Post-closure reclamation and site restoration
costs are estimated based upon environmental regulatory requirements and are
accrued over the life of the mine using the units of production method.
Current expenditures relating to ongoing environmental and reclamation programs
are expensed as incurred.  As of December 31, 1994 and 1993 the Company has
provided approximately $2,843,658 and $1,616,506 for post-closure reclamation
and restoration, and anticipates the total of such costs will be approximately
$12.1 million.  Amounts provided are included as other Long Term Liabilities.

            Exploration and Development:  Costs incurred in the search for new
mineral properties are charged directly to expense.  Development expenditures
incurred prior to reaching the production stage, related to mining and drilling
properties with identified economic reserves, are capitalized.  Interest cost
is capitalized on development properties until the properties are placed into
operation.

            Cash Equivalents:  The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents.  As of December 31, 1994 and 1993, cash and cash equivalents
included $14,182,060 and $9,618,316 of cash, respectively.  The balance of the
reported amounts consists principally of investment grade commercial paper.
Amounts reported in the balance sheet for cash and cash equivalents represent
cost which approximates fair value.

            Short-term Investments:  The Company invests in debt and equity
securities which, prior to January 1, 1994, are stated at the lower of cost or
market.  Effective January 1, 1994, the Company changed its method of
accounting for investments by adopting Statement of Financial Accounting
Standards (FAS) 115, "Accounting for Certain Investments in Debt and Equity
Securities".  FAS 115 requires the use of fair market value accounting.  The
Company has classified its short term investments as available for sale,
according to provisions of the new pronouncement.  Available for sale
securities are carried at fair value, determined by quoted prices.  Unrealized
holding gains and losses on such securities are excluded from earnings and
reported as a separate component of shareholders' equity until realized.

            Foreign Currencies:  Monetary assets and liabilities of the
Company's New Zealand and Chilean operations are translated into U.S. dollars
at year-end exchange rates and revenue and expenses are translated at average
exchange rates.  Non-monetary assets and liabilities are converted at
historical rates.  In each instance, the functional currency is the U.S.
dollar. Realized gains and losses from foreign currency transactions are
reflected in income.

            Foreign Currency Forward Exchange Contracts:   As part of its
program to manage foreign currency risk, the Company has entered into foreign
currency forward exchange contracts.  Contracts related to firm commitments,





                                      F-8
<PAGE>   55
primarily foreign construction projects, are designated and effective as
hedges.  Gains and losses are deferred and recognized in the same period as the
related transactions.  For contracts associated with anticipated transactions
(foreign operating expenses), changes in forward rates are reflected currently
in determining net income.  At December 31, 1994, the Company had contracts
outstanding, payable in U.S. dollars, to purchase approximately $4.8 million,
$3.4 million and $22.1 million denominated in New Zealand, Australian and
Chilean currencies, respectively.  These contracts mature at various dates
through December 1995.

            Forward Delivery Contracts:  The Company sells refined gold and
silver from its mines to various precious metals refiners pursuant to fixed
price forward contracts or at spot prices prevailing at the time of sale.  As
of December 31, 1994, the Company had entered into contracts which require
future delivery of 75,000 ounces of gold on various dates through 1996 at an
average price of $417.17.  Revenue from forward sales transactions is
recognized as metal is delivered.

            Earnings Per Share:  Earnings per share is calculated based on the
weighted average number of common stock and common stock equivalents
outstanding, unless the addition of common stock equivalents would be
anti-dilutive.

            Reclassification:  Certain reclassifications of prior year balances
have been made to conform to current year classifications.


NOTE C--BUSINESS COMBINATIONS

Cyprus Gold New Zealand, Limited

       On April 30, 1993, the Company acquired Cyprus Gold New Zealand, Limited
for approximately $54 million in cash,.  The acquisition has been accounted for
as a purchase.  Had the acquisition taken place as of January 1, 1993,
management estimates that consolidated sales of dore' would have been $91.1
million, consolidated net loss would have been $10.1 million and net loss would
have been $.66 per share in 1993.  Had the acquisition taken place as of
January 1, 1992, management estimates that consolidated sales of dore' would
have been $78.4 million, consolidated net loss would have been $1.3 million and
net loss would have been $.09 per share in 1992.





                                      F-9
<PAGE>   56
NOTE D--SHORT TERM INVESTMENTS AND MARKETABLE SECURITIES

       The amortized cost of available-for-sale securities is adjusted for
premium and discount amortization.  Such amortization is included in Other
Income.  The following is a summary of Available-for-Sale Securities as of
December 31, 1994.




<TABLE>
<CAPTION>
                                   Available-For-Sale Securities
                          ----------------------------------------------
                                       Gross         Gross     Estimated
                                     Unrealized   Unrealized     Fair
(In Thousands)              Cost       Losses        Gains       Value
                          --------     ------        -----      --------
<S>                       <C>          <C>            <C>       <C>
U.S. Corporate            $ 67,856     $3,438                   $ 64,418
U.S. Government             48,314      2,461                     45,853
                          --------     ------         ----      --------
Total Debt Securities      116,170      5,899                    110,271
Equity Securities           21,180      3,184          263        18,259
                          --------     ------         ----      --------
                          $137,350     $9,083         $263      $128,530
                          ========     ======         ====      ========
</TABLE>


       The gross realized gains on sales of Available-For-Sale Securities
totaled $2,731,499 and $192,983 during 1994 and 1993, respectively.  The gross
realized losses totaled $1,189,764 and $63,961 during 1994 and 1993,
respectively.  Investments mature at various dates through December 1996.


NOTE E--INVENTORIES

       Inventories are composed of the following:

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                        1994                      1993    
                                                                    -------------             -------------
        <S>                                                         <C>                       <C>
        Mining:
             Ore in process and
                 on leach pads                                      $ 28,895,419              $ 27,958,186
             Dore' inventory                                           1,748,207                 1,947,294
             Supplies                                                  3,571,501                 3,356,544 
                                                                    -------------             -------------
                                                                      34,215,127                33,262,024
        Manufacturing:
             Raw Materials                                             1,092,727                   755,206
             Finished goods                                              638,271                   653,239 
                                                                    -------------             -------------

                                                                    $ 35,946,125              $ 34,670,469 
                                                                    =============             =============
</TABLE>





                                      F-10
<PAGE>   57
NOTE F--PROPERTY, PLANT AND EQUIPMENT

    Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                                December 31,
                                                                        1994                       1993    
                                                                    -------------             -------------
     <S>                                                            <C>                       <C>
     Land                                                           $  2,225,434              $  1,684,835
     Buildings and improvements                                       20,269,747                19,603,642
     Machinery and equipment                                          57,622,995                51,368,673
     Capital leases, buildings
       and equipment                                                   8,350,355                 8,350,355 
                                                                    -------------             -------------
                                                                    $ 88,468,531              $ 81,007,505 
                                                                    =============             =============
</TABLE>


     Assets subject to capital leases consist of the following:

<TABLE>
<CAPTION>
                                                                                December 31,
                                                                       1994                       1993    
                                                                    ------------              ------------
     <S>                                                            <C>                       <C>
     Buildings                                                      $ 5,104,730               $ 5,104,730
     Equipment                                                        3,245,625                 3,245,625 
                                                                    ------------              ------------
         TOTAL BUILDINGS AND EQUIPMENT                                8,350,355                 8,350,355
     Operational mining property                                      7,871,007                 7,871,007 
                                                                    ------------              ------------
                                                                     16,221,362                16,221,362
     Less allowance for accumulated
        amortization and depletion                                    8,633,847                 7,987,780 
                                                                    ------------              ------------

     TOTAL ASSETS SUBJECT TO CAPITAL
      LEASES                                                        $ 7,587,515               $ 8,233,582 
                                                                    =============             ============
</TABLE>


       Lease amortization is included in depreciation and depletion expense.

       The Company has a capital lease agreement for the Rochester mineral
processing facilities, which expires in 1996.  The Company has the option to
renew the lease for two additional years.  Upon expiration of the lease, the
Company is entitled to purchase the facilities for the lesser of $5,850,000 or
fair market value.  The Company is required to maintain a security deposit of
approximately $2.3 million in an interest-bearing escrow account with the
interest payable to the Company.





                                      F-11
<PAGE>   58
       The Company has entered into various operating lease agreements, which
expire over a period of five years.  The total rent expense charged to
operations under these agreements was $3,140,692, $3,261,261 and $3,460,729 for
1994, 1993 and 1992, respectively.


Minimum lease payments under capital and operating leases are as follows:

<TABLE>
<CAPTION>
            Year Ending                    Capital                 Operating
            December 31                    Leases                    Leases  
            -----------                  -----------              -----------
  <S>                                    <C>                      <C>
               1995                      $ 2,292,941              $ 3,203,837
               1996                        2,292,952                1,897,291
               1997                                                 1,766,772
               1998                                                 1,550,185
               1999                                                   589,315 
                                         ------------             ------------
  TOTAL MINIMUM PAYMENTS DUE               4,585,893              $ 9,007,400
                                                                  ===========
     Less amount representing interest       351,980
                                         -----------
                                       
     PRESENT VALUE OF NET              
     MINIMUM LEASE PAYMENTS                4,233,913
            Less current maturities        2,041,057
                                         -----------
                                         $ 2,192,856
                                         ===========
</TABLE>                               
                                       




                                      F-12
<PAGE>   59
 NOTE G - MINING PROPERTIES

<TABLE>
<CAPTION>
   Capitalized costs for mining properties                                           December 31,
      consist of the following:                                              1994                        1993   
                                                                        -----------                 ------------
   <S>                                                                  <C>                         <C>
   Operational mining properties:
      Rochester Mine, less accumulated
         depletion of $28,399,912
         and $24,420,982                                                $ 37,355,588                $ 36,070,308

      Golden Cross Mine, less
         accumulated depletion of
          $ 3,631,051 and $1,756,888                                      12,116,068                  13,654,420

      Coeur d'Alene Mining District,
         less accumulated depletion of
         $5,715,913 and $6,633,633                                         7,176,695                   7,184,623

      El Bronce Mine less accumulated
         depletion of $101,598                                             5,936,518

      Other                                                                   86,186                      86,186 
                                                                        -------------               -------------
         TOTAL OPERATIONAL MINING PROPERTIES                              62,671,055                  56,995,537

   Developmental mining properties:
      Kensington                                                          52,139,488                  47,388,330
      Fachinal                                                            32,444,979                  26,779,454
      Waihi East                                                           8,454,000                   8,454,000
      Other                                                                2,858,307                     914,954 
                                                                        ------------                 ------------
         TOTAL DEVELOPMENTAL MINING PROPERTIES                            95,896,774                  83,536,738 
                                                                        -------------               -------------

         TOTAL MINING PROPERTIES                                        $158,567,829                $140,532,275 
                                                                        =============               =============
</TABLE>


OPERATIONAL MINING PROPERTIES

        The Rochester Mine:  The Company owns and operates this silver and gold
surface mining operation.  The Company has conducted operations at the
Rochester Mine since September 1986.  It is one of the largest primary silver
mines in the United States and a significant gold producer as well.  A prior
owner of the property has retained a royalty interest that varies between 0%
and 5% of the net smelter revenues of the Rochester property, provided the
market price of silver is at least $17.

        Golden Cross Mine:  On April 30, 1993, the Company acquired an 80%
operating interest in the Golden Cross Mine.  The mine is an underground and
surface gold mining operation located near Waihi, New Zealand.





                                      F-13
<PAGE>   60
        The Company's 80% interest in the Golden Cross Mine, accounted for by
the proportionate consolidation method, is summarized as follows:

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
        (Dollars in Thousands)                                         1994                             1993    
                                                                    ----------                        ----------
               <S>                                                  <C>                               <C>
               Sales of dore'                                       $ 27,582                          $ 21,452
               Cost of mine operation                                (28,297)                          (19,761)
                                                                    ----------                        ---------
               Loss before income taxes                                      
                      and cumulative effect
                      of change in accounting
                      method                                        $   (715)                            1,691   
                                                                    ==========                        ==========

               Assets                                               $ 94,139                            74,305
               Liabilities                                           (92,804)                          (70,751)
                                                                    ----------                        ---------
               Shareholders' equity                                 $  1,335                          $  3,554  
                                                                    ==========                        ==========
</TABLE>


        During the third quarter of 1994, the Company received updated reserve
information indicating an increase in reserves at the Golden Cross Mine.
Accordingly, the Company adjusted its depletion rate effective July 1, 1994 to
reflect the increased reserves.  The impact of the change was an increase in
net income of $1,156,178 or $.075 per share for the six months ended December
31, 1994.

        Coeur d'Alene Mining District:  The Company has been the holder of
mineral interests in the Coeur d'Alene Mining District continuously since 1928.
The Company's most significant interests included, through December 31, 1994, a
50% joint venture interest in the Coeur Mine, a 62.5% interest in the profits
from operation of the Galena Mine and other ancillary mining claims.  Hecla
Mining Company retains a net profits royalty interest in the Galena Mine up to
a maximum of $2 million commencing when the price of silver reaches $11 an
ounce.  At December 31, 1994, Hecla was entitled to recoup a total of
$1,117,572 from the first net profits received from future mine operations.

        Effective January 1, 1995, the Company entered into an agreement with
ASARCO Incorporated, forming a new company called Silver Valley Resources, Inc.
Both Coeur and ASARCO contributed their respective interests in the Galena and
Coeur Mines, as well as other assets and waived certain cash flow entitlements
at the Galena Mine in return for shares of capital stock of Silver Valley
Resources.  ASARCO and Coeur each hold a 50% equity interest in Silver Valley
Resources, Inc.

        El Bronce Mine:  On October 3, 1994, the Company invested in and
assumed operating control of the El Bronce gold mine under terms of a
management agreement.  The mine is located in northern Chile, approximately 90
miles north of Santiago.  According to the terms of the management agreement,
the Company is entitled to 51% of the operating profits, and has an option to
acquire a 51% equity interest in CDE El Bronce within three years for a total
price of $20.5 million, subject to meeting certain criteria.  Coeur has
commenced a three year program designed to increase gold production and improve
the reserve base and profitability levels.  Management fees earned in 1994,
reflected as a component of "Other Income", totaled $1.0 million.





                                      F-14
<PAGE>   61
DEVELOPMENTAL PROPERTIES

        Kensington:  The Company owns a 50% interest in the Kensington gold
property located near Juneau, Alaska, is responsible for 50% of project costs,
and will receive 50% of the project revenues.  The Company's joint venture
partner is the operator of the project. On August 15, 1994, the Company
purchased 33 1/3% of the Jualin property adjacent to the Kensington property
for $2.1 million, bringing its ownership interest in the Jualin property to
100%.  Concurrent with the acquisition, the Company sold the common stock of
International Curator which it previously owned, and relinquished all of its
rights with respect to the Boleo property.  The Company recorded a gain on the
sale of International Curator stock of $2.7 million, which is reflected as a
component of "Other Income".  The Company's investment in the Kensington Joint
Venture is accounted for under the proportionate consolidation method and is
summarized as follows:

<TABLE>
<CAPTION>
                                                                           December 31,
                                                                   1994                        1993    
                                                              --------------              -------------
      <S>                                                     <C>                         <C>
      Total Assets/Venture's Equity                           $  54,242,841               $ 47,495,650 
                                                              ==============              =============
</TABLE>



      The Kensington Joint Venture is a development stage mining property and
consequently has no operations.

      Fachinal: The Fachinal Mine will be a silver and gold mining operation
located in southern Chile.  On July 19, 1994, the Company's Board of Directors
approved the construction of the Fachinal project, following the completion by
an independent engineering firm of a detailed feasibility study.  Commitments
of $27,121,795 have been made to purchase the power plant, processing equipment
and major mining equipment.  Initial production is expected in the fourth
quarter of 1995.



NOTE H--LONG-TERM DEBT

      The $50 million of 6% Convertible Subordinated Debentures Due 2002 are
convertible into shares of Common Stock prior to maturity, unless previously
redeemed, at a conversion rate of approximately 38 shares of Common Stock for
each $1,000 of principal (equivalent to a conversion  price of $26.00 per share
of Common Stock).  The Company is required to make an annual interest payment.
The debentures are redeemable at the option of the Company.  The debentures,
which have no other funding requirements until maturity, mature June 10, 2002.

      The $75 million of 7% Convertible Subordinated Debentures Due 2002 are
convertible into shares of Common Stock at any time prior to maturity unless
previously redeemed at a conversion rate of approximately 63 shares of Common
Stock for each $1,000 of principal (equivalent to conversion price of $15.68
per share of Common Stock).  The Company is required to make semi-annual





                                      F-15
<PAGE>   62
interest payments.  The debentures are redeemable at the option of the Company
on or after December 15, 1995.  The debentures, which have no other funding
requirements until maturity, mature December 11, 2002.

      During the first quarter of 1994, the Company effected an offering of
$100 million of 6 3/8% Convertible Subordinated Debentures Due 2004 which are
convertible into shares of Common Stock on or before January 31, 2004, unless
previously redeemed, at a conversion price of $26.20 per share.  The Company is
required to make semi-annual interest payments.  The debentures are redeemable
at the option of the Company on or after January 31, 1997.  The debentures,
which have no other funding requirements until maturity, mature January 31,
2004.

      The carrying amounts and fair values of long-term borrowings, which are
based on published values on December 31, 1994, consisted of the following:


<TABLE>
<CAPTION>
                                      December 31, 1994                              December 31, 1993           
                               ------------------------------------           -----------------------------------
                               Carrying                   Fair                  Carrying                  Fair
                                  Amount                  Value                   Value                   Value   
                               -----------            -------------           -----------             ------------
<S>                          <C>                      <C>                     <C>                     <C>
6%     Convertible
         Subordinated
         Debentures
         Due 2002              $50,000,000            $40,000,000             $50,000,000             $ 51,500,000
7%     Convertible
         Subordinated
         Debentures
         Due 2002              $75,000,000            $85,125,000             $75,000,000             $109,875,000
6.375% Convertible
         Subordinated
         Debentures
          Due 2004            $100,000,000            $83,500,000
</TABLE>

     Total interest accrued in 1994, 1993 and 1992 was $15,641,771, $9,293,420
and $4,104,639, respectively, of which $4,242,689, $3,928,846 and $3,007,887,
was capitalized as a cost of the mines under construction.

     Interest paid was $12,061,341, $8,834,559, and $3,663,349 in 1994, 1993
and 1992, respectively.

     As of December 31, 1994, the Company has outstanding letters of credit
totaling approximately $11.2 million related to performance bonds.


NOTE I--INCOME TAXES

      Effective January 1, 1993, the Company changed its method of accounting
for income taxes by adopting Statement of Financial Accounting Standards (FAS)
109, "Accounting for Income Taxes."  FAS 109 requires an asset and liability
approach to accounting for income taxes and establishes criteria for
recognizing deferred tax assets.  Accordingly, the Company adjusted its
existing deferred income tax assets and liabilities to reflect current
statutory income tax rates and previously unrecognized tax benefits related to
federal and certain state net operating loss carryforwards.  The cumulative
effect of the accounting change on prior years at January 1, 1993 is a
non-recurring gain of $5,181,188, or $.34 per share, and is included in





                                      F-16
<PAGE>   63
the accompanying Consolidated Statement of Operations for the year ended
December 31, 1993.

      The components of the provision (benefit) for income taxes in the
consolidated statements of operations are as follows:


<TABLE>
<CAPTION>
                                                                    Year Ended December 31,                   
                                                --------------------------------------------------------------
                                                    1994                     1993                    1992    
                                                ------------             ------------            ------------
      <S>                                       <C>                      <C>                     <C>
      Current                                   $   364,044              $   285,420             $   135,628
      Deferred                                     (100,738)              (3,716,180)             (3,882,764)
                                                -------------            ------------            ------------
      PROVISION (BENEFIT) FOR
        INCOME TAX                              $   263,306              $(3,430,760)            $(3,747,136)
                                                =============            ============            ============
</TABLE>



      Deferred taxes arise due to temporary differences in deductions for tax
purposes and for financial statement accounting purposes.  The tax effect and
sources of these differences are as follows:


<TABLE>
<CAPTION>
                                                                   Year Ended December 31,                    
                                                --------------------------------------------------------------
                                                    1994                     1993                     1992   
                                                -----------              ------------            ------------
<S>                                             <C>                      <C>                     <C>
Reserve for loss on
      mine closure                              $  122,881               $   (84,541)            $   272,842
Net mine exploration and
      development costs                          1,248,575                 1,329,435               1,876,045
Net lease payments                                 469,745                   547,783                 553,872
Regular tax benefit on
      utilization of net
      operating losses                          (1,196,892)               (7,341,935)             (6,467,765)
Impact on deferred taxes
      of alternative minimum
      tax in current year                                                                            337,721
Environmental costs                                430,500                  (426,273)
Amortization of bond premium                      (689,447)
Unrealized investment losses                    (3,087,048)
Change in valuation
      allowance                                  2,691,752                   334,689
Change in deferred
      state taxes                                  (40,077)                  617,119
Accrual to return
  reconciliation                                  (159,421)
Other                                              108,694                 1,307,543                (455,479)
                                                -----------              ------------            ------------
                                                $ (100,738)              $(3,716,180)            $(3,882,764)
                                                ===========              ============            ============
</TABLE>





                                      F-17
<PAGE>   64
      As of December 31, the significant components of the Company's net
deferred tax liability were as follows:


<TABLE>
<CAPTION>
                                                                               Year Ended December 31,          
                                                                    --------------------------------------------
                                                                         1994                         1993     
                                                                    -------------                --------------
<S>                                                                 <C>                          <C>
Deferred tax liabilities:
    PP&E, net                                                       $ 20,624,892                 $ 19,756,681
    State taxes                                                          427,104                               
                                                                    -------------                --------------

    Total deferred tax liabilities                                    21,051,996                   19,756,681

Deferred tax assets:
    Net operating loss carryforwards                                  26,549,914                   25,353,022
    AMT credit carryforwards                                             938,670                      938,672
    Business credit carryforward                                         432,800                      628,933
    Unrealized losses on short-term
     investments                                                       3,087,048                               
                                                                    -------------                --------------

    Total deferred tax assets                                         31,008,432                   26,920,627

Valuation allowance for deferred
 tax assets                                                          (11,537,240)                  (8,845,488)
                                                                    --------------               -------------
    Net deferred tax assets                                           19,471,192                   18,075,139

    Net deferred tax liabilities                                    $  1,580,804                 $  1,681,542  
                                                                    ==============               ==============
</TABLE>


    The change in the valuation allowance in 1994 is primarily due to
uncertainties related to the ultimate recovery of deferred tax assets from
unrealized losses on short-term investments.

    A reconciliation of the Company's effective income tax rate with the
federal statutory tax rate for the periods indicated is as follows:


<TABLE>
<CAPTION>
                                                                           Year Ended December 31,              
                                                               -------------------------------------------------
                                                                 1994                 1993                 1992 
                                                               --------             -------              -------
<S>                                                             <C>                  <C>                 <C>
Tax benefit computed at
  statutory rates                                               (35.0%)              (35.0%)             (34.0%)
Percentage depletion                                            (55.1%)               (7.9%)             (21.6%)
Deemed dividend from foreign affiliate                                                                     6.2%
Dividend received deduction                                      (6.2%)
Alternative minimum tax impact                                                                           (27.2%)
Interest on foreign subsidiary debt                              85.1%                 8.2%
Increase in valuation allowance                                  (1.3%)                2.0%
Payment of foreign taxes                                         11.5%                 2.4%
Investment on foreign subsidiary debt                            10.2%                 3.3%
Other (net)                                                      (2.0%)                6.6%               (6.6%)
                                                               ----------           --------             -------
      EFFECTIVE TAX RATE                                          7.2%               (20.4%)             (83.2%)
                                                               ==========           ========             =======
</TABLE>


       For tax purposes, as of December 31, 1994, the Company has an operating
loss carryforward of approximately $75.9 million and an alternative minimum tax
loss carryforward of approximately $52.3 million which expire through





                                      F-18
<PAGE>   65
2006.  The Company also has alternative minimum tax credit carryforwards of
approximately $939,000.

       As of December 31, 1994, Callahan Mining Corporation, a subsidiary, has
a net operating loss carryforward of approximately $24.5 million and an
alternative minimum tax loss carryforward of approximately $16.7 million which
expire through 2006.  The utilization of Callahan Mining Corporation's net
operating losses is subject to limitations.


NOTE J--SHAREHOLDERS' EQUITY AND STOCK PLANS

       In June 1989, the shareholders adopted a shareholder rights plan which
entitles each holder of the Company's Common Stock to one right.  Each right
entitles the holder to purchase one one-hundredth of a share of newly
authorized junior preferred stock.  The exercise price is $100, making the
price per full preferred share $10,000.  The rights will not be distributed and
become exercisable unless and until ten days after a person acquires 20% of the
outstanding common shares or commences an offer that would result in the
ownership of 30% or more of the shares.  Each right also carries the right to
receive upon exercise that number of Coeur common shares which has a market
value equal to two times the exercise price.  Each preferred share issued is
entitled to receive 100 times the dividend declared per share of Common Stock
and 100 votes for each share of Common Stock and is entitled to 100 times the
liquidation payment made per common share.  The Board may elect to redeem the
rights prior to their exercisability at a price of one cent ($.01) per right.
Any preferred shares issued are not redeemable.

       The Company has an Annual Incentive Plan (the "Annual Plan") and a
Long-Term Incentive Plan ("Long-Term Plan") which were approved by shareholders
in June 1989.  Under the Annual Plan, benefits are payable 50% in cash and 50%
in shares of Common Stock.  Under the Long-Term Plan, 40% of the benefits
consist of non-qualified stock options that are exercisable at prices equal to
the fair market value of the shares on the date of grant and vest cumulatively
at an annual rate of 25% during the four-year period following the date of
grant.  Of the remaining 60% balance of the awards under the Long-Term Plan,
60% is payable in shares of Common Stock and 40% is payable in cash at the end
of a four-year vesting period.

       As of December 31, 1994 and December 31, 1993, nonqualified stock
options to purchase 153,600 shares and 125,888 shares, respectively, were
outstanding under the Long-Term Plan.  The options are exercisable at prices
ranging from $13.75 to $27.00 per share.

       As of December 31, 1994 and December 31, 1993, the Company had awarded
57,189 shares and 38,411 shares, respectively, of Common Stock under the
Long-Term Plan and the Annual Plan, representing deferred compensation of
$909,326 and $401,747, respectively, based on the fair market value of the
shares at the date of the award.





                                      F-19
<PAGE>   66

       Total compensation expense charged to operations under the Plans was
$1,359,692, $396,212 and $804,812 for 1994, 1993 and 1992, respectively.


<TABLE>
<CAPTION>
                                                                                   Exercise
                                                           Shares                    Price  
                                                        -----------                ---------
        <S>                                                <C>                     <C>
        Stock options outstanding
             at 1/1/92                                      80,700                 $  18.38
        Issued                                              43,100                    15.13
        Canceled                                           (19,300)                   17.11 
                                                        -----------                --------
        Stock options outstanding
             at 12/31/92                                   104,500                    17.28
        Issued                                              39,963                    18.50
        Exercised                                           (8,675)                   13.86
        Canceled                                            (9,900)                   17.31 
                                                        -----------                --------
        Stock options outstanding
             at 12/31/93                                   125,888                    17.90
        Issued                                              27,712                    20.38
                                                        ----------                 --------
        Stock options outstanding
                 at 12/31/94                               153,600                 $  18.34 
                                                        ==========                 ========
</TABLE>


     As of December 31, 1994 and 1993, 121,537 shares and 168,027 shares,
respectively, were available for grant under the Plans and 10,523,032 shares of
Common Stock are reserved for potential conversion of Convertible Subordinated
Debentures.


NOTE K--EMPLOYEE BENEFIT PLANS

        The Company provides a noncontributory defined contribution
profit-sharing plan for all eligible employees.  Total plan expense charged to
operations was $609,782, $585,477, and $476,516 for 1994, 1993 and 1992,
respectively, which is based on a percentage of salary of qualified employees.

        Effective January 1, 1995, the Company has adopted a savings plan
(which qualifies under Section 401(k) of the U.S. Internal Revenue code)
covering all full-time U.S. employees.  Under the plan, employees may elect to
contribute up to 10% of their cash compensation, subject to ERISA limitations.
The Company is required to make matching cash contributions equal to 50% of the
employee's contribution or up to 3% of the employee's compensation.  Employees
have the option of investing in four different types of investment funds.


NOTE L--LITIGATION

        On June 24, 1994, the U.S. District Court for the District of Idaho
approved the settlement of Kassover v. Coeur d'Alene Mines Corporation et al
(the "Lawsuit"), a class action lawsuit instituted against the Company and
others in 1990.  Pursuant to the Settlement, 220,083 shares of Common Stock





                                      F-20
<PAGE>   67
were issued by the Company in exchange for the claims of the members of the
plaintiff class (the "Claimants") and their counsel.  The number of shares was
determined by dividing $4 million by the average daily closing price of the
Common Stock for the five business days preceding the "fairness hearing"
relating to the Settlement held on June 16, 1994.  The Company issued 66,025
shares to counsel for the Claimants in late July 1994, and issued the balance
of 154,058 shares in December 1994, following the processing of the Claimants'
claims.

        During October 1993, the Company and Callahan negotiated an agreement
with the U.S. Environmental Protection Agency (the "EPA") and a group of other
companies that are potentially responsible parties ("PRPs") in connection with
the Bunker Hill Superfund site.  The negotiated settlement agreement, adopted
in a Court Consent Decree, calls for the Company and Callahan to pay a total of
$1,230,000 to a group of other PRPs in order to remove the Company and Callahan
from any additional cleanup liability relating to the site.  Accordingly, the
Company recorded a non-recurring environmental settlement expense of $1,230,000
during the third quarter of 1993.  Payment was made on December 16, 1994.

        During September 1993, the Company commenced foreclosure proceedings
upon the collateral underlying two delinquent collateralized promissory notes.
In view of this and the Company's inability to ascertain what amount, if any,
may be realized therefrom, the Company effected a non-recurring write-off of
uncollectible notes receivable and accrued interest of approximately $2,268,000
in the third quarter of 1993.

        The items referred to above are reflected as nonrecurring charges in
the 1993 Consolidated Statements of Operations.

        On September 29, 1994, following a jury trial, a judgment was entered
in favor of Callahan in a lawsuit commenced in March 1992 by FN Enterprises,
Inc. ("FN"), a business consulting firm for Callahan.  The suit, which is
before the federal district court for the District of Northern California,
seeks to recover a "success fee" in the approximate amount of $673,000 in
connection with the merger that resulted in Callahan becoming a wholly-owned
subsidiary of the Company.  Callahan has filed a counterclaim seeking
rescission of the contract and damages from FN equal to the amount of fees and
expenses paid to FN.  The court dismissed FN's claim in its entirety.  The
claim is now pending post-trial motions made by FN.

        On September 22, 1994, a judgment was entered against the Company in
the United States District Court for the District of Idaho in a case entitled
Goldberg v. Coeur d'Alene Mines Corporation in the amount of $725,688, plus
costs and attorney fees in the approximate amount of $225,000.  The action
involves an alleged claim by the plaintiff to recover on four promissory notes
made by a predecessor of the Company.  The notes are claimed to be the
obligation of the Company by virtue of successive mergers which occurred in
1974 and in 1988.  On January 19, 1995 the case was resolved by virtue of a
settlement in the amount of $800,000.  The amount was fully accrued as of
December 31, 1994.

     The Company is also subject to other pending or threatened legal actions
that arise in the normal course of business.  In the opinion of management,





                                      F-21
<PAGE>   68
liabilities arising from these claims, if any, will not have a material effect
on the financial position of the Company.  Depending on the timing of any
future liabilities, the amount of which cannot now be reasonably estimated,
relating to these matters, such amounts could possibly have a material impact
on the results of operations for a given period.





                                      F-22
<PAGE>   69
NOTE M--GEOGRAPHIC AND BUSINESS SEGMENT INFORMATION

        The Company operates in two business segments:  mining and
manufacturing. Financial information regarding these segments is as follows.
Corporate assets included in the presentation consist principally of cash and
cash equivalents.

<TABLE>
<CAPTION>
                                                                         Year Ended December 31,       
                                                       ---------------------------------------------------------
                                                           1994                  1993                   1992   
                                                       ---------------------------------------------------------
                                                                          (Thousands of Dollars)
<S>                                                    <C>                     <C>                    <C>
Revenues:
-------- 
   Mining group                                        $  79,606               $  67,990              $   41,414
   Manufacturing group                                    11,417                  10,192                  10,108 
                                                         -------               ----------             -----------
      Totals, business segments                           91,023                  78,182                  51,522
   Other revenues                                         12,857                   5,537                   4,906 
                                                       ---------               ----------             -----------
      Consolidated revenues                            $ 103,880               $  83,719              $   56,428 
                                                       ==========              ==========             ===========

Income (Loss) Before Income Taxes:
--------------------------------- 
   Mining group                                        $   6,367               $   3,194              $     (363)
   Manufacturing group                                     1,153                   1,103                   1,121 
                                                       ----------              ----------             -----------
      Totals, business segments                            7,520                   4,297                     758
   Other revenues                                         12,857                   5,537                   4,906
   Corporate and other expenses                          (24,056)                (26,555)                (10,170)
                                                       ----------              ----------             -----------
   Consolidated net loss before taxes
      and cumulative effect                            $  (3,679)              $ (16,721)             $   (4,506)
                                                       ==========              ==========             ===========


Depreciation, Depletion and Amortization:
---------------------------------------- 
   Mining group                                        $  12,384               $  12,010              $    4,941
   Manufacturing group                                       288                     259                     232 
                                                       ----------              ----------             -----------
      Totals, business segments                           12,672                  12,269                   5,173
   Corporate                                               3,946                   1,584                     627 
                                                       ---------               ----------             -----------
      Total                                            $  16,618               $  13,853              $    5,800 
                                                       =========               ==========             ===========

Property, Plant and Equipment Additions
---------------------------------------
(Including Noncash Expenditures):
-------------------------------- 
   Mining group                                        $   7,731               $  29,680              $    2,614
   Manufacturing group                                       252                     853                     272 
                                                       ----------              ----------             -----------
      Totals, business segments                            7,983                  30,533                   2,886
   Corporate                                               1,265                   2,755                     716 
                                                       ----------              ----------             -----------
      Total                                            $   9,248               $  33,288              $    3,602 
                                                       ==========              ==========             ===========

Identifiable Assets:
------------------- 
   Mining group                                        $ 240,415               $ 219,110              $  151,281
   Manufacturing group                                     6,481                   5,499                   4,460 
                                                       ----------              ----------             -----------
      Totals, business segments                          246,896                 224,609                 155,741
   Corporate and other                                   165,947                 101,099                 169,515 
                                                       ----------              ----------             -----------
   Consolidated assets                                 $ 412,843               $ 325,708              $  325,256 
                                                       ==========              ==========             ===========
</TABLE>





                                      F-23
<PAGE>   70
       The following table sets forth certain financial information relating to
international and domestic operations.


<TABLE>
<CAPTION>
                                                                            Year Ended December 31,       
                                                            -----------------------------------------------------
                                                                1994               1993                 1992   
                                                            -----------------------------------------------------
                                                                          (Thousands of Dollars)
<S>                                                         <C>                  <C>                  <C>
Revenues:
-------- 
   United States                                            $  74,735            $  62,630            $   56,428
   New Zealand                                                 27,450               21,089
   Chile                                                        1,695                                             
                                                            ----------           ----------           ------------
      Consolidated revenues                                 $ 103,880            $  83,719            $   56,428 
                                                            ==========           ==========           ===========

Income (Loss) Before Income Taxes:
--------------------------------- 
   United States                                            $  (3,746)           $ (18,399)           $   (4,411)
   New Zealand                                                   (803)               1,678
   Chile                                                          870                                        (95)
                                                            ----------           ----------           -----------
      Consolidated net loss before taxes
      and cumulative effect                                 $  (3,679)           $ (16,721)           $   (4,506)
                                                            ==========           ==========           ===========


Depreciation, Depletion and Amortization:
---------------------------------------- 
   United States                                            $   9,788            $   7,482            $    5,742
   New Zealand                                                  6,632                6,230
   Chile                                                          198                  141                    58 
                                                            ----------           ----------           -----------
      Total                                                 $  16,618            $  13,853            $    5,800 
                                                            ==========           ==========           ===========

Property, Plant and Equipment Additions
---------------------------------------
(Including Noncash Expenditures):
-------------------------------- 
   United States                                            $   5,253            $   3,818            $    3,349
   New Zealand                                                    303               29,310
   Chile                                                        3,692                  160                   253 
                                                            ----------           ----------           -----------
      Total                                                 $   9,248            $  33,288            $    3,602 
                                                            ==========           ==========           ===========

Identifiable Assets:
------------------- 
   United States                                            $ 319,072            $ 243,387            $  305,424
   New Zealand                                                 46,613               54,452
   Chile                                                       47,158               27,869                19,832 
                                                            ----------           ----------           -----------
      Consolidated assets                                   $ 412,843            $ 325,708            $  325,256  
                                                            ==========           ==========           ============
</TABLE>





                                      F-24
<PAGE>   71
NOTE N--SUMMARY OF QUARTERLY FINANCIAL DATA

       The following table sets forth a summary of the quarterly results of
operations for the years ended December 31, 1994 and 1993:

<TABLE>
<CAPTION>
                                                     First           Second                Third              Fourth
                                                   Quarter          Quarter               Quarter             Quarter 
                                                  ---------        ---------            -----------         ----------
                                                                      (000's-Except Per Share Data)
 <S>                                              <C>              <C>                  <C>                 <C>
 1994
-----
 Net Sales                                        $ 22,895         $ 22,291             $  23,526           $ 22,310
 Gross Margin                                        2,856            2,992                 4,151              1,455
 Net income (loss)                                $ (2,597)        $ (1,335)            $   1,643           $ (1,653)
 Net income (loss) per share                      $   (.17)        $   (.09)            $     .11           $   (.11)

 1993
 ----
 Net Sales                                        $ 11,981         $ 18,663             $ 22,602            $ 24,935
 Gross Margin                                          731            1,864                2,704               3,991
 Net income (loss) before
   cumulative effect                                (1,981)          (1,007)             (10,388)                 86
 Net income (loss)                                $  3,201         $ (1,007)            $(10,388)(b)        $     86
 Net income (loss) per shares
   before cumulative effect                       $   (.08)        $   (.07)            $   (.68)           $    .01
 Net income (loss) per share                      $    .22         $   (.07)            $   (.68)(b)        $    .01
 Fully diluted income per share                   $    .19(a)
</TABLE>

  (a)     Fully diluted income per share reflects the impact of all convertible
          securities including those not considered to be Common Stock
          equivalents.

  (b)     Includes one time provisions for litigation settlement of $5,875,000,
          environmental settlement of $1,230,000 and the write-off of
          uncollectible notes receivable of $2,268,564.





                                      F-25
<PAGE>   72
                                 EXHIBIT INDEX
                                 -------------
<TABLE>
    <S>             <C>
    3(a)    -       Articles of Incorporation of the Registrant and amendments
                    thereto. (Incorporated herein by reference to Exhibit 3(a) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1988.)

    3(b)    -       Bylaws of the Registrant and amendments thereto.  (Incorporated
                    herein by reference to Exhibit 3(b) to the Registrant's Annual
                    Report on Form 10-K for the year ended December 31, 1988.)

    3(c)    -       Certificate of Designations, Powers and Preferences of the Series
                    A Junior Preferred Stock of the Registrant, as filed with Idaho
                    Secretary of State on May 25, 1989 (Incorporated by reference to
                    Exhibit 4(a) of the Registrant's Quarterly Report on Form 10-Q
                    for the quarter ended June 30, 1989.)

    4       -       Specimen certificate of the Registrant's stock.  (Incorporated
                    herein by reference to Exhibit 4 to the Registrant's Registration
                    Statement on Form S-2 (File No. 2-84174).)
</TABLE>









<PAGE>   73



<TABLE>
    <S>             <C>
    10(a)   -       Agreement, dated August 31, 1964, between the Registrant, Rainbow
                    Mining and Milling Company Ltd. and American Smelting and
                    Refining Company, and amendments thereto.  (Incorporated herein
                    by reference to Exhibit H to the Registrant's Registration
                    Statement on Form 10 dated April 25, 1977.)

    10(b)   -       Agreement, dated August 1, 1979, between the Registrant, Callahan
                    Mining Corporation, Day Mines Incorporated and ASARCO
                    Incorporated.  (Incorporated herein by reference to Exhibit (a)
                    to the Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1979.)

    10(c)   -       Agreement, dated January 1, 1982, between the Registrant,
                    Callahan Mining Corporation and ASARCO Incorporated.
                    (Incorporated herein by reference to Exhibit 10(c) of the
                    Registrant's Registration Statement on Form S-2 [File No. 2-
                    84174].)

    10(d)   -       Executive Compensation Program.  (Incorporated herein by
                    reference to Exhibit 10(e) to the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1989.) *

    10(e)   -       Employment Agreement, dated March 30, 1989 between the Registrant
                    and Dennis E. Wheeler.  (Incorporated herein by reference to
                    Exhibit 10(g) to Registrant's Annual Report on Form 10-K for the
                    year ended December 31, 1989.) *

    10(f)   -       Severance Agreements, dated March 30, 1989, between the
                    Registrant and James Sabala, Robert Richins, and Tom Angelos.
                    (Incorporated herein by reference to Exhibit 10(h) to
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1989.) *

    10(g)   -       Profit Sharing Retirement Plan of the Registrant. (Incorporated
                    herein by reference to Exhibit (q) to Registrant's Registration
                    Statement on Form S-2 (File No. 2-98631).) *

    10(h)   -       Lease agreement, dated as of October 10, 1986, between
                    Manufacturers Hanover Commercial Corporation and Coeur-Rochester,
                    Inc.  (Incorporated herein by reference to Exhibit 10(a) to
                    Registrant's Current Report on Form 8-K, dated October 10, 1986.)
</TABLE>

--------------------------------
* Management contract or compensatory plan









<PAGE>   74




<TABLE>
    <S>             <C>
    10(i)   -       Indenture, dated as of June 10, 1987, between the Registrant and
                    Citibank, N.A., as Trustee, relating to the Registrant's 6%
                    Convertible Subordinated Debentures Due 2002.  (Incorporated
                    herein by reference to Exhibit 4 to the Registrant's Current
                    Report on Form 8-K dated June 10, 1987.)

    10(j)   -       Venture Agreement, dated as of August 5, 1987, between Coeur
                    Alaska, Inc. and Echo Bay Exploration Inc.  (Incorporated herein
                    by reference to Exhibit 10(a) of the Registrant's Current Report
                    on Form 8-K dated August 5, 1987.)

    10(k)   -       Venture Agreement, dated as of August 5, 1987, among the
                    Registrant, Echo Bay Exploration Inc. and Echo Bay Minerals
                    Company.  (Incorporated herein by reference to Exhibit 10(b) of
                    the Registrant's Current Report on Form 8-K dated August 5,
                    1987.)

    10(l)   -       Amended Venture Agreement, dated November 1, 1990 between Coeur
                    Alaska, Inc. and Echo Bay Exploration, Inc.  (Incorporated herein
                    by reference to Exhibit 10(l) of the Registrant's Annual Report
                    on Form 10-K for the year ended December 31, 1991.)

    10(m)   -       Agreement, dated January 1, 1994, between Coeur-Rochester, Inc.
                    and Johnson Matthey Inc. (Incorporated herein by reference to
                    Exhibit 10(m) of the Registrant's Annual Report on Form 10-K for
                    the year ended December 31, 1993.)

    10(n)   -       Refining Agreement, dated January 24, 1994, between the
                    Registrant and Handy & Harman.  (Incorporated herein by reference
                    to Exhibit 10(n) of the Registrant's Annual Report on Form 10-K
                    for the year ended December 31, 1993.)

    10(o)   -       Master Equipment Lease No. 099-03566-01, dated as of December 28,
                    1988, between Idaho First National Bank and the Registrant.
                    (Incorporated herein by reference to Exhibit 10(w) of the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1988.)

    10(p)   -       Master Equipment Lease No. 01893, dated as of December 28, 1988,
                    between Cargill Leasing Corporation and the Registrant.
                    (Incorporated herein by reference to Exhibit 10(x) of the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1988.)
</TABLE>


--------------------------------
* Management contract or compensatory plan









<PAGE>   75



<TABLE>
    <S>             <C>
    10(q)   -       Rights Agreement, dated as of May 24, 1989, between the
                    Registrant and First Interstate Bank of Oregon, N.A., as Rights
                    Agent.  (Incorporated herein by reference to Exhibit 2 to the
                    Registrant's Form 8-A relating to the registration of the Rights
                    on the American and Spokane Stock Exchanges.)

    10(r)   -       Participation Agreement, dated as of November 1, 1988, between
                    the Registrant and ASARCO, Incorporated.  (Incorporated herein by
                    reference to Exhibit 10(y) to the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1989.)

    10(s)   -       Form of letter, dated May 10, 1991, extending the term of
                    Severance Agreement, dated March 30, 1989 between the Registrant
                    and Dennis Wheeler,James Sabala, Robert Richins and Tom Angelos.
                    (Incorporated herein by reference to Exhibit 10(u) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.) *

    10(t)   -       Lease dated January 15, 1947 between Vulcan Silver-Lead
                    Corporation and American Smelting and Refining Company.
                    (Incorporated herein by reference to Exhibit 10(v) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.)

    10(u)   -       Supplemental Agreement dated June 4, 1959 between Callahan Mining
                    Corporation, American Smelting and Refining Company and Day
                    Mines, Inc., amending lease dated January 15, 1947.
                    (Incorporated herein by reference to Exhibit 10(w) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.)

    10(v)   -       Operating Agreement dated as of March 18, 1970 between Callahan
                    Mining Corporation, American Smelting and Refining Company and
                    Day Mines, Inc. with respect to the Caladay Project.
                    (Incorporated herein by reference to Exhibit 10(x) to the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.)

    10(w)   -       Lease dated September 20, 1982 between Callahan Mining
                    Corporation and Hecla Mining Company for the Hornsilver-Peerless
                    properties (Incorporated herein by reference to Exhibit 10(y) to
                    the Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1991.)
</TABLE>


--------------------------------
* Management contract or compensatory plan









<PAGE>   76


<TABLE>
    <S>           <C>
    10(x)   -       Agreement and Plan of Merger, dated as of September 16, 1991, by
                    and among the Registrant, CMC Acquisition Corporation and
                    Callahan Mining Corporation.  (Incorporated herein by reference
                    to Exhibit A to the Prospectus, dated November 22, 1991,
                    contained in the Registrant's Registration Statement on Form S-4
                    (File No. 33-44096).

    10(y)   -       Agreement, dated June 11, 1992, between Callahan Mining
                    Corporation and Hecla Mining Company  (Incorporated herein by
                    reference to Exhibit 10(z) to the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1992.)

    10(z)   -       Indenture, dated as of December 1, 1992, between the Registrant
                    and Bankers Trust Company, as Trustee, relating to the Company's
                    7% Convertible Subordinated Debentures Due 2002.  (Incorporated
                    herein by reference to Exhibit 10(aa) to the Registrant's Annual
                    Report on Form 10-K for the year ended December 31, 1992.)

    10(aa)  -       Severance Agreement, dated October 1, 1992, between Registrant
                    and Michael L. Clark.  (Incorporated herein by reference to
                    Exhibit 10(bb) to the Registrant's Annual Report on Form 10-K for
                    the year ended December 31, 1992.) *

    10(bb)  -       Form of letter, dated June 28, 1993, extending the term of
                    Severance Agreement dated March 30, 1989 between the Registrant
                    and James Sabala, Robert Richins, Tom Angelos, William Boyd, Al
                    Wilder and Michael L. Clark.  (Incorporated herein by reference
                    to Exhibit 10(cc) of the Registrant's Annual Report on Form 10-K
                    for the year ended December 31, 1993.)*

    10(cc)  -       Employment Agreement, dated June 28, 1993, extending the
                    agreement dated March 30, 1989 between the Registrant and Dennis
                    E. Wheeler. (Incorporated herein by reference to Exhibit 10(cc)
                    of the Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1993.) *

    10(dd)  -       Stock Purchase Agreement, dated as of April 30, 1993, among Coeur
                    New Zealand, Inc., the Registrant, Cyprus gold New Zealand
                    Limited, Cyprus Exploration and Development Corporation and
                    Cyprus Minerals Company.  (Incorporated herein by reference to
                    Exhibit 2 of the Registrant's Current Report on Form 8K dated
                    April 30, 1993.)
</TABLE>


--------------------------------
* Management contract or compensatory plan









<PAGE>   77


<TABLE>
    <S>             <C>
    10(ee)  -       Amended and Restated Profit Sharing Retirement Plan of the
                    Registrant.  (Incorporated herein by reference to Exhibit 10(ff)
                    of the Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1993.) *

    10(ff)  -       Indenture, dated as of January 26, 1994, between the Registrant
                    and Bankers Trust Company relating to the Registrant's 6 3/8%
                    Convertible Subordinated Debentures Due 2004.  (Incorporated
                    herein by reference to Exhibit 10(gg) of the Registrant's Annual
                    Report on Form 10-K for the year ended December 31, 1993.)

    10(gg)  -       Purchase Agreement, dated January 18, 1994, between the
                    Registrant and Kidder, Peabody & Co. Incorporated relating to the
                    6 3/8% Convertible Subordinated Debentures Due 2004.
                    (Incorporated herein by reference to Exhibit 10(hh) of the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1993.)

    10(hh)  -       Registration Rights Agreement, dated January 26, 1994, between
                    the Registrant and Kidder, Peabody & Co., Incorporated relating
                    to the 6 3/8% Convertible Subordinated Debentures Due 2004.
                    (Incorporated herein by reference to Exhibit 10(ii) of the
                    Registrant's Annual Report on Form 10-K for the year ended
                    December 31, 1993.)

    10(ii)  -       1993 Annual Incentive Plan and Long-Term Performance Share Plan
                    of the Registrant.  (Incorporated herein by reference to Exhibit
                    10(jj) of the Registrant's Annual Report on Form 10-K for the
                    year ended December 31, 1993.) *

    10(jj)  -       Supplemental Retirement and Deferred Compensation Plan, dated
                    January 1, 1993, of the Registrant. (Incorporated herein by
                    reference to Exhibit 10(kk) of the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1993.) *

    10(kk)  -       Lease Agreement, dated January 12, 1994, between First Security
                    Bank of Idaho and Coeur Rochester, Inc. (Incorporated herein by
                    reference to Exhibit 10(mm) of the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1993.)

    10(ll)  -       Agreement, dated January 1, 1994, between Coeur Gold New Zealand
                    Limited and Johnson Matthey (Aust.) Ltd.  (Incorporated herein by
                    reference to Exhibit 10(mm) of the Registrant's Annual Report on
                    Form 10-K for the year ended December 31, 1993.)
</TABLE>

--------------------------------                                
* Management contract or compensatory plan









<PAGE>   78


<TABLE>
    <S>             <C>
    10(mm)  -       Nonemployee Directors' Retirement Plan effective as of March 19,
                    1993, of the Registrant.  (Incorporated herein by reference to
                    Exhibit 10(oo) of the Registrant's Annual Report on Form 10-K for
                    the year ended December 31, 1993.) *

    10(nn)  -       Extension of Employment and Severance Agreement
                    between the Registrant and Dennis E. Wheeler which
                    extension is dated June 28, 1994. (Filed herewith.)*

    10(oo)  -       Form of letter, dated June 28, 1994, extending the
                    terms of the Severance Agreements dated march 30,
                    1989 between the Registrant and James Sabala, Tom
                    Angelos, Michael Clark, Al Wilder and William Boyd.
                    (Filed herewith.)*

    10(pp)  -       401k Plan of the Registrant.  (Filed herewith.)*

    10(qq)  -       Option Agreement of October 24, 1994 between
                    Compania Minera El Bronce and CDE Chilean Mining
                    Corporation.  (Filed herewith.)


    21      -       List of subsidiaries of the Registrant.
                    (Filed herewith.)

    23      -       Consent of Ernst & Young.  (Filed herewith.)

    27      -       Financial Data Schedule
</TABLE>



--------------------------------
* Management contract or compensatory plan




<PAGE>   1
                                                                  EXHIBIT 10(nn)




                       [COEUR D'ALENE MINES LETTERHEAD]




June 28, 1994


Mr. Dennis E. Wheeler
Coeur d'Alene Mines Corporation
505 Front Avenue
P.O. Box I
Coeur d'Alene, Idaho  83814

Dear Dennis:

         Presented to you for execution in duplicate is this letter pertaining
to the Company's Non-qualified Stock Option Agreement, Restricted Stock Grant
Agreement and Employment and Severance Agreement.  (The Stock Option Agreement
and the Stock Grant Agreement are made pursuant to the 1989 Long-Term Incentive
Plan.)

Employment and Severance Agreement

         The Employment and Severance Agreement which is dated as of March 30,
1989 currently terminates at June 1, 1996, subject to all of the terms of that
agreement, as amended.  However, this letter will document a new termination
date at June 1, 1997 and continuing automatically for a new year on June 1st of
any current year to the end that your Employment and Severance Agreement will
always have a three year duration unless terminated or modified on June 1st of
any year by written notice from the Company to you, or in accordance with the
terms of the Agreement.   Your base salary pursuant to the agreement is
$325,000 per year.  If the Board of Directors should at anytime increase the
base salary, that becomes the new salary for purposes of the agreement.


Non-qualified Stock Option Agreement

         The Non-qualified Stock Option Agreement was made March 30, 1989.   It
is amended each year in the discretion of the board of directors with respect
to issuance of shares pursuant to the agreement, and may be amended in other
ways in accordance with its terms.  This letter is intended to, and does,
confirm that you agree to the terms of the agreement, as it may be amended from
time- to-time as to issuance of shares, or in other ways in accordance with the
agreement.
<PAGE>   2
Mr. Dennis E. Wheeler
June 28, 1994
Page 2


Restricted Stock Grant Agreement

         The Restricted Stock Grant Agreement was made March 30, 1989.   It is
amended each year in the discretion of the board of directors with respect to
issuance of shares pursuant to the agreement, and may be amended in other ways
in accordance with its terms.  This letter is intended to, and does, confirm
that you agree to the terms of the agreement, as it may be amended from time-
to-time as to issuance of shares, or in other ways in accordance with the
agreement.

Signature

         By signing this letter below it is understood that you agree to the
terms of the three agreements.


                                                           Very truly yours,

                                                           /s/ WILLIAM F. BOYD 
                                                           -------------------
                                                           William F. Boyd


WFB/mw





DATED: July 1, 1994                                /s/ DENNIS E. WHEELER
      ---------------------                        ---------------------------
                                                   Dennis E. Wheeler


<PAGE>   1
                                                                  EXHIBIT 10(oo)


                       [COEUR D'ALENE MINES LETTERHEAD]


June 28, 1994


Mr. William F. Boyd
Coeur d'Alene Mines Corporation
505 Front Avenue
P.O. Box I
Coeur d'Alene, Idaho  83814

Dear Bill:

         I am pleased to present to you for execution in duplicate this letter
pertaining to the Company's Non-qualified Stock Option Agreement, Restricted
Stock Grant Agreement and Severance Agreement.  (The Stock Option Agreement and
the Stock Grant Agreement are made pursuant to the 1989 Long-Term Incentive
Plan.)

Severance Agreement

         The Severance Agreement which is dated as of March 30, 1989 currently
terminates at December 31, 1994, subject to all of the terms of that agreement.
However, this letter will document a new termination date at December 31, 1995
and continuing from year-to-year thereafter unless terminated at the end of any
year by written notice from the company to you, or in accordance with the terms
of the agreement.  All other terms and conditions of the Severance Agreement
shall remain exactly the same.

Non-qualified Stock Option Agreement

         The Non-qualified Stock Option Agreement was made March 30, 1989.   It
is amended each year in the discretion of the board of directors with respect
to issuance of shares pursuant to the agreement, and may be amended in other
ways in accordance with its terms.  This letter is intended to, and does,
confirm that you agree to the terms of the contract, as it may be amended from
time- to-time as to issuance of shares, or in other ways in accordance with the
agreement.

Restricted Stock Grant Agreement

         The Restricted Stock Grant Agreement was made March 30, 1989.   It is
amended each year in the discretion of the board of directors with respect to
issuance of shares pursuant to the agreement, and may be amended in other ways
in accordance with its terms.  This letter is intended to, and does, confirm
that you agree to the terms of the contract, as it may be amended
<PAGE>   2
Mr. William F. Boyd
June 28, 1994
Page Two


from time-to-time as to issuance of shares, or in other ways in accordance with
the agreement.

Signature

         By signing this letter below it is understood that you agree to the
terms of the three agreements.  The signature of your spouse below shows that
your spouse agrees to be bound by all of the terms and conditions of the Stock
Option Agreement and the Stock Grant Agreement.  Please return one signed
letter to me.

                                                         Very truly yours,

                                                         /s/ DENNIS E. WHEELER
                                                         ---------------------
                                                         Dennis E. Wheeler

DEW/mw




DATED:                                                   /s/ WILLIAM F. BOYD
      ---------------------                              ---------------------
                                                         William F. Boyd

DATED: 7/5/94                                            /s/ JOAN BOYD
      ---------------------                              ---------------------
                                                         Joan Boyd



<PAGE>   1

                                                                  EXHIBIT 10(pp)





                              LUKINS & ANNIS, P.S.
                      DEFINED CONTRIBUTION PROTOTYPE PLAN
                                      AND
                                TRUST AGREEMENT
<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                         <C>
ALPHABETICAL LISTING OF DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

ARTICLE I, DEFINITIONS
         1.01           Employer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.01
         1.02           Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.01
         1.03           Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.01
         1.04           Adoption Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.01
         1.05           Plan Administrator  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.01
         1.06           Advisory Committee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.01
         1.07           Employee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.01
         1.08           Self-Employed Individual/Owner-Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.02
         1.09           Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.02
         1.10           Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.03
         1.11           Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.03
         1.12           Compensation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.03
         1.13           Earned Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.04
         1.14           Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.15           Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.16           Nonforfeitable  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.17           Plan Year/Limitation Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.18           Effective Date  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.19           Plan Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.20           Accounting Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.21           Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.22           Trust Fund  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.23           Nontransferable Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.24           ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.25           Code  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.26           Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.05
         1.27           Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.06
         1.28           Disability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.07
         1.29           Service for Predecessor Employer  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.07
         1.30           Related Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.07
         1.31           Leased Employees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.08
         1.32           Special Rules for Owner-Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.08
         1.33           Determination of Top Heavy Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.09
         1.34           Paired Plans  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.10

ARTICLE II, EMPLOYEE PARTICIPANTS
         2.01           Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2.01
         2.02           Year of Service - Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2.01
         2.03           Break in Service - Participation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2.01
         2.04           Participation upon Re-employment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2.02
         2.05           Change in Employee Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2.02
         2.06           Election Not to Participate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2.02
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<S>                                                                                                                  <C>
ARTICLE III, EMPLOYER CONTRIBUTIONS AND FORFEITURES
         3.01           Amount  3.01
         3.02           Determination of Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.01
         3.03           Time of Payment of Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.01
         3.04           Contribution Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.01
         3.05           Forfeiture Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.03
         3.06           Accrual of Benefit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.04
         3.07 - 3.16    Limitations on Allocations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.05 - 3.07
         3.17           Special Allocation Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.07
         3.18           Defined Benefit Plan Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.07
         3.19           Definitions - Article III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.08

ARTICLE IV, PARTICIPANT CONTRIBUTIONS
         4.01           Participant Nondeductible Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4.01
         4.02           Participant Deductible Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4.01
         4.03           Participant Rollover Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4.01
         4.04           Participant Contribution - Forfeitability . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4.02
         4.05           Participant Contribution - Withdrawal/Distribution  . . . . . . . . . . . . . . . . . . . . . . .   4.02
         4.06           Participant Contribution - Accrued Benefit  . . . . . . . . . . . . . . . . . . . . . . . . . . .   4.02

ARTICLE V, TERMINATION OF SERVICE - PARTICIPANT VESTING
         5.01           Normal Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.01
         5.02           Participant Disability or Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.01
         5.03           Vesting Schedule  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.01
         5.04           Cash-Out Distributions to Partially-Vested Participants/Restoration
                        of Forfeited Accrued Benefit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.01
         5.05           Segregated Account for Repaid Amount  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.03
         5.06           Year of Service - Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.03
         5.07           Break in Service - Vesting  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.03
         5.08           Included Years of Service - Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.03
         5.09           Forfeiture Occurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.03

ARTICLE VI, TIME AND METHOD OF PAYMENT OF BENEFITS
         6.01           Time of Payment of Accrued Benefit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6.01
         6.02           Method of Payment of Accrued Benefit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6.03
         6.03           Benefit Payment Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6.05
         6.04           Annuity Distributions to Participants and Surviving Spouses . . . . . . . . . . . . . . . . . . .   6.06
         6.05           Waiver Election - Qualified Joint and Survivor Annuity  . . . . . . . . . . . . . . . . . . . . .   6.08
         6.06           Waiver Election - Preretirement Survivor Annuity  . . . . . . . . . . . . . . . . . . . . . . . .   6.08
         6.07           Distributions Under Domestic Relations Orders . . . . . . . . . . . . . . . . . . . . . . . . . .   6.09

ARTICLE VII, EMPLOYER ADMINISTRATIVE PROVISIONS
         7.01           Information to Committee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7.01
         7.02           No Liability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7.01
         7.03           Indemnity of Certain Fiduciaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7.01
         7.04           Employer Direction of Investment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7.01
         7.05           Amendment to Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7.01
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<S>                                                                                                                       <C>
ARTICLE VIII, PARTICIPANT ADMINISTRATIVE PROVISIONS
         8.01           Beneficiary Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.01
         8.02           No Beneficiary Designation/Death of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . .   8.01
         8.03           Personal Data to Committee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.02
         8.04           Address for Notification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.02
         8.05           Assignment or Alienation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.02
         8.06           Notice of Change in Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.02
         8.07           Litigation Against the Trust  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.02
         8.08           Information Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.02
         8.09           Appeal Procedure for Denial of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.02
         8.10           Participant Direction of Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.03


ARTICLE IX, ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
         9.01           Members' Compensation, Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.01
         9.02           Term  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.01
         9.03           Powers  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.01
         9.04           General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.01
         9.05           Funding Policy  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.02
         9.06           Manner of Action  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.02
         9.07           Authorized Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.02
         9.08           Interested Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.02
         9.09           Individual Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.02
         9.10           Value of Participant's Accrued Benefit  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.02
         9.11           Allocation and Distribution of Net Income Gain or Loss  . . . . . . . . . . . . . . . . . . . . .   9.03
         9.12           Individual Statement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.03
         9.13           Account Charged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.04
         9.14           Unclaimed Account Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.04

ARTICLE X, CUSTODIAN/TRUSTEE, POWERS AND DUTIES
         10.01          Acceptance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.01
         10.02          Receipt of Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.01
         10.03          Investment Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.01
         10.04          Records and Statements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.06
         10.05          Fees and Expenses from Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.06
         10.06          Parties to Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.06
         10.07          Professional Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.06
         10.08          Distribution of Cash or Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.06
         10.09          Distribution Directions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.06
         10.10          Third Party/Multiple Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.07
         10.11          Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.07
         10.12          Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.07
         10.13          Interim Duties and Successor Trustee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.07
         10.14          Valuation of Trust  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.07
         10.15          Limitation on Liability - If Investment Manager, Ancillary
                        Trustee or Independent Fiduciary Appointed  . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.07
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<S>                                                                                                                       <C>
         10.16          Investment in Group Trust Fund  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.08
         10.17          Appointment of Ancillary Trustee or Independent Fiduciary . . . . . . . . . . . . . . . . . . . . 10.08

ARTICLE XI, PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
         11.01          Insurance Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
         11.02          Limitation on Life Insurance Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
         11.03          Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02
         11.04          Dividend Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02
         11.05          Insurance Company Not a Party to Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
         11.06          Insurance Company Not Responsible for Trustee's Actions . . . . . . . . . . . . . . . . . . . . . 11.03
         11.07          Insurance Company Reliance on Trustee's Signature . . . . . . . . . . . . . . . . . . . . . . . . 11.03
         11.08          Acquittance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
         11.09          Duties of Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03

ARTICLE XII, MISCELLANEOUS
         12.01          Evidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
         12.02          No Responsibility for Employer Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
         12.03          Fiduciaries Not Insurers  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
         12.04          Waiver of Notice  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
         12.05          Successors  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
         12.06          Word Usage  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
         12.07          State Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12.01
         12.08          Employer's Right to Participate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
         12.09          Employment Not Guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.02

ARTICLE XIII, EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
         13.01          Exclusive Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
         13.02          Amendment By Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
         13.03          Amendment By Regional Prototype Plan Sponsor  . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
         13.04          Discontinuance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
         13.05          Full Vesting on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
         13.06          Merger/Direct Transfer  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
         13.07          Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03

ARTICLE XIV, CODE Section 401(K) ARRANGEMENTS
         14.01          Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.01
         14.02          Code Section  401(k) Arrangement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.01
         14.03          Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.02
         14.04          Matching Contributions/Employee Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 14.04
         14.05          Time of Payment of Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.04
         14.06          Special Allocation Provisions - Deferral Contributions,
                        Matching Contributions and Qualified Nonelective Contributions  . . . . . . . . . . . . . . . . . 14.04
         14.07          Annual Elective Deferral Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.05
         14.08          Actual Deferral Percentage ("ADP") Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.06
         14.09          Nondiscrimination Rules for Employer Matching Contributions/
                        Participant Nondeductible Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.10
         14.10          Multiple Use Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12
</TABLE>





                                       iv
<PAGE>   6
<TABLE>
<S>                                                                                                                       <C>
         14.11          Distribution Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12
         14.12          Special Allocation Rules  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.13

ARTICLE A - APPENDIX TO BASIC PLAN DOCUMENT   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

ARTICLE B - APPENDIX TO BASIC PLAN DOCUMENT   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
</TABLE>





                                       v
<PAGE>   7
                      ALPHABETICAL LISTING OF DEFINITIONS

<TABLE>
<CAPTION>
         PLAN DEFINITION                                                                              SECTION REFERENCE
                                                                                                         (PAGE NUMBER)
<S>                                                                                                          <C>
100% Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(l) (3.10)
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1.14 (1.05)
Accounting Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.20 (1.05)
Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.15 (1.05)
Actual Deferral Percentage ("ADP") Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.08 (14.06)
Adoption Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.04 (1.01)
Advisory Committee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.06 (1.01)
Annual Addition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(a) (3.08)
Average Contribution Percentage Test  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.09 (14.09)
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.11 (1.03)
Break in Service for Eligibility Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03 (2.01)
Break in Service for Vesting Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07 (5.03)
Cash-out Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04 (5.01)
Code . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25 (1.05)
Code Section 411(d)(6) Protected Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02 (13.01)
Compensation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.12 (1.03)
Compensation for Code Section 401(k) Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(f) (14.02)
Compensation for Code Section 415 Purposes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(b) (3.08)
Compensation for Top Heavy Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(3) (1.10)
Contract(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11.03(c) (11.02)
Custodian Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.03[B] (10.03)
Deemed Cash-out Rule  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5.04(C) (5.02)
Deferral Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(g) (14.02)
Deferral Contributions Account  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.06 (14.04)
Defined Benefit Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(i) (3.09)
Defined Benefit Plan Fraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(j) (3.09)
Defined Contribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(h) (3.09)
Defined Contribution Plan Fraction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(k) (3.10)
Determination Date  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(7) (1.10)
Disability    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.28 (1.07)
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01 (6.01)
Distribution Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(m) (14.03)
Earned Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13 (1.05)
Effective Date  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.18 (1.05)
Elective Deferrals  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(h) (14.02)
Elective Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13.06(A) (13.02)
Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(c) (14.02)
Employee      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07 (1.02)
Employee Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(n) (14.03)
Employer      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 (1.01)
Employer Contribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.06 (14.04)
</TABLE>





                                       vi
<PAGE>   8
<TABLE>
<S>                                                                                          <C>
Employer for Code Section 415 Purposes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(c) (3.08)
Employer for Top Heavy Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(6) (1.10)
Employment Commencement Date  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02 (2.01)
ERISA         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.24 (1.05)
Excess Aggregate Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.09 (14.10)
Excess Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(d) (3.08)
Excess Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.08 (14.06)
Exempt Participant  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01 (8.01)
Forfeiture Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08 (5.03)
Group Trust Fund  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.16 (10.08)
Hardship      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(A)(4) (6.01)
Hardship for Code Section 401(k) Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.11 (14.12)
Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.09 (1.02)
Highly Compensated Group  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(d) (14.02)
Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.27 (1.06)
Incidental Insurance Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01 (11.01)
Insurable Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11.03(d) (11.02)
Investment Manager  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9.04(i) (9.01)
Issuing Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11.03(b) (11.02)
Joint and Survivor Annuity  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6.04(A) (6.06)
Key Employee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(1) (1.10)
Leased Employees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.31 (1.08)
Limitation Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1.17 and 3.19(e) (1.08) and (3.08)
Loan Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9.04(A) (9.02)
Mandatory Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.04 (14.04)
Mandatory Contributions Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.04 (14.04)
Master or Prototype Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(f) (3.08)
Matching Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(i) (14.03)
Maximum Permissible Amount  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.19(g) (3.08)
Minimum Distribution Incidental Benefit (MDIB)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6.02(A) (6.03)
Multiple Use Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.10 (14.10)
Named Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.03[D] (10.05)
Nonelective Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(j) (14.03)
Nonforfeitable  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.16 (1.05)
Nonhighly Compensated Employee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(b) (14.02)
Nonhighly Compensated Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(e) (14.02)
Non-Key Employee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(2) (1.10)
Nontransferable Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.23 (1.05)
Normal Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01 (5.01)
Owner-Employee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08 (1.02)
Paired Plans  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.34 (1.10)
Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.10 (1.03)
Participant Deductible Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02 (4.01)
Participant Forfeiture  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 (3.03)
Participant Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.03[E] (10.05)
Participant Nondeductible Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01 (4.01)
Permissive Aggregation Group  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(5) (1.10)
</TABLE>





                                      vii
<PAGE>   9
<TABLE>
<S>                                                                                                        <C>
Plan          . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03 (1.01)
Plan Administrator  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05 (1.01)
Plan Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.19 (1.05)
Plan Year     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.17 (1.05)
Policy        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11.03(a) (11.02)
Predecessor Employer  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.29 (1.07)
Preretirement Survivor Annuity  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6.04(B) (6.06)
Qualified Domestic Relations Order  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07 (6.09)
Qualified Matching Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(k) (14.03)
Qualified Nonelective Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.03(l) (14.03)
Qualifying Employer Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.03[F] (10.06)
Qualifying Employer Securities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.03[F] (10.06)
Related Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30 (1.07)
Required Aggregation Group  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(4) (1.10)
Required Beginning Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6.01(B) (6.02)
Rollover Contributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03 (4.01)
Self-Employed Individual  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08 (1.02)
Service       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.26 (1.05)
Term Life Insurance Contract  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03 (11.02)
Top Heavy Minimum Allocation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.04(B) (3.01)
Top Heavy Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33 (1.09)
Trust         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.21 (1.05)
Trustee       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02 (1.01)
Trustee Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.03[A] (10.01)
Trust Fund    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.22 (1.05)
Weighted Average Allocation Method  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 (14.13)
Year of Service for Eligibility Purposes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02 (2.01)
Year of Service for Vesting Purposes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.06 (5.03)
</TABLE>





                                      viii
<PAGE>   10
            DEFINED CONTRIBUTION PROTOTYPE PLAN AND TRUST AGREEMENT
                            BASIC PLAN DOCUMENT # 01

     Lukins & Annis, P.S., in its capacity as Regional Prototype Plan Sponsor,
establishes this Prototype Plan intended to conform to and qualify under
Section 401 and Section 501 of the Internal Revenue Code of 1986, as amended.
An Employer establishes a Plan and Trust under this Prototype Plan by executing
an Adoption Agreement. If the Employer adopts this Plan as a restated Plan in
substitution for, and in amendment of, an existing plan, the provisions of this
Plan, as a restated Plan, apply solely to an Employee whose employment with the
Employer terminates on or after the restated Effective Date of the Employer's
Plan. If an Employee's employment with the Employer terminates prior to the
restated Effective Date, that Employee is entitled to benefits under the Plan
as the Plan existed on the date of the Employee's termination of employment.

                                   ARTICLE I
                                  DEFINITIONS

     1.01   "Employer" means each employer who adopts this Plan by executing an
Adoption Agreement.

     1.02   "Trustee" means the person or persons who as Trustee execute the
Employer's Adoption Agreement, or any successor in office who in writing
accepts the position of Trustee. The Employer must designate in its Adoption
Agreement whether the Trustee will administer the Trust as a discretionary
Trustee or as a nondiscretionary Trustee. If a person acts as a discretionary
Trustee, the Employer also may appoint a Custodian. See Article X.

     1.03   "Plan" means the retirement plan established or continued by the
Employer in the form of this Agreement, including the Adoption Agreement under
which the Employer has elected to participate in this Prototype Plan. The
Employer must designate the name of the Plan in its Adoption Agreement. An
Employer may execute more than one Adoption Agreement offered under this
Prototype Plan, each of which will constitute a separate Plan and Trust
established or continued by that Employer. The Plan and the Trust created by
each adopting Employer is a separate Plan and a separate Trust, independent
from the plan and the trust of any other employer adopting this Prototype Plan.
All section references within the Plan are Plan section references unless the
context clearly indicates otherwise.

     1.04   "Adoption Agreement" means the document executed by each Employer
adopting this Prototype Plan. The terms of this Prototype Plan as modified by
the terms of an adopting Employer's Adoption Agreement constitute a separate
Plan and Trust to be construed as a single Agreement. Each elective provision
of the Adoption Agreement corresponds by section reference to the section of
the Plan which grants the election. Each Adoption Agreement offered under this
Prototype Plan is either a Nonstandardized Plan or a Standardized Plan, as
identified in the preamble to that Adoption Agreement. The provisions of this
Prototype Plan apply equally to Nonstandardized Plans and to Standardized Plans
unless otherwise specified.

     1.05   "Plan Administrator" is the Employer unless the Employer designates
another person to hold the position of Plan Administrator. In addition to his
other duties, the Plan Administrator has full responsibility for compliance
with the reporting and disclosure rules under ERISA as respects this Agreement.

     1.06   "Advisory Committee" means the Employer's Advisory Committee as
from time to time constituted.

     1.07   "Employee" means any employee (including a Self-Employed
Individual) of the Employer. The Employer must specify in its Adoption
Agreement any Employee, or class of Employees, not eligible to participate in
the Plan. If the Employer elects to exclude collective bargaining employees,
the exclusion applies to any employee of the Employer included in a





                                                                            1.01
<PAGE>   11
unit of employees covered by an agreement which the Secretary of Labor finds to
be a collective bargaining agreement between employee representatives and one
or more employers unless the collective bargaining agreement requires the
employee to be included within the Plan. The term "employee representatives"
does not include any organization more than half the members of which are
owners, officers, or executives of the Employer.

     1.08   "Self-Employed Individual/Owner-Employee." "Self-Employed
Individual" means an individual who has Earned Income (or who would have had
Earned Income but for the fact that the trade or business did not have net
earnings) for the taxable year from the trade or business for which the Plan is
established. "Owner-Employee" means a Self-Employed Individual who is the sole
proprietor in the case of a sole proprietorship. If the Employer is a
partnership, "Owner-Employee" means a Self-Employed Individual who is a partner
and owns more than 10% of either the capital or profits interest of the
partnership.

     1.09   "Highly Compensated Employee" means an Employee who, during the
Plan Year or during the preceding 12-month period:

     (a) is a more than 5% owner of the Employer (applying the constructive
     ownership rules of Code Section 318, and applying the principles of Code
     Section 318, for an unincorporated entity);

     (b) has Compensation in excess of $75,000 (as adjusted by the Commissioner
     of Internal Revenue for the relevant year);

     (c) has Compensation in excess of $50,000 (as adjusted by the Commissioner
     of Internal Revenue for the relevant year) and is part of the top-paid 20%
     group of employees (based on Compensation for the relevant year); or

     (d) has Compensation in excess of 50% of the dollar amount prescribed in
     Code Section 415(b)(1)(A) (relating to defined benefit plans) and is an
     officer of the Employer.

     If the Employee satisfies the definition in clause (b), (c) or (d) in the
Plan Year but does not satisfy clause (b), (c) or (d) during the preceding
12-month period and does not satisfy clause (a) in either period, the Employee
is a Highly Compensated Employee only if he is one of the 100 most highly
compensated Employees for the Plan Year. The number of officers taken into
account under clause (d) will not exceed the greater of 3 or 10% of the total
number (after application of the Code Section 414(q) exclusions) of Employees,
but no more than 50 officers. If no Employee satisfies the Compensation
requirement in clause (d) for the relevant year, the Advisory Committee will
treat the highest paid officer as satisfying clause (d) for that year.

     For purposes of this Section 1.09, "Compensation" means Compensation as
defined in Section 1.12, except any exclusions from Compensation elected in the
Employer's Adoption Agreement Section 1.12 do not apply, and Compensation must
include "elective contributions" (as defined in Section 1.12). The Advisory
Committee must make the determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of the top paid 20%
group, the top 100 paid Employees, the number of officers includible in clause
(d) and the relevant Compensation, consistent with Code Section 414(q) and
regulations issued under that Code section. The Employer may make a calendar
year election to determine the Highly Compensated Employees for the Plan Year,
as prescribed by Treasury regulations. A calendar year election must apply to
all plans and arrangements of the Employer. For purposes of applying any
nondiscrimination test required under the Plan or under the Code, in a manner
consistent with applicable Treasury regulations, the Advisory Committee will
treat a Highly Compensated Employee and all family members (a spouse, a lineal
ascendant or descendant, or a spouse of a lineal ascendant or descendant) as a
single Highly Compensated Employee, but only if the Highly Compensated Employee
is a more than 5% owner or is one of the 10 Highly Compensated Employees with
the greatest Compensation for the Plan Year. This





                                                                            1.02
<PAGE>   12
aggregation rule applies to a family member even if that family member is a
Highly Compensated Employee without family aggregation.

     The term "Highly Compensated Employee" also includes any former Employee
who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after his
55th birthday. If the former Employee's Separation from Service occurred prior
to January 1, 1987, he is a Highly Compensated Employee only if he satisfied
clause (a) of this Section 1.09 or received Compensation in excess of $50,000
during: (1) the year of his Separation from Service (or the prior year); or (2)
any year ending after his 54th birthday.

     1.10   "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.

     1.11   "Beneficiary" is a person designated by a Participant who is or may
become entitled to a benefit under the Plan. A Beneficiary who becomes entitled
to a benefit under the Plan remains a Beneficiary under the Plan until the
Trustee has fully distributed his benefit to him. A Beneficiary's right to (and
the Plan Administrator's, the Advisory Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.

     1.12   "Compensation" means, except as provided in the Employer's Adoption
Agreement, the Participant's Earned Income, wages, salaries, fees for
professional service and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses). The Employer must elect in its Adoption Agreement
whether to include elective contributions in the definition of Compensation.
"Elective contributions" are amounts excludible from the Employee's gross
income under Code Section Section 125, 402(a)(8), 402(h) or 403(b), and
contributed by the Employer, at the Employee's election, to a Code Section
401(k) arrangement, a Simplified Employee Pension, cafeteria plan or
tax-sheltered annuity. The term "Compensation" does not include:

     (a) Employer contributions (other than "elective contributions," if
     includible in the definition of Compensation under Section 1.12 of the
     Employer's Adoption Agreement) to a plan of deferred compensation to the
     extent the contributions are not included in the gross income of the
     Employee for the taxable year in which contributed, on behalf of an
     Employee to a Simplified Employee Pension Plan to the extent such
     contributions are excludible from the Employee's gross income, and any
     distributions from a plan of deferred compensation, regardless of whether
     such amounts are includible in the gross income of the Employee when
     distributed.

     (b) Amounts realized from the exercise of a non-qualified stock option, or
     when restricted stock (or property) held by an Employee either becomes
     freely transferable or is no longer subject to a substantial risk of
     forfeiture.





                                                                            1.03
<PAGE>   13
     (c) Amounts realized from the sale, exchange or other disposition of stock
     acquired under a stock option described in Part II, Subchapter D, Chapter
     1 of the Code.

     (d) Other amounts which receive special tax benefits, such as premiums for
     group term life insurance (but only to the extent that the premiums are
     not includible in the gross income of the Employee), or contributions made
     by an Employer (whether or not under a salary reduction agreement) towards
     the purchase of an annuity contract described in Code Section 403(b)
     (whether or not the contributions are excludible from the gross income of
     the Employee), other than "elective contributions," if elected in the
     Employer's Adoption Agreement.

     Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.12, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into account
only Compensation actually paid for the relevant period. A Compensation payment
includes Compensation by the Employer through another person under the common
paymaster provisions in Code Section Section 3121 and 3306.

(A) LIMITATIONS ON COMPENSATION.

     (1)    COMPENSATION DOLLAR LIMITATION. For any Plan Year beginning after
December 31, 1988, the Advisory Committee must take into account only the first
$200,000 (or beginning January 1, 1990, such larger amount as the Commissioner
of Internal Revenue may prescribe) of any Participant's Compensation. For any
Plan Year beginning prior to January 1, 1989, this $200,000 limitation (but not
the family aggregation requirement described in the next paragraph) applies
only if the Plan is top heavy for such Plan Year or operates as a deemed top
heavy plan for such Plan Year.

     (2)    APPLICATION OF COMPENSATION LIMITATION TO CERTAIN FAMILY MEMBERS.
The $200,000 Compensation limitation applies to the combined Compensation of
the Employee and of any family member aggregated with the Employee under
Section 1.09 who is either (i) the Employee's spouse; or (ii) the Employee's
lineal descendant under the age of 19. If, for a Plan Year, the combined
Compensation of the Employee and such family members who are Participants
entitled to an allocation for that Plan Year exceeds the $200,000 (or adjusted)
limitation, "Compensation" for each such Participant, for purposes of the
contribution and allocation provisions of Article III, means his Adjusted
Compensation. Adjusted Compensation is the amount which bears the same ratio to
the $200,000 (or adjusted) limitation as the affected Participant's
Compensation (without regard to the $200,000 Compensation limitation) bears to
the combined Compensation of all the affected Participants in the family unit.
If the Plan uses permitted disparity, the Advisory Committee must determine the
integration level of each affected family member Participant prior to the
proration of the $200,000 Compensation limitation, but the combined integration
level of the affected Participants may not exceed $200,000 (or the adjusted
limitation). The combined Excess Compensation of the affected Participants in
the family unit may not exceed $200,000 (or the adjusted limitation) minus the
affected Participants' combined integration level (as determined under the
preceding sentence). If the combined Excess Compensation exceeds this
limitation, the Advisory Committee will prorate the Excess Compensation
limitation among the affected Participants in the family unit in proportion to
each such individual's Adjusted Compensation minus his





                                                                            1.04
<PAGE>   14
integration level. If the Employer's Plan is a Nonstandardized Plan, the
Employer may elect to use a different method in determining the Adjusted
Compensation of the affected Participants by specifying that method in an
addendum to the Adoption Agreement, numbered Section 1.12.

(B) NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.12, except: (1) the Employer may
elect to include or to exclude elective contributions, irrespective of the
Employer's election in its Adoption Agreement regarding elective contributions;
and (2) the Employer will not give effect to any elections made in the
"modifications to Compensation definition" section of Adoption Agreement
Section 1.12. The Employer's election described in clause (1) must be
consistent and uniform with respect to all Employees and all plans of the
Employer for any particular Plan Year. If the Employer's Plan is a
Nonstandardized Plan, the Employer, irrespective of clause (2), may elect to
exclude from this nondiscrimination definition of Compensation any items of
Compensation excludible under Code Section 414(s) and the applicable Treasury
regulations, provided such adjusted definition conforms to the
nondiscrimination requirements of those regulations.

     1.13   "Earned Income" means net earnings from self-employment in the
trade or business with respect to which the Employer has established the Plan,
provided personal services of the individual are a material income producing
factor. The Advisory Committee will determine net earnings without regard to
items excluded from gross income and the deductions allocable to those items.
The Advisory Committee will determine net earnings after the deduction allowed
to the Self-Employed Individual for all contributions made by the Employer to a
qualified plan and, for Plan Years beginning after December 31, 1989, the
deduction allowed to the Self-Employed under Code Section 164(f) for
self-employment taxes.

     1.14   "Account" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Employer's Plan.

     1.15   "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and Employee
contributions, if any.

     1.16   "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Accrued Benefit.

     1.17   "Plan Year" means the fiscal year of the Plan, the consecutive
month period specified in the Employer's Adoption Agreement. The Employer's
Adoption Agreement also must specify the "Limitation Year" applicable to the
limitations on allocations described in Article III. If the Employer maintains
Paired Plans, each Plan must have the same Plan Year.

     1.18   "Effective Date" of this Plan is the date specified in the
Employer's Adoption Agreement.

     1.19   "Plan Entry Date" means the date(s) specified in Section 2.01 of the
Employer's Adoption Agreement.





                                                                            1.05
<PAGE>   15
     1.20   "Accounting Date" is the last day of an Employer's Plan Year.
Unless otherwise specified in the Plan, the Advisory Committee will make all
Plan allocations for a particular Plan Year as of the Accounting Date of that
Plan Year.

     1.21   "Trust" means the separate Trust created under the Employer's Plan.

     1.22   "Trust Fund" means all property of every kind held or acquired by
the Employer's Plan, other than incidental benefit insurance contracts.

     1.23   "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Plan distributes an
annuity contract, the contract must be a Nontransferable Annuity.

     1.24   "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

     1.25   "Code" means the Internal Revenue Code of 1986, as amended.

     1.26   "Service" means any period of time the Employee is in the employ of
the Employer, including any period the Employee is on an unpaid leave of
absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees.  "Separation from Service" means the Employee no
longer has an employment relationship with the Employer maintaining this Plan.

     1.27   "Hour of Service" means:

     (a)    Each Hour of Service for which the Employer, either directly or
     indirectly, pays an Employee, or for which the Employee is entitled to
     payment, for the performance of duties. The Advisory Committee credits
     Hours of Service under this paragraph (a) to the Employee for the
     computation period in which the Employee performs the duties, irrespective
     of when paid;

     (b)    Each Hour of Service for back pay, irrespective of mitigation of
     damages, to which the Employer has agreed or for which the Employee has
     received an award. The Advisory Committee credits Hours of Service under
     this paragraph (b) to the Employee for the computation period(s) to which
     the award or the agreement pertains rather than for the computation period
     in which the award, agreement or payment is made; and

     (c)    Each Hour of Service for which the Employer, either directly or
     indirectly, pays an Employee, or for which the Employee is entitled to
     payment (irrespective of whether the employment relationship is
     terminated), for reasons other than for the performance of duties during a
     computation period, such as leave of absence, vacation, holiday, sick
     leave, illness, incapacity (including disability), layoff, jury duty or
     military duty. The Advisory Committee will credit no more than 501 Hours
     of Service under this paragraph





                                                                            1.06
<PAGE>   16
     (c) to an Employee on account of any single continuous period during which
     the Employee does not perform any duties (whether or not such period
     occurs during a single computation period). The Advisory Committee credits
     Hours of Service under this paragraph (c) in accordance with the rules of
     paragraphs (b) and (c) of Labor Reg. Section 2530.200b-2, which the Plan,
     by this reference, specifically incorporates in full within this paragraph
     (c).

     The Advisory Committee will not credit an Hour of Service under more than
one of the above paragraphs. A computation period for purposes of this Section
1.27 is the Plan Year, Year of Service period, Break in Service period or other
period, as determined under the Plan provision for which the Advisory Committee
is measuring an Employee's Hours of Service. The Advisory Committee will
resolve any ambiguity with respect to the crediting of an Hour of Service in
favor of the Employee.

(A) METHOD OF CREDITING HOURS OF SERVICE. The Employer must elect in its
Adoption Agreement the method the Advisory Committee will use in crediting an
Employee with Hours of Service. For purposes of the Plan, "actual" method means
the determination of Hours of Service from records of hours worked and hours
for which the Employer makes payment or for which payment is due from the
Employer.  If the Employer elects to apply an "equivalency" method, for each
equivalency period for which the Advisory Committee would credit the Employee
with at least one Hour of Service, the Advisory Committee will credit the
Employee with: (i) 10 Hours of Service for a daily equivalency; (ii) 45 Hours
of Service for a weekly equivalency; (iii) 95 Hours of Service for a
semimonthly payroll period equivalency; and (iv) 190 Hours of Service for a
monthly equivalency.

(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether the
Employee incurs a Break in Service under any provision of this Plan, the
Advisory Committee must credit Hours of Service during an Employee's unpaid
absence period due to maternity or paternity leave. The Advisory Committee
considers an Employee on maternity or paternity leave if the Employee's absence
is due to the Employee's pregnancy, the birth of the Employee's child, the
placement with the Employee of an adopted child, or the care of the Employee's
child immediately following the child's birth or placement. The Advisory
Committee credits Hours of Service under this paragraph on the basis of the
number of Hours of Service the Employee would receive if he were paid during
the absence period or, if the Advisory Committee cannot determine the number of
Hours of Service the Employee would receive, on the basis of 8 hours per day
during the absence period. The Advisory Committee will credit only the number
(not exceeding 501) of Hours of Service necessary to prevent an Employee's
Break in Service. The Advisory Committee credits all Hours of Service described
in this paragraph to the computation period in which the absence period begins
or, if the Employee does not need these Hours of Service to prevent a Break in
Service in the computation period in which his absence period begins, the
Advisory Committee credits these Hours of Service to the immediately following
computation period.

     1.28 "Disability" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary position of
employment (or is unable to engage in any substantial gainful activity) for an
indefinite period which the Advisory Committee considers will be of long
continued duration. A Participant also is disabled if he





                                                                            1.07
<PAGE>   17
incurs the permanent loss or loss of use of a member or function of the body,
or is permanently disfigured, and incurs a Separation from Service. The Plan
considers a Participant disabled on the date the Advisory Committee determines
the Participant satisfies the definition of disability. The Advisory Committee
may require a Participant to submit to a physical examination in order to
confirm disability. The Advisory Committee will apply the provisions of this
Section 1.28 in a nondiscriminatory, consistent and uniform manner. If the
Employer's Plan is a Nonstandardized Plan, the Employer may provide an
alternate definition of disability in an addendum to its Adoption Agreement,
numbered Section 1.28.

     1.29   SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the
plan of a predecessor employer, the Plan treats service of the Employee with
the predecessor employer as service with the Employer. If the Employer does not
maintain the plan of a predecessor employer, the Plan does not credit service
with the predecessor employer, unless the Employer identifies the predecessor
in its Adoption Agreement and specifies the purposes for which the Plan will
credit service with that predecessor employer.

     1.30   RELATED EMPLOYERS. A related group 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)) or an affiliated service group (as defined in Code Section 414(m) or in
Code Section 414(o)). If the Employer is a member of a related group, the term
"Employer" includes the related group members for purposes of crediting Hours
of Service, determining Years of Service and Breaks in Service under Articles
II and V, applying the Participation Test and the Coverage Test under Section
3.06(E), applying the limitations on allocations in Part 2 of Article III,
applying the top heavy rules and the minimum allocation requirements of Article
III, the definitions of Employee, Highly Compensated Employee, Compensation and
Leased Employee, and for any other purpose required by the applicable Code
section or by a Plan provision. However, an Employer may contribute to the Plan
only by being a signatory to the Execution Page of the Adoption Agreement or to
a Participation Agreement to the Employer's Adoption Agreement. If one or more
of the Employer's related group members become Participating Employers by
executing a Participation Agreement to the Employer's Adoption Agreement, the
term "Employer" includes the participating related group members for all
purposes of the Plan, and "Plan Administrator" means the Employer that is the
signatory to the Execution Page of the Adoption Agreement.

     If the Employer's Plan is a Standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are eligible to
participate in the Plan, irrespective of whether the related group member
directly employing the Employee is a Participating Employer. If the Employer's
Plan is a Nonstandardized Plan, the Employer must specify in Section 1.07 of
its Adoption Agreement, whether the Employees of related group members that are
not Participating Employers are eligible to participate in the Plan. Under a
Nonstandardized Plan, the Employer may elect to exclude from the definition of
"Compensation" for allocation purposes any Compensation received from a related
employer that has not executed a Participation Agreement and whose Employees
are not eligible to participate in the Plan.

     1.31 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee of
the Employer. A Leased Employee is an individual (who otherwise is not an
Employee of the





                                                                            1.08
<PAGE>   18
Employer) who, pursuant to a leasing agreement between the Employer and any
other person, has performed services for the Employer (or for the Employer and
any persons related to the Employer within the meaning of Code Section
144(a)(3)) on a substantially full time basis for at least one year and who
performs services historically performed by employees in the Employer's
business field. If a Leased Employee is treated as an Employee by reason of
this Section 1.31 of the Plan, "Compensation" includes Compensation from the
leasing organization which is attributable to services performed for the
Employer.

(A) SAFE HARBOR PLAN EXCEPTION. The Plan does not treat a Leased Employee as an
Employee if the leasing organization covers the employee in a safe harbor plan
and, prior to application of this safe harbor plan exception, 20% or less of
the Employer's Employees (other than Highly Compensated Employees) are Leased
Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code Section 415(c)(3) plus elective contributions
(as defined in Section 1.12).

(B) OTHER REQUIREMENTS. The Advisory Committee must apply this Section 1.31 in
a manner consistent with Code Sections 414(n) and 414(o) and the
regulations issued under those Code sections. The Employer must specify in the
Adoption Agreement the manner in which the Plan will determine the allocation
of Employer contributions and Participant forfeitures on behalf of a
Participant if the Participant is a Leased Employee covered by a plan
maintained by the leasing organization.

     1.32 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special provisions
and restrictions apply to Owner-Employees:

     (a)    If the Plan provides contributions or benefits for an
     Owner-Employee or for a group of Owner-Employees who controls the trade or
     business with respect to which this Plan is established and the
     Owner-Employee or Owner-Employees also control as Owner-Employees one or
     more other trades or businesses, plans must exist or be established with
     respect to all the controlled trades or businesses so that when the plans
     are combined they form a single plan which satisfies the requirements of
     Code Section 401(a) and Code Section 401(d) with respect to the employees
     of the controlled trades or businesses.

     (b)    The Plan excludes an Owner-Employee or group of Owner-Employees if
     the Owner-Employee or group of Owner-Employees controls any other trade or
     business, unless the employees of the other controlled trade or business
     participate in a plan which satisfies the requirements of Code Section
     401(a) and Code Section 401(d). The other qualified plan must provide
     contributions and benefits which are not less favorable than the
     contributions and benefits provided for the Owner-Employee or group of
     Owner-Employees under this Plan, or if an Owner-Employee is covered under
     another qualified plan as an Owner-Employee, then the plan established
     with respect to the trade or business he does control must provide
     contributions or benefits as favorable as those provided under the most
     favorable plan of the trade or business he does not control. If the
     exclusion of this paragraph (b) applies and the Employer's Plan is a





                                                                            1.09
<PAGE>   19
     Standardized Plan, the Employer may not participate or continue to
     participate in this Prototype Plan and the Employer's Plan becomes an
     individually-designed plan for purposes of qualification reliance.

     (c)    For purposes of paragraphs (a) and (b) of this Section 1.32, an
     Owner-Employee or group of Owner-Employees controls a trade or business if
     the Owner-Employee or Owner-Employees together (1) own the entire interest
     in an unincorporated trade or business, or (2) in the case of a
     partnership, own more than 50% of either the capital interest or the
     profits interest in the partnership.

     1.33 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only qualified
plan maintained by the Employer, the Plan is top heavy for a Plan Year if the
top heavy ratio as of the Determination Date exceeds 60%. The top heavy ratio
is a fraction, the numerator of which is the sum of the present value of
Accrued Benefits of all Key Employees as of the Determination Date and the
denominator of which is a similar sum determined for all Employees. The
Advisory Committee must include in the top heavy ratio, as part of the present
value of Accrued Benefits, any contribution not made as of the Determination
Date but includible under Code Section 416 and the applicable Treasury
regulations, and distributions made within the Determination Period. The
Advisory Committee must calculate the top heavy ratio by disregarding the
Accrued Benefit (and distributions, if any, of the Accrued Benefit) of any
Non-Key Employee who was formerly a Key Employee, and by disregarding the
Accrued Benefit (including distributions, if any, of the Accrued Benefit) of an
individual who has not received credit for at least one Hour of Service with
the Employer during the Determination Period. The Advisory Committee must
calculate the top heavy ratio, including the extent to which it must take into
account distributions, rollovers and transfers, in accordance with Code Section
416 and the regulations under that Code section.

     If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is
terminated, this Plan is top heavy only if it is part of the Required
Aggregation Group, and the top heavy ratio for the Required Aggregation Group
and for the Permissive Aggregation Group, if any, each exceeds 60%. The
Advisory Committee will calculate the top heavy ratio in the same manner as
required by the first paragraph of this Section 1.33, taking into account all
plans within the Aggregation Group. To the extent the Advisory Committee must
take into account distributions to a Participant, the Advisory Committee must
include distributions from a terminated plan which would have been part of the
Required Aggregation Group if it were in existence on the Determination Date.
The Advisory Committee will calculate the present value of accrued benefits
under defined benefit plans or simplified employee pension plans included
within the group in accordance with the terms of those plans, Code Section 416
and the regulations under that Code section. If a Participant in a defined
benefit plan is a Non-Key Employee, the Advisory Committee will determine his
accrued benefit under the accrual method, if any, which is applicable uniformly
to all defined benefit plans maintained by the Employer or, if there is no
uniform method, in accordance with the slowest accrual rate permitted under the
fractional rule accrual method described in Code Section 411(b)(1)(C). If the
Employer maintains a defined benefit plan, the Employer must specify in
Adoption Agreement Section 3.18 the actuarial assumptions (interest and
mortality only) the Advisory Committee will use to calculate the present value
of benefits from a defined benefit plan. If an aggregated plan does not have a





                                                                           1.010
<PAGE>   20
valuation date coinciding with the Determination Date, the Advisory Committee
must value the Accrued Benefits in the aggregated plan as of the most recent
valuation date falling within the twelve-month period ending on the
Determination Date, except as Code Section 416 and applicable Treasury
regulations require for the first and second plan year of a defined benefit
plan. The Advisory Committee will calculate the top heavy ratio with reference
to the Determination Dates that fall within the same calendar year.

(A) STANDARDIZED PLAN. If the Employer's Plan is a Standardized Plan, the Plan
operates as a deemed top heavy plan in all Plan Years, except, if the
Standardized Plan includes a Code Section 401(k) arrangement, the Employer may
elect to apply the top heavy requirements only in Plan Years for which the Plan
actually is top heavy. Under a deemed top heavy plan, the Advisory Committee
need not determine whether the Plan actually is top heavy. However, if the
Employer, in Adoption Agreement Section 3.18, elects to override the 100%
limitation, the Advisory Committee will need to determine whether a deemed top
heavy Plan's top heavy ratio for a Plan Year exceeds 90%.

(B) DEFINITIONS. For purposes of applying the provisions of this Section 1.33:

     (1) "Key Employee" means, as of any Determination Date, any Employee or
     former Employee (or Beneficiary of such Employee) who, for any Plan Year
     in the Determination Period: (i) has Compensation in excess of 50% of the
     dollar amount prescribed in Code Section 415(b)(1)(A) (relating to defined
     benefit plans) and is an officer of the Employer; (ii) has Compensation in
     excess of the dollar amount prescribed in Code Section 415(c)(1)(A)
     (relating to defined contribution plans) and is one of the Employees
     owning the ten largest interests in the Employer; (iii) is a more than 5%
     owner of the Employer; or (iv) is a more than 1% owner of the Employer and
     has Compensation of more than $150,000. The constructive ownership rules
     of Code Section 318 (or the principles of that section, in the case of an
     unincorporated Employer,) will apply to determine ownership in the
     Employer. The number of officers taken into account under clause (i) will
     not exceed the greater of 3 or 10% of the total number (after application
     of the Code Section 414(q) exclusions) of Employees, but no more than 50
     officers. The Advisory Committee will make the determination of who is a
     Key Employee in accordance with Code Section 416(i)(1) and the regulations
     under that Code section.

     (2) "Non-Key Employee" is an employee who does not meet the definition of
         Key Employee.

     (3) "Compensation" means Compensation as determined under Section 1.09 for
     purposes of identifying Highly Compensated Employees.

     (4) "Required Aggregation Group" means: (i) each qualified plan of the
     Employer in which at least one Key Employee participates at any time
     during the Determination Period; and (ii) any other qualified plan of the
     Employer which enables a plan described in clause (i) to meet the
     requirements of Code Section 401(a)(4) or of Code Section 410.

     (5) "Permissive Aggregation Group" is the Required Aggregation Group plus
     any other qualified plans maintained by the Employer, but only if such
     group would satisfy in the





                                                                           1.011
<PAGE>   21
     aggregate the requirements of Code Section 401(a)(4) and of Code Section
     410. The Advisory Committee will determine the Permissive Aggregation
     Group.

     (6) "Employer" means the Employer that adopts this Plan and any related
     employers described in Section 1.30.

     (7) "Determination Date" for any Plan Year is the Accounting Date of the
     preceding Plan Year or, in the case of the first Plan Year of the Plan,
     the Accounting Date of that Plan Year. The "Determination Period" is the 5
     year period ending on the Determination Date.

     1.34   "Paired Plans" means the Employer has adopted two Standardized Plan
Adoption Agreements offered with this Prototype Plan, one Adoption Agreement
being a Paired Profit Sharing Plan and one Adoption Agreement being a Paired
Pension Plan. A Paired Profit Sharing Plan may include a Code Section 401(k)
arrangement. A Paired Pension Plan must be a money purchase pension plan or a
target benefit pension plan. Paired Plans must be the subject of a favorable
opinion letter issued by the National Office of the Internal Revenue Service.
This Prototype Plan does not pair any of its Standardized Plan Adoption
Agreements with Standardized Plan Adoption Agreements under a defined benefit
prototype plan.





                                      1.12
<PAGE>   22
                                   ARTICLE II
                             EMPLOYEE PARTICIPANTS


     2.01   ELIGIBILITY. Each Employee becomes a Participant in the Plan in
accordance with the participation option selected by the Employer in its
Adoption Agreement. If this Plan is a restated Plan, each Employee who was a
Participant in the Plan on the day before the Effective Date continues as a
Participant in the Plan, irrespective of whether he satisfies the participation
conditions in the restated Plan, unless otherwise provided in the Employer's
Adoption Agreement.

     2.02   YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Adoption Agreement Section 2.01, the Plan takes
into account all of his Years of Service with the Employer, except as provided
in Section 2.03. "Year of Service" means an eligibility computation period
during which the Employee completes not less than the number of Hours of
Service specified in the Employer's Adoption Agreement. The initial eligibility
computation period is the first 12 consecutive month period measured from the
Employment Commencement Date. The Plan measures succeeding eligibility
computation periods in accordance with the option selected by the Employer in
its Adoption Agreement. If the Employer elects to measure subsequent periods on
a Plan Year basis, an Employee who receives credit for the required number of
Hours of Service during the initial eligibility computation period and during
the first applicable Plan Year will receive credit for two Years of Service
under Article II. "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer. If the Employer
elects a service condition under Adoption Agreement Section 2.01 based on
months, the Plan does not apply any Hour of Service requirement after the
completion of the first Hour of Service.

     2.03   BREAK IN SERVICE  -  PARTICIPATION. An Employee incurs a "Break in
Service" if during any 12 consecutive month period he does not complete more
than 500 Hours of Service with the Employer. The "12 consecutive month period"
under this Section 2.03 is the same 12 consecutive month period for which the
Plan measures "Years of Service" under Section 2.02.

(A) 2-YEAR ELIGIBILITY. If the Employer elects a 2 years of service condition
for eligibility purposes under Adoption Agreement Section 2.01, the Plan treats
an Employee who incurs a one year Break in Service and who has never become a
Participant as a new Employee on the date he first performs an Hour of Service
for the Employer after the Break in Service.

(B) SUSPENSION OF YEARS OF SERVICE. The Employer must elect in its Adoption
Agreement whether a Participant will incur a suspension of Years of Service
after incurring a one year Break in Service. If this rule applies under the
Employer's Plan, the Plan disregards a Participant's Years of Service (as
defined in Section 2.02) earned prior to a Break in Service until the
Participant completes another Year of Service and the Plan suspends the
Participant's participation in the Plan. If the Participant completes a Year of
Service following his Break in Service, the Plan restores that Participant's
pre-Break Years of Service (and the Participant resumes active participation in
the Plan) retroactively to the first day of the computation period





                                                                            2.01
<PAGE>   23
in which the Participant earns the first post-Break Year of Service. The
initial computation period under this Section 2.03(B) is the 12 consecutive
month period measured from the date the Participant first receives credit for
an Hour of Service following the one year Break in Service period. The Plan
measures any subsequent periods, if necessary, in a manner consistent with the
computation period selection in Adoption Agreement Section 2.02. This Section
2.03(B) does not affect a Participant's vesting credit under Article V and,
during a suspension period, the Participant's Account continues to share fully
in Trust Fund allocations under Section 9.11. Furthermore, this Section 2.03(B)
will not result in the restoration of any Year of Service disregarded under the
Break in Service rule of Section 2.03(A).

     2.04   PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment
with the Employer terminates will re-enter the Plan as a Participant on the
date of his re-employment, subject to the Break in Service rule, if applicable,
under Section 2.03(B). An Employee who satisfies the Plan's eligibility
conditions but who terminates employment with the Employer prior to becoming a
Participant will become a Participant on the later of the Plan Entry Date on
which he would have entered the Plan had he not terminated employment or the
date of his re-employment, subject to the Break in Service rule, if applicable,
under Section 2.03(B).  Any Employee who terminates employment prior to
satisfying the Plan's eligibility conditions becomes a Participant in
accordance with Adoption Agreement Section 2.01.

     2.05   CHANGE IN EMPLOYEE STATUS.  If a Participant has not incurred a
Separation from Service but ceases to be eligible to participate in the Plan,
by reason of employment within an employment classification excluded by the
Employer under Adoption Agreement Section 1.07, the Advisory Committee must
treat the Participant as an Excluded Employee during the period such a
Participant is subject to the Adoption Agreement exclusion. The Advisory
Committee determines a Participant's sharing in the allocation of Employer
contributions and Participant forfeitures, if applicable, by disregarding his
Compensation paid by the Employer for services rendered in his capacity as an
Excluded Employee. However, during such period of exclusion, the Participant,
without regard to employment classification, continues to receive credit for
vesting under Article V for each included Year of Service and the Participant's
Account continues to share fully in Trust Fund allocations under Section 9.11.

     If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification, he
will participate in the Plan immediately if he has satisfied the eligibility
conditions of Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the Plan takes
into account all of the Participant's included Years of Service with the
Employer as an Excluded Employee for purposes of vesting credit under Article
V.





                                                                            2.02
<PAGE>   24
     2.06   ELECTION NOT TO PARTICIPATE. If the Employer's Plan is a
Standardized Plan, the Plan does not permit an otherwise eligible Employee nor
any Participant to elect not to participate in the Plan. If the Employer's Plan
is a Nonstandardized Plan, the Employer must specify in its Adoption  Agreement
whether an Employee eligible to participate, or any present Participant, may
elect not to participate in the Plan. For an election to be effective for a
particular Plan Year, the Employee or Participant must file the election in
writing with the Plan Administrator not later than the time specified in the
Employer's Adoption Agreement. The Employer may not make a contribution under
the Plan for the Employee or for the Participant for the Plan Year for which
the election is effective, nor for any succeeding Plan Year, unless the
Employee or Participant re-elects to participate in the Plan. After an
Employee's or Participant's election not to participate has been effective for
at least the minimum period prescribed by the Employer's Adoption Agreement,
the Employee or Participant may re-elect to participate in the Plan for any
Plan Year and subsequent Plan Years. An Employee or Participant may re-elect to
participate in the Plan by filing his election in writing with the Plan
Administrator not later than the time specified in the Employer's Adoption
Agreement. An Employee or Participant who re-elects to participate may again
elect not to participate only as permitted in the Employer's Adoption
Agreement. If an Employee is a Self-Employed Individual, the Employee's
election (except as permitted by Treasury regulations without creating a Code
Section 401(k) arrangement with respect to that Self-Employed Individual) must
be effective no later than the date the Employee first would become a
Participant in the Plan and the election is irrevocable. The Plan Administrator
must furnish an Employee or a Participant any form required for purposes of an
election under this Section 2.06. An election timely filed is effective for the
entire Plan Year.

     A Participant who elects not to participate may not receive a distribution
of his Accrued Benefit attributable either to Employer or to Participant
contributions except as provided under Article IV or under Article VI. However,
for each Plan Year for which a Participant's election not to participate is
effective, the Participant's Account, if any, continues to share in Trust Fund
allocations under Article IX. Furthermore, the Employee or the Participant
receives vesting credit under Article V for each included Year of Service
during the period the election not to participate is effective.

           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                            2.03
<PAGE>   25
                                  ARTICLE III
                     EMPLOYER CONTRIBUTIONS AND FORFEITURES


PART 1.  AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS: SECTIONS 3.01
THROUGH 3.06

     3.01   AMOUNT. For each Plan Year, the Employer contributes to the Trust
the amount determined by application of the contribution option selected by the
Employer in its Adoption Agreement. The Employer may not make a contribution to
the Trust for any Plan Year to the extent the contribution would exceed the
Participants' Maximum Permissible Amounts.

     The Employer contributes to this Plan on the condition its contribution is
not due to a mistake of fact and the Revenue Service will not disallow the
deduction for its contribution. The Trustee, upon written request from the
Employer, must return to the Employer the amount of the Employer's contribution
made by the Employer by mistake of fact or the amount of the Employer's
contribution disallowed as a deduction under Code Section 404. The Trustee will
not return any portion of the Employer's contribution under the provisions of
this paragraph more than one year after:

     (a) The Employer made the contribution by mistake of fact; or

     (b) The disallowance of the contribution as a deduction, and then, only 
     to the extent of the disallowance.

     The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution
returnable for any losses attributable to it. The Trustee may require the
Employer to furnish it whatever evidence the Trustee deems necessary to enable
the Trustee to confirm the amount the Employer has requested be returned is
properly returnable under ERISA.

     3.02   DETERMINATION OF CONTRIBUTION.  The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.

     3.03   TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for  each Plan Year in one or more installments without interest.
The Employer must make its contribution to the Plan within the time prescribed
by the Code or applicable Treasury regulations. Subject to the consent of the
Trustee, the Employer may make its contribution in property rather than in
cash, provided the contribution of property is not a prohibited transaction
under the Code or under ERISA.

     3.04   CONTRIBUTION ALLOCATION.

(A) METHOD OF ALLOCATION. The Employer must specify in its Adoption Agreement
the manner of allocating each annual Employer contribution to this Trust.





                                                                            3.01
<PAGE>   26
(B) TOP HEAVY MINIMUM ALLOCATION. The Plan must comply with the provisions of
this Section 3.04(B), subject to the elections in the Employer's Adoption
Agreement.

     (1) TOP HEAVY MINIMUM ALLOCATION UNDER STANDARDIZED PLAN. Subject to the
Employer's election under Section 3.04(B)(3), the top heavy minimum allocation
requirement applies to a Standardized Plan for each Plan Year, irrespective of
whether the Plan is top heavy.

            (a)  Each Participant employed by the Employer on the last day of
            the Plan Year will receive a top heavy minimum allocation for that
            Plan Year. The Employer may elect in Section 3.04 of its Adoption
            Agreement to apply this paragraph (a) only to a Participant who is
            a Non-Key Employee.

            (b)  Subject to any overriding elections in Section 3.18 of the
            Employer's Adoption Agreement, the top heavy minimum allocation is
            the lesser of 3% of the Participant's Compensation for the Plan
            Year or the highest contribution rate for the Plan Year made on
            behalf of any Participant for the Plan Year. However, if the
            Employee participates in Paired Plans, the top heavy minimum
            allocation is 3% of his Compensation. If, under Adoption Agreement
            Section 3.04, the Employer elects to apply paragraph (a) only to a
            Participant who is a Non-Key Employee, the Advisory Committee will
            determine the "highest contribution rate" described in the first
            sentence of this paragraph (b) by reference only to the
            contribution rates of Participants who are Key Employees for the
            Plan Year.

     (2) TOP HEAVY MINIMUM ALLOCATION UNDER NONSTANDARDIZED PLAN. The top heavy
minimum allocation requirement applies to a Nonstandardized Plan only in Plan
Years for which the Plan is top heavy. Except as provided in the Employer's
Adoption Agreement, if the Plan is top heavy in any Plan Year:

            (a)  Each Non-Key Employee who is a Participant and is employed by
            the Employer on the last day of the Plan Year will receive a top
            heavy minimum allocation for that Plan Year, irrespective of
            whether he satisfies the Hours of Service condition under Section
            3.06 of the Employer's Adoption Agreement; and

            (b)  The top heavy minimum allocation is the lesser of 3% of the
            Non-Key Employee's Compensation for the Plan Year or the highest
            contribution rate for the Plan Year made on behalf of any Key
            Employee. However, if a defined benefit plan maintained by the
            Employer which benefits a Key Employee depends on this Plan to
            satisfy the antidiscrimination rules of Code Section 401(a)(4) or
            the coverage rules of Code Section 410 (or another plan benefiting
            the Key Employee so depends on such defined benefit plan), the top
            heavy minimum allocation is 3% of the Non-Key Employee's
            Compensation regardless of the contribution rate for the Key
            Employees.

     (3) SPECIAL ELECTION FOR STANDARDIZED CODE Section 401(k) PLAN. If the
Employer's Plan is a Standardized Code Section 401(k) Plan, the Employer may
elect in Adoption Agreement Section 3.04





                                                                            3.02
<PAGE>   27
to apply the top heavy minimum allocation requirements of Section 3.04(B)(1)
only for Plan Years in which the Plan actually is a top heavy plan.

     (4) SPECIAL DEFINITIONS. For purposes of this Section 3.04(B), the term
"Participant" includes any Employee otherwise eligible to participate in the
Plan but who is not a Participant because of his Compensation level or because
of his failure to make elective deferrals under a Code Section 401(k)
arrangement or because of his failure to make mandatory contributions. For
purposes of subparagraph (1)(b) or (2)(b), "Compensation" means Compensation as
defined in Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to include
these amounts in Section 1.12 of its Adoption Agreement, any exclusion selected
in Section 1.12 of the Adoption Agreement (other than the exclusion of elective
contributions) does not apply, and any modification to the definition of
Compensation in Section 3.06 does not apply.

     (5) DETERMINING CONTRIBUTION RATES. For purposes of this Section 3.04(B),
a Participant's contribution rate is the sum of all Employer contributions (not
including Employer contributions to Social Security) and forfeitures allocated
to the Participant's Account for the Plan Year divided by his Compensation for
the entire Plan Year. However, for purposes of satisfying a Participant's top
heavy minimum allocation in Plan Years beginning after December 31, 1988, the
Participant's contribution rate does not include any elective contributions
under a Code Section 401(k) arrangement nor any Employer matching contributions
allocated on the basis of those elective contributions or on the basis of
employee contributions, except a Nonstandardized Plan may include in the
contribution rate any matching contributions not necessary to satisfy the
nondiscrimination requirements of Code Section 401(k) or of Code Section
401(m).

     If the Employee is a Participant in Paired Plans, the Advisory Committee
will consider the Paired Plans as a single Plan to determine a Participant's
contribution rate and to determine whether the Plans satisfy this top heavy
minimum allocation requirement. To determine a Participant's contribution rate
under a Nonstandardized Plan, the Advisory Committee must treat all qualified
top heavy defined contribution plans maintained by the Employer (or by any
related Employers described in Section 1.30) as a single plan.

     (6) NO ALLOCATIONS. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Participant (for purposes of
Section 3.04 (B)(1)(b)) or for any Key Employee (for purposes of Section
3.04(B)(2)(b)), the Plan does not require any top heavy minimum allocation for
the Plan Year, unless a top heavy minimum allocation applies because of the
maintenance by the Employer of more than one plan.

     (7) ELECTION OF METHOD. The Employer must specify in its Adoption
Agreement the manner in which the Plan will satisfy the top heavy minimum
allocation requirement.

     (a) If the Employer elects to make any necessary additional contribution
     to this Plan, the Advisory Committee first will allocate the Employer
     contributions (and Participant forfeitures, if any) for the Plan Year in
     accordance with the provisions of Adoption Agreement Section 3.04. The
     Employer then will contribute an additional amount for the Account of any
     Participant entitled under this Section 3.04(B) to a top heavy





                                                                            3.03
<PAGE>   28
     minimum allocation and whose contribution rate for the Plan Year, under
     this Plan and any other plan aggregated under paragraph (5), is less than
     the top heavy minimum allocation. The additional amount is the amount
     necessary to increase the Participant's contribution rate to the top heavy
     minimum allocation. The Advisory Committee will allocate the additional
     contribution to the Account of the Participant on whose behalf the
     Employer makes the contribution.

     (b) If the Employer elects to guarantee the top heavy minimum allocation
     under another plan, this Plan does not provide the top heavy minimum
     allocation and the Advisory Committee will allocate the annual Employer
     contributions (and Participant forfeitures) under the Plan solely in
     accordance with the allocation method selected under Adoption Agreement
     Section 3.04.

     3.05   FORFEITURE ALLOCATION. The amount of a Participant's Accrued
Benefit forfeited under the Plan is a Participant forfeiture. The Advisory
Committee will allocate Participant forfeitures in the manner specified by the
Employer in its Adoption Agreement. The Advisory Committee will continue to
hold the undistributed, non-vested portion of a terminated Participant's
Accrued Benefit in his Account solely for his benefit until a forfeiture occurs
at the time specified in Section 5.09 or if applicable, until the time
specified in Section 9.14. Except as provided under Section 5.04, a Participant
will not share in the allocation of a forfeiture of any portion of his Accrued
Benefit.

     3.06   ACCRUAL OF BENEFIT. The Advisory Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year in accordance with the Employer's elections in its
Adoption Agreement.

(A) COMPENSATION TAKEN INTO ACCOUNT. The Employer must specify in its Adoption
Agreement the Compensation the Advisory Committee is to take into account in
allocating an Employer contribution to a Participant's Account for the Plan
Year in which the Employee first becomes a Participant. For all other Plan
Years, the Advisory Committee will take into account only the Compensation
determined for the portion of the Plan Year in which the Employee actually is a
Participant. The Advisory Committee must take into account the Employee's
entire Compensation for the Plan Year to determine whether the Plan satisfies
the top heavy minimum allocation requirement of Section 3.04(B). The Employer,
in an addendum to its Adoption Agreement numbered 3.06(A), may elect to measure
Compensation for the Plan Year for allocation purposes on the basis of a
specified period other than the Plan Year.

(B) HOURS OF SERVICE REQUIREMENT. Subject to the applicable minimum allocation
requirement of Section 3.04, the Advisory Committee will not allocate any
portion of an Employer contribution for a Plan Year to any Participant's
Account if the Participant does not complete the applicable minimum Hours of
Service requirement specified in the Employer's Adoption Agreement.

(C) EMPLOYMENT REQUIREMENT. If the Employer's Plan is a Standardized Plan, a
Participant who, during a particular Plan Year, completes the accrual
requirements of Adoption Agreement Section 3.06 will share in the allocation of
Employer contributions for that Plan Year without regard to whether he is
employed by the Employer on the Accounting Date of





                                                                            3.04
<PAGE>   29
that Plan Year. If the Employer's Plan is a Nonstandardized Plan, the Employer
must specify in its Adoption Agreement whether the Participant will accrue a
benefit if he is not employed by the Employer on the Accounting Date of the
Plan Year. If the Employer's Plan is a money purchase plan or a target benefit
plan, whether Nonstandardized or Standardized, the Plan conditions benefit
accrual on employment with the Employer on the last day of the Plan Year for
the Plan Year in which the Employer terminates the Plan.

(D) OTHER REQUIREMENTS. If the Employer's Adoption Agreement includes options
for other requirements affecting the Participant's accrual of benefits under
the Plan, the Advisory Committee will apply this Section 3.06 in accordance
with the Employer's Adoption Agreement selections.

(E) SUSPENSION OF ACCRUAL REQUIREMENTS UNDER NONSTANDARDIZED PLAN. If the
Employer's Plan is a Nonstandardized Plan, the Employer may elect in its
Adoption Agreement to suspend the accrual requirements elected under Adoption
Agreement Section 3.06 if, for any Plan Year beginning after December 31, 1989,
the Plan fails to satisfy the Participation Test or the Coverage Test. A Plan
satisfies the Participation Test if, on each day of the Plan Year, the number
of Employees who benefit under the Plan is at least equal to the lesser of 50
or 40% of the total number of Includible Employees as of such day. A Plan
satisfies the Coverage Test if, on the last day of each quarter of the Plan
Year, the number of Nonhighly Compensated Employees who benefit under the Plan
is at least equal to 70% of the total number of Includible Nonhighly
Compensated Employees as of such day. "Includible" Employees are all Employees
other than: (1) those Employees excluded from participating in the Plan for the
entire Plan Year by reason of the collective bargaining unit exclusion or the
nonresident alien exclusion under Adoption Agreement Section 1.07 or by reason
of the participation requirements of Sections 2.01 and 2.03; and (2) any
Employee who incurs a Separation from Service during the Plan Year and fails to
complete at least 501 Hours of Service for the Plan Year. A "Nonhighly
Compensated Employee" is an Employee who is not a Highly Compensated Employee
and who is not a family member aggregated with a Highly Compensated Employee
pursuant to Section 1.09 of the Plan.

     For purposes of the Participation Test and the Coverage Test, an Employee
is benefiting under the Plan on a particular date if, under Adoption Agreement
Section 3.04, he is entitled to an allocation for the Plan Year. Under the
Participation Test, when determining whether an Employee is entitled to an
allocation under Adoption Agreement Section 3.04, the Advisory Committee will
disregard any allocation required solely by reason of the top heavy minimum
allocation, unless the top heavy minimum allocation is the only allocation made
under the Plan for the Plan Year.

     If this Section 3.06(E) applies for a Plan Year, the Advisory Committee
will suspend the accrual requirements for the Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed with the
Employer on the last day of the Plan Year, then the Includible Employee(s) who
have the latest Separation from Service during the Plan Year, and continuing to
suspend in descending order the accrual requirements for each Includible
Employee who incurred an earlier Separation from Service, from the latest to
the earliest Separation from Service date, until the Plan satisfies both the
Participation Test and the Coverage Test for the Plan Year. If two or more
Includible Employees have a Separation from





                                                                            3.05
<PAGE>   30
Service on the same day, the Advisory Committee will suspend the accrual
requirements for all such Includible Employees, irrespective of whether the
Plan can satisfy the Participation Test and the Coverage Test by accruing
benefits for fewer than all such Includible Employees. If the Plan suspends the
accrual requirements for an Includible Employee, that Employee will share in
the allocation of Employer contributions and Participant forfeitures, if any,
without regard to the number of Hours of Service he has earned for the Plan
Year and without regard to whether he is employed by the Employer on the last
day of the Plan Year. If the Employer's Plan includes Employer matching
contributions subject to Code Section 401(m), this suspension of accrual
requirements applies separately to the Code Section 401(m) portion of the Plan,
and the Advisory Committee will treat an Employee as benefiting under that
portion of the Plan if he is an Eligible Employee for purposes of the Code
Section 401(m) nondiscrimination test. The Employer may modify the operation of
this Section 3.06(E) by electing appropriate modifications in Section 3.06 of
its Adoption Agreement.

PART 2. LIMITATIONS ON ALLOCATIONS: SECTIONS 3.07 THROUGH 3.19

     [Note: Sections 3.07 through 3.10 apply only to Participants in this Plan
who do not participate, and who have never participated, in another qualified
plan or in a welfare benefit fund (as defined in Code Section 419(e))
maintained by the Employer.]

     3.07   The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may
not exceed the Maximum Permissible Amount. If the amount the Employer otherwise
would contribute to the Participant's Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount, the Employer
will reduce the amount of its contribution so the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. If an allocation of
Employer contributions, pursuant to Section 3.04, would result in an Excess
Amount (other than an Excess Amount resulting from the circumstances described
in Section 3.10) to the Participant's Account, the Advisory Committee will
reallocate the Excess Amount to the remaining Participants who are eligible for
an allocation of Employer contributions for the Plan Year in which the
Limitation Year ends. The Advisory Committee will make this reallocation on the
basis of the allocation method under the Plan as if the Participant whose
Account otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.

     3.08   Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Advisory Committee may determine the Maximum
Permissible Amount on the basis of the Participant's estimated annual
Compensation for such Limitation Year.  The Advisory Committee must make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer contributions
(including any allocation of forfeitures) based on estimated annual
Compensation by any Excess Amounts carried over from prior years.

     3.09   As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the Maximum Permissible
Amount for such Limitation Year on the basis of the Participant's actual
Compensation for such Limitation Year.





                                                                            3.06
<PAGE>   31
     3.10   If, pursuant to Section 3.09, or because of the allocation of
forfeitures, there is an Excess Amount with respect to a Participant for a
Limitation Year, the Advisory Committee will dispose of such Excess Amount as
follows:

     (a) The Advisory Committee will return any nondeductible voluntary
     Employee contributions to the Participant to the extent the return would
     reduce the Excess Amount.

     (b) If, after the application of paragraph (a), an Excess Amount still
     exists, and the Plan covers the Participant at the end of the Limitation
     Year, then the Advisory Committee will use the Excess Amount(s) to reduce
     future Employer contributions (including any allocation of forfeitures)
     under the Plan for the next Limitation Year and for each succeeding
     Limitation Year, as is necessary, for the Participant. If the Employer's
     Plan is a profit sharing plan, the Participant may elect to limit his
     Compensation for allocation purposes to the extent necessary to reduce his
     allocation for the Limitation Year to the Maximum Permissible Amount and
     eliminate the Excess Amount.

     (c) If, after the application of paragraph (a), an Excess Amount still
     exists, and the Plan does not cover the Participant at the end of the
     Limitation Year, then the Advisory Committee will hold the Excess Amount
     unallocated in a suspense account. The Advisory Committee will apply the
     suspense account to reduce Employer Contributions (including allocation of
     forfeitures) for all remaining Participants in the next Limitation Year,
     and in each succeeding Limitation Year if necessary. Neither the Employer
     nor any Employee may contribute to the Plan for any Limitation Year in
     which the Plan is unable to allocate fully a suspense account maintained
     pursuant to this paragraph (c).

     (d) The Advisory Committee will not distribute any Excess Amount(s) to
     Participants or to former Participants.

     [Note: Sections 3.11 through 3.16 apply only to Participants who, in
addition to this Plan, participate in one or more plans (including Paired
Plans), all of which are qualified Master or Prototype defined contribution
plans or welfare benefit funds (as defined in Code Section 419(e)) maintained
by the Employer during the Limitation Year.]

     3.11   The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may
not exceed the Maximum Permissible Amount, reduced by the sum of any Annual
Additions allocated to the Participant's Accounts for the same Limitation Year
under this Plan and such other defined contribution plan. If the amount the
Employer otherwise would contribute to the Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to exceed this
limitation, the Employer will reduce the amount of its contribution so the
Annual Additions under all such plans for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions,
pursuant to Section 3.04, would result in an Excess Amount (other than an
Excess Amount resulting from the circumstances described in Section 3.10) to
the Participant's Account, the Advisory Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends. The
Advisory Committee will make this





                                                                            3.07
<PAGE>   32
reallocation on the basis of the allocation method under the Plan as if the
Participant whose Account otherwise would receive the Excess Amount is not
eligible for an allocation of Employer contributions.

     3.12   Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the Advisory Committee may determine the amounts
referred to in 3.11 above on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee will make this
determination on a reasonable and uniform basis for all Participants similarly
situated.  The Advisory Committee must reduce any Employer contribution
(including allocation of forfeitures) based on estimated annual Compensation by
any Excess Amounts carried over from prior years.

     3.13   As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the amounts referred to
in 3.11 on the basis of the Participant's actual Compensation for such
Limitation Year.

     3.14   If pursuant to Section 3.13, or because of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount will consist of the
Amounts last allocated. The Advisory Committee will determine the Amounts last
allocated by treating the Annual Additions attributable to a welfare benefit
fund as allocated first, irrespective of the actual allocation date under the
welfare benefit fund.

     3.15   The Employer must specify in its Adoption Agreement the Excess
Amount attributed to this Plan, if the Advisory Committee allocates an Excess
Amount to a Participant on an allocation date of this Plan which coincides with
an allocation date of another plan.

     3.16   The Advisory Committee will dispose of any Excess Amounts
attributed to this Plan as provided in Section 3.10.

     [Note: Section 3.17 applies only to Participants who, in addition to this
Plan, participate in one or more qualified plans which are qualified defined
contribution plans other than a Master or Prototype plan maintained by the
Employer during the Limitation Year.]

     3.17   SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions which
the  Advisory Committee may allocate under this Plan on behalf of any
Participant are limited in accordance with the provisions of Section 3.11
through 3.16, as though the other plan were a Master or Prototype plan, unless
the Employer provides other limitations in an addendum to the Adoption
Agreement, numbered Section 3.17.

     3.18   DEFINED BENEFIT PLAN LIMITATION.  If the Employer maintains a
defined benefit plan, or has ever maintained a defined benefit plan which the
Employer has terminated, then the sum of the defined benefit plan fraction and
the defined contribution plan fraction for any Participant for any Limitation
Year must not exceed 1.0. The Employer must provide in Adoption Agreement
Section 3.18 the





                                                                            3.08
<PAGE>   33
manner in which the Plan will satisfy this limitation. The Employer also must
provide in its Adoption Agreement Section 3.18 the manner in which the Plan
will satisfy the top heavy requirements of Code Section 416 after taking into
account the existence (or prior maintenance) of the defined benefit plan.

     3.19   DEFINITIONS - ARTICLE III. For purposes of Article III, the
following terms mean:

     (a) "Annual Addition" - The sum of the following amounts allocated on
     behalf of a Participant for a Limitation Year, of (i) all Employer
     contributions; (ii) all forfeitures; and (iii) all Employee contributions.
     Except to the extent provided in Treasury regulations, Annual Additions
     include excess contributions described in Code Section 401(k), excess
     aggregate contributions described in Code Section 401(m) and excess
     deferrals described in Code Section 402(g), irrespective of whether the
     plan distributes or forfeits such excess amounts. Annual Additions also
     include Excess Amounts reapplied to reduce Employer contributions under
     Section 3.10. Amounts allocated after March 31, 1984, to an individual
     medical account (as defined in Code Section 415(l)(2)) included as part of
     a defined benefit plan maintained by the Employer are Annual Additions.
     Furthermore, Annual Additions include contributions paid or accrued after
     December 31, 1985, for taxable years ending after December 31, 1985,
     attributable to post-retirement medical benefits allocated to the separate
     account of a key employee (as defined in Code Section 419A(d)(3)) under a
     welfare benefit fund (as defined in Code Section 419(e)) maintained by the
     Employer.

     (b) "Compensation" - For purposes of applying the limitations of Part 2 of
     this Article III, "Compensation" means Compensation as defined in Section
     1.12, except Compensation does not include elective contributions,
     irrespective of whether the Employer has elected to include these amounts
     as Compensation under Section 1.12 of its Adoption Agreement, and any
     exclusion selected in Section 1.12 of the Adoption Agreement (other than
     the exclusion of elective contributions) does not apply.

     (c) "Employer" - The Employer that adopts this Plan and any related
     employers described in Section 1.30. Solely for purposes of applying the
     limitations of Part 2 of this Article III, the Advisory Committee will
     determine related employers described in Section 1.30 by modifying Code
     Sections 414(b) and (c) in accordance with Code Section 415(h).

     (d) "Excess Amount" - The excess of the Participant's Annual Additions for
     the Limitation Year over the Maximum Permissible Amount.

     (e) "Limitation Year" - The period selected by the Employer under Adoption
     Agreement Section 1.17. All qualified plans of the Employer must use the
     same Limitation Year. If the Employer amends the Limitation Year to a
     different 12 consecutive month period, the new Limitation Year must begin
     on a date within the Limitation Year for which the Employer makes the
     amendment, creating a short Limitation Year.

     (f) "Master or Prototype Plan" - A plan the form of which is the subject
     of a favorable notification letter or a favorable opinion letter from the
     Internal Revenue Service.

     (g) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
     greater, one-fourth of the defined benefit dollar limitation under Code
     Section 415(b)(1)(A)), or (ii) 25% of the





                                                                            3.09
<PAGE>   34
     Participant's Compensation for the Limitation Year. If there is a short
     Limitation Year because of a change in Limitation Year, the Advisory
     Committee will multiply the $30,000 (or adjusted) limitation by the
     following fraction:

                 Number of months in the short Limitation Year   
                 ---------------------------------------------
                                       12

     (h) "Defined contribution plan" - A retirement plan which provides for an
     individual account for each participant and for benefits based solely on
     the amount contributed to the participant's account, and any income,
     expenses, gains and losses, and any forfeitures of accounts of other
     participants which the plan may allocate to such participant's account.
     The Advisory Committee must treat all defined contribution plans (whether
     or not terminated) maintained by the Employer as a single plan.  Solely
     for purposes of the limitations of Part 2 of this Article III, the
     Advisory Committee will treat employee contributions made to a defined
     benefit plan maintained by the Employer as a separate defined contribution
     plan. The Advisory Committee also will treat as a defined contribution
     plan an individual medical account (as defined in Code Section 415(l)(2))
     included as part of a defined benefit plan maintained by the Employer and,
     for taxable years ending after December 31, 1985, a welfare benefit fund
     under Code Section 419(e) maintained by the Employer to the extent there
     are post-retirement medical benefits allocated to the separate account of
     a key employee (as defined in Code Section 419A(d)(3)).

     (i) "Defined benefit plan" - A retirement plan which does not provide for
     individual accounts for Employer contributions. The Advisory Committee
     must treat all defined benefit plans (whether or not terminated)
     maintained by the Employer as a single plan.

[Note: The definitions in paragraphs (j), (k) and (l) apply only if the
limitation described in Section 3.18 applies to the Employer's Plan.]

     (j) "Defined benefit plan fraction" -

 Projected annual benefit of the Participant under the defined benefit plan(s)
 -----------------------------------------------------------------------------
 The lesser of (i) 125% (subject to the "100% limitation" in paragraph (l)) of
    the dollar limitation in effect under Code Section 415(b)(1)(A) for the
    Limitation Year, or (ii) 140% of the Participant's average Compensation
              for his high three (3) consecutive Years of Service

            To determine the denominator of this fraction, the Advisory
     Committee will make any adjustment required under Code Section 415(b) and
     will determine a Year of Service, unless otherwise provided in an addendum
     to Adoption Agreement Section 3.18, as a Plan Year in which the Employee
     completed at least 1,000 Hours of Service. The "projected annual benefit"
     is the annual retirement benefit (adjusted to an actuarially equivalent
     straight life annuity if the plan expresses such benefit in a form other
     than a straight life annuity or qualified joint and survivor annuity) of
     the Participant under the terms of the defined benefit plan on the
     assumptions he continues employment until his normal retirement age (or
     current age, if later) as stated in the defined benefit plan, his
     compensation continues at the same rate as in effect in the Limitation
     Year under





                                                                           3.010
<PAGE>   35
     consideration until the date of his normal retirement age and all other
     relevant factors used to determine benefits under the defined benefit plan
     remain constant as of the current Limitation Year for all future
     Limitation Years.

            CURRENT ACCRUED BENEFIT. If the Participant accrued benefits in one
     or more defined benefit plans maintained by the Employer which were in
     existence on May 6, 1986, the dollar limitation used in the denominator of
     this fraction will not be less than the Participant's Current Accrued
     Benefit. A Participant's Current Accrued Benefit is the sum of the annual
     benefits under such defined benefit plans which the Participant had
     accrued as of the end of the 1986 Limitation Year (the last Limitation
     Year beginning before January 1, 1987), determined without regard to any
     change in the terms or conditions of the Plan made after May 5, 1986, and
     without regard to any cost of living adjustment occurring after May 5,
     1986. This Current Accrued Benefit rule applies only if the defined
     benefit plans individually and in the aggregate satisfied the requirements
     of Code Section 415 as in effect at the end of the 1986 Limitation Year.

     (k) "Defined contribution plan fraction" -

   The sum, as of the close of the Limitation Year, of the Annual Additions
      to the Participant's Account under the defined contribution plan(s)
   ------------------------------------------------------------------------
           The sum of the lesser of the following amounts determined
      for the Limitation Year and for each prior Year of Service with the
 Employer:(i) 125% (subject to the "100% limitation" in paragraph (l)) of the
      dollar limitation in effect under Code Section 415(c)(1)(A) for the
       Limitation Year (determined without regard to the special dollar
              limitations for employee stock ownership plans), or
       (ii) 35% of the Participant's Compensation for the Limitation Year

            For purposes of determining the defined contribution plan fraction,
     the Advisory Committee will not recompute Annual Additions in Limitation
     Years beginning prior to January 1, 1987, to treat all Employee
     contributions as Annual Additions. If the Plan satisfied Code Section 415
     for Limitation Years beginning prior to January 1, 1987, the Advisory
     Committee will redetermine the defined contribution plan fraction and the
     defined benefit plan fraction as of the end of the 1986 Limitation Year,
     in accordance with this Section 3.19. If the sum of the redetermined
     fractions exceeds 1.0, the Advisory Committee will subtract permanently
     from the numerator of the defined contribution plan fraction an amount
     equal to the product of (1) the excess of the sum of the fractions over
     1.0, times (2) the denominator of the defined contribution plan fraction.
     In making the adjustment, the Advisory Committee must disregard any
     accrued benefit under the defined benefit plan which is in excess of the
     Current Accrued Benefit. This Plan continues any transitional rules
     applicable to the determination of the defined contribution plan fraction
     under the Employer's Plan as of the end of the 1986 Limitation Year.

     (l) "100% limitation."  If the 100% limitation applies, the Advisory
     Committee must determine the denominator of the defined benefit plan
     fraction and the denominator of the defined contribution plan fraction by
     substituting 100% for 125%. If the Employer's Plan is a Standardized Plan,
     the 100% limitation applies in all Limitation Years, subject





                                                                           3.011
<PAGE>   36
     to any override provisions under Section 3.18 of the Employer's Adoption
     Agreement. If the Employer overrides the 100% limitation under a
     Standardized Plan, the Employer must specify in its Adoption Agreement the
     manner in which the Plan satisfies the extra minimum benefit requirement
     of Code Section 416(h) and the 100% limitation must continue to apply if
     the Plan's top heavy ratio exceeds 90%. If the Employer's Plan is a
     Nonstandardized Plan, the 100% limitation applies only if: (i) the Plan's
     top heavy ratio exceeds 90%; or (ii) the Plan's top heavy ratio is greater
     than 60%, and the Employer does not elect in its Adoption Agreement
     Section 3.18 to provide extra minimum benefits which satisfy Code Section
     416(h)(2).


           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                            3.12
<PAGE>   37
                                   ARTICLE IV
                           PARTICIPANT CONTRIBUTIONS


     4.01   PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does not permit
Participant nondeductible contributions unless the Employer maintains its Plan
under a Code Section 401(k) Adoption Agreement. If the Employer does not
maintain its Plan under a Code Section 401(k) Adoption Agreement and, prior to
the adoption of this Prototype Plan, the Plan accepted Participant
nondeductible contributions for a Plan Year beginning after December 31, 1986,
those contributions must satisfy the requirements of Code Section 401(m). This
Section 4.01 does not prohibit the Plan's acceptance of Participant
nondeductible contributions prior to the first Plan Year commencing after the
Plan Year in which the Employer adopts this Prototype Plan.

     4.02   PARTICIPANT DEDUCTIBLE CONTRIBUTIONS. A qualified Plan may not
accept Participant deductible contributions after April 15, 1987. If the
Employer's Plan includes Participant deductible contributions ("DECs") made
prior to April 16, 1987, the Advisory Committee must maintain a separate
accounting for the Participant's Accrued Benefit attributable to DECs,
including DECs which are part of a rollover contribution described in Section
4.03. The Advisory Committee will treat the accumulated DECs as part of the
Participant's Accrued Benefit for all purposes of the Plan, except for purposes
of determining the top heavy ratio under Section 1.33. The Advisory Committee
may not use DECs to purchase life insurance on the Participant's behalf.

     4.03   PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's  written consent and after filing with the Trustee the form
prescribed by the Advisory Committee, may contribute cash or other property to
the Trust other than as a voluntary contribution if the contribution is a
"rollover contribution" which the Code permits an employee to transfer either
directly or indirectly from one qualified plan to another qualified plan.
Before accepting a rollover contribution, the Trustee may require an Employee
to furnish satisfactory evidence that the proposed transfer is in fact a
"rollover contribution" which the Code permits an employee to make to a
qualified plan. A rollover contribution is not an Annual Addition under Part 2
of Article III.

     The Trustee will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee designation), in
its sole discretion, agrees to invest the rollover contribution as part of the
Trust Fund. The Trustee will not have any investment responsibility with
respect to a Participant's segregated rollover Account. The Participant,
however, from time to time, may direct the Trustee in writing as to the
investment of his segregated rollover Account in property, or property
interests, of any kind, real, personal or mixed; provided however, the
Participant may not direct the Trustee to make loans to his Employer. A
Participant's segregated rollover Account alone will bear any extraordinary
expenses resulting from investments made at the direction of the Participant.
As of the Accounting Date (or other valuation date) for each Plan Year, the
Advisory Committee will allocate and credit the net income (or net loss) from a
Participant's segregated rollover Account and the increase or decrease in the
fair market value of the assets of a segregated rollover Account solely to that





                                                                            4.01
<PAGE>   38
Account. The Trustee is not liable nor responsible for any loss resulting to
any Beneficiary, nor to any Participant, by reason of any sale or investment
made or other action taken pursuant to and in accordance with the direction of
the Participant. In all other respects, the Trustee will hold, administer and
distribute a rollover contribution in the same manner as any Employer
contribution made to the Trust.

     An eligible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same extent
and in the same manner as a Participant. If an Employee makes a rollover
contribution to the Trust prior to satisfying the Plan's eligibility
conditions, the Advisory Committee and Trustee must treat the Employee as a
Participant for all purposes of the Plan except the Employee is not a
Participant for purposes of sharing in Employer contributions or Participant
forfeitures under the Plan until he actually becomes a Participant in the Plan.
If the Employee has a Separation from Service prior to becoming a Participant,
the Trustee will distribute his rollover contribution Account to him as if it
were an Employer contribution Account.

     4.04   PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's Accrued
Benefit is, at all times, 100% Nonforfeitable to the extent the value of his
Accrued Benefit is derived from his Participant contributions described in this
Article IV.

     4.05   PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A Participant,
by giving prior written notice to the Trustee, may withdraw all or any part of
the value of his Accrued Benefit derived from his Participant contributions
described in this Article IV. A distribution of Participant contributions must
comply with the joint and survivor requirements described in Article VI, if
those requirements apply to the Participant. A Participant may not exercise his
right to withdraw the value of his Accrued Benefit derived from his Participant
contributions more than once during any Plan Year. The Trustee, in accordance
with the direction of the Advisory Committee, will distribute a Participant's
unwithdrawn Accrued Benefit attributable to his Participant contributions in
accordance with the provisions of Article VI applicable to the distribution of
the Participant's Nonforfeitable Accrued Benefit.

     4.06   PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory Committee
must maintain a separate Account(s) in the name of each Participant to reflect
the Participant's Accrued Benefit under the Plan derived from his Participant
contributions. A Participant's Accrued Benefit derived from his Participant
contributions as of any applicable date is the balance of his separate
Participant contribution Account(s).

           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                            4.02
<PAGE>   39
                                   ARTICLE V
                  TERMINATION OF SERVICE - PARTICIPANT VESTING


     5.01   NORMAL RETIREMENT AGE.  The Employer must define Normal Retirement
Age in its Adoption Agreement. A Participant's Accrued Benefit derived from
Employer contributions is 100% Nonforfeitable upon and after his attaining
Normal Retirement Age (if employed by the Employer on or after that date).

     5.02   PARTICIPANT DISABILITY OR DEATH. The Employer may elect in its
Adoption Agreement to provide a Participant's Accrued Benefit derived from
Employer contributions will be 100% Nonforfeitable if the Participant's
Separation from Service is a result of his death or his disability.

     5.03   VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02, for
each Year of Service, a Participant's Nonforfeitable percentage of his Accrued
Benefit derived from Employer contributions equals the percentage in the
vesting schedule completed by the Employer in its Adoption Agreement.

(A) ELECTION OF SPECIAL VESTING FORMULA. If the Trustee makes a distribution
(other than a cash-out distribution described in Section 5.04) to a
partially-vested Participant, and the Participant has not incurred a Forfeiture
Break in Service at the relevant time, the Advisory Committee will establish a
separate Account for the Participant's Accrued Benefit. At any relevant time
following the distribution, the Advisory Committee will determine the
Participant's Nonforfeitable Accrued Benefit  derived  from  Employer
contributions  in  accordance  with  the  following  formula:  P(AB + (R x D))
- (R x D).

     To apply this formula, "P" is the Participant's current vesting percentage
at the relevant time, "AB" is the Participant's Employer-derived Accrued
Benefit at the relevant time, "R" is the ratio of "AB" to the Participant's
Employer-derived Accrued Benefit immediately following the earlier distribution
and "D" is the amount of the earlier distribution. If, under a restated Plan,
the Plan has made distribution to a partially-vested Participant prior to its
restated Effective Date and is unable to apply the cash-out provisions of
Section 5.04 to that prior distribution, this special vesting formula also
applies to that Participant's remaining Account. The Employer, in an addendum
to its Adoption Agreement, numbered Section 5.03, may elect to modify this
formula to read as follows: P(AB + D) - D.

     5.04   CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/
RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a
partially-vested Participant receives a cash-out distribution before he incurs
a Forfeiture Break in Service (as defined in Section 5.08), the cash-out
distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Accrued Benefit derived from Employer contributions. See
Section 5.09. A partially-vested Participant is a Participant whose
Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A
cash-out distribution is a distribution of the entire present value of the
Participant's Nonforfeitable Accrued Benefit.





                                                                            5.01
<PAGE>   40
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially-vested Participant
who is re-employed by the Employer after receiving a cash-out distribution of
the Nonforfeitable percentage of his Accrued Benefit may repay the Trustee the
amount of the cash-out distribution attributable to Employer contributions,
unless the Participant no longer has a right to restoration by reason of the
conditions of this Section 5.04(A). If a partially-vested Participant makes the
cash-out distribution repayment, the Advisory Committee, subject to the
conditions of this Section 5.04(A), must restore his Accrued Benefit
attributable to Employer contributions to the same dollar amount as the dollar
amount of his Accrued Benefit on the Accounting Date, or other valuation date,
immediately preceding the date of the cash-out distribution, unadjusted for any
gains or losses occurring subsequent to that Accounting Date, or other
valuation date. Restoration of the Participant's Accrued Benefit includes
restoration of all Code Section 411(d)(6) protected benefits with respect to
that restored Accrued Benefit, in accordance with applicable Treasury
regulations. The Advisory Committee will not restore a re-employed
Participant's Accrued Benefit under this paragraph if:

     (1) 5 years have elapsed since the Participant's first re-employment date
     with the Employer following the cash-out distribution; or

     (2) The Participant incurred a Forfeiture Break in Service (as defined in
     Section 5.08). This condition also applies if the Participant makes
     repayment within the Plan Year in which he incurs the Forfeiture Break in
     Service and that Forfeiture Break in Service would result in a complete
     forfeiture of the amount the Advisory Committee otherwise would restore.

(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions preventing
restoration of the Participant's Accrued Benefit applies, the Advisory
Committee will restore the Participant's Accrued Benefit as of the Plan Year
Accounting Date coincident with or immediately following the repayment. To
restore the Participant's Accrued Benefit, the Advisory Committee, to the
extent necessary, will allocate to the Participant's Account:

     (1) First, the amount, if any, of Participant forfeitures the Advisory
     Committee would otherwise allocate under Section 3.05;

     (2) Second, the amount, if any, of the Trust Fund net income or gain for 
     the Plan Year; and

     (3) Third, the Employer contribution for the Plan Year to the extent made 
     under a discretionary formula.

     In an addendum to its Adoption Agreement numbered 5.04(B), the Employer
may eliminate as a means of restoration any of the amounts described in clauses
(1), (2) and (3) or may change the order of priority of these amounts. To the
extent the amounts described in clauses (1), (2) and (3) are insufficient to
enable the Advisory Committee to make the required restoration, the Employer
must contribute, without regard to any requirement or condition of Section
3.01, the additional amount necessary to enable the Advisory Committee to make
the required restoration. If, for a particular Plan Year, the Advisory
Committee must restore the Accrued Benefit of more than one re-employed
Participant, then the Advisory Committee will





                                                                            5.02
<PAGE>   41
make the restoration allocations to each such Participant's Account in the same
proportion that a Participant's restored amount for the Plan Year bears to the
restored amount for the Plan Year of all re-employed Participants. The Advisory
Committee will not take into account any allocation under this Section 5.04 in
applying the limitation on allocations under Part 2 of Article III.

(C) 0% VESTED PARTICIPANT. The Employer must specify in its Adoption Agreement
whether the deemed cash-out rule applies to a 0% vested Participant. A 0%
vested Participant is a Participant whose Accrued Benefit derived from Employer
contributions is entirely forfeitable at the time of his Separation from
Service. If the Participant's Account is not entitled to an allocation of
Employer contributions for the Plan Year in which he has a Separation from
Service, the Advisory Committee will apply the deemed cash-out rule as if the
0% vested Participant received a cash-out distribution on the date of the
Participant's Separation from Service. If the Participant's Account is entitled
to an allocation of Employer contributions or Participant forfeitures for the
Plan Year in which he has a Separation from Service, the Advisory Committee
will apply the deemed cash-out rule as if the 0% vested Participant received a
cash-out distribution on the first day of the first Plan Year beginning after
his Separation from Service. For purposes of applying the restoration
provisions of this Section 5.04, the Advisory Committee will treat the 0%
vested Participant as repaying his cash-out "distribution" on the first date of
his re-employment with the Employer. If the deemed cash-out rule does not apply
to the Employer's Plan, a 0% vested Participant will not incur a forfeiture
until he incurs a Forfeiture Break in Service.

     5.05   SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory Committee
restores the Participant's Accrued Benefit, as described in Section 5.04, the
Trustee will invest the cash-out amount the Participant has repaid in a
segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Advisory Committee restores the Participant's
Accrued Benefit, the Participant's segregated Account remains a part of the
Trust, but it alone shares in any income it earns and it alone bears any
expense or loss it incurs. Unless the repayment qualifies as a rollover
contribution, the Advisory Committee will direct the Trustee to repay to the
Participant as soon as is administratively practicable the full amount of the
Participant's segregated Account if the Advisory Committee determines either of
the conditions of Section 5.04(A) prevents restoration as of the applicable
Accounting Date, notwithstanding the Participant's repayment.

     5.06   YEAR OF SERVICE - VESTING. For purposes of vesting under Section
5.03, Year of Service means any 12-consecutive month period designated in the
Employer's Adoption Agreement during which an Employee completes not less than
the number of Hours of Service (not exceeding 1,000) specified in the
Employer's Adoption Agreement. A Year of Service includes any Year of Service
earned prior to the Effective Date of the Plan, except as provided in Section
5.08.

     5.07   BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any vesting computation
period he does not complete more





                                                                            5.03
<PAGE>   42
than 500 Hours of Service. If, pursuant to Section 5.06, the Plan does not
require more than 500 Hours of Service to receive credit for a Year of Service,
a Participant incurs a Break in Service in a vesting computation period in
which he fails to complete a Year of Service.

     5.08   INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" under Section 5.06, the Plan takes into account all Years of
Service an Employee completes with the Employer except:

     (a) For the sole purpose of determining a Participant's Nonforfeitable
     percentage of his Accrued Benefit derived from Employer contributions
     which accrued for his benefit prior to a Forfeiture Break in Service, the
     Plan disregards any Year of Service after the Participant first incurs a
     Forfeiture Break in Service. The Participant incurs a Forfeiture Break in
     Service when he incurs 5 consecutive Breaks in Service.

     (b) The Plan disregards any Year of Service excluded under the Employer's
     Adoption Agreement.

     The Plan does not apply the Break in Service rule under Code Section
411(a)(6)(B). Therefore, an Employee need not complete a Year of Service after
a Break in Service before the Plan takes into account the Employee's otherwise
includible Years of Service under this Article V.

     5.09   FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the Plan on
the earlier of:

     (a) The last day of the vesting computation period in which the
     Participant first incurs a Forfeiture Break in Service; or

     (b) The date the Participant receives a cash-out distribution.

     The Advisory Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by reference
to the vesting schedule of Section 5.03. A Participant does not forfeit any
portion of his Accrued Benefit for any other reason or cause except as
expressly provided by this Section 5.09 or as provided under Section 9.14.


           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                            5.04
<PAGE>   43
                                   ARTICLE VI
                     TIME AND METHOD OF PAYMENT OF BENEFITS


     6.01   TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section
6.03, the Participant or the Beneficiary elects in writing to a different time
or method of payment, the Advisory Committee will direct the Trustee to
commence distribution of a Participant's Nonforfeitable Accrued Benefit in
accordance with this Section 6.01. A Participant must consent, in writing, to
any distribution required under this Section 6.01 if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of the distribution
to the Participant, exceeds $3,500 and the Participant has not attained the
later of Normal Retirement Age or age 62. Furthermore, the Participant's spouse
also must consent, in writing, to any distribution, for which Section 6.04
requires the spouse's consent. For all purposes of this Article VI, the term
"annuity starting date" means the first day of the first period for which the
Plan pays an amount as an annuity or in any other form. A distribution date
under this Article VI, unless otherwise specified within the Plan, is the date
or dates the Employer specifies in the Adoption Agreement, or as soon as
administratively practicable following that distribution date. For purposes of
the consent requirements under this Article VI, if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of any distribution,
exceeds $3,500, the Advisory Committee must treat that present value as
exceeding $3,500 for purposes of all subsequent Plan distributions to the
Participant.

(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH.

     (1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $3,500.  If
the Participant's Separation from Service is for any reason other than death,
the Advisory Committee will direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit in a lump sum, on the distribution date the
Employer specifies in the Adoption Agreement, but in no event later than the
60th day following the close of the Plan Year in which the Participant attains
Normal Retirement Age. If the Participant has attained Normal Retirement Age at
the time of his Separation from Service, the distribution under this paragraph
will occur no later than the 60th day following the close of the Plan Year in
which the Participant's Separation from Service occurs.

     (2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. If the
Participant's Separation from Service is for any reason other than death, the
Advisory Committee will direct the Trustee to commence distribution of the
Participant's Nonforfeitable Accrued Benefit in a form and at the time elected
by the Participant, pursuant to Section 6.03. In the absence of an election by
the Participant, the Advisory Committee will direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Bene-fit in a lump sum (or, if
applicable, the normal annuity form of distribution required under Section
6.04), on the 60th day following the close of the Plan Year in which the latest
of the following events occurs: (a) the Participant attains Normal Retirement
Age; (b) the Participant attains age 62; or (c) the Participant's Separation
from Service.

     (3) DISABILITY. If the Participant's Separation from Service is because of
his disability, the Advisory Committee will direct the Trustee to pay the
Participant's Nonforfeitable Accrued





                                                                            6.01
<PAGE>   44
Benefit in lump sum, on the distribution date the Employer specifies in the
Adoption Agreement, subject to the notice and consent requirements of this
Article VI and subject to the applicable mandatory commencement dates described
in Paragraphs (1) and (2).

     (4) HARDSHIP. Prior to the time at which the Participant may receive
distribution under Paragraphs (1), (2) or (3), the Participant may request a
distribution from his Nonforfeitable Accrued Benefit in an amount necessary to
satisfy a hardship, if the Employer elects in the Adoption Agreement to permit
hardship distributions. Unless the Employer elects otherwise in the Adoption
Agreement, a hardship distribution must be on account of any of the following:
(a) medical expenses; (b) the purchase (excluding mortgage payments) of the
Participant's principal residence; (c) post-secondary education tuition, for
the next semester or quarter, for the Participant or for the Participant's
spouse, children or dependents; (d) to prevent the eviction of the Participant
from his principal residence or the foreclosure on the mortgage of the
Participant's principal residence; (e) funeral expenses of the Participant's
family member; or (f) the Participant's disability. A partially-vested
Participant may not receive a hardship distribution described in this Paragraph
(A)(4) prior to incurring a Forfeiture Break in Service, unless the hardship
distribution is a cash-out distribution (as defined in Article V). The Advisory
Committee will direct the Trustee to make the hardship distribution as soon as
administratively practicable after the Participant makes a valid request for
the hardship distribution.

(B) REQUIRED BEGINNING DATE. If any distribution commencement date described
under Paragraph (A) of this Section 6.01, either by Plan provision or by
Participant election (or nonelection), is later than the Participant's Required
Beginning Date, the Advisory Committee instead must direct the Trustee to make
distribution on the Participant's Required Beginning Date, subject to the
transitional election, if applicable, under Section 6.03(D). A Participant's
Required Beginning Date is the April 1 following the close of the calendar year
in which the Participant attains age 70 1/2. However, if the Participant, prior
to incurring a Separation from Service, attained age 70 1/2 by January 1, 1988,
and, for the five Plan Year period ending in the calendar year in which he
attained age 70 1/2 and for all subsequent years, the Participant was not a
more than 5% owner, the Required Beginning Date is the April 1 following the
close of the calendar year in which the Participant separates from Service or,
if earlier, the April 1 following the close of the calendar year in which the
Participant becomes a more than 5% owner. Furthermore, if a Participant who was
not a more than 5% owner attained age 70 1/2 during 1988 and did not incur a
Separation from Service prior to January 1, 1989, his Required Beginning Date
is April 1, 1990. A mandatory distribution at the Participant's Required
Beginning Date will be in lump sum (or, if applicable, the normal annuity form
of distribution required under Section 6.04) unless the Participant, pursuant
to the provisions of this Article VI, makes a valid election to receive an
alternative form of payment.

(C) DEATH OF THE PARTICIPANT. The Advisory Committee will direct the Trustee,
in accordance with this Section 6.01(C), to distribute to the Participant's
Beneficiary the Participant's Nonforfeitable Accrued Benefit remaining in the
Trust at the time of the Participant's death. Subject to the requirements of
Section 6.04, the Advisory Committee will determine the death benefit by
reducing the Participant's Nonforfeitable Accrued Benefit by any security
interest the Plan has against that Nonforfeitable Accrued Benefit by reason of
an outstanding Participant loan.





                                                                            6.02
<PAGE>   45
     (1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT EXCEED
$3,500. The Advisory Committee, subject to the requirements of Section 6.04,
must direct the Trustee to distribute the deceased Participant's Nonforfeitable
Accrued Benefit in a single sum, as soon as administratively practicable
following the Participant's death or, if later, the date on which the Advisory
Committee receives notification of or otherwise confirms the Participant's
death.

     (2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500.
The Advisory Committee will direct the Trustee to distribute the deceased
Participant's Nonforfeitable Accrued Benefit at the time and in the form
elected by the Participant or, if applicable by the Beneficiary, as permitted
under this Article VI. In the absence of an election, subject to the
requirements of Section 6.04, the Advisory Committee will direct the Trustee to
distribute the Participant's undistributed Nonforfeitable Accrued Benefit in a
lump sum on the first distribution date following the close of the Plan Year in
which the Participant's death occurs or, if later, the first distribution date
following the date the Advisory Committee receives notification of or otherwise
confirms the Participant's death.

     If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form
(other than a joint and survivor annuity) this Article VI would permit for a
Participant.

     6.02   METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 6.04, and any
restrictions prescribed by Section 6.03, a Participant or Beneficiary may elect
distribution under one, or any combination, of the following methods: (a) by
payment in a lump sum; or (b) by payment in monthly, quarterly or annual
installments over a fixed reasonable period of time, not exceeding the life
expectancy of the Participant, or the joint life and last survivor expectancy
of the Participant and his Beneficiary. The Employer may elect in its Adoption
Agreement to modify the methods of payment available under this Section 6.02.

     The distribution options permitted under this Section 6.02 are available
only if the present value of the Participant Nonforfeitable Accrued Benefit, at
the time of the distribution to the Participant, exceeds $3,500. To facilitate
installment payments under this Article VI, the Advisory Committee may direct
the Trustee to segregate all or any part of the Participant's Accrued Benefit
in a separate Account. The Trustee will invest the Participant's segregated
Account in Federally insured interest bearing savings account(s) or time
deposit(s) (or a combination of both), or in other fixed income investments. A
segregated Account remains a part of the Trust, but it alone shares in any
income it earns, and it alone bears any expense or loss it incurs. A
Participant or Beneficiary may elect to receive an installment distribution in
the form of a Nontransferable Annuity Contract. Under an installment
distribution, the Participant or Beneficiary, at any time, may elect to
accelerate the payment of all, or any portion, of the Participant's unpaid
Nonforfeitable Accrued Benefit, subject to the requirements of Section 6.04.

(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Advisory Committee
may not





                                                                            6.03
<PAGE>   46
direct the Trustee to distribute the Participant's Nonforfeitable Accrued
Benefit, nor may the Participant elect to have the Trustee distribute his
Nonforfeitable Accrued Benefit, under a method of payment which, as of the
Required Beginning Date, does not satisfy the minimum distribution requirements
under Code Section 401(a)(9) and the applicable Treasury regulations. The
minimum distribution for a calendar year equals the Participant's
Nonforfeitable Accrued Benefit as of the latest valuation date preceding the
beginning of the calendar year divided by the Participant's life expectancy or,
if applicable, the joint and last survivor expectancy of the Participant and
his designated Beneficiary (as determined under Article VIII, subject to the
requirements of the Code Section 401(a)(9) regulations). The Advisory Committee
will increase the Participant's Nonforfeitable Accrued Benefit, as determined
on the relevant valuation date, for contributions or forfeitures allocated
after the valuation date and by December 31 of the valuation calendar year, and
will decrease the valuation by distributions made after the valuation date and
by December 31 of the valuation calendar year. For purposes of this valuation,
the Advisory Committee will treat any portion of the minimum distribution for
the first distribution calendar year made after the close of that year as a
distribution occurring in that first distribution calendar year. In computing a
minimum distribution, the Advisory Committee must use the unisex life
expectancy multiples under Treas. Reg.  Section 1.72-9. The Advisory Committee,
only upon the Participant's written request, will compute the minimum
distribution for a calendar year subsequent to the first calendar year for
which the Plan requires a minimum distribution by redetermining the applicable
life expectancy. However, the Advisory Committee may not redetermine the joint
life and last survivor expectancy of the Participant and a nonspouse designated
Beneficiary in a manner which takes into account any adjustment to a life
expectancy other than the Participant's life expectancy.

     If the Participant's spouse is not his designated Beneficiary, a method of
payment to the Participant (whether by Participant election or by Advisory
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code Section 401(a)(9) for distributions made
on or after the Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the Advisory Committee
will compute the minimum distribution required by this Section 6.02(A) by
substituting the applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the Participant's
death, the Advisory Committee will compute the minimum distribution required by
this Section 6.02(A) solely on the basis of the applicable life expectancy
factor and will disregard the MDIB factor. For Plan Years beginning prior to
January 1, 1989, the Plan satisfies the incidental benefits requirement if the
distributions to the Participant satisfied the MDIB requirement or if the
present value of the retirement benefits payable solely to the Participant is
greater than 50% of the present value of the total benefits payable to the
Participant and his Beneficiaries. The Advisory Committee must determine
whether benefits to the Beneficiary are incidental as of the date the Trustee
is to commence payment of the retirement benefits to the Participant, or as of
any date the Trustee redetermines the payment period to the Participant.

     The minimum distribution for the first distribution calendar year is due
by the Participant's Required Beginning Date. The minimum distribution for each
subsequent distribution calendar year, including the calendar year in which the
Participant's Required Beginning Date occurs, is due by December 31 of that
year. If the Participant receives





                                                                            6.04
<PAGE>   47
distribution in the form of a Nontransferable Annuity Contract, the
distribution satisfies this Section 6.02(A) if the contract complies with the
requirements of Code Section 401(a)(9) and the applicable Treasury regulations.

(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code Section
401(a)(9) and the applicable Treasury regulations. If the Participant's death
occurs after his Required Beginning Date or, if earlier, the date the
Participant commences an irrevocable annuity pursuant to Section 6.04, the
method of payment to the Beneficiary must provide for completion of payment
over a period which does not exceed the payment period which had commenced for
the Participant. If the Participant's death occurs prior to his Required
Beginning Date, and the Participant had not commenced an irrevocable annuity
pursuant to Section 6.04, the method of payment to the Beneficiary, subject to
Section 6.04, must provide for completion of payment to the Beneficiary over a
period not exceeding: (i) 5 years after the date of the Participant's death; or
(ii) if the Beneficiary is a designated Beneficiary, the designated
Beneficiary's life expectancy. The Advisory Committee may not direct payment of
the Participant's Nonforfeitable Accrued Benefit over a period described in
clause (ii) unless the Trustee will commence payment to the designated
Beneficiary no later than the December 31 following the close of the calendar
year in which the Participant's death occurred or, if later, and the designated
Beneficiary is the Participant's surviving spouse, December 31 of the calendar
year in which the Participant would have attained age 70 1/2. If the Trustee
will make distribution in accordance with clause (ii), the minimum distribution
for a calendar year equals the Participant's Nonforfeitable Accrued Benefit as
of the latest valuation date preceding the beginning of the calendar year
divided by the designated Beneficiary's life expectancy. The Advisory Committee
must use the unisex life expectancy multiples under Treas. Reg. Section 1.72-9
for purposes of applying this paragraph.  The Advisory Committee, only upon the
written request of the Participant or of the Participant's surviving spouse,
will recalculate the life expectancy of the Participant's surviving spouse not
more frequently than annually, but may not recalculate the life expectancy of a
nonspouse designated Beneficiary after the Trustee commences payment to the
designated Beneficiary. The Advisory Committee will apply this paragraph by
treating any amount paid to the Participant's child, which becomes payable to
the Participant's surviving spouse upon the child's attaining the age of
majority, as paid to the Participant's surviving spouse. Upon the Beneficiary's
written request, the Advisory Committee must direct the Trustee to accelerate
payment of all, or any portion, of the Participant's unpaid Accrued Benefit, as
soon as administratively practicable following the effective date of that
request.

     6.03   BENEFIT PAYMENT ELECTIONS.  Not earlier than 90 days, but not later
than 30 days, before the Participant's annuity starting date, the Advisory
Committee must provide a benefit notice to a Participant who is eligible to
make an election under this Section 6.03. The benefit notice must explain the
optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to defer
distribution until he attains the later of Normal Retirement Age or age 62.

     If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that election.
Any election under this Section 6.03 is subject to the requirements of Section
6.02 and of Section 6.04. The Participant or Beneficiary





                                                                            6.05
<PAGE>   48
must make an election under this Section 6.03 by filing his election with the
Advisory Committee at any time before the Trustee otherwise would commence to
pay a Participant's Accrued Benefit in accordance with the requirements of
Article VI.

(A) PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. If the present value
of a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may elect
to have the Trustee commence distribution as of any distribution date permitted
under the Employer's Adoption Agreement Section 6.03. The Participant may
reconsider an election at any time prior to the annuity starting date and elect
to commence distribution as of any other distribution date permitted under the
Employer's Adoption Agreement Section 6.03. If the Participant is
partially-vested in his Accrued Benefit, an election under this Paragraph (A)
to distribute prior to the Participant's incurring a Forfeiture Break in
Service (as defined in Section 5.08), must be in the form of a cash-out
distribution (as defined in Article V). A Participant may not receive a
cash-out distribution if, prior to the time the Trustee actually makes the
cash-out distribution, the Participant returns to employment with the Employer.
Following his attainment of Normal Retirement Age, a Participant who has
separated from Service may elect distribution as of any distribution date,
irrespective of the elections under Adoption Agreement Section 6.03.

(B) PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE. The Employer must
specify in its Adoption Agreement the distribution election rights, if any, a
Participant has prior to his Separation from Service. A Participant must make
an election under this Section 6.03(B) on a form prescribed by the Advisory
Committee at any time during the Plan Year for which his election is to be
effective. In his written election, the Participant must specify the percentage
or dollar amount he wishes the Trustee to distribute to him. The Participant's
election relates solely to the percentage or dollar amount specified in his
election form and his right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount or percentage specified in
his election form terminates on the Accounting Date. The Trustee must make a
distribution to a Participant in accordance with his election under this
Section 6.03(B) within the 90 day period (or as soon as administratively
practicable) after the Participant files his written election with the Trustee.
The Trustee will distribute the balance of the Participant's Accrued Benefit
not distributed pursuant to his election(s) in accordance with the other
distribution provisions of this Plan.

(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased Participant's
Nonforfeitable Accrued Benefit exceeds $3,500, the Participant's Beneficiary
may elect to have the Trustee distribute the Participant's Nonforfeitable
Accrued Benefit in a form and within a period permitted under Section 6.02. The
Beneficiary's election is subject to any restrictions designated in writing by
the Participant and not revoked as of his date of death.

(D) TRANSITIONAL ELECTIONS. Notwithstanding the provisions of Sections 6.01 and
6.02, if the Participant (or Beneficiary) signed a written distribution
designation prior to January 1, 1984, the Advisory Committee must distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with that
designation, subject however, to the survivor requirements, if applicable, of
Sections 6.04, 6.05 and 6.06. This Section 6.03(D) does not apply to a pre-1984
distribution designation, and the Advisory Committee will not comply with that
designation, if any of the following applies: (1) the method of distribution
would have disqualified the Plan under Code Section 401(a)(9) as in effect on
December 31, 1983; (2) the Participant did not have an Accrued





                                                                            6.06
<PAGE>   49
Benefit as of December 31, 1983; (3) the distribution designation does not
specify the timing and form of the distribution and the death Beneficiaries (in
order of priority); (4) the substitution of a Beneficiary modifies the payment
period of the distribution; or, (5) the Participant (or Beneficiary) modifies
or revokes the distribution designation. In the event of a revocation, the Plan
must distribute, no later than December 31 of the calendar year following the
year of revocation, the amount which the Participant would have received under
Section 6.02(A) if the distribution designation had not been in effect or, if
the Beneficiary revokes the distribution designation, the amount which the
Beneficiary would have received under Section 6.02(B) if the distribution
designation had not been in effect. The Advisory Committee will apply this
Section 6.03(D) to rollovers and transfers in accordance with Part J of the
Code Section 401(a)(9) Treasury regulations.

     6.04   ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.

(A) JOINT AND SURVIVOR ANNUITY. The  Advisory  Committee  must direct the
Trustee to distribute a married or unmarried Participant's Nonforfeitable
Accrued Benefit in the form of a qualified joint and survivor annuity, unless
the Participant makes a valid waiver election (described in Section 6.05)
within the 90 day period ending on the annuity starting date. If, as of the
annuity starting date, the Participant is married, a qualified joint and
survivor annuity is an immediate annuity which is purchasable with the
Participant's Nonforfeitable Accrued Benefit and which provides a life annuity
for the Participant and a survivor annuity payable for the remaining life of
the Participant's surviving spouse equal to 50% of the amount of the annuity
payable during the life of the Participant. If, as of the annuity starting
date, the Participant is not married, a qualified joint and survivor annuity is
an immediate life annuity for the Participant which is purchasable with the
Participant's Nonforfeitable Accrued Benefit. On or before the annuity starting
date, the Advisory Committee, without Participant or spousal consent, must
direct the Trustee to pay the Participant's Nonforfeitable Accrued Benefit in a
lump sum, in lieu of a qualified joint and survivor annuity, in accordance with
Section 6.01, if the Participant's Nonforfeitable Accrued Benefit is not
greater than $3,500. This Section 6.04(A) applies only to a Participant who has
completed at least one Hour of Service with the Employer after August 22, 1984.

(B) PRERETIREMENT SURVIVOR ANNUITY. If a married Participant dies prior to his
annuity starting date, the Advisory Committee will direct the Trustee to
distribute a portion of the Participant's Nonforfeitable Accrued Benefit to the
Participant's surviving spouse in the form of a preretirement survivor annuity,
unless the Participant has a valid waiver election (as described in Section
6.06) in effect, or unless the Participant and his spouse were not married
throughout the one year period ending on the date of his death.  A
preretirement survivor annuity is an annuity which is purchasable with 50% of
the Participant's Nonforfeitable Accrued Benefit (determined as of the date of
the Participant's death) and which is payable for the life of the Participant's
surviving spouse. The value of the preretirement survivor annuity is
attributable to Employer contributions and to Employee contributions in the
same proportion as the Participant's Nonforfeitable Accrued Benefit is
attributable to those contributions. The portion of the Participant's
Nonforfeitable Accrued Benefit not payable under this paragraph is payable to
the Participant's Beneficiary, in accordance with the other provisions of this
Article VI. If the present value of the preretirement survivor annuity does not
exceed $3,500, the Advisory





                                                                            6.07
<PAGE>   50
Committee, on or before the annuity starting date, must direct the Trustee to
make a lump sum distribution to the Participant's surviving spouse, in lieu of
a preretirement survivor annuity. This Section 6.04(B) applies only to a
Participant who dies after August 22, 1984, and either (i) completes at least
one Hour of Service with the Employer after August 22, 1984, or (ii) separated
from Service with at least 10 Years of Service (as defined in Section 5.06) and
completed at least one Hour of Service with the Employer in a Plan Year
beginning after December 31, 1975.

(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $3,500, the Participant's surviving spouse may elect
to have the Trustee commence payment of the preretirement survivor annuity at
any time following the date of the Participant's death, but not later than the
mandatory distribution periods described in Section 6.02, and may elect any of
the forms of payment described in Section 6.02, in lieu of the preretirement
survivor annuity. In the absence of an election by the surviving spouse, the
Advisory Committee must direct the Trustee to distribute the preretirement
survivor annuity on the first distribution date following the close of the Plan
Year in which the latest of the following events occurs: (i) the Participant's
death; (ii) the date the Advisory Committee receives notification of or
otherwise confirms the Participant's death; (iii) the date the Participant
would have attained Normal Retirement Age; or (iv) the date the Participant
would have attained age 62.

(D) SPECIAL RULES. If the Participant has in effect a valid waiver election
regarding the qualified joint and survivor annuity or the preretirement
survivor annuity, the Advisory Committee must direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with Sections
6.01, 6.02 and 6.03. The Advisory Committee will reduce the Participant's
Nonforfeitable Accrued Benefit by any security interest (pursuant to any offset
rights authorized by Section 10.03[E]) held by the Plan by reason of a
Participant loan to determine the value of the Participant's Nonforfeitable
Accrued Benefit distributable in the form of a qualified joint and survivor
annuity or preretirement survivor annuity, provided any post-August 18, 1985,
loan satisfied the spousal consent requirement described in Section 10.03[E] of
the Plan. For purposes of applying this Article VI, the Advisory Committee
treats a former spouse as the Participant's spouse or surviving spouse to the
extent provided under a qualified domestic relations order described in Section
6.07. The provisions of this Section 6.04, and of Sections 6.05 and 6.06, apply
separately to the portion of the Participant's Nonforfeitable Accrued Benefit
subject to the qualified domestic relations order and to the portion of the
Participant's Nonforfeitable Accrued Benefit not subject to that order.

(E) PROFIT SHARING PLAN ELECTION. If this Plan is a profit sharing plan, the
Employer must elect the extent to which the preceding provisions of Section
6.04 apply. If the Employer elects to apply this Section 6.04 only to a
Participant described in this Section 6.04(E), the preceding provisions of this
Section 6.04 apply only to the following Participants: (1) a Participant as
respects whom the Plan is a direct or indirect transferee from a plan subject
to the Code Section 417 requirements and the Plan received the transfer after
December 31, 1984, unless the transfer is an elective transfer described in
Section 13.06; (2) a Participant who elects a life annuity distribution (if
Section 6.02 or Section 13.02 of the Plan requires the Plan to provide a life
annuity distribution option); and (3) a Participant whose benefits under a
defined benefit plan maintained by the Employer are offset by benefits provided
under this Plan. If the Employer





                                                                            6.08
<PAGE>   51
elects to apply this Section 6.04 to all Participants, the preceding provisions
of this Section 6.04 apply to all Participants described in the first two
paragraphs of this Section 6.04, without regard to the limitations of this
Section 6.04(E). Sections 6.05 and 6.06 only apply to Participants to whom the
preceding provisions of this Section 6.04 apply.

     6.05   WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY.   Not
earlier than 90 days, but not later than 30 days, before the Participant's
annuity starting date, the Advisory Committee must provide the Participant a
written explanation of the terms and conditions of the qualified joint and
survivor annuity, the Participant's right to make, and the effect of, an
election to waive the joint and survivor form of benefit, the rights of the
Participant's spouse regarding the waiver election and the Participant's right
to make, and the effect of, a revocation of a waiver election. The Plan does
not limit the number of times the Participant may revoke a waiver of the
qualified joint and survivor annuity or make a new waiver during the election
period.

     A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has received the
written explanation described in this Section 6.05, has consented in writing to
the waiver election, the spouse's consent acknowledges the effect of the
election, and a notary public or the Plan Administrator (or his representative)
witnesses the spouse's consent, (b) the spouse consents to the alternate form
of payment designated by the Participant or to any change in that designated
form of payment, and (c) unless the spouse is the Participant's sole primary
Beneficiary, the spouse consents to the Participant's Beneficiary designation
or to any change in the Participant's Beneficiary designation. The spouse's
consent to a waiver of the qualified joint and survivor annuity is irrevocable,
unless the Participant revokes the waiver election. The spouse may execute a
blanket consent to any form of payment designation or to any Beneficiary
designation made by the Participant, if the spouse acknowledges the right to
limit that consent to a specific designation but, in writing, waives that
right. The consent requirements of this Section 6.05 apply to a former spouse
of the Participant, to the extent required under a qualified domestic relations
order described in Section 6.07.

     The Advisory Committee will accept as valid a waiver election which does
not satisfy the spousal consent requirements if the Advisory Committee
establishes the Participant does not have a spouse, the Advisory Committee is
not able to locate the Participant's spouse, the Participant is legally
separated or has been abandoned (within the meaning of State law) and the
Participant has a court order to that effect, or other circumstances exist
under which the Secretary of the Treasury will excuse the consent requirement.
If the Participant's spouse is legally incompetent to give consent, the
spouse's legal guardian (even if the guardian is the Participant) may give
consent.

     6.06   WAIVER  ELECTION  -  PRERETIREMENT  SURVIVOR  ANNUITY. The Advisory
Committee must provide a written explanation of the preretirement survivor
annuity to each married Participant, within the following period which ends
last: (1) the period beginning on the first day of the Plan Year in which the
Participant attains age 32 and ending on the last day of the Plan Year in which
the Participant attains age 34; (2) a reasonable period after an Employee
becomes a Participant; (3) a reasonable period after the joint and





                                                                            6.09
<PAGE>   52
survivor rules become applicable to the Participant; or (4) a reasonable period
after a fully subsidized preretirement survivor annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period described in
clauses (2), (3) and (4) is the period beginning one year before and ending one
year after the applicable event. If the Participant separates from Service
before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the
Advisory Committee must provide the written explanation within the period
beginning one year before and ending one year after the Separation from
Service. The written explanation must describe, in a manner consistent with
Treasury regulations, the terms and conditions of the preretirement survivor
annuity comparable to the explanation of the qualified joint and survivor
annuity required under Section 6.05. The Plan does not limit the number of
times the Participant may revoke a waiver of the preretirement survivor annuity
or make a new waiver during the election period.

     A Participant's waiver election of the preretirement survivor annuity is
not valid unless (a) the Participant makes the waiver election no earlier than
the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is payable)
satisfies the consent requirements described in Section 6.05, except the spouse
need not consent to the form of benefit payable to the designated Beneficiary.
The spouse's consent to the waiver of the preretirement survivor annuity is
irrevocable, unless the Participant revokes the waiver election. Irrespective
of the time of election requirement described in clause (a), if the Participant
separates from Service prior to the first day of the Plan Year in which he
attains age 35, the Advisory Committee will accept a waiver election as
respects the Participant's Accrued Benefit attributable to his Service prior to
his Separation from Service. Furthermore, if a Participant who has not
separated from Service makes a valid waiver election, except for the timing
requirement of clause (a), the Advisory Committee will accept that election as
valid, but only until the first day of the Plan Year in which the Participant
attains age 35. A waiver election described in this paragraph is not valid
unless made after the Participant has received the written explanation
described in this Section 6.06.

     6.07   DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in
this Plan prevents the Trustee, in accordance with the direction of the
Advisory Committee, from complying with the provisions of a qualified domestic
relations order (as defined in Code Section 414(p)). This Plan specifically
permits distribution to an alternate payee under a qualified domestic relations
order at any time, irrespective of whether the Participant has attained his
earliest retirement age (as defined under Code Section 414(p)) under the Plan.
A distribution to an alternate payee prior to the Participant's attainment of
earliest retirement age is available only if: (1) the order specifies
distribution at that time or permits an agreement between the Plan and the
alternate payee to authorize an earlier distribution; and (2) if the present
value of the alternate payee's benefits under the Plan exceeds $3,500, and the
order requires, the alternate payee consents to any distribution occurring
prior to the Participant's attainment of earliest retirement age. The Employer,
in an addendum to its Adoption Agreement numbered 6.07, may elect to limit
distribution to an alternate payee only when the Participant has attained his
earliest retirement age under the Plan. Nothing in this Section 6.07 gives a
Participant a right to receive distribution at a time otherwise not permitted
under the Plan nor does it permit the alternate payee to receive a form of
payment not otherwise permitted under the Plan.





                                                                           6.010
<PAGE>   53
     The Advisory Committee must establish reasonable procedures to determine
the qualified status of a domestic relations order.  Upon receiving a domestic
relations order, the Advisory Committee promptly will notify the Participant
and any alternate payee named in the order, in writing, of the receipt of the
order and the Plan's procedures for determining the qualified status of the
order.  Within a reasonable period of time after receiving the domestic
relations order, the Advisory Committee must determine the qualified status of
the order and must notify the Participant and each alternate payee, in writing,
of its determination. The Advisory Committee must provide notice under this
paragraph by mailing to the individual's address specified in the domestic
relations order, or in a manner consistent with Department of Labor
regulations.

     If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Advisory Committee is making its determination of
the qualified status of the domestic relations order, the Advisory Committee
must make a separate accounting of the amounts payable. If the Advisory
Committee determines the order is a qualified domestic relations order within
18 months of the date amounts first are payable following receipt of the order,
the Advisory Committee will direct the Trustee to distribute the payable
amounts in accordance with the order. If the Advisory Committee does not make
its determination of the qualified status of the order within the 18-month
determination period, the Advisory Committee will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the
order did not exist and will apply the order prospectively if the Advisory
Committee later determines the order is a qualified domestic relations order.

     To the extent it is not inconsistent with the provisions of the qualified
domestic relations order, the Advisory Committee may direct the Trustee to
invest any partitioned amount in a segregated subaccount or separate account
and to invest the account in Federally insured, interest-bearing savings
account(s) or time deposit(s) (or a combination of both), or in other fixed
income investments. A segregated subaccount remains a part of the Trust, but it
alone shares in any income it earns, and it alone bears any expense or loss it
incurs. The Trustee will make any payments or distributions required under this
Section 6.07 by separate benefit checks or other separate distribution to the
alternate payee(s).



           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                           6.011
<PAGE>   54
                                  ARTICLE VII
                       EMPLOYER ADMINISTRATIVE PROVISIONS


     7.01   INFORMATION  TO  COMMITTEE.  The Employer must supply current
information to the Advisory Committee as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service and date
of termination of employment of each Employee who is, or who will be eligible
to become, a Participant under the Plan, together with any other information
which the Advisory Committee considers necessary. The Employer's records as to
the current information the Employer furnishes to the Advisory Committee are
conclusive as to all persons.

     7.02   NO LIABILITY. The Employer assumes no obligation or responsibility
to any of its Employees, Participants or Beneficiaries for any act of, or
failure to act, on the part of its Advisory Committee (unless the Employer is
the Advisory Committee), the Trustee, the Custodian, if any, or the Plan
Administrator (unless the Employer is the Plan Administrator).

     7.03   INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and
saves harmless the Plan Administrator and the members of the Advisory
Committee, and each of them, from and against any and all loss resulting from
liability to which the Plan Administrator and the Advisory Committee, or the
members of the Advisory Committee, may be subjected by reason of any act or
conduct (except willful misconduct or gross negligence) in their official
capacities in the administration of this Trust or Plan or both, including all
expenses reasonably incurred in their defense, in case the Employer fails to
provide such defense. The indemnification provisions of this Section 7.03 do
not relieve the Plan Administrator or any Advisory Committee member from any
liability he may have under ERISA for breach of a fiduciary duty. Furthermore,
the Plan Administrator and the Advisory Committee members and the Employer may
execute a letter agreement further delineating the indemnification agreement of
this Section 7.03, provided the letter agreement must be consistent with and
does not violate ERISA. The indemnification provisions of this Section 7.03
extend to the Trustee (or to a Custodian, if any) solely to the extent provided
by a letter agreement executed by the Trustee (or Custodian) and the Employer.

     7.04   EMPLOYER DIRECTION OF INVESTMENT.  The Employer has the right to
direct the Trustee with respect to the investment and re-investment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit
such direction. If the Trustee consents to Employer direction of investment,
the Trustee and the Employer must execute a letter agreement as a part of this
Plan containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Employer direction as respects
the investment or re-investment of any part of the Trust Fund.

     7.05   AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the
right to  amend the vesting schedule at any time, the Advisory Committee will
not apply the amended vesting schedule to reduce the Nonforfeitable percentage
of any Participant's Accrued Benefit derived from Employer contributions
(determined as of the later of the date the Employer adopts the amendment, or
the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard





                                                                            7.01
<PAGE>   55
to the amendment. An amended vesting schedule will apply to a Participant only
if the Participant receives credit for at least one Hour of Service after the
new schedule becomes effective.

     If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. For Plan Years beginning prior to January
1, 1989, the election described in the preceding sentence applies only to
Participants having at least 5 Years of Service with the Employer. The
Participant must file his election with the Advisory Committee within 60 days
of the latest of (a) the Employer's adoption of the amendment; (b) the
effective date of the amendment; or (c) his receipt of a copy of the amendment.
The Advisory Committee, as soon as practicable, must forward a true copy of any
amendment to the vesting schedule to each affected Participant, together with
an explanation of the effect of the amendment, the appropriate form upon which
the Participant may make an election to remain under the vesting schedule
provided under the Plan prior to the amendment and notice of the time within
which the Participant must make an election to remain under the prior vesting
schedule. The election described in this Section 7.05 does not apply to a
Participant if the amended vesting schedule provides for vesting at least as
rapid at all times as the vesting schedule in effect prior to the amendment.
For purposes of this Section 7.05, an amendment to the vesting schedule
includes any Plan amendment which directly or indirectly affects the
computation of the Nonforfeitable percentage of an Employee's rights to his
Employer derived Accrued Benefit. Furthermore, the Advisory Committee must
treat any shift in the vesting schedule, due to a change in the Plan's top
heavy status, as an amendment to the vesting schedule for purposes of this
Section 7.05.



           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                            7.02
<PAGE>   56
                                  ARTICLE VIII
                     PARTICIPANT ADMINISTRATIVE PROVISIONS


     8.01   BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Nonforfeitable Accrued Benefit (including any
life insurance proceeds payable to the Participant's Account) in the event of
his death and the Participant may designate the form and method of payment.
The Advisory Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Advisory
Committee, the form effectively revokes all designations filed prior to that
date by the same Participant.

(A) COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01 does not
impose any special spousal consent requirements on the Participant's
Beneficiary designation. However, in the absence of spousal consent (as
required by Article VI) to the Participant's Beneficiary designation: (1) any
waiver of the joint and survivor annuity or of the preretirement survivor
annuity is not valid; and (2) if the Participant dies prior to his annuity
starting date, the Participant's Beneficiary designation will apply only to the
portion of the death benefit which is not payable as a preretirement survivor
annuity. Regarding clause (2), if the Participant's surviving spouse is a
primary Beneficiary under the Participant's Beneficiary designation, the
Trustee will satisfy the spouse's interest in the Participant's death benefit
first from the portion which is payable as a preretirement survivor annuity.

(B) PROFIT SHARING PLAN EXCEPTION. If the Plan is a profit sharing plan, the
Beneficiary designation of a married Exempt Participant is not valid unless the
Participant's spouse consents (in a manner described in Section 6.05) to the
Beneficiary designation. An "Exempt Participant" is a Participant who is not
subject to the joint and survivor requirements of Article VI. The spousal
consent requirement in this paragraph does not apply if the Exempt Participant
and his spouse are not married throughout the one year period ending on the
date of the Participant's death, or if the Participant's spouse is the
Participant's sole primary Beneficiary.

     8.02   NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
the Participant's Nonforfeitable Accrued Benefit in accordance with Section
6.02 in the following order of priority, unless the Employer specifies a
different order of priority in an addendum to its Adoption Agreement, to:

     (a) The Participant's surviving spouse;

     (b) The Participant's surviving children, including adopted children, in
     equal shares;

     (c) The Participant's surviving parents, in equal shares; or





                                                                            8.01
<PAGE>   57
     (d) The Participant's estate.

     If the Beneficiary does not predecease the Participant, but dies prior to
distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise or unless the Employer provides otherwise in its Adoption Agreement.
If the Plan is a profit sharing plan, and the Plan includes Exempt
Participants, the Employer may not specify a different order of priority in the
Adoption Agreement unless the Participant's surviving spouse will be first in
the different order of priority. The Advisory Committee will direct the Trustee
as to the method and to whom the Trustee will make payment under this Section
8.02.

     8.03   PERSONAL DATA TO COMMITTEE.  Each Participant and each Beneficiary
of a  deceased Participant must furnish to the Advisory Committee such
evidence, data or information as the Advisory Committee considers necessary or
desirable for the purpose of administering the Plan. The provisions of this
Plan are effective for the benefit of each Participant upon the condition
precedent that each Participant will furnish promptly full, true and complete
evidence, data and information when requested by the Advisory Committee,
provided the Advisory Committee advises each Participant of the effect of his
failure to comply with its request.

     8.04   ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of
a deceased Participant must file with the Advisory Committee from time to time,
in writing, his post office address and any change of post office address. Any
communication, statement or notice addressed to a Participant, or Beneficiary,
at his last post office address filed with the Advisory Committee, or as shown
on the records of the Employer, binds the Participant, or Beneficiary, for all
purposes of this Plan.

     8.05   ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p) relating
to qualified domestic relations orders, neither a Participant nor a Beneficiary
may anticipate, assign or alienate (either at law or in equity) any benefit
provided under the Plan, and the Trustee will not recognize any such
anticipation, assignment or alienation. Furthermore, a benefit under the Plan
is not subject to attachment, garnishment, levy, execution or other legal or
equitable process.

     8.06   NOTICE OF CHANGE IN TERMS.  The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.

     8.07   LITIGATION AGAINST THE TRUST. A court of competent jurisdiction may
authorize any appropriate equitable relief to redress violations of ERISA or to
enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.





                                                                            8.02
<PAGE>   58
     8.08   INFORMATION AVAILABLE.  Any Participant in the Plan or any
Beneficiary may  examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator
will maintain all of the items listed in this Section 8.08 in his office, or in
such other place or places as he may designate from time to time in order to
comply with the regulations issued under ERISA, for examination during
reasonable business hours. Upon the written request of a Participant or
Beneficiary the Plan Administrator must furnish him with a copy of any item
listed in this Section 8.08. The Plan Administrator may make a reasonable
charge to the requesting person for the copy so furnished.

     8.09   APPEAL PROCEDURE FOR DENIAL OF BENEFITS.  A Participant or a
Beneficiary ("Claimant") may file with the Advisory Committee a written claim
for benefits, if the Participant or Beneficiary determines the distribution
procedures of the Plan have not provided him his proper Nonforfeitable Accrued
Benefit. The Advisory Committee must render a decision on the claim within 60
days of the Claimant's written claim for benefits. The Plan Administrator must
provide adequate notice in writing to the Claimant whose claim for benefits
under the Plan the Advisory Committee has denied. The Plan Administrator's
notice to the Claimant must set forth:

     (a) The specific reason for the denial;

     (b) Specific references to pertinent Plan provisions on which the Advisory
     Committee based its denial;

     (c) A description of any additional material and information needed for
     the Claimant to perfect his claim and an explanation of why the material
     or information is needed; and

     (d) That any appeal the Claimant wishes to make of the adverse
     determination must be in writing to the Advisory Committee within 75 days
     after receipt of the Plan Administrator's notice of denial of benefits.
     The Plan Administrator's notice must further advise the Claimant that his
     failure to appeal the action to the Advisory Committee in writing within
     the 75-day period will render the Advisory Committee's determination
     final, binding and conclusive.

     If the Claimant should appeal to the Advisory Committee, he, or his duly
authorized representative, may submit, in writing, whatever issues and comments
he, or his duly authorized representative, feels are pertinent. The Claimant,
or his duly authorized representative, may review pertinent Plan documents. The
Advisory Committee will re-examine all facts related to the appeal and make a
final determination as to whether the denial of benefits is justified under the
circumstances. The Advisory Committee must advise the Claimant of its decision
within 60 days of the Claimant's written request for review, unless special
circumstances (such as a hearing) would make the rendering of a decision within
the 60-day limit unfeasible, but in no event may the Advisory Committee render
a decision respecting a denial for a claim for benefits later than 120 days
after its receipt of a request for review.



                                                                            8.03
<PAGE>   59
     The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.

     8.10   PARTICIPANT DIRECTION OF INVESTMENT.  A Participant has the right
to direct the Trustee with respect to the investment or re-investment of the
assets comprising the Participant's individual Account only if the Trustee
consents in writing to permit such direction. If the Trustee consents to
Participant direction of investment, the Trustee will accept direction from
each Participant on a written election form (or other written agreement), as a
part of this Plan, containing such conditions, limitations and other provisions
the parties deem appropriate. The Trustee or, with the Trustee's consent, the
Advisory Committee, may establish written procedures, incorporated specifically
as part of this Plan, relating to Participant direction of investment under
this Section 8.10. The Trustee will maintain a segregated investment Account to
the extent a Participant's Account is subject to Participant self-direction.
The Trustee is not liable for any loss, nor is the Trustee liable for any
breach, resulting from a Participant's direction of the investment of any part
of his directed Account.

     The Advisory Committee, to the extent provided in a written loan policy
adopted under Section 9.04, will treat a loan made to a Participant as a
Participant direction of investment under this Section 8.10. To the extent of
the loan outstanding at any time, the borrowing Participant's Account alone
shares in any interest paid on the loan, and it alone bears any expense or loss
it incurs in connection with the loan. The Trustee may retain any principal or
interest paid on the borrowing Participant's loan in an interest bearing
segregated Account on behalf of the borrowing Participant until the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee) deems it
appropriate to add the amount paid to the Participant's separate Account under
the Plan.

     If the Trustee consents to Participant direction of investment of his
Account, the Plan treats any post-December 31, 1981, investment by a
Participant's directed Account in collectibles (as defined by Code Section
408(m)) as a deemed distribution to the Participant for Federal income tax
purposes.



           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                           8.04
<PAGE>   60
                                   ARTICLE IX
       ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS


     9.01   MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Advisory Committee to administer the Plan, the members of which may or may not
be Participants in the Plan, or which may be the Plan Administrator acting
alone. In the absence of an Advisory Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the Advisory
Committee. The members of the Advisory Committee will serve without
compensation for services as such, but the Employer will pay all expenses of
the Advisory Committee, except to the extent the Trust properly pays for such
expenses, pursuant to Article X.

     9.02   TERM. Each member of the Advisory Committee serves until the
       appointment of his successor.

     9.03   POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filling of the vacancy.

     9.04   GENERAL. The Advisory Committee has the following powers and duties:

     (a)    To select a Secretary, who need not be a member of the Advisory
     Committee;

     (b)    To determine the rights of eligibility of an Employee to
     participate in the Plan, the value of a Participant's Accrued Benefit and
     the Nonforfeitable percentage of each Participant's Accrued Benefit;

     (c)    To adopt rules of procedure and regulations necessary for the
     proper and efficient administration of the Plan provided the rules are not
     inconsistent with the terms of this Agreement;

     (d)    To construe and enforce the terms of the Plan and the rules and
     regulations it adopts, including interpretation of the Plan documents and
     documents related to the Plan's operation;

     (e)    To direct the Trustee as respects the crediting and distribution of
     the Trust;

     (f)    To review and render decisions respecting a claim for (or denial of
     a claim for) a benefit under the Plan;

     (g)    To furnish the Employer with information which the Employer may
     require for tax or other purposes;





                                                                            9.01
<PAGE>   61
     (h)    To engage the service of agents whom it may deem advisable to
     assist it with the performance of its duties;

     (i)    To engage the services of an Investment Manager or Managers (as
     defined in ERISA Section 3(38)), each of whom will have full power and
     authority to manage, acquire or dispose (or direct the Trustee with
     respect to acquisition or disposition) of any Plan asset under its
     control;

     (j)    To establish, in its sole discretion, a nondiscriminatory policy
     (see Section 9.04(A)) which the Trustee must observe in making loans, if
     any, to Participants and Beneficiaries; and

     (k)    To establish and maintain a funding standard account and to make
     credits and charges to the account to the extent required by and in
     accordance with the provisions of the Code.

     The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.

(A) LOAN POLICY. If the Advisory Committee adopts a loan policy, pursuant to
paragraph (j), the loan policy must be a written document and must include: (1)
the identity of the person or positions authorized to administer the
participant loan program; (2) a procedure for applying for the loan; (3) the
criteria for approving or denying a loan; (4) the limitations, if any, on the
types and amounts of loans available; (5) the procedure for determining a
reasonable rate of interest; (6) the types of collateral which may secure the
loan; and (7) the events constituting default and the steps the Plan will take
to preserve plan assets in the event of default. This Section 9.04 specifically
incorporates a written loan policy as part of the Employer's Plan.

     9.05   FUNDING POLICY. The Advisory Committee will review, not less often
than annually,  all pertinent Employee information and Plan data in order to
establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.

     9.06   MANNER OF ACTION. The decision of a majority of the members
appointed and qualified controls.

     9.07   AUTHORIZED REPRESENTATIVE. The Advisory Committee may
authorize any one of its members, or its Secretary, to sign on its behalf any
notices, directions, applications, certificates, consents, approvals, waivers,
letters or other documents.  The Advisory Committee must evidence this
authority by an instrument signed by all members and filed with the Trustee.

     9.08   INTERESTED MEMBER. No member of the Advisory Committee may decide
or  determine any matter concerning the distribution, nature or method of
settlement of his





                                                                            9.02
<PAGE>   62
own benefits under the Plan, except in exercising an election available to that
member in his capacity as a Participant, unless the Plan Administrator is
acting alone in the capacity of the Advisory Committee.

     9.09   INDIVIDUAL  ACCOUNTS.  The Advisory Committee will maintain, or
direct the  Trustee to maintain, a separate Account, or multiple Accounts, in
the name of each Participant to reflect the Participant's Accrued Benefit under
the Plan. If a Participant re-enters the Plan subsequent to his having a
Forfeiture Break in Service, the Advisory Committee, or the Trustee, must
maintain a separate Account for the Participant's pre-Forfeiture Break in
Service Accrued Benefit and a separate Account for his post-Forfeiture Break in
Service Accrued Benefit, unless the Participant's entire Accrued Benefit under
the Plan is 100% Nonforfeitable.

     The Advisory Committee will make its allocations, or request the Trustee
to make its allocations, to the Accounts of the Participants in accordance with
the provisions of Section 9.11. The Advisory Committee may direct the Trustee
to maintain a temporary segregated investment Account in the name of a
Participant to prevent a distortion of income, gain or loss allocations under
Section 9.11. The Advisory Committee must maintain records of its activities.

     9.10   VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's  Accrued Benefit consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account (exclusive of the cash value of incidental benefit insurance
contracts) bears to the total net credit balance in the Accounts (exclusive of
the cash value of the incidental benefit insurance contracts) of all
Participants plus the cash surrender value of any incidental benefit insurance
contracts held by the Trustee on the Participant's life.

     For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date immediately
preceding the date of the distribution. Any distribution (other than a
distribution from a segregated Account) made to a Participant (or to his
Beneficiary) more than 90 days after the most recent valuation date may include
interest on the amount of the distribution as an expense of the Trust Fund. The
interest, if any, accrues from such valuation date to the date of the
distribution at the rate established in the Employer's Adoption Agreement.

     9.11   ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A
"valuation date" under this Plan is each Accounting Date and each interim
valuation date determined under Section 10.14. As of each valuation date the
Advisory Committee must adjust Accounts to reflect net income, gain or loss
since the last valuation date. The valuation period is the period beginning the
day after the last valuation date and ending on the current valuation date.

(A) TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply to
all Participant Accounts other than segregated investment Accounts. The
Advisory Committee first will adjust the Participant Accounts, as those
Accounts stood at the beginning of the current valuation period, by reducing
the Accounts for any forfeitures arising under Section 5.09 or under Section
9.14, for amounts charged during the valuation period to the Accounts in
accordance with





                                                                            9.03
<PAGE>   63
Section 9.13 (relating to distributions) and Section 11.01 (relating to
insurance premiums), and for the cash value of incidental benefit insurance
contracts. The Advisory Committee then, subject to the restoration allocation
requirements of Section 5.04 or of Section 9.14, will allocate the net income,
gain or loss pro rata to the adjusted Participant Accounts. The allocable net
income, gain or loss is the net income (or net loss), including the increase or
decrease in the fair market value of assets, since the last valuation date.

(B) SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account receives
all income it earns and bears all expense or loss it incurs. The Advisory
Committee will adopt uniform and nondiscriminatory procedures for determining
income or loss of a segregated investment Account in a manner which reasonably
reflects investment directions relating to pooled investments and investment
directions occurring during a valuation period. As of the valuation date, the
Advisory Committee must reduce a segregated Account for any forfeiture arising
under Section 5.09 after the Advisory Committee has made all other allocations,
changes or adjustments to the Account for the Plan Year.

(C) ADDITIONAL RULES. An Excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in this Section 9.11. If the Employer maintains its Plan under a Code
Section 401(k) Adoption Agreement, the Employer may specify in its Adoption
Agreement alternate valuation provisions authorized by that Adoption Agreement.
This Section 9.11 applies solely to the allocation of net income, gain or loss
of the Trust. The Advisory Committee will allocate the Employer contributions
and Participant forfeitures, if any, in accordance with Article III.

     9.12   INDIVIDUAL STATEMENT. As soon as practicable after the Accounting
Date of each  Plan Year, but within the time prescribed by ERISA and the
regulations under ERISA, the Plan Administrator will deliver to each
Participant (and to each Beneficiary) a statement reflecting the condition of
his Accrued Benefit in the Trust as of that date and such other information
ERISA requires be furnished the Participant or Beneficiary. No Participant,
except a member of the Advisory Committee, has the right to inspect the records
reflecting the Account of any other Participant.

     9.13   ACCOUNT CHARGED. The Advisory Committee will charge a Participant's
Account for all distributions made from that Account to the Participant, to his
Beneficiary or to an alternate payee. The Advisory Committee also will charge a
Participant's Account for any administrative expenses incurred by the Plan
directly related to that Account.

     9.14   UNCLAIMED  ACCOUNT  PROCEDURE.  The Plan does not require either
the Trustee or the Advisory Committee to search for, or to ascertain the
whereabouts of, any Participant or Beneficiary. At the time the Participant's
or Beneficiary's benefit becomes distributable under Article VI, the Advisory
Committee, by certified or registered mail addressed to his last known address
of record with the Advisory Committee or the Employer, must notify any
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.14 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts
known in writing to the Advisory Committee within 6 months from the date of
mailing of the notice, the Advisory Committee will treat the





                                                                            9.04
<PAGE>   64
Participant's or Beneficiary's unclaimed payable Accrued Benefit as forfeited
and will reallocate the unclaimed payable Accrued Benefit in accordance with
Section 3.05. A forfeiture under this paragraph will occur at the end of the
notice period or, if later, the earliest date applicable Treasury regulations
would permit the forfeiture. Pending forfeiture, the Advisory Committee,
following the expiration of the notice period, may direct the Trustee to
segregate the Nonforfeitable Accrued Benefit in a segregated Account and to
invest that segregated Account in Federally insured interest bearing savings
accounts or time deposits (or in a combination of both), or in other fixed
income investments.

     If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section
9.14 makes a claim, at any time, for his forfeited Accrued Benefit, the
Advisory Committee must restore the Participant's or Beneficiary's forfeited
Accrued Benefit to the same dollar amount as the dollar amount of the Accrued
Benefit forfeited, unadjusted for any gains or losses occurring subsequent to
the date of the forfeiture. The Advisory Committee will make the restoration
during the Plan Year in which the Participant or Beneficiary makes the claim,
first from the amount, if any, of Participant forfeitures the Advisory
Committee otherwise would allocate for the Plan Year, then from the amount, if
any, of the Trust Fund net income or gain for the Plan Year and then from the
amount, or additional amount, the Employer contributes to enable the Advisory
Committee to make the required restoration. The Advisory Committee must direct
the Trustee to distribute the Participant's or Beneficiary's restored Accrued
Benefit to him not later than 60 days after the close of the Plan Year in which
the Advisory Committee restores the forfeited Accrued Benefit. The forfeiture
provisions of this Section 9.14 apply solely to the Participant's or to the
Beneficiary's Accrued Benefit derived from Employer contributions.



           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                            9.05
<PAGE>   65
                                   ARTICLE X
                      CUSTODIAN/TRUSTEE, POWERS AND DUTIES


     10.01  ACCEPTANCE. The Trustee accepts the Trust created under the Plan
and agrees to perform the obligations imposed. The Trustee must provide bond
for the faithful performance of its duties under the Trust to the extent
required by ERISA.

     10.02  RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the
Employer for the funds contributed to it by the Employer, but does not have any
duty to see that the contributions received comply with the provisions of the
Plan. The Trustee is not obliged to collect any contributions from the
Employer, nor is obliged to see that funds deposited with it are deposited
according to the provisions of the Plan.

     10.03  INVESTMENT POWERS.

[A] DISCRETIONARY TRUSTEE DESIGNATION. If the Employer, in Adoption Agreement
Section 1.02, designates the Trustee to administer the Trust as a discretionary
Trustee, then the Trustee has full discretion and authority with regard to the
investment of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager or with respect
to a Plan asset properly subject to Employer, Participant or Advisory Committee
direction of investment. The Trustee must coordinate its investment policy with
Plan financial needs as communicated to it by the Advisory Committee. The
Trustee is authorized and empowered, but not by way of limitation, with the
following powers, rights and duties:

     (a)    To invest any part or all of the Trust Fund in any common or
     preferred stocks, open-end or closed-end mutual funds, put and call
     options traded on a national exchange, United States retirement plan
     bonds, corporate bonds, debentures, convertible debentures, commercial
     paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
     indirect obligations of the United States Government or its agencies,
     improved or unimproved real estate situated in the United States, limited
     partnerships, insurance contracts of any type, mortgages, notes or other
     property of any kind, real or personal, to buy or sell options on common
     stock on a nationally recognized exchange with or without holding the
     underlying common stock, to buy and sell commodities, commodity options
     and contracts for the future delivery of commodities, and to make any
     other investments the Trustee deems appropriate, as a prudent man would do
     under like circumstances with due regard for the purposes of this Plan.
     Any investment made or retained by the Trustee in good faith is proper but
     must be of a kind constituting a diversification considered by law
     suitable for trust investments.

     (b)    To retain in cash so much of the Trust Fund as it may deem
     advisable to satisfy liquidity needs of the Plan and to deposit any cash
     held in the Trust Fund in a bank account at reasonable interest.

     (c)    To invest, if the Trustee is a bank or similar financial
     institution supervised by the United States or by a State, in any type of
     deposit of the Trustee (or of a bank





                                                                           10.01
<PAGE>   66
     related to the Trustee within the meaning of Code Section 414(b)) at a
     reasonable rate of interest or in a common trust fund, as described in
     Code Section 584, or in a collective investment fund, the provisions of
     which govern the investment of such assets and which the Plan incorporates
     by this reference, which the Trustee (or its affiliate, as defined in Code
     Section 1504) maintains exclusively for the collective investment of money
     contributed by the bank (or the affiliate) in its capacity as trustee and
     which conforms to the rules of the Comptroller of the Currency.

     (d)    To manage, sell, contract to sell, grant options to purchase,
     convey, exchange, transfer, abandon, improve, repair, insure, lease for
     any term even though commencing in the future or extending beyond the term
     of the Trust, and otherwise deal with all property, real or personal, in
     such manner, for such considerations and on such terms and conditions as
     the Trustee decides.

     (e)    To credit and distribute the Trust as directed by the Advisory
     Committee. The Trustee is not obliged to inquire as to whether any payee
     or distributee is entitled to any payment or whether the distribution is
     proper or within the terms of the Plan, or as to the manner of making any
     payment or distribution. The Trustee is accountable only to the Advisory
     Committee for any payment or distribution made by it in good faith on the
     order or direction of the Advisory Committee.

     (f)    To borrow money, to assume indebtedness, extend mortgages and
     encumber by mortgage or pledge.

     (g)    To compromise, contest, arbitrate or abandon claims and demands, in
     its discretion.
 
     (h)    To have with respect to the Trust all of the rights of an
     individual owner, including the power to give proxies, to participate in
     any voting trusts, mergers, consolidations or liquidations, and to
     exercise or sell stock subscriptions or conversion rights.

     (i)    To lease for oil, gas and other mineral purposes and to create
     mineral severances by grant or reservation; to pool or unitize interests
     in oil, gas and other minerals; and to enter into operating agreements and
     to execute division and transfer orders.

     (j)    To hold any securities or other property in the name of the Trustee
     or its nominee, with depositories or agent depositories or in another form
     as it may deem best, with or without disclosing the trust relationship.

     (k)    To perform any and all other acts in its judgment necessary or
     appropriate for the proper and advantageous management, investment and
     distribution of the Trust.

     (l)    To retain any funds or property subject to any dispute without
     liability for the payment of interest, and to decline to make payment or
     delivery of the funds or property until final adjudication is made by a
     court of competent jurisdiction.





                                                                           10.02
<PAGE>   67
     (m)    To file all tax returns required of the Trustee.

     (n)    To furnish to the Employer, the Plan Administrator and the Advisory
     Committee an annual statement of account showing the condition of the
     Trust Fund and all investments, receipts, disbursements and other
     transactions effected by the Trustee during the Plan Year covered by the
     statement and also stating the assets of the Trust held at the end of the
     Plan Year, which accounts are conclusive on all persons, including the
     Employer, the Plan Administrator and the Advisory Committee, except as to
     any act or transaction concerning which the Employer, the Plan
     Administrator or the Advisory Committee files with the Trustee written
     exceptions or objections within 90 days after the receipt of the accounts
     or for which ERISA authorizes a longer period within which to object.

     (o)    To begin, maintain or defend any litigation necessary in connection
     with the administration of the Plan, except that the Trustee is not
     obliged or required to do so unless indemnified to its satisfaction.

[B] NONDISCRETIONARY TRUSTEE DESIGNATION/APPOINTMENT OF CUSTODIAN. If the
Employer, in its Adoption Agreement Section 1.02, designates the Trustee to
administer the Trust as a nondiscretionary Trustee, then the Trustee will not
have any discretion or authority with regard to the investment of the Trust
Fund, but must act solely as a directed trustee of the funds contributed to it.
A nondiscretionary Trustee, as directed trustee of the funds held by it under
the Employer's Plan, is authorized and empowered, by way of limitation, with
the following powers, rights and duties, each of which the nondiscretionary
Trustee exercises solely as directed trustee in accordance with the written
direction of the Named Fiduciary (except to the extent a Plan asset is subject
to the control and management of a properly appointed Investment Manager or
subject to Advisory Committee or Participant direction of investment):

     (a) To invest any part or all of the Trust Fund in any common or preferred
     stocks, open-end or closed-end mutual funds, put and call options traded
     on a national exchange, United States retirement plan bonds, corporate
     bonds, debentures, convertible debentures, commercial paper, U.S. Treasury
     bills, U.S. Treasury notes and other direct or indirect obligations of the
     United States Government or its agencies, improved or unimproved real
     estate situated in the United States, limited partnerships, insurance
     contracts of any type, mortgages, notes or other property of any kind,
     real or personal, to buy or sell options on common stock on a nationally
     recognized options exchange with or without holding the underlying common
     stock, to buy and sell commodities, commodity options and contracts for
     the future delivery of commodities, and to make any other investments the
     Named Fiduciary deems appropriate.

     (b) To retain in cash so much of the Trust Fund as the Named Fiduciary may
     direct in writing to satisfy liquidity needs of the Plan and to deposit
     any cash held in the Trust Fund in a bank account at reasonable interest,
     including, specific authority to invest in any type of deposit of the
     Trustee (or of a bank related to the Trustee within the meaning of Code
     Section 414(b)) at a reasonable rate of interest.





                                                                           10.03
<PAGE>   68
     (c) To sell, contract to sell, grant options to purchase, convey,
     exchange, transfer, abandon, improve, repair, insure, lease for any term
     even though commencing in the future or extending beyond the term of the
     Trust, and otherwise deal with all property, real or personal, in such
     manner, for such considerations and on such terms and conditions as the
     Named Fiduciary directs in writing.

     (d) To credit and distribute the Trust as directed by the Advisory
     Committee. The Trustee is not obliged to inquire as to whether any payee
     or distributee is entitled to any payment or whether the distribution is
     proper or within the terms of the Plan, or as to the manner of making any
     payment or distribution. The Trustee is accountable only to the Advisory
     Committee for any payment or distribution made by it in good faith on the
     order or direction of the Advisory Committee.

     (e) To borrow money, to assume indebtedness, extend mortgages and encumber
     by mortgage or pledge.

     (f) To have with respect to the Trust all of the rights of an individual
     owner, including the power to give proxies, to participate in any voting
     trusts, mergers, consolidations or liquidations, and to exercise or sell
     stock subscriptions or conversion rights, provided the exercise of any
     such powers is in accordance with and at the written direction of the
     Named Fiduciary.

     (g) To lease for oil, gas and other mineral purposes and to create mineral
     severances by grant or reservation; to pool or unitize interests in oil,
     gas and other minerals; and to enter into operating agreements and to
     execute division and transfer orders, provided the exercise of any such
     powers is in accordance with and at the written direction of the Named
     Fiduciary.

     (h) To hold any securities or other property in the name of the
     nondiscretionary Trustee or its nominee, with depositories or agent
     depositories or in another form as the Named Fiduciary may deem best, with
     or without disclosing the custodial relationship.

     (i) To retain any funds or property subject to any dispute without
     liability for the payment of interest, and to decline to make payment or
     delivery of the funds or property until a court of competent jurisdiction
     makes final adjudication.

     (j) To file all tax returns required of the Trustee.

     (k) To furnish to the Named Fiduciary, the Employer, the Plan
     Administrator and the Advisory Committee an annual statement of account
     showing the condition of the Trust Fund and all investments, receipts,
     disbursements and other transactions effected by the nondiscretionary
     Trustee during the Plan Year covered by the statement and also stating the
     assets of the Trust held at the end of the Plan Year, which accounts are
     conclusive on all persons, including the Named Fiduciary, the Employer,
     the Plan Administrator and the Advisory Committee, except as to any act or
     transaction concerning which the Named Fiduciary, the Employer, the Plan
     Administrator or the Advisory Committee files with the nondiscretionary
     Trustee written exceptions or objections within 90 days after





                                                                           10.04
<PAGE>   69
     the receipt of the accounts or for which ERISA authorizes a longer period
     within which to object.

     (l) To begin, maintain or defend any litigation necessary in connection
     with the administration of the Plan, except that the Trustee is not
     obliged or required to do so unless indemnified to its satisfaction.

     APPOINTMENT OF CUSTODIAN. The Employer may appoint a Custodian under the
Plan, the acceptance by the Custodian indicated on the execution page of the
Employer's Adoption Agreement. If the Employer appoints a Custodian, the
Employer's Plan must have a discretionary Trustee, as described in Section
10.03[A]. A Custodian has the same powers, rights and duties as a
nondiscretionary Trustee, as described in this Section 10.03[B]. The Custodian
accepts the terms of the Plan and Trust by executing the Employer's Adoption
Agreement. Any reference in the Plan to a Trustee also is a reference to a
Custodian where the context of the Plan dictates. A limitation of the Trustee's
liability by Plan provision also acts as a limitation of the Custodian's
liability. Any action taken by the Custodian at the discretionary Trustee's
direction satisfies any provision in the Plan referring to the Trustee's taking
that action.

     MODIFICATION OF POWERS/LIMITED RESPONSIBILITY. The Employer and the
Custodian or nondiscretionary Trustee, by letter agreement, may limit the
powers of the Custodian or nondiscretionary Trustee to any combination of
powers listed within this Section 10.03[B].  If there is a Custodian or a
nondiscretionary Trustee under the Employer's Plan, then the Employer, in
adopting this Plan acknowledges the Custodian or nondiscretionary Trustee has
no discretion with respect to the investment or re-investment of the Trust Fund
and that the Custodian or nondiscretionary Trustee is acting solely as
custodian or as directed trustee with respect to the assets comprising the
Trust Fund.

[C] LIMITATION OF POWERS OF CERTAIN CUSTODIANS. If a Custodian is a bank which,
under its governing state law, does not possess trust powers, then paragraphs
(a), (c), (e), (f), (g) of Section 10.03[B], Section 10.16 and Article XI do
not apply to that bank and that bank only has the power and authority to
exercise the remaining powers, rights and duties under Section 10.03[B].

[D] NAMED FIDUCIARY/LIMITATION OF LIABILITY OF NONDISCRETIONARY TRUSTEE OR
CUSTODIAN. Under a nondiscretionary Trustee designation, the Named Fiduciary
under the Employer's Plan has the sole responsibility for the management and
control of the Employer's Trust Fund, except with respect to a Plan asset under
the control or direction of a properly appointed Investment Manager or with
respect to a Plan asset properly subject to Participant or Advisory Committee
direction of investment. If the Employer appoints a Custodian, the Named
Fiduciary is the discretionary Trustee. Under a nondiscretionary Trustee
designation, unless the Employer designates in writing another person or
persons to serve as Named Fiduciary, the Named Fiduciary under the Plan is the
president of a corporate Employer, the managing partner of a partnership
Employer or the sole proprietor, as appropriate. The Named Fiduciary will
exercise its management and control of the Trust Fund through its written
direction to the nondiscretionary Trustee or to the Custodian, whichever
applies to the Employer's Plan.





                                                                           10.05
<PAGE>   70
     The nondiscretionary Trustee or Custodian has no duty to review or to make
recommendations regarding investments made at the written direction of the
Named Fiduciary. The nondiscretionary Trustee or Custodian must retain any
investment obtained at the written direction of the Named Fiduciary until
further directed in writing by the Named Fiduciary to dispose of such
investment. The nondiscretionary Trustee or Custodian is not liable in any
manner or for any reason for making, retaining or disposing of any investment
pursuant to any written direction described in this paragraph. Furthermore, the
Employer agrees to indemnify and to hold the nondiscretionary Trustee or
Custodian harmless from any damages, costs or expenses, including reasonable
counsel fees, which the nondiscretionary Trustee or Custodian may incur as a
result of any claim asserted against the nondiscretionary Trustee, the
Custodian or the Trust arising out of the nondiscretionary Trustee's or
Custodian's compliance with any written direction described in this paragraph.

[E] PARTICIPANT LOANS. This Section 10.03[E] specifically authorizes the
Trustee to make loans on a nondiscriminatory basis to a Participant or to a
Beneficiary in accordance with the loan policy established by the Advisory
Committee, provided: (1) the loan policy satisfies the requirements of Section
9.04; (2) loans are available to all Participants and Beneficiaries on a
reasonably equivalent basis and are not available in a greater amount for
Highly Compensated Employees than for other Employees; (3) any loan is
adequately secured and bears a reasonable rate of interest; (4) the loan
provides for repayment within a specified time; (5) the default provisions of
the note prohibit offset of the Participant's Nonforfeitable Accrued Benefit
prior to the time the Trustee otherwise would distribute the Participant's
Nonforfeitable Accrued Benefit; (6) the amount of the loan does not exceed (at
the time the Plan extends the loan) the present value of the Participant's
Nonforfeitable Accrued Benefit; and (7) the loan otherwise conforms to the
exemption provided by Code Section 4975(d)(1). If the joint and survivor
requirements of Article VI apply to the Participant, the Participant may not
pledge any portion of his Accrued Benefit as security for a loan made after
August 18, 1985, unless, within the 90 day period ending on the date the pledge
becomes effective, the Participant's spouse, if any, consents (in a manner
described in Section 6.05 other than the requirement relating to the consent of
a subsequent spouse) to the security or, by separate consent, to an increase in
the amount of security. If the Employer is an unincorporated trade or business,
a Participant who is an Owner-Employee may not receive a loan from the Plan,
unless he has obtained a prohibited transaction exemption from the Department
of Labor. If the Employer is an "S Corporation," a Participant who is a
shareholder-employee (an employee or an officer) who, at any time during the
Employer's taxable year, owns more than 5%, either directly or by attribution
under Code Section 318(a)(1), of the Employer's outstanding stock may not
receive a loan from the Plan, unless he has obtained a prohibited transaction
exemption from the Department of Labor. If the Employer is not an
unincorporated trade or business nor an "S Corporation," this Section 10.03[E]
does not impose any restrictions on the class of Participants eligible for a
loan from the Plan.

[F] INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING EMPLOYER REAL
PROPERTY. The investment options in this Section 10.03[F] include the ability
to invest in qualifying Employer securities or qualifying Employer real
property, as defined in and as limited by ERISA. If the Employer's Plan is a
Nonstandardized profit sharing plan, it may elect in its Adoption Agreement to
permit the aggregate investments in qualifying Employer securities and in
qualifying Employer real property to exceed 10% of the value of Plan assets.





                                                                           10.06
<PAGE>   71
     10.04  RECORDS AND STATEMENTS.  The records of the Trustee pertaining to
the Plan must be open to the inspection of the Plan Administrator, the Advisory
Committee and the Employer at all reasonable times and may be audited from time
to time by any person or persons as the Employer, Plan Administrator or
Advisory Committee may specify in writing. The Trustee must furnish the Plan
Administrator or Advisory Committee with whatever information relating to the
Trust Fund the Plan Administrator or Advisory Committee considers necessary.

     10.05  FEES AND EXPENSES FROM FUND. A Trustee or Custodian will receive
reasonable annual compensation as may be agreed upon from time to time between
the Employer and the Trustee or Custodian. No person who is receiving full pay
from the Employer may receive compensation for services as Trustee or as
Custodian. The Trustee will pay from the Trust Fund all fees and expenses
reasonably incurred by the Plan, to the extent such fees and expenses are for
the ordinary and necessary administration and operation of the Plan, unless the
Employer pays such fees and expenses. Any fee or expense paid, directly or
indirectly, by the Employer is not an Employer contribution to the Plan,
provided the fee or expense relates to the ordinary and necessary
administration of the Fund.

     10.06  PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no
Participant or Beneficiary is a necessary party or is required to receive
notice of process in any court proceeding involving the Plan, the Trust Fund or
any fiduciary of the Plan. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the Advisory Committee,
the Trustee, Custodian, Participants and Beneficiaries.

     10.07  PROFESSIONAL AGENTS. The Trustee may employ and pay from the Trust
Fund reasonable compensation to agents, attorneys, accountants and other
persons to advise the Trustee as in its opinion may be necessary. The Trustee
may delegate to any agent, attorney, accountant or other person selected by it
any non-Trustee power or duty vested in it by the Plan, and the Trustee may act
or refrain from acting on the advice or opinion of any agent, attorney,
accountant or other person so selected.

     10.08  DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make distribution
under the Plan in cash or property, or partly in each, at its fair market value
as determined by the Trustee. For purposes of a distribution to a Participant
or to a Participant's designated Beneficiary or surviving spouse, "property"
includes a Nontransferable Annuity Contract, provided the contract satisfies
the requirements of this Plan.

     10.09  DISTRIBUTION DIRECTIONS. If no one claims a payment or distribution
made from  the Trust, the Trustee must promptly notify the Advisory Committee
and then dispose of the payment in accordance with the subsequent direction of
the Advisory Committee.

     10.10  THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee
is obligated to see to the proper application of any money paid or property
delivered to the Trustee, or to inquire whether the Trustee has acted pursuant
to any of the terms of the Plan. Each person dealing with the Trustee may act
upon any notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and is not liable to any





                                                                           10.07
<PAGE>   72
person in so acting. The certificate of the Trustee that it is acting in
accordance with the Plan will be conclusive in favor of any person relying on
the certificate. If more than two persons act as Trustee, a decision of the
majority of such persons controls with respect to any decision regarding the
administration or investment of the Trust Fund or of any portion of the Trust
Fund with respect to which such persons act as Trustee. However, the signature
of only one Trustee is necessary to effect any transaction on behalf of the
Trust.

     10.11  RESIGNATION. The Trustee or Custodian may resign its position at
any time by giving 30 days' written notice in advance to the Employer and to
the Advisory Committee. If the Employer fails to appoint a successor Trustee
within 60 days of its receipt of the Trustee's written notice of resignation,
the Trustee will treat the Employer as having appointed itself as Trustee and
as having filed its acceptance of appointment with the former Trustee. The
Employer, in its sole discretion, may replace a Custodian. If the Employer does
not replace a Custodian, the discretionary Trustee will assume possession of
Plan assets held by the former Custodian.

     10.12  REMOVAL. The Employer, by giving 30 days' written notice in advance
to the Trustee, may remove any Trustee or Custodian.  In the event of the
resignation or removal of a Trustee, the Employer must appoint a successor
Trustee if it intends to continue the Plan. If two or more persons hold the
position of Trustee, in the event of the removal of one such person, during any
period the selection of a replacement is pending, or during any period such
person is unable to serve for any reason, the remaining person or persons will
act as the Trustee.

     10.13  INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and by filing the acceptance with
the former Trustee and the Advisory Committee without the signing or filing of
any further statement. The resigning or removed Trustee, upon receipt of
acceptance in writing of the Trust by the successor Trustee, must execute all
documents and do all acts necessary to vest the title of record in any
successor Trustee. Each successor Trustee has and enjoys all of the powers,
both discretionary and ministerial, conferred under this Agreement upon his
predecessor. A successor Trustee is not personally liable for any act or
failure to act of any predecessor Trustee, except as required under ERISA. With
the approval of the Employer and the Advisory Committee, a successor Trustee,
with respect to the Plan, may accept the account rendered and the property
delivered to it by a predecessor Trustee without incurring any liability or
responsibility for so doing.

     10.14  VALUATION OF TRUST. The Trustee must value the Trust Fund as of
each  Accounting Date to determine the fair market value of each Participant's
Accrued Benefit in the Trust. The Trustee also must value the Trust Fund on
such other valuation dates as directed in writing by the Advisory Committee or
as required by the Employer's Adoption Agreement.

     10.15  LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY TRUSTEE
OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the acts or
omissions of any Investment Manager the Advisory Committee may appoint, nor is
the Trustee under any obligation to invest or otherwise manage any asset of the
Plan which





                                                                           10.08
<PAGE>   73
is subject to the management of a properly appointed Investment Manager. The
Advisory Committee, the Trustee and any properly appointed Investment Manager
may execute a letter agreement as a part of this Plan delineating the duties,
responsibilities and liabilities of the Investment Manager with respect to any
part of the Trust Fund under the control of the Investment Manager.

     The limitation on liability described in this Section 10.15 also applies
to the acts or omissions of any ancillary trustee or independent fiduciary
properly appointed under Section 10.17 of the Plan. However, if a discretionary
Trustee, pursuant to the delegation described in Section 10.17 of the Plan,
appoints an ancillary trustee, the discretionary Trustee is responsible for the
periodic review of the ancillary trustee's actions and must exercise its
delegated authority in accordance with the terms of the Plan and in a manner
consistent with ERISA. The Employer, the discretionary Trustee and an ancillary
trustee may execute a letter agreement as a part of this Plan delineating any
indemnification agreement between the parties.

     10.16  INVESTMENT IN GROUP TRUST FUND. The Employer, by adopting this
Plan, specifically authorizes the Trustee to invest all or any portion of the
assets comprising the Trust Fund in any group trust fund which at the time of
the investment provides for the pooling of the assets of plans qualified under
Code Section 401(a). This authorization applies solely to a group trust fund
exempt from taxation under Code Section 501(a) and the trust agreement of which
satisfies the requirements of Revenue Ruling 81-100. The provisions of the
group trust fund agreement, as amended from time to time, are by this reference
incorporated within this Plan and Trust. The provisions of the group trust fund
will govern any investment of Plan assets in that fund. The Employer must
specify in an attachment to its adoption agreement the group trust fund(s) to
which this authorization applies. If the Trustee is acting as a
nondiscretionary Trustee, the investment in the group trust fund is available
only in accordance with a proper direction, by the Named Fiduciary, in
accordance with Section 10.03[B]. Pursuant to paragraph (c) of Section 10.03[A]
of the Plan, a Trustee has the authority to invest in certain common trust
funds and collective investment funds without the need for the authorizing
addendum described in this Section 10.16.

     Furthermore, at the Employer's direction, the Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.

     10.17  APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The
Employer, in writing, may appoint any person in any State to act as ancillary
trustee with respect to a designated portion of the Trust Fund. An ancillary
trustee must acknowledge in writing its acceptance of the terms and conditions
of its appointment as ancillary trustee and its fiduciary status under ERISA.
The ancillary trustee has the rights, powers, duties and discretion as the
Employer may delegate, subject to any limitations or directions specified in
the instrument evidencing appointment of the ancillary trustee and to the terms
of the Plan or of ERISA. The investment powers delegated to the ancillary
trustee





                                                                           10.09
<PAGE>   74
may include any investment powers available under Section 10.03 of the Plan
including the right to invest any portion of the assets of the Trust Fund in a
common trust fund, as described in Code Section 584, or in any collective
investment fund, the provisions of which govern the investment of such assets
and which the Plan incorporates by this reference, but only if the ancillary
trustee is a bank or similar financial institution supervised by the United
States or by a State and the ancillary trustee (or its affiliate, as defined in
Code Section 1504) maintains the common trust fund or collective investment
fund exclusively for the collective investment of money contributed by the
ancillary trustee (or its affiliate) in a trustee capacity and which conforms
to the rules of the Comptroller of the Currency. The Employer also may appoint
as an ancillary trustee, the trustee of any group trust fund designated for
investment pursuant to the provisions of Section 10.16 of the Plan.

     The ancillary trustee may resign its position at any time by providing at
least 30 days' advance written notice to the Employer, unless the Employer
waives this notice requirement. The Employer, in writing, may remove an
ancillary trustee at any time.  In the event of resignation or removal, the
Employer may appoint another ancillary trustee, return the assets to the
control and management of the Trustee or receive such assets in the capacity of
ancillary trustee. The Employer may delegate its responsibilities under this
Section 10.17 to a discretionary Trustee under the Plan, but not to a
nondiscretionary Trustee or to a Custodian, subject to the acceptance by the
discretionary Trustee of that delegation.

     If the U.S. Department of Labor ("the Department") requires engagement of
an independent fiduciary to have control or management of all or a portion of
the Trust Fund, the Employer will appoint such independent fiduciary, as
directed by the Department. The independent fiduciary will have the duties,
responsibilities and powers prescribed by the Department and will exercise
those duties, responsibilities and powers in accordance with the terms,
restrictions and conditions established by the Department and, to the extent
not inconsistent with ERISA, the terms of the Plan. The independent fiduciary
must accept its appointment in writing and must acknowledge its status as a
fiduciary of the Plan.


           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                          10.010
<PAGE>   75
                                   ARTICLE XI
             PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY

     11.01  INSURANCE BENEFIT. The Employer may elect to provide incidental
life insurance benefits for insurable Participants who consent to life
insurance benefits by signing the appropriate insurance company application
form. The Trustee will not purchase any incidental life insurance benefit for
any Participant prior to an allocation to the Participant's Account. At an
insured Participant's written direction, the Trustee will use all or any
portion of the Participant's nondeductible voluntary contributions, if any, to
pay insurance premiums covering the Participant's life. This Section 11.01 also
authorizes the purchase of life insurance, for the benefit of the Participant,
on the life of a family member of the Participant or on any person in whom the
Participant has an insurable interest. However, if the policy is on the joint
lives of the Participant and another person, the Trustee may not maintain that
policy if that other person predeceases the Participant.

     The Employer will direct the Trustee as to the insurance company and
insurance agent through which the Trustee is to purchase the insurance
contracts, the amount of the coverage and the applicable dividend plan. Each
application for a policy, and the policies themselves, must designate the
Trustee as sole owner, with the right reserved to the Trustee to exercise any
right or option contained in the policies, subject to the terms and provisions
of this Agreement. The Trustee must be the named beneficiary for the Account of
the insured Participant. Proceeds of insurance contracts paid to the
Participant's Account under this Article XI are subject to the distribution
requirements of Article V and of Article VI. The Trustee will not retain any
such proceeds for the benefit of the Trust.

     The Trustee will charge the premiums on any incidental benefit insurance
contract covering the life of a Participant against the Account of that
Participant. The Trustee will hold all incidental benefit insurance contracts
issued under the Plan as assets of the Trust created under the Plan.

(A) INCIDENTAL INSURANCE BENEFITS. The aggregate of life insurance premiums
paid for the benefit of a Participant, at all times, may not exceed the
following percentages of the aggregate of the Employer's contributions
allocated to any Participant's Account: (i) 49% in the case of the purchase of
ordinary life insurance contracts; or (ii) 25% in the case of the purchase of
term life insurance or universal life insurance contracts. If the Trustee
purchases a combination of ordinary life insurance contract(s) and term life
insurance or universal life insurance contract(s), then the sum of one-half of
the premiums paid for the ordinary life insurance contract(s) and the premiums
paid for the term life insurance or universal life insurance contract(s) may
not exceed 25% of the Employer contributions allocated to any Participant's
Account.

(B) EXCEPTION FOR CERTAIN PROFIT SHARING PLANS. If the Employer's Plan is a
profit sharing plan, the incidental insurance benefits requirement does not
apply to the Plan if the Plan purchases life insurance benefits only from
Employer contributions accumulated in the Participant's Account for at least
two years (measured from the allocation date).





                                                                           11.01
<PAGE>   76
     11.02  LIMITATION  ON  LIFE  INSURANCE  PROTECTION. The Trustee will not
continue any life insurance protection for any Participant beyond his annuity
starting date (as defined in Article VI). If the Trustee holds any incidental
benefit insurance contract(s) for the benefit of a Participant when he
terminates his employment (other than by reason of death), the Trustee must
proceed as follows:

     (a) If the entire cash value of the contract(s) is vested in the
     terminating Participant, or if the contract(s) will have no cash value at
     the end of the policy year in which termination of employment occurs, the
     Trustee will transfer the contract(s) to the Participant endorsed so as to
     vest in the transferee all right, title and interest to the contract(s),
     free and clear of the Trust; subject however, to restrictions as to
     surrender or payment of benefits as the issuing insurance company may
     permit and as the Advisory Committee directs;

     (b) If only part of the cash value of the contract(s) is vested in the
     terminating Participant, the Trustee, to the extent the Participant's
     interest in the cash value of the contract(s) is not vested, may adjust
     the Participant's interest in the value of his Account attributable to
     Trust assets other than incidental benefit insurance contracts and proceed
     as in (a), or the Trustee must effect a loan from the issuing insurance
     company on the sole security of the contract(s) for an amount equal to the
     difference between the cash value of the contract(s) at the end of the
     policy year in which termination of employment occurs and the amount of
     the cash value that is vested in the terminating Participant, and the
     Trustee must transfer the contract(s) endorsed so as to vest in the
     transferee all right, title and interest to the contract(s), free and
     clear of the Trust; subject however, to the restrictions as to surrender
     or payment of benefits as the issuing insurance company may permit and the
     Advisory Committee directs;

     (c) If no part of the cash value of the contract(s) is vested in the
     terminating Participant, the Trustee must surrender the contract(s) for
     cash proceeds as may be available.

     In accordance with the written direction of the Advisory Committee, the
Trustee will make any transfer of contract(s) under this Section 11.02 on the
Participant's annuity starting date (or as soon as administratively practicable
after that date). The Trustee may not transfer any contract under this Section
11.02 which contains a method of payment not specifically authorized by Article
VI or which fails to comply with the joint and survivor annuity requirements,
if applicable, of Article VI. In this regard, the Trustee either must convert
such a contract to cash and distribute the cash instead of the contract, or
before making the transfer, require the issuing company to delete the
unauthorized method of payment option from the contract.

     11.03  DEFINITIONS. For purposes of this Article XI:

     (a) "Policy" means an ordinary life insurance contract or a term life
     insurance contract issued by an insurer on the life of a Participant.

     (b) "Issuing insurance company" is any life insurance company which has
     issued a policy upon application by the Trustee under the terms of this
     Agreement.





                                                                           11.02
<PAGE>   77
     (c) "Contract" or "Contracts" means a policy of insurance. In the event of
     any conflict between the provisions of this Plan and the terms of any
     contract or policy of insurance issued in accordance with this Article XI,
     the provisions of the Plan control.


     (d) "Insurable Participant" means a Participant to whom an insurance
     company, upon an application being submitted in accordance with the Plan,
     will issue insurance coverage, either as a standard risk or as a risk in
     an extra mortality classification.

     11.04  DIVIDEND PLAN. The dividend plan is premium reduction unless the
Advisory Committee directs the Trustee to the contrary.  The Trustee must use
all dividends for a contract to purchase insurance benefits or additional
insurance benefits for the Participant on whose life the insurance company has
issued the contract. Furthermore, the Trustee must arrange, where possible, for
all policies issued on the lives of Participants under the Plan to have the
same premium due date and all ordinary life insurance contracts to contain
guaranteed cash values with as uniform basic options as are possible to obtain.
The term "dividends" includes policy dividends, refunds of premiums and other
credits.

     11.05  INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance company,
solely in its capacity as an issuing insurance company, is a party to this
Agreement nor is the company responsible for its validity.

     11.06  INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No
insurance company, solely in its capacity as an issuing insurance company, need
examine the terms of this Agreement nor is responsible for any action taken by
the Trustee.

     11.07  INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the purpose
of making application to an insurance company and in the exercise of any right
or option contained in any policy, the insurance company may rely upon the
signature of the Trustee and is saved harmless and completely discharged in
acting at the direction and authorization of the Trustee.

     11.08  ACQUITTANCE. An insurance company is discharged from all liability
for any amount paid to the Trustee or paid in accordance with the direction of
the Trustee, and is not obliged to see to the distribution or further
application of any moneys it so pays.

     11.09  DUTIES OF INSURANCE COMPANY.  Each insurance company must keep such
records, make such identification of contracts, funds and accounts within
funds, and supply such information as may be necessary for the proper
administration of the Plan under which it is carrying insurance benefits.

     Note: The provisions of this Article XI are not applicable, and the Plan
may not invest in insurance contracts, if a Custodian signatory to the Adoption
Agreement is a bank which has not acquired trust powers from its governing
state banking authority.



           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                           11.03
<PAGE>   78
                                  ARTICLE XII
                                 MISCELLANEOUS

     12.01  EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. The
Advisory Committee and the Trustee are fully protected in acting and relying
upon any evidence described under the immediately preceding sentence.

     12.02  NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor the
Advisory Committee has any obligation or responsibility with respect to any
action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or
make any payment or contribution, or to otherwise provide any benefit
contemplated under this Plan. Furthermore, the Plan does not require the
Trustee or the Advisory Committee to collect any contribution required under
the Plan, or to determine the correctness of the amount of any Employer
contribution. Neither the Trustee nor the Advisory Committee need inquire into
or be responsible for any action or failure to act on the part of the others,
or on the part of any other person who has any responsibility regarding the
management, administration or operation of the Plan, whether by the express
terms of the Plan or by a separate agreement authorized by the Plan or by the
applicable provisions of ERISA.  Any action required of a corporate Employer
must be by its Board of Directors or its designate.

     12.03  FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee, the
Plan Administrator and the Employer in no way guarantee the Trust Fund from
loss or depreciation. The Employer does not guarantee the payment of any money
which may be or becomes due to any person from the Trust Fund. The liability of
the Advisory Committee and the Trustee to make any payment from the Trust Fund
at any time and all times is limited to the then available assets of the Trust.

     12.04  WAIVER OF NOTICE. Any person entitled to notice under the Plan may
waive the notice, unless the Code or Treasury regulations prescribe the notice
or ERISA specifically or impliedly prohibits such a waiver.

     12.05  SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee, the Advisory
Committee, the Plan Administrator and their successors.

     12.06  WORD USAGE. Words used in the masculine also apply to the feminine
where applicable, and wherever the context of the Employer's Plan dictates, the
plural includes the singular and the singular includes the plural.

     12.07  STATE LAW. The law of the state of the Employer's principal place
of business (unless otherwise designated in an addendum to the Employer's
Adoption Agreement) will





                                                                           12.01
<PAGE>   79
determine all questions arising with respect to the provisions of this
Agreement except to the extent superseded by Federal law.

     12.08  EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails to
qualify or to maintain qualification or if the Employer makes any amendment or
modification to a provision of this Plan (other than a proper completion of an
elective provision under the Adoption Agreement or the attachment of an
addendum authorized by the Plan or by the Adoption Agreement), the Employer may
no longer participate under this Prototype Plan. Furthermore, if the Employer
no longer is a client of the Regional Prototype Sponsor, subsequent amendments
to this Prototype Plan by the Regional Prototype Sponsor, pursuant to Section
13.03 of the Plan, will result in the discontinuance of the Employer's
participation in this Prototype Plan unless it resumes its client relationship
with the Regional Prototype Sponsor. If the Employer is not entitled to
participate under this Prototype Plan, the Employer's Plan is an
individually-designed plan and the reliance procedures specified in the
applicable Adoption Agreement no longer will apply.

     12.09  EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with
respect to the establishment of the Trust, or any modification or amendment to
the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees,
or against the Plan Administrator, except as expressly provided by the Plan,
the Trust, ERISA or by a separate agreement.



           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                           12.02
<PAGE>   80
                                  ARTICLE XIII
                   EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION


     13.01  EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no part of
any asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries under the Plan, may any
part of the corpus or income of the Trust Fund, or any asset of the Trust, be
(at any time) used for, or diverted to, purposes other than the exclusive
benefit of the Participants or their Beneficiaries. However, if the
Commissioner of Internal Revenue, upon the Employer's request for initial
approval of this Plan, determines the Trust created under the Plan is not a
qualified trust exempt from Federal income tax, then (and only then) the
Trustee, upon written notice from the Employer, will return the Employer's
contributions (and increment attributable to the contributions) to the
Employer. The Trustee must make the return of the Employer contribution under
this Section 13.01 within one year of a final disposition of the Employer's
request for initial approval of the Plan. The Employer's Plan and Trust will
terminate upon the Trustee's return of the Employer's contributions.

     13.02  AMENDMENT  BY  EMPLOYER.  The Employer has the right at any time
and  from time to time:

     (a)    To amend the elective provisions of the Adoption Agreement in any
     manner it deems necessary or advisable in order to qualify (or maintain
     qualification of) this Plan and the Trust created under it under the
     provisions of Code Section 401(a);

     (b)    To amend the Plan to allow the Plan to operate under a waiver of the
     minimum funding requirement; and

     (c)    To amend this Agreement in any other manner.

     No amendment may authorize or permit any of the Trust Fund (other than the
part which is required to pay taxes and administration expenses) to be used for
or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or
permit any portion of the Trust Fund to revert to or become a property of the
Employer. The Employer also may not make any amendment which affects the
rights, duties or responsibilities of the Trustee, the Plan Administrator or
the Advisory Committee without the written consent of the affected Trustee, the
Plan Administrator or the affected member of the Advisory Committee. The
Employer must make all amendments in writing. Each amendment must state the
date to which it is either retroactively or prospectively effective. See
Section 12.08 for the effect of certain amendments adopted by the Employer.

(A) CODE Section 411(D)(6) PROTECTED BENEFITS. An amendment (including the
adoption of this Plan as a restatement of an existing plan) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code
Section 412(c)(8), and may not reduce or eliminate Code Section 411(d)(6)
protected benefits determined immediately prior to the adoption date (or, if
later, the effective date) of the amendment. An amendment reduces or eliminates
Code Section 411(d)(6)





                                                                           13.01
<PAGE>   81
protected benefits if the amendment has the effect of either (1) eliminating or
reducing an early retirement benefit or a retirement-type subsidy (as defined
in Treasury regulations), or (2) except as provided by Treasury regulations,
eliminating an optional form of benefit. The Advisory Committee must disregard
an amendment to the extent application of the amendment would fail to satisfy
this paragraph. If the Advisory Committee must disregard an amendment because
the amendment would violate clause (1) or clause (2), the Advisory Committee
must maintain a schedule of the early retirement option or other optional forms
of benefit the Plan must continue for the affected Participants.

     13.03  AMENDMENT BY REGIONAL PROTOTYPE PLAN SPONSOR. The Regional
Prototype Plan Sponsor, without the Employer's consent, may amend the Plan and
Trust, from time to time, in order to conform the Plan and Trust to any
requirement for qualification of the Plan and Trust under the Internal Revenue
Code. The Regional Prototype Plan Sponsor may not amend the Plan in any manner
which would modify any election made by the Employer under the Plan without the
Employer's written consent. Furthermore, the Regional Prototype Plan Sponsor
may not amend the Plan in any manner which would violate the proscription of
Section 13.02. A Trustee does not have the power to amend the Plan or Trust.

     13.04  DISCONTINUANCE. The Employer has the right, at any time, to suspend
or discontinue its contributions under the Plan, and to terminate, at any time,
this Plan and the Trust created under this Agreement. The Plan will terminate
upon the first to occur of the following:

     (a) The date terminated by action of the Employer;

     (b) The dissolution or merger of the Employer, unless the successor makes
     provision to continue the Plan, in which event the successor must
     substitute itself as the Employer under this Plan. Any termination of the
     Plan resulting from this paragraph (b) is not effective until compliance
     with any applicable notice requirements under ERISA.

     13.05  FULL VESTING ON TERMINATION. Upon either full or partial
termination of the Plan, or, if applicable, upon complete discontinuance of
profit sharing plan contributions to the Plan, an affected Participant's right
to his Accrued Benefit is 100% Nonforfeitable, irrespective of the
Nonforfeitable percentage which otherwise would apply under Article V.

     13.06  MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a
party to, any merger or consolidation with another plan, or to a transfer of
assets or liabilities to another plan, unless immediately after the merger,
consolidation or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or consolidation
or transfer. The Trustee possesses the specific authority to enter into merger
agreements or direct transfer of assets agreements with the trustees of other
retirement plans described in Code Section 401(a), including an elective
transfer, and to accept the direct transfer of plan assets, or to transfer plan
assets, as a party to any such agreement.





                                                                           13.02
<PAGE>   82
     The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts such a direct transfer of plan assets, the
Advisory Committee and Trustee must treat the Employee as a Participant for all
purposes of the Plan except the Employee is not a Participant for purposes of
sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan.

(A) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not consent to,
or be a party to a merger, consolidation or transfer of assets with a defined
benefit plan, except with respect to an elective transfer, or unless the
transferred benefits are in the form of paid-up individual annuity contracts
guaranteeing the payment of the transferred benefits in accordance with the
terms of the transferor plan and in a manner consistent with the Code and with
ERISA. The Trustee will hold, administer and distribute the transferred assets
as a part of the Trust Fund and the Trustee must maintain a separate Employer
contribution Account for the benefit of the Employee on whose behalf the
Trustee accepted the transfer in order to reflect the value of the transferred
assets.  Unless a transfer of assets to this Plan is an elective transfer, the
Plan will preserve all Code Section 411(d)(6) protected benefits with respect
to those transferred assets, in the manner described in Section 13.02. A
transfer is an elective transfer if: (1) the transfer satisfies the first
paragraph of this Section 13.06; (2) the transfer is voluntary, under a fully
informed election by the Participant; (3) the Participant has an alternative
that retains his Code Section 411(d)(6) protected benefits (including an option
to leave his benefit in the transferor plan, if that plan is not terminating);
(4) the transfer satisfies the applicable spousal consent requirements of the
Code; (5) the transferor plan satisfies the joint and survivor notice
requirements of the Code, if the Participant's transferred benefit is subject
to those requirements; (6) the Participant has a right to immediate
distribution from the transferor plan, in lieu of the elective transfer; (7)
the transferred benefit is at least the greater of the single sum distribution
provided by the transferor plan for which the Participant is eligible or the
present value of the Participant's accrued benefit under the transferor plan
payable at that plan's normal retirement age; (8) the Participant has a 100%
Nonforfeitable interest in the transferred benefit; and (9) the transfer
otherwise satisfies applicable Treasury regulations. An elective transfer may
occur between qualified plans of any type. Any direct transfer of assets from a
defined benefit plan after August 9, 1988, which does not satisfy the
requirements of this paragraph will render the Employer's Plan
individually-designed. See Section 12.08.

(B) DISTRIBUTION RESTRICTIONS UNDER CODE Section 401(K). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or amounts
treated as elective contributions) under a Plan with a Code Section 401(k)
arrangement, the distribution restrictions of Code Sections 401(k)(2)
and (10) continue to apply to those transferred elective contributions.

     13.07  TERMINATION.

(A) PROCEDURE. Upon termination of the Plan, the distribution provisions of
Article VI remain operative, with the following exceptions:

     (1) if the present value of the Participant's Nonforfeitable Accrued
     Benefit does not exceed $3,500, the Advisory Committee will direct the
     Trustee to distribute the





                                                                           13.03
<PAGE>   83
     Participant's Nonforfeitable Accrued Benefit to him in lump sum as soon as
     administratively practicable after the Plan terminates; and

     (2) if the present value of the Participant's Nonforfeitable Accrued
     Benefit exceeds $3,500, the Participant or the Beneficiary, in addition to
     the distribution events permitted under Article VI, may elect to have the
     Trustee commence distribution of his Nonforfeitable Accrued Benefit as
     soon as administratively practicable after the Plan terminates.

     To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500 and the Participant does not elect an immediate
distribution pursuant to Paragraph (2).

     If the Employer's Plan is a profit sharing plan, in lieu of the preceding
provisions of this Section 13.07 and the distribution provisions of Article VI,
the Advisory Committee will direct the Trustee to distribute each Participant's
Nonforfeitable Accrued Benefit, in lump sum, as soon as administratively
practicable after the termination of the Plan, irrespective of the present
value of the Participant's Nonforfeitable Accrued Benefit and whether the
Participant consents to that distribution. This paragraph does not apply if:
(1) the Plan provides an annuity option; or (2) as of the period between the
Plan termination date and the final distribution of assets, the Employer
maintains any other defined contribution plan (other than an ESOP). The
Employer, in an addendum to its Adoption Agreement numbered 13.07, may elect
not to have this paragraph apply.

     The Trust will continue until the Trustee in accordance with the direction
of the Advisory Committee has distributed all of the benefits under the Plan.
On each valuation date, the Advisory Committee will credit any part of a
Participant's Accrued Benefit retained in the Trust with its proportionate
share of the Trust's income, expenses, gains and losses, both realized and
unrealized.  Upon termination of the Plan, the amount, if any, in a suspense
account under Article III will revert to the Employer, subject to the
conditions of the Treasury regulations permitting such a reversion. A
resolution or amendment to freeze all future benefit accrual but otherwise to
continue maintenance of this Plan, is not a termination for purposes of this
Section 13.07.

(B) DISTRIBUTION RESTRICTIONS UNDER CODE Section 401(K). If the Employer's Plan
includes a Code Section 401(k) arrangement or if transferred assets described
in Section 13.06 are subject to the distribution restrictions of Code Sections
401(k)(2) and (10), the special distribution provisions of this Section
13.07 are subject to the restrictions of this paragraph. The portion of the
Participant's Nonforfeitable Accrued Benefit attributable to elective
contributions (or to amounts treated under the Code Section 401(k) arrangement
as elective contributions) is not distributable on account of Plan termination,
as described in this Section 13.07, unless: (a) the Participant otherwise is
entitled under the Plan to a distribution of that portion of his Nonforfeitable
Accrued Benefit; or (b) the Plan termination occurs without the establishment
of a successor plan.  A successor plan under clause (b) is a defined
contribution plan (other than an ESOP) maintained by the Employer (or by a
related employer) at the time of the termination of the Plan or within the
period ending twelve months after the final distribution of assets. A
distribution made after





                                                                           13.04
<PAGE>   84
March 31, 1988, pursuant to clause (b), must be part of a lump sum distribution
to the Participant of his Nonforfeitable Accrued Benefit.



           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                           13.05
<PAGE>   85
                                  ARTICLE XIV
                        CODE Section 401(K) ARRANGEMENTS

     14.01  APPLICATION. This Article XIV applies to an Employer's Plan only if
the Employer is maintaining its Plan under a Code Section 401(k) Adoption
Agreement.

     14.02  CODE Section 401(k) ARRANGEMENT. The Employer will elect in Section
3.01 of its Adoption Agreement the terms of the Code Section 401(k)
arrangement, if any, under the Plan. If the Employer's Plan is a Standardized
Plan, the Code Section 401(k) arrangement must be a salary reduction
arrangement. If the Employer's Plan is a Nonstandardized Plan, the Code Section
401(k) arrangement may be a salary reduction arrangement or a cash or deferred
arrangement.

(A) SALARY REDUCTION ARRANGEMENT. If the Employer elects a salary reduction
arrangement, any Employee eligible to participate in the Plan may file a salary
reduction agreement with the Advisory Committee. The salary reduction agreement
may not be effective earlier than the following date which occurs last: (i) the
Employee's Plan Entry Date (or, in the case of a reemployed Employee, his
reparticipation date under Article II); (ii) the execution date of the
Employee's salary reduction agreement; (iii) the date the Employer adopts the
Code Section 401(k) arrangement by executing the Adoption Agreement; or (iv)
the effective date of the Code Section 401(k) arrangement, as specified in the
Employer's Adoption Agreement. Regarding clause (i), an Employee subject to the
Break in Service rule of Section 2.03(B) of the Plan may not enter into a
salary reduction agreement until the Employee has completed a sufficient number
of Hours of Service to receive credit for a Year of Service (as defined in
Section 2.02) following his reemployment commencement date. A salary reduction
agreement must specify the amount of Compensation (as defined in Section 1.12)
or percentage of Compensation the Employee wishes to defer. The salary
reduction agreement will apply only to Compensation which becomes currently
available to the Employee after the effective date of the salary reduction
agreement. The Employer will apply a reduction election to all Compensation
(and to increases in such Compensation) unless the Employee specifies in his
salary reduction agreement to limit the election to certain Compensation. The
Employer will specify in Adoption Agreement Section 3.01 the rules and
restrictions applicable to the Employees salary reduction agreements.

(B) CASH OR DEFERRED ARRANGEMENT. If the Employer elects a cash or deferred
arrangement, a Participant may elect to make a cash election against his
proportionate share of the Employer's Cash or Deferred Contribution, in
accordance with the Employer's elections in Adoption Agreement Section 3.01. A
Participant's proportionate share of the Employer's Cash or Deferred
Contribution is the percentage of the total Cash or Deferred Contribution which
bears the same ratio that the Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for the Plan Year. For
purposes of determining each Participant's proportionate share of the Cash or
Deferred Contribution, a Participant's Compensation is his Compensation as
determined under Section 1.12 of the Plan (as modified by Section 3.06 for
allocation purposes), excluding any effect the proportionate share may have on
the Participant's Compensation for the Plan Year. The Advisory Committee will
determine the proportionate share prior to the Employer's actual contribution
to the Trust, to provide the Participants the opportunity to file cash
elections. The Employer will pay directly to the Participant the portion of his
proportionate share the Participant has elected to receive in cash.





                                                                           14.01
<PAGE>   86
(C) ELECTION NOT TO PARTICIPATE. A Participant's or Employee's election not to
participate, pursuant to Section 2.06, includes his right to enter into a
salary reduction agreement or to share in the allocation of a Cash or Deferred
Contribution, unless the Participant or Employee limits the effect of the
election to the non-401(k) portions of the Plan.

     14.03  DEFINITIONS. For purposes of this Article XIV:

     (a)    "Highly Compensated Employee" means an Eligible Employee who
     satisfies the definition in Section 1.09 of the Plan.  Family members
     aggregated as a single Employee under Section 1.09 constitute a single
     Highly Compensated Employee, whether a particular family member is a
     Highly Compensated Employee or a Nonhighly Compensated Employee without
     the application of family aggregation.

     (b)    "Nonhighly Compensated Employee" means an Eligible Employee who is
     not a Highly Compensated Employee and who is not a family member treated
     as a Highly Compensated Employee.

     (c)    "Eligible Employee" means, for purposes of the ADP test described
     in Section 14.08, an Employee who is eligible to enter into a salary
     reduction agreement for the Plan Year, irrespective of whether he actually
     enters into such an agreement, and a Participant who is eligible for an
     allocation of the Employer's Cash or Deferred Contribution for the Plan
     Year. For purposes of the ACP test described in Section 14.09, an
     "Eligible Employee" means a Participant who is eligible to receive an
     allocation of matching contributions (or would be eligible if he made the
     type of contributions necessary to receive an allocation of matching
     contributions) and a Participant who is eligible to make nondeductible
     contributions, irrespective of whether he actually makes nondeductible
     contributions. An Employee continues to be an Eligible Employee during a
     period the Plan suspends the Employee's right to make elective deferrals
     or nondeductible contributions following a hardship distribution.

     (d)    "Highly Compensated Group" means the group of Eligible Employees
     who are Highly Compensated Employees for the Plan Year.

     (e)    "Nonhighly Compensated Group" means the group of Eligible Employees
     who are Nonhighly Compensated Employees for the Plan Year.

     (f)    "Compensation" means, except as specifically provided in this
     Article XIV, Compensation as defined for nondiscrimination purposes in
     Section 1.12(B) of the Plan. For Plan Years beginning prior to the later
     of January 1, 1992, or 60 days after the Treasury issues final regulations
     under Code Section Section 401(k) and 401(m), the Plan may limit
     Compensation taken into account to Compensation received only for the
     portion of the Plan Year in which the Employee was an Eligible Employee
     and only for the portion of the Plan Year in which the Plan or the Code
     Section 401(k) arrangement was in effect. For subsequent Plan Years,
     Compensation must include Compensation for the entire Plan Year,
     irrespective of whether the Plan or the Code Section 401(k) arrangement
     was in effect for the entire Plan Year or whether the Employee begins,
     resumes or ceases to be an Eligible Employee during the Plan Year.





                                                                           14.02
<PAGE>   87
     (g)    "Deferral contributions" are Salary Reduction Contributions and
     Cash or Deferred Contributions the Employer contributes to the Trust on
     behalf of an Eligible Employee, irrespective of whether, in the case of
     Cash or Deferred Contributions, the contribution is at the election of the
     Employee.

     (h)    "Elective deferrals" are all Salary Reduction Contributions and
     that portion of any Cash or Deferred Contribution which the Employer
     contributes to the Trust at the election of an Eligible Employee. Any
     portion of a Cash or Deferred Contribution contributed to the Trust
     because of the Employee's failure to make a cash election is an elective
     deferral. However, any portion of a Cash or Deferred Contribution over
     which the Employee does not have a cash election is not an elective
     deferral.  Elective deferrals do not include amounts which have become
     currently available to the Employee prior to the election nor amounts
     designated as nondeductible contributions at the time of deferral or
     contribution.

     (i)    "Matching contributions" are contributions made by the Employer on
     account of elective deferrals under a Code Section 401(k) arrangement or
     on account of employee contributions. Matching contributions also include
     Participant forfeitures allocated on account of such elective deferrals or
     employee contributions.

     (j)    "Nonelective contributions" are contributions made by the Employer
     which are not subject to a deferral election by an Employee and which are
     not matching contributions.

     (k)    "Qualified matching contributions" are matching contributions which
     are 100% Nonforfeitable at all times and which are subject to the
     distribution restrictions described in paragraph (m). Matching
     contributions are not 100% Nonforfeitable at all times if the Employee has
     a 100% Nonforfeitable interest because of his Years of Service taken into
     account under a vesting schedule. Any matching contributions allocated to
     a Participant's Qualified Matching Contributions Account under the Plan
     automatically satisfy the definition of qualified matching contributions.

     (l)    "Qualified nonelective contributions" are nonelective contributions
     which are 100% Nonforfeitable at all times and which are subject to the
     distribution restrictions described in paragraph (m). Nonelective
     contributions are not 100% Nonforfeitable at all times if the Employee has
     a 100% Nonforfeitable interest because of his Years of Service taken into
     account under a vesting schedule. Any nonelective contributions allocated
     to a Participant's Qualified Nonelective Contributions Account under the
     Plan automatically satisfy the definition of qualified nonelective
     contributions.

     (m)    "Distribution restrictions" means the Employee may not receive a
     distribution of the specified contributions (nor earnings on those
     contributions) except in the event of (1) the Participant's death,
     disability, termination of employment or attainment of age 59 1/2, (2)
     financial hardship satisfying the requirements of Code Section 401(k) and
     the applicable Treasury regulations, (3) a plan termination, without
     establishment of a successor defined contribution plan (other than an
     ESOP), (4) a sale of substantially all of the assets (within the meaning
     of Code Section 409(d)(2)) used in a trade or business, but





                                                                           14.03
<PAGE>   88
     only to an employee who continues employment with the corporation
     acquiring those assets, or (5) a sale by a corporation of its interest in
     a subsidiary (within the meaning of Code Section 409(d)(3)), but only to
     an employee who continues employment with the subsidiary. For Plan Years
     beginning after December 31, 1988, a distribution on account of financial
     hardship, as described in clause (2), may not include earnings on elective
     deferrals credited as of a date later than December 31, 1988, and may not
     include qualified matching contributions and qualified nonelective
     contributions, nor any earnings on such contributions, irrespective of
     when credited. A distribution described in clauses (3), (4) or (5), if
     made after March 31, 1988, must be a lump sum distribution, as required
     under Code Section 401(k)(10).

     (n)    "Employee contributions" are contributions made by a Participant on
     an after-tax basis, whether voluntary or mandatory, and designated, at the
     time of contribution, as an employee (or nondeductible) contribution.
     Elective deferrals and deferral contributions are not employee
     contributions. Participant nondeductible contributions, made pursuant to
     Section 4.01 of the Plan, are employee contributions.

     14.04  MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The Employer may
elect in Adoption Agreement Section 3.01 to provide matching contributions. The
Employer also may elect in Adoption Agreement Section 4.01 to permit or to
require a Participant to make nondeductible contributions.

(A) MANDATORY CONTRIBUTIONS. Any Participant nondeductible contributions
eligible for matching contributions are mandatory contributions. The Advisory
Committee will maintain a separate accounting, pursuant to Section 4.06 of the
Plan, to reflect the Participant's Accrued Benefit derived from his mandatory
contributions. The Employer, under Adoption Agreement Section 4.05, may
prescribe special distribution restrictions which will apply to the Mandatory
Contributions Account prior to the Participant's Separation from Service.
Following his Separation from Service, the general distribution provisions of
Article VI apply to the distribution of the Participant's Mandatory
Contributions Account.

     14.05  TIME OF PAYMENT OF CONTRIBUTIONS. The Employer must make Salary
Reduction Contributions to the Trust within an administratively reasonable
period of time after withholding the corresponding Compensation from the
Participant. Furthermore, the Employer must make Salary Reduction
Contributions, Cash or Deferred Contributions, Employer matching contributions
(including qualified Employer matching contributions) and qualified Employer
nonelective contributions no later than the time prescribed by the Code or by
applicable Treasury regulations. Salary Reduction Contributions and Cash or
Deferred Contributions are Employer contributions for all purposes under this
Plan, except to the extent the Code or Treasury regulations prohibit the use of
these contributions to satisfy the qualification requirements of the Code.

     14.06  SPECIAL ALLOCATION PROVISIONS - DEFERRAL CONTRIBUTIONS, MATCHING
CONTRIBUTIONS AND QUALIFIED NONELECTIVE CONTRIBUTIONS.  To make allocations
under the Plan, the Advisory Committee must establish a Deferral Contributions
Account, a Qualified Matching Contributions Account, a Regular Matching





                                                                           14.04
<PAGE>   89
Contributions Account, a Qualified Nonelective Contributions Account and an
Employer Contributions Account for each Participant.

(A) DEFERRAL CONTRIBUTIONS. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the amount of Deferral
Contributions the Employer makes to the Trust on behalf of the Participant. The
Advisory Committee will make this allocation as of the last day of each Plan
Year unless, in Adoption Agreement Section 3.04, the Employer elects more
frequent allocation dates for salary reduction contributions.

(B) MATCHING CONTRIBUTIONS. The Employer must specify in its Adoption Agreement
whether the Advisory Committee will allocate matching contributions to the
Qualified Matching Contributions Account or to the Regular Matching
Contributions Account of each Participant. The Advisory Committee will make
this allocation as of the last day of each Plan Year unless, in Adoption
Agreement Section 3.04, the Employer elects more frequent allocation dates for
matching contributions.

     (1) To the extent the Employer makes matching contributions under a fixed
     matching contribution formula, the Advisory Committee will allocate the
     matching contribution to the Account of the Participant on whose behalf
     the Employer makes that contribution.  A fixed matching contribution
     formula is a formula under which the Employer contributes a certain
     percentage or dollar amount on behalf of a Participant based on that
     Participant's deferral contributions or nondeductible contributions
     eligible for a match, as specified in Section 3.01 of the Employer's
     Adoption Agreement. The Employer may contribute on a Participant's behalf
     under a specific matching contribution formula only if the Participant
     satisfies the accrual requirements for matching contributions specified in
     Section 3.06 of the Employer's Adoption Agreement and only to the extent
     the matching contribution does not exceed the Participant's annual
     additions limitation in Part 2 of Article III.

     (2) To the extent the Employer makes matching contributions under a
     discretionary formula, the Advisory Committee will allocate the
     discretionary matching contributions to the Account of each Participant
     who satisfies the accrual requirements for matching contributions
     specified in Section 3.06 of the Employer's Adoption Agreement. The
     allocation of discretionary matching contributions to a Participant's
     Account is in the same proportion that each Participant's eligible
     contributions bear to the total eligible contributions of all
     Participants. If the discretionary formula is a tiered formula, the
     Advisory Committee will make this allocation separately with respect to
     each tier of eligible contributions, allocating in such manner the amount
     of the matching contributions made with respect to that tier. "Eligible
     contributions" are the Participant's deferral contributions or
     nondeductible contributions eligible for an allocation of matching
     contributions, as specified in Section 3.01 of the Employer's Adoption
     Agreement.

     If the matching contribution formula applies both to deferral
contributions and to Participant nondeductible contributions, the matching
contributions apply first to deferral contributions. Furthermore, the matching
contribution formula does not apply to deferral contributions that are excess
deferrals under Section 14.07. For this purpose: (a) excess





                                                                           14.05
<PAGE>   90
deferrals relate first to deferral contributions for the Plan Year not
otherwise eligible for a matching contribution; and (2) if the Plan Year is not
a calendar year, the excess deferrals for a Plan Year are the last elective
deferrals made for a calendar year.

(C) QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of that designated
contribution, as specified in Section 3.04 of the Employer's Adoption
Agreement. The Advisory Committee will make the allocation to each eligible
Participant's Account in the same ratio that the Participant's Compensation for
the Plan Year bears to the total Compensation of all eligible Participants for
the Plan Year. The Advisory Committee will determine a Participant's
Compensation in accordance with the general definition of Compensation under
Section 1.12 of the Plan, as modified by the Employer in Sections 1.12 and 3.06
of its Adoption Agreement.

(D) NONELECTIVE CONTRIBUTIONS. To the extent the Employer makes nonelective
contributions for the Plan Year which, at the time of contribution, it does not
designate as qualified nonelective contributions, the Advisory Committee will
allocate those contributions in accordance with the elections under Section
3.04 of the Employer's Adoption Agreement. For purposes of the special
nondiscrimination tests described in Sections 14.08 and 14.09, the Advisory
Committee may treat nonelective contributions allocated under this paragraph as
qualified nonelective contributions, if the contributions otherwise satisfy the
definition of qualified nonelective contributions.

     14.07  ANNUAL ELECTIVE DEFERRAL LIMITATION.

(A) ANNUAL ELECTIVE DEFERRAL LIMITATION. An Employee's elective deferrals for a
calendar year beginning after December 31, 1986, may not exceed the 402(g)
limitation. The 402(g) limitation is the greater of $7,000 or the adjusted
amount determined by the Secretary of the Treasury. If, pursuant to a salary
reduction agreement or pursuant to a cash or deferral election, the Employer
determines the Employee's elective deferrals to the Plan for a calendar year
would exceed the 402(g) limitation, the Employer will suspend the Employee's
salary reduction agreement, if any, until the following January 1 and pay in
cash the portion of a cash or deferral election which would result in the
Employee's elective deferrals for the calendar year exceeding the 402(g)
limitation. If the Advisory Committee determines an Employee's elective
deferrals already contributed to the Plan for a calendar year exceed the 402(g)
limitation, the Advisory Committee will distribute the amount in excess of the
402(g) limitation (the "excess deferral"), as adjusted for allocable income, no
later than April 15 of the following calendar year. If the Advisory Committee
distributes the excess deferral by the appropriate April 15, it may make the
distribution irrespective of any other provision under this Plan or under the
Code. The Advisory Committee will reduce the amount of excess deferrals for a
calendar year distributable to the Employee by the amount of excess
contributions (as determined in Section 14.08), if any, previously distributed
to the Employee for the Plan Year beginning in that calendar year.

     If an Employee participates in another plan under which he makes elective
deferrals pursuant to a Code Section 401(k) arrangement, elective deferrals
under a Simplified Employee





                                                                           14.06
<PAGE>   91
Pension, or salary reduction contributions to a tax-sheltered annuity,
irrespective of whether the Employer maintains the other plan, he may provide
the Advisory Committee a written claim for excess deferrals made for a calendar
year. The Employee must submit the claim no later than the March 1 following
the close of the particular calendar year and the claim must specify the amount
of the Employee's elective deferrals under this Plan which are excess
deferrals. If the Advisory Committee receives a timely claim, it will
distribute the excess deferral (as adjusted for allocable income) the Employee
has assigned to this Plan, in accordance with the distribution procedure
described in the immediately preceding paragraph.

(B) ALLOCABLE INCOME. For purposes of making a distribution of excess deferrals
pursuant to this Section 14.07, allocable income means net income or net loss
allocable to the excess deferrals for the calendar year in which the Employee
made the excess deferral and for the "gap period" measured from the beginning
of the next calendar year to the date of the distribution. If the distribution
of the excess deferral occurs during the calendar year in which the Employee
made the excess deferral, the Advisory Committee will treat as a "gap period"
the period from the first day of that calendar year to the date of the
distribution. The Advisory Committee will determine allocable income in the
same manner as described in Section 14.08(F) for excess contributions, except
the numerator of the allocation fraction will be the amount of the Employee's
excess deferrals and the denominator of the allocation fraction will be the
Employee's Accrued Benefit attributable to his elective deferrals.

     14.08  ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
Advisory Committee must determine whether the Plan's Code Section 401(k)
arrangement satisfies either of the following ADP tests:

     (i) The average ADP for the Highly Compensated Group does not exceed 1.25
     times the average ADP of the Nonhighly Compensated Group; or

     (ii) The average ADP for the Highly Compensated Group does not exceed the
     average ADP for the Nonhighly Compensated Group by more than two
     percentage points (or the lesser percentage permitted by the multiple use
     limitation in Section 14.10) and the average ADP for the Highly
     Compensated Group is not more than twice the average ADP for the Nonhighly
     Compensated Group.

(A) CALCULATION OF ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible
Employee's deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. For aggregated family members treated as a
single Highly Compensated Employee, the ADP of the family unit is the greater
of: (i) the ADP determined by combining the deferral contributions and
Compensation of the family members who are Highly Compensated Employees without
family aggregation; or (ii) the ADP determined by combining the deferral
contributions and Compensation of all aggregated family members. A Nonhighly
Compensated Employee's ADP does not include elective deferrals made to this
Plan or to any other Plan maintained by the Employer, to the extent such
elective deferrals exceed the 402(g) limitation described in Section 14.07(A).





                                                                           14.07
<PAGE>   92
     The Advisory Committee may determine (in a manner consistent with Treasury
regulations) the ADPs of the Eligible Employees by taking into account
qualified nonelective contributions or qualified matching contributions, or
both, made to this Plan or to any other qualified Plan maintained by the
Employer. The Advisory Committee may not include qualified nonelective
contributions in the ADP test unless the allocation of nonelective
contributions is nondiscriminatory when the Advisory Committee takes into
account all nonelective contributions (including the qualified nonelective
contributions) and also when the Advisory Committee takes into account only the
nonelective contributions not used in either the ADP test described in this
Section 14.08 or the ACP test described in Section 14.09. For Plan Years
beginning after December 31, 1989, the Advisory Committee may not include in
the ADP test any qualified nonelective contributions or qualified matching
contributions under another qualified plan unless that plan has the same plan
year as this Plan. The Advisory Committee must maintain records to demonstrate
compliance with the ADP test, including the extent to which the Plan used
qualified nonelective contributions or qualified matching contributions to
satisfy the test.

(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine the
ADP of any Highly Compensated Employee, the deferral contributions taken into
account must include any elective deferrals made by the Highly Compensated
Employee under any other Code Section 401(k) arrangement maintained by the
Employer, unless the elective deferrals are to an ESOP. If the plans containing
the Code Section 401(k) arrangements have different plan years, the Advisory
Committee will determine the combined deferral contributions on the basis of
the plan years ending in the same calendar year.

(C) AGGREGATION OF CERTAIN CODE Section 401(K) ARRANGEMENTS. If the Employer
treats two plans as a unit for coverage or nondiscrimination purposes, the
Employer must combine the Code Section 401(k) arrangements under such plans to
determine whether either plan satisfies the ADP test. This aggregation rule
applies to the ADP determination for all Eligible Employees, irrespective of
whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly
Compensated Employee. The Advisory Committee also may elect to aggregate the
Code Section 401(k) arrangements under plans which the Employer does not treat
as a unit for coverage or nondiscrimination purposes. For Plan Years beginning
after December 31, 1989, an aggregation of Code Section 401(k) arrangements
under this paragraph does not apply to plans which have different plan years
and, for Plan Years beginning after December 31, 1988, the Advisory Committee
may not aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan
(or non-ESOP portion of a plan).

(D) CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If, pursuant to this Section
14.08, the Advisory Committee has elected to include qualified matching
contributions in the average ADP, the Advisory Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or qualified
matching contributions for the Plan Year, the Advisory Committee will treat the
remaining portion of his excess contributions as attributable to qualified
nonelective contributions. The Advisory Committee will reduce the amount of
excess contributions for a Plan Year distributable to a Highly Compensated





                                                                           14.08
<PAGE>   93
Employee by the amount of excess deferrals (as determined in Section 14.07), if
any, previously distributed to that Employee for the Employee's taxable year
ending in that Plan Year.

(E) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the Advisory Committee determines
the Plan fails to satisfy the ADP test for a Plan Year, it must distribute the
excess contributions, as adjusted for allocable income, during the next Plan
Year. However, the Employer will incur an excise tax equal to 10% of the amount
of excess contributions for a Plan Year not distributed to the appropriate
Highly Compensated Employees during the first 2 1/2 months of that next Plan
Year. The excess contributions are the amount of deferral contributions made by
the Highly Compensated Employees which causes the Plan to fail to satisfy the
ADP test. The Advisory Committee will distribute to each Highly Compensated
Employee his respective share of the excess contributions. The Advisory
Committee will determine the respective shares of excess contributions by
starting with the Highly Compensated Employee(s) who has the greatest ADP,
reducing his ADP to the next highest ADP, then, if necessary, reducing the ADP
of the Highly Compensated Employee(s) at the next highest ADP level (including
the ADP of the Highly Compensated Employee(s) whose ADP the Advisory Committee
already has reduced), and continuing in this manner until the average ADP for
the Highly Compensated Group satisfies the ADP test.  If the Highly Compensated
Employee is part of an aggregated family group, the Advisory Committee, in
accordance with the applicable Treasury regulations, will determine each
aggregated family member's allocable share of the excess contributions assigned
to the family unit.

(F) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.08, the Advisory Committee must calculate the
allocable income for the Plan Year in which the excess contributions arose and
for the "gap period" measured from the beginning of the next Plan Year to the
date of the distribution. "Allocable income" means net income or net loss.  To
calculate allocable income for the Plan Year, the Advisory Committee: (1) first
will determine the net income or net loss for the Plan Year on the Highly
Compensated Employee's Accrued Benefit attributable to deferral contributions;
and (2) then will multiply this net income or net loss by the following
fraction:


        Amount of the Highly Compensated Employee's excess contributions  
             Accrued Benefit attributable to deferral contributions


The Accrued Benefit attributable to deferral contributions includes the Accrued
Benefit attributable to qualified matching contributions and qualified
nonelective contributions taken into account in the ADP test for the Plan Year
or for any prior Plan Year. For purposes of the denominator of the fraction,
the Advisory Committee will calculate the Accrued Benefit attributable to
deferral contributions as of the last day of the Plan Year (without regard to
the net income or net loss for the Plan Year on that Accrued Benefit).

     To calculate allocable income for the "gap period," the Advisory Committee
will perform the same calculation as described in the preceding paragraph,
except in clause (1) the Advisory Committee will determine, as of the last day
of the month preceding the date of distribution, the net income or net loss for
the "gap period" and in clause (2) will calculate the Accrued





                                                                           14.09
<PAGE>   94
Benefit attributable to deferral contributions as of the day before the
distribution. If the Plan does not perform a valuation on the last day of the
month preceding the date of distribution, the Advisory Committee, in lieu of
the calculation described in this paragraph, will calculate allocable income
for each month in the "gap period" as equal to 10% of the allocable income for
the Plan Year. Under this alternate calculation, the Advisory Committee will
disregard the month in which the distribution occurs, if the Plan makes the
distribution no later than the 15th day of that month.

     14.09  NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years beginning
after December 31, 1986, the Advisory Committee must determine whether the
annual Employer matching contributions (other than qualified matching
contributions used in the ADP under Section 14.08), if any, and the Employee
contributions, if any, satisfy either of the following average contribution
percentage ("ACP") tests:

     (i)    The ACP for the Highly Compensated Group does not exceed 1.25 times
     the ACP of the Nonhighly Compensated Group; or

     (ii)   The ACP for the Highly Compensated Group does not exceed the ACP
     for the Nonhighly Compensated Group by more than two percentage points (or
     the lesser percentage permitted by the multiple use limitation in Section
     14.10) and the ACP for the Highly Compensated Group is not more than twice
     the ACP for the Nonhighly Compensated Group.

(A) CALCULATION OF ACP. The average contribution percentage for a group is the
average of the separate contribution percentages calculated for each Eligible
Employee who is a member of that group. An Eligible Employee's contribution
percentage for a Plan Year is the ratio of the Eligible Employee's aggregate
contributions for the Plan Year to the Employee's Compensation for the Plan
Year.  "Aggregate contributions" are Employer matching contributions (other
than qualified matching contributions used in the ADP test under Section 14.08)
and employee contributions (as defined in Section 14.03). For aggregated family
members treated as a single Highly Compensated Employee, the contribution
percentage of the family unit is the greater of: (i) the contribution
percentage determined by combining the aggregate contributions and Compensation
of the family members who are Highly Compensated Employees without family
aggregation; or (ii) the contribution percentage determined by combining the
aggregate contributions and Compensation of all aggregated family members.

     The Advisory Committee, in a manner consistent with Treasury regulations,
may determine the contribution percentages of the Eligible Employees by taking
into account qualified nonelective contributions (other than qualified
nonelective contributions used in the ADP test under Section 14.08) or elective
deferrals, or both, made to this Plan or to any other qualified Plan maintained
by the Employer. The Advisory Committee may not include qualified nonelective
contributions in the ACP test unless the allocation of nonelective
contributions is nondiscriminatory when the Advisory Committee takes into
account all nonelective contributions (including the qualified nonelective
contributions) and also when the Advisory Committee takes into account only the
nonelective contributions not used in either the ADP test described in Section
14.08 or the ACP test described in this Section 14.09. The Advisory Committee
may not include elective deferrals in the ACP test, unless the Plan which
includes the elective deferrals satisfies the ADP test both with and without
the elective deferrals included in this ACP test. For Plan Years beginning
after December 31, 1989, the Advisory Committee may not include in the ACP test
any qualified nonelective contributions or elective deferrals under another
qualified plan unless that plan has the same plan year as this Plan. The





                                                                          14.010
<PAGE>   95
Advisory Committee must maintain records to demonstrate compliance with the ACP
test, including the extent to which the Plan used qualified nonelective
contributions or elective deferrals to satisfy the test.

(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine the
contribution percentage of any Highly Compensated Employee, the aggregate
contributions taken into account must include any matching contributions (other
than qualified matching contributions used in the ADP test) and any Employee
contributions made on his behalf to any other plan maintained by the Employer,
unless the other plan is an ESOP. If the plans have different plan years, the
Advisory Committee will determine the combined aggregate contributions on the
basis of the plan years ending in the same calendar year.

(C) AGGREGATION OF CERTAIN PLANS. If the Employer treats two plans as a unit
for coverage or nondiscrimination purposes, the Employer must combine the plans
to determine whether either plan satisfies the ACP test. This aggregation rule
applies to the contribution percentage determination for all Eligible
Employees, irrespective of whether an Eligible Employee is a Highly Compensated
Employee or a Nonhighly Compensated Employee. The Advisory Committee also may
elect to aggregate plans which the Employer does not treat as a unit for
coverage or nondiscrimination purposes. For Plan Years beginning after December
31, 1989, an aggregation of plans under this paragraph does not apply to plans
which have different plan years and, for Plan Years beginning after December
31, 1988, the Advisory Committee may not aggregate an ESOP (or the ESOP portion
of a plan) with a non-ESOP plan (or non-ESOP portion of a plan).

(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee will
determine excess aggregate contributions after determining excess deferrals
under Section 14.07 and excess contributions under Section 14.08. If the
Advisory Committee determines the Plan fails to satisfy the ACP test for a Plan
Year, it must distribute the excess aggregate contributions, as adjusted for
allocable income, during the next Plan Year. However, the Employer will incur
an excise tax equal to 10% of the amount of excess aggregate contributions for
a Plan Year not distributed to the appropriate Highly Compensated Employees
during the first 2 1/2 months of that next Plan Year. The excess aggregate
contributions are the amount of aggregate contributions allocated on behalf of
the Highly Compensated Employees which causes the Plan to fail to satisfy the
ACP test. The Advisory Committee will distribute to each Highly Compensated
Employee his respective share of the excess aggregate contributions. The
Advisory Committee will determine the respective shares of excess aggregate
contributions by starting with the Highly Compensated Employee(s) who has the
greatest contribution percentage, reducing his contribution percentage to the
next highest contribution percentage, then, if necessary, reducing the
contribution percentage of the Highly Compensated Employee(s) at the next
highest contribution percentage level (including the contribution percentage of
the Highly Compensated Employee(s) whose contribution percentage the Advisory
Committee already has reduced), and continuing in this manner until the ACP for
the Highly Compensated Group satisfies the ACP test. If the Highly Compensated
Employee is part of an aggregated family group, the Advisory Committee, in
accordance with the applicable Treasury regulations, will determine each
aggregated family member's allocable share of the excess aggregate
contributions assigned to the family unit.

(E) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.09, the Advisory Committee must calculate the
allocable income for the Plan Year in which the excess aggregate contributions
arose and for the "gap period" measured from the beginning of the next Plan
Year to the date of the distribution. "Allocable income" means net income or
net loss. The Advisory Committee will determine allocable income in the same
manner as described in Section 14.08(F) for excess contributions, except the
numerator of the





                                                                          14.011
<PAGE>   96
allocation fraction will be the Highly Compensated Employee's excess aggregate
contributions and the denominator of the allocation fraction will be the
Employee's Accrued Benefit attributable to aggregate contributions and, if
applicable, to qualified nonelective contributions and elective deferrals
included in the ACP test for the Plan Year or for any prior Plan Year.

(F) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee
will treat a Highly Compensated Employee's allocable share of excess aggregate
contributions in the following priority: (1) first as attributable to his
Employee contributions which are voluntary contributions, if any; (2) then as
matching contributions allocable with respect to excess contributions
determined under the ADP test described in Section 14.08; (3) then on a pro
rata basis to matching contributions and to the deferral contributions relating
to those matching contributions which the Advisory Committee has included in
the ACP test; (4) then on a pro rata basis to Employee contributions which are
mandatory contributions, if any, and to the matching contributions allocated on
the basis of those mandatory contributions; and (5) last to qualified
nonelective contributions used in the ACP test. To the extent the Highly
Compensated Employee's excess aggregate contributions are attributable to
matching contributions, and he is not 100% vested in his Accrued Benefit
attributable to matching contributions, the Advisory Committee will distribute
only the vested portion and forfeit the nonvested portion. The vested portion
of the Highly Compensated Employee's excess aggregate contributions
attributable to Employer matching contributions is the total amount of such
excess aggregate contributions (as adjusted for allocable income) multiplied by
his vested percentage (determined as of the last day of the Plan Year for which
the Employer made the matching contribution). The Employer will specify in
Adoption Agreement Section 3.05 the manner in which the Plan will allocate
forfeited excess aggregate contributions.

     14.10   MULTIPLE USE LIMITATION. For Plan Years beginning after December
31, 1988, if at least one Highly Compensated Employee is includible in the ADP
test under Section 14.08 and in the ACP test under Section 14.09, the sum of
the Highly Compensated Group's ADP and ACP may not exceed the multiple use
limitation.

     The multiple use limitation is the sum of (i) and (ii):

     (i)    125% of the greater of: (a) the ADP of the Nonhighly Compensated
     Group under the Code Section 401(k) arrangement; or (b) the ACP of the
     Nonhighly Compensated Group for the Plan Year beginning with or within the
     Plan Year of the Code Section 401(k) arrangement.

     (ii)   2% plus the lesser of (i)(a) or (i)(b), but no more than twice the
     lesser of (i)(a) or (i)(b).

     For Plan Years beginning prior to the later of January 1, 1992, or 60 days
after the Treasury issues final regulations under Code Section 401(m), the
Advisory Committee, in lieu of determining the multiple use limitation as the
sum of (i) and (ii), may elect to determine the multiple use limitation as the
sum of (iii) and (iv):

     (iii)  125% of the lesser of: (a) the ADP of the Nonhighly Compensated
     Group under the Code Section 401(k) arrangement; or (b) the ACP of the
     Nonhighly Compensated Group for the Plan Year beginning with or within the
     Plan Year of the Code Section 401(k) arrangement.

     (iv)   2% plus the greater of (iii)(a) or (iii)(b), but no more than twice
     the greater of (iii)(a) or (iii)(b).





                                                                           14.12
<PAGE>   97
     The Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.08 and the
ACP test under Section 14.09 and after making any corrective distributions
required by those Sections. If, after applying this Section 14.10, the Advisory
Committee determines the Plan has failed to satisfy the multiple use
limitation, the Advisory Committee will correct the failure by treating the
excess amount as excess aggregate contributions under Section 14.09.  This
Section 14.10 does not apply unless, prior to application of the multiple use
limitation, the ADP and the ACP of the Highly Compensated Group each exceeds
125% of the respective percentages for the Nonhighly Compensated Group.

     14.11  DISTRIBUTION RESTRICTIONS. The Employer must elect in Section 6.03
the Adoption Agreement the distribution events permitted under the Plan. The
distribution events applicable to the Participant's Deferral Contributions
Account, Qualified Nonelective Contributions Account and Qualified Matching
Contributions Account must satisfy the distribution restrictions described in
paragraph (m) of Section 14.03.

(A) HARDSHIP DISTRIBUTIONS FROM DEFERRAL CONTRIBUTIONS ACCOUNT. The Employer
must elect in Adoption Agreement Section 6.03 whether a Participant may receive
hardship distributions from his Deferral Contributions Account prior to the
Participant's Separation from Service. Hardship distributions from the Deferral
Contributions Account must satisfy the requirements of this Section 14.11. A
hardship distribution option may not apply to the Participant's Qualified
Nonelective Contributions Account or Qualified Matching Contributions Account.

     (1) DEFINITION OF HARDSHIP. A hardship distribution under this Section
14.11 must be on account of one or more of the following immediate and heavy
financial needs: (1) medical expenses described in Code Section 213(d) incurred
by the Participant, by the Participant's spouse, or by any of the Participant's
dependents; (2) the purchase (excluding mortgage payments) of a principal
residence for the Participant; (3) the payment of post-secondary education
tuition, for the next semester or for the next quarter, for the Participant,
for the Participant's spouse, or for any of the Participant's dependents; or
(4) to prevent the eviction of the Participant from his principal residence or
the foreclosure on the mortgage of the Participant's principal residence.

     (2) RESTRICTIONS. The following restrictions apply to a Participant who
receives a hardship distribution: (a) the Participant may not make elective
deferrals or employee contributions to the Plan for the 12-month period
following the date of his hardship distribution; (b) the distribution is not in
excess of the amount of the immediate and heavy financial need; (c) the
Participant must have obtained all distributions, other than hardship
distributions, and all nontaxable loans currently available under this Plan and
all other qualified plans maintained by the Employer; and (d) the Participant
agrees to limit elective deferrals under this Plan and under any other
qualified Plan maintained by the Employer, for the Participant's taxable year
immediately following the taxable year of the hardship distribution, to the
402(g) limitation (as described in Section 14.07), reduced by the amount of the
Participant's elective deferrals made in the taxable year of the hardship
distribution. The suspension of elective deferrals and employee contributions
described in clause (a) also must apply to all other qualified plans and to all
nonqualified plans of deferred compensation maintained by the Employer, other
than any mandatory employee contribution portion of a defined benefit plan,
including stock option, stock purchase and other similar plans, but not
including health or welfare benefit plans (other than the cash or deferred
arrangement portion of a cafeteria plan).





                                                                           14.13
<PAGE>   98
     (3) EARNINGS. For Plan Years beginning after December 31, 1988, a hardship
distribution under this Section 14.11 may not include earnings on an Employee's
elective deferrals credited after December 31, 1988, and may not include
qualified matching contributions and qualified nonelective contributions, nor
any earnings on such contributions, irrespective of when credited.

(B) DISTRIBUTIONS AFTER SEPARATION FROM SERVICE. Following the Participant's
Separation from Service, the distribution events applicable to the Participant
apply equally to all of the Participant's Accounts, except as elected in
Section 6.03 of the Employer's Adoption Agreement.

     14.12  SPECIAL ALLOCATION RULES. If the Code Section 401(k) arrangement
provides for salary reduction contributions, if the Plan accepts Employee
contributions, pursuant to Adoption Agreement Section 4.01, or if the Plan
allocates matching contributions as of any date other than the last day of the
Plan Year, the Employer must elect in Adoption Agreement 9.11 whether any
special allocation provisions will apply under Section 9.11 of the Plan. For
purposes of the elections:

     (a) A "segregated Account" direction means the Advisory Committee will
     establish a segregated Account for the applicable contributions made on
     the Participant's behalf during the Plan Year. The Trustee must invest the
     segregated Account in Federally insured interest bearing savings
     account(s) or time deposits, or a combination of both, or in any other
     fixed income investments, unless otherwise specified in the Employer's
     Adoption Agreement. As of the last day of each Plan Year (or, if earlier,
     an allocation date coinciding with a valuation date described in Section
     9.11), the Advisory Committee will reallocate the segregated Account to
     the Participant's appropriate Account, in accordance with Section 3.04 or
     Section 4.06, whichever applies to the contributions.

     (b) A "weighted average allocation" method will treat a weighted portion
     of the applicable contributions as if includible in the Participant's
     Account as of the beginning of the valuation period. The weighted portion
     is a fraction, the numerator of which is the number of months in the
     valuation period, excluding each month in the valuation period which
     begins prior to the contribution date of the applicable contributions, and
     the denominator of which is the number of months in the valuation period.
     The Employer may elect in its Adoption Agreement to substitute a weighting
     period other than months for purposes of this weighted average allocation.


           *   *   *   *   *   *   *   *   *   *   *   *   *   *   *





                                                                           14.14
<PAGE>   99
                                   ARTICLE A
                      APPENDIX TO PLAN AND TRUST AGREEMENT

     This Article is necessary to comply with the Unemployment Compensation
Amendments Act of 1992 and is an integral part of the basic plan document.
Section 12.08 applies to any modification or amendment of this Article.

     A-1.  APPLICATIONS.  This Article applies to distributions made on or
after January 1, 1993.  Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
Article, 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.

     A-2.  DEFINITIONS.

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

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

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

     (d)    "Direct rollover." A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.





                                      A-1
<PAGE>   100
                                   ARTICLE B
                        APPENDIX TO BASIC PLAN DOCUMENT

     This Article is necessary to comply with the Omnibus Budget Reconciliation
Act of 1993 ("OBRA 93") and is an integral part of the basic plan document.
Section 12.08 applies to any modification or amendment of this Article.

     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.

     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.

     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 that prior 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.





                                      B-1

<PAGE>   1
                                                                  EXHIBIT 10(qq)

Digest No. 354.


                          IRREVOCABLE OPTION AGREEMENT

                           COMPANIA MINERA EL BRONCE

                                       TO

                         CDE CHILEAN MINING CORPORATION


In Santiago, Chile, on October 24, 1994, before me, MARIA GLORIA ACHARAN
TOLEDO, Chilean, lawyer, national identification card No.  5,575,365-2, Notary
Public of the Forty Second Notary of this Commune, with office at No. 257
Teatinos St., there appear: Mr.  MAXIMILIANO CALLEJAS CALLEJAS, Chilean,
married, mining execution engineer, national identification card No.
3,172,853-3; Mrs. EDDA CALLEJAS MIRAND, Chilean, bachelor, agronomist, national
identification card No. 4,317,082 - 1, and Mrs. VERONICA ROJAS CLLEJAS,
Chilean, married, mining industrialist, national identification card No.
6,062,614-6, as directors and on behalf, as will be evidenced, of COMPANIA
MINERA EL BRONCE, contractual mining company dealing in the business indicated
in its name, Tax Payer Number 89,482,100-0, all domiciled in this city at No.
240 Carmencita St., Las Condes, for the one part; and for the other MICHAEL
CHARLES TIPPETT, citizen of the United States of America married, geologist,
Foreigener's identification card NO. 24,506,207-1, on behalf, as will be
evidenced, of CDE CHILEAN MINING CORPORATION AGENCIA CHILE, hereinafter "CDE",
Chilean Agency of a foreign stock corporation, dealing in the ining, industrial
and commercial line, both domiciled at No. 133 La Gloria, Las





                                       1
<PAGE>   2
Condes, Santiago, the latter acting per se and on behalf, as will also be
evidenced, of COMPANIA MINERA CDE EL BRONCE, contractual mining company of the
same domicile, hereinafter also "CDE EL BRONCE"; the appearing parties of legal
age, who evidenced their identities with the respective cards and state:


FIRST:           Compania Minera CDE El Bronce is a contractual mining company,
organized by public deed delivered on October 11, 1994 before the Notary of
Santiago Mrs. Gloria Acharan Toledo, that is registered on folio 205 No. 59 of
the Mining Property Register of 1994 and on folio 9,119 folio No. 20 of the
Mining Shareholders' Register of 1994, both of the Custodian of Mines of
Santiago. The corporate interest of CDE El Bronce is divided into one hundred
shares, of which ninety nine shares belong to Compania Minera El Bronce, of
which 99 are ordinary Series A shares, while the remaining share, called
preferred or Series B share, belongs to CDE, as is evidenced by the inscription
mentioned of folio 9,119, No. 9 of the Shareholders' Register of the Custodian
of Mines of Santiago of the year 1994. CDE El Bronce has purchased and acquired
the following mining claims, located in the Commune and Province of Petorca,
Fifth Region of Valparaiso, whose constitutive judgment and/or survey
certificate is registered in the Property Register of the Custodian of Mines of
Petorca, on the folios, numbers and years indicated in each mining claims as
follows:

1)          Albertito Uno a Nueve whose survey certificate is on folio 11 over
No. 7 of 1982;

2)          Alma Uno a Cincuenta y Cuatro, with survey certificate and
constitutive judgment registered on folio 12 over No. 3 of the year 1950;





                                       2
<PAGE>   3
3)          Bronce Nuevo Uno a Treinta y dos, with survey certificate
registered on folio 45 No. 19 of 1940;

4)          Carlota Uno a cincuenta, with survey certificate and constitute
judgment registered on folio 19 over number 7 of 1988;

5)          Carmencita Uno a Cuarenta y uno, with survey certificate registered
on folio 17 over No.  1981;

6)          Corrida del Bronce Viejo or Bronce Viejo, with survey certificate
registered on folio 5 over No. 14 of 1889 and replacement of boundaries on
folio 34 over No. 13 of the year 1938;

7)          El Chivato or Socavon del Chivato, with survey certificate
registered on folio 12 over No. 15 of 1898998, with replacement of boundaries
on folio 34 over No. 13 of 1934;

8)          Defensa Uno a Cinco, with survey certificate registered on folio 31
over No. 18 of 1939;

9)          Don Alberto Uno a Cuatro, with survey certificate registered on
folio 41 number 28 of 1983;

10)         El Aspe, with survey certificate on folio 82 over Number 33 of
1935;

11)         Flor Maria Uno a Once, with survey certificate registered on folio
2 number 2 of 1980;

12)         Chiripa, with survey certificate registered on folio 99 over No. 37
of 1937;

13)         Gabriel Uno a Ochenta, with survey certificate and constitutive
judgment registered on folio 24 over No. 13 of 1992;

14)         Jose Antonio Uno a Sesenta, with survey certificate and
constitutive judgment registered on folio 30 over No. 14 of 1992;

15)         La Morocha Uno a Treinta, with survey certificate registered on
folio 14 No. 4 of 1997;

16)         Luis Uno a Nueve, with survey certificate and





                                       3
<PAGE>   4
constitutive judgment registered on folio 12 over No. 5 of 1992;

17)         Luz Uno a Sesenta with survey certificate and constitutive judgment
registered on folio 1 No. 1 of the year 1994,

18)         Patty Uno a Ocho, with survey certificate and constitutive judgment
registered on folio 2, No. 2 of 1989

19)         Paz Uno a Cuarenta, with survey certificate and constitutive
judgment registered on folio 7 over No. 2 of the year 1994;

20)         Poderosa Uno a Dos, with survey certificate registered on folio 32
over No. 13 of 1937;

21)         Rolando Uno a Tres or Rolando Primero, Segundo y Tercero, with
survey certificate registered on folio 6 over No. 3 of 1941;

22)         Samuel Uno a Cincuenta y Tres, with survey certificate and
constitutive judgment registered on folio 7 No. 4 of 1992;

23)         Socavon de San Nicomedes o San Nicomedes, with survey certificate
registered on folio 14 No. 16 of 1892 and replacement of boundaries on folio 34
over Number 13 of 1938;

24)         Urbano Uno a Doce, with survey certificate and constitutive
judgment registered on folio 2 over No. 3 of 1992;

25)         Vallenar Uno a treinta, with survey certificate registered on folio
46 over No. 29 of the year 1983;

26)         Rinconcito Uno a Cuatro, with survey certificate and constitutive
judgment registered on folio 22 No. 10 of 1993;

27)         Almendro Uno a Sesenta, with survey certificate and constitutive
judgment registered on folio 12 number 8 of 1993;

28)         Caracol Uno a Veinticuatro, with survey certificate and
constitutive judgment registered on folio 17 number 9 of 1993;

29)         Petorquita Uno a Treinta y tres with survey certificate





                                       4
<PAGE>   5
and constitutive judgment registered on folio 15 Number 6 of 1988;

30)         Algarrobilla Uno al Cincuenta, with survey certificate registered
on folio 2 number 2 of the year 1988;

31)         Boton de Oro Uno al Tres, with survey certificate registered on
folio 23 over No. 17 of 1983;

32)         Francisca Uno al Doscientos, with survey certificate registered on
folio 43 number 7 of the year 1986;

33)         Litre Uno al Cincuenta, with survey certificate registered on folio
26 number 8 of the year 1988;

34)         Malvina Uno al Cinco, with survey certificate registered on folio
18 over No. 10 of the year 1984;

35)         Presidente Montt Uno a Doscientos, with survey certificate
registered on folio 28 over number 6 of the year 1985;

36)         Soledad Uno a Trescientos, with survey certificate registered on
folio 108 over number 32 of the year 1989,

37)         Gran Rosario Uno al Diez, whose survey certificate is registered on
folio 28 No. 17 of the year 1939;

38)         Resguardo Uno al Cincuenta, whose survey certificate is registered
on folio 14 No. 10 of the year 1987;

39)         Ampliacion Relave Uno al Diez, whose survey certificate is
registered on folio 75 number 24 of the year 1989:

40)         Rights equivalent to 87.5% in the mining claims Dichosa, Juego de
Chuecas and La Verde, whose survey certificate is registered on folio 58 over
No. 22 of the year 1937;

41)         Beneficencia, whose survey certificate is registered on folio 31
number 15 of the year 1935;

42)         El Buitre or el Guitre, La Gallina y Los Gallos, with survey
certificate registered on folio 1 number 1 of the year 1935;

43)         Esperanca Uno al Cien, with survey certificate registered on folio
4 number 4 of the year 1986;





                                       5
<PAGE>   6
44)         Hospicio, with survey certificate registered on folio 26 number 13
of the year 1935;

45)         Hospital, with survey certificate registered on folio 10 over No.
13 of the year 1898;

46)         Nueva Espana, with survey certificate registered on folio 39 over
No. 17 of the year 1940;

47)         Sanatorio, whose survey certificate is registered on folio 28 over
number 14 of the year 1935;

48)         Gatica Uno a Cien, whose survey certificate is registered on folio
92 over No. 28 of the year 1989;

49)         Pedro de Valdivia, with survey certificate registered on folio 85
number 34 of the year 1935;

50)         San Ramon Primero y Segundo, whose survey certificate is registered
on folio 22 number 13 of the year 1942;

51)         Santa Clotilde Tercero y Cuarto, whose survey certificate is
registered on folio 19 over No. 12 of the year 1942.

Compania Minera CDE El Bronce has also acquired the following exploration
concessions, mining manifestations and petitions:


EXPLORATION CONCESSIONS: Freirinita, with constitutive judgment registered on
folio 138 number 172 of the Register of Discoveries of the Custodian of Mines
of Petorca of the year 1991 and judgment of extension noted on the margin of
the previous inscription.

MINING MANIFESTATIONS AND PETITIONS: All registered in the Register of
Discoveries of Mines of the Custodian of Mines of Petorca, under the folio and
number of the year which is indicated in each c~





                                       6
<PAGE>   7
Mining Manifestations:

a)          Terraza Uno Uno a Dieciocho, registered on folio 243 number 229 of 
1993, registered in its name on folio 54 No. 50 of the year 1994;

b)          Terraza Dos Uno a Doce, registered on folio 243 over No. 230 of 
1993, registered in its name on folio 54 over Number 56 of the year 1994;

c)          Tatan Uno a Trece, registered on folio 186 over number 186 of 1993,
registered in its name on folio 53 over number 54 of the year 1994;

d)          Montenegro Uno a Cuarenta y Ocho, registered on folio 13 over 
number 13 of 1993, registered in its name on folio 54 number 53 of the year 
1994;

e)          Servia Uno a Veintiseis, registered on folio 15 No. 14 of 1994, 
registered in its name on folio 52 over number 52 of the year 1994;

f)          Croacia Uno a Veintiocho, registered on folio 12 No. 12 of 1994; 
registered in its name on folio 52 No. 51 of the year 1994;

g)          Atacamita Uno a Veinte, registered on folio 55 No. 69 of 1991, 
registered in its name on folio 51 over No. 50 of the year 1994;

h)          Maria Eugenia Uno a Diez, registered in its name on folio 24 over 
No. 25 of the year 1994.

Mining Petitions:

a)          Diego registered in its name on folio 48 over No. 47 of the year 
1994;

b)          Sofia, registered in its name on folio 39 No. 37 of the year 1994:

c)          Ignacio, registered in its name on folio 40 No. 38 of the year 1994:

d)          Morado, registered in its name on folio 7 over No. 8 of the year 
1994;





                                       7
<PAGE>   8
e)          Negro, registered in its name on folio 6 over No. 7 of the year 
1994;

f)          Paulo, registered in its name on folio 47 over No. 46 of the year 
1994;

g)          Pedro, registered in its name on folio 38 No. 36 of the year 1994;

h)          Tomas, registered in its name on folio 49 over No. 48 of the year 
1994;

i)          Veronica, registered in its name on folio 37 No. 35 of the year 
1994.

Finally, Compania Minera CDE El Bronce has acquired the following mining
shares:

1)          Fifty shares equivalent to fifty per cent of the total shares into 
which the corporate interest is divided of Legal Mining Company "San 
Sebastian Uno de Petorca", juridical person registered on folio 13 over No. 9 
of the Property Register and on folio 22 over No. 44 of the Shareholders' 
Register, both of the year 1987, of the Custodian of Mines of Petorca, and 
that is the owner of the mining claims called "San Sebastian Uno al Quince" 
whose survey certificate was registered on folio 9 No. 8 of the Property 
Register of the same Custodian corresponding to the year 1984.

2)          Fifty shares or fifty percent of the rights in Sociedad Legal 
Minera San Lorenzo Una de la Quebrada del Chacal, owner of the mining claims 
called San Lorenzo Uno al Diez, whose survey certificate is registered on 
folio 18 No. 7 of the Property Register of the Custodian of Mines of Petorca 
of 1952.

            CDE El Bronce acquired the mining claims, mining exploration
concession, manifestations, petitions and shares already identified by purchase
made from Compania Minera El





                                       8
<PAGE>   9
Bronce, according to public deed delivered on this same date and in this same
Notary. In the same instrument, CDE El Bronce set up first mortgage on such
mining claims, concessions, rights and shares, binding itself not to encumber
or alienate them, and not to enter into acts and contracts with them. Such
mortgage and prohibition will only be maintained current during the period this
option is in effect and it is the obligation of CDE El Bronce and of Compania
Minera El Bronce to release them before CDE exercises this option, without any
cost whatsoever for CDE

SECOND.          Compania Minera El Bronce hereby grants to CDE, an irrevocable
and exclusive purchase option, in the terms of article 169 of the Mining Code,
on twenty ordinary shares of CDE El Bronce, in the form and conditions
accounted for in this instrument in such a way that once the option is
exercised and the capitalization of loans referred to in the fifth clause
hereof is made, CDE will acquire and will be the owner of fifty one percent of
all the shares into which the corporate interest of CDE El Bronce may be
divided, Minera El Bronce remaining as owner of the balance of forty nine
percent.

THIRD:           The Purchase Option referred to in the preceding paragraph is
given for the period that expires on July 25, 1997.  Consequently, at any time
before such time expires, and provided that by that time the loans indicated in
the sixth clause and the disbursements detailed in the seventh clause have been
made in investments, CDE may exercise its option, expressing its will to enter
into the purchase sale contract on the twenty shares of CDE El Bronce, subject
of this agreement.





                                       9
<PAGE>   10
         As a consequence of the exercise of the option and of the
capitalization referred to in the fifth Clause, CDE shall be the owner of fifty
one per cent of all the shares that result after such capitalization and
Compania Minera El Bronce will be the owner of the balance of forty nine
percent. For this purpose, CDE must give notice of its decision to exercise the
option by sending a registered letter addressed through a Notary Public to the
domicile of Compania Minera El Bronce. In the event CDE does not express its
intention to enter into the purchase sale referred to within the time
stipulated, it will be understood that it desists from its option and this will
lapse by matter of law. Likewise, at any time since this date and pending the
stipulated time period, CDE may decide not to persevere in this option
agreement and desist from its option, notice of which decision must be given to
Compania Minera El Bronce by registered letter addressed to the domicile of the
latter through a Notary Public, and the same effects indicated herein will
occur as regards the loans.

FOURTH.          During the effectiveness of this option agreement, CDE is
expressly authorized, through the persons it may appoint, to enter the mining
properties owned by the CDE El Bronce being able to make therein all kinds of
prospection work, reconnaissance, take samples, and in general, investigations
that will enable it to make a qualitative and quantitative evaluation of the
concessions, and to introduce in the mining claims all kinds of equipment and
machinery to perform the reconnaissance and prospection work and set up camps
for the persons working therein, and CDE El Bronce must give the facilities
that may be necessary for these purposes. This cannot in any way represent the
interruption or obstruction of the activities and operations that CDE El Bronce
carries out at present, nor will the latter have any





                                       10
<PAGE>   11
obligation to provide services, supplies or materials for such work, even less
so gratuitously.

         It is expressly agreed that during the life of this agreement, Minera
El Bronce or its affiliates will have the right to participate in the biddings,
in equal economic and technical conditions as those offered by third parties,
and may be awarded the performance of the exploration works, exploration and
construction programs. For the same object indicated, furthermore, CDE may
extract, for its own risk and cost, minerals from the mining claims to the
extent and quantities that may be necessary for such purpose, regardless of the
grade of fines and regardless of whether they are oxides, sulfides or of these
metals or others that are associated, such as gold or copper minerals. CDE
shall not make any payment whatsoever to CDE El Bronce for account of the value
of the minerals for the extraction of the minerals to the extent and in the
amounts indicated value of the minerals while this option is effective. CDE
will be fully responsible and accountable for damages, impairments or
deterioration imputable to CDE or that is caused or may be caused to the person
or property of CDE El Bronce or of third parties, as a result or by reason of
the performance of the work referred to in this clause, as well as for the
fulfillment of the legal and regulatory provisions with regard to mining safety
or environmental rules that may be applicable to the exploration operations.

CDE may manifest mining claims and/or ask for exploration concessions within
the area of interest specified in Appendix A hereof during its effectiveness,
acting always in the name and in representation of CDE El Bronce, it being
expressly established, furthermore, that any manifestation or petition that CDE
or any of its dependents, consultants or advisers





                                       11
<PAGE>   12

file within such area of interest during the life of this contract, will be
understood to be made by CDE El Bronce for all purposes, without prejudice of
what is provided in the final paragraph of article 41 of the Mining Code.

         Likewise, CDE binds itself so that any petition, manifestation,
concession or mining right it acquires or decides, promises or takes the option
to acquire from third parties within the area of interest referred to, must be
done in favor of CDE El Bronce and in its representation, unless the Board of
Directors of the latter company does not approve the acquisition, promise or
option in question, in which case the respective petitions, manifestations or
concessions may be acquired, taken in promise or option by CDE in its own name
and interest.


FIFTH.           In the event CDE exercises the option to purchase twenty
ordinary shares of CDE El Bronce, then CDE will pay to Compania Minera El
Bronce the equivalent in national currency of TWO HUNDRED THOUSAND DOLLARS of
the United States of America. This payment must be made by check in the name of
Compania Minera El Bronce that must be delivered on the date the option is
exercised.  In addition, CDE and Compania Minera El Bronce shall cause that
simultaneously the general shareholders' meeting of CDE El Bronce shall
increase the capital of the company and issue the new pertinent shares, through
capitalizing the total amount of the loans in accordance with the sixth clause
hereof, in the case of CDE and through capitalization of the balance of price
resulting from the purchase sale of the mining claims, assets and properties
evidenced in the public deed between ComPania





                                       12
<PAGE>   13
Minera El Bronce and CDE El Bronce of this same date before this same Notary.
For the purpose of such capitalizations, the General Shareholders' Meeting must
resolve the issue of the number of shares that may be necessary in order that
CDE may subscribe a number of shares such that together with the shares it
acquires when the option is exercised it will be the owner of fifty one per
cent of the total shares of CDE El Bronce and Compania Minera El Bronce shall
subscribe a number of shares such that, together with those which it owns at
the date of capitalization, it will hold the remaining forty nine percent. As a
consequence of such capitalization, the By-laws of CDE El Bronce must be
modified and shall substantially be those contained in Annex B hereto.


SIXTH.           It is a condition precedent to maintain this option in effect
and to be able to exercise it validly, that CDE shall have made local loans to
CDE El Bronce, in their equivalent in pesos national legal currency, in
accordance with the "observed dollar~ exchange rate established by the Central
Bank of Chile in effect on the business day prior to the date of the respective
actual payment, in the amounts and dates indicated below:

a)       US$ 4,800,000 of which total US$ 4,050,000 are loaned in this same
act, leaving on record that US$ 750,000 were loaned prior to this date.

b)       US$ 7,869,100, loan that will be made at the latest on July 25, 1995.

c)       US$ 3,934,600, loan that will be made at the latest on July 25, 1996.

d)       US$ 3,866,700, loan that will be made at the latest on July 25, 1997.





                                       13
<PAGE>   14
         The timely granting of the loans mentioned above is a condition to
maintain the option effective, so that if CDE does not make such loans when
due, it will be understood that it has desisted from its option and that,
therefore it has decided not to persevere in this agreement.

         CDE will be entitled to make in advance one or all of the loans
referred to in this clause, and CDE is obliged to accept one or all the loans
made to it. No interest will accrue on the loans indicated in letters a), b),
c) and d), and they will be directed by CDE El Bronce exclusively to the
payment of the installments of price of the Purchase sale referred to in the
preceding fifth clause, expressly authorizing Compania Minera El Bronce to
receive the respective sums directly applying them to such payment, and the
parties binding themselves and CDE El Bronce to proceed as indicated, and CDE
El Bronce promises to record them properly in its accounts by virtue of the
mercantile current account that is agreed in this same act.


SEVENTH:         In addition to the loans and payment indicated in the
preceding clause, CDE binds itself to make expenditures in a Program of
Investments and Explorations that will be agreed mutually between CDE and
Compania Minera El Bronce, with the purpose of increasing the reserves or
calculating the volume or discovering new reserves and increasing the operating
efficiency of the operations in El Bronce orebody, by means of investment in
mining equipment and/or in the ore processing plant, or others tending to
optimize the efficiency of the ongoing mining operations, or in order to cover
working capital requirements or operating deficits, for a sum of up to five
million one hundred and ninety thousand dollars of the United States of
America, according to the





                                       14
<PAGE>   15
same exchange rate indicated in the sixth clause hereof, in line with the
following schedule:

a)       A minimum of three million dollars of the United States of America
before July 25, 1995; and

b)       The balance until completing five million one hundred and ninety
thousand dollars of the United States of America, before July 25, 1996, or on 
a future date if the parties should agree.

         The complete and timely fulfillment of the disbursements in the way of
explorations and investments established in this clause is a condition for CDE
to exercise its option, so that the latter cannot validly exercise it, or
demand the execution of the final purchase sale agreement, if it is not up to
date in the fulfillment of such obligation of expenditures in explorations and
investments, in the minimum amounts indicated above, and in order to evidence
that such expenses in exploration and investment have been made, a report or
certificate from the auditing firm Langton Clarke y Cia. Limitada, or from
another prestigious auditing firm elected by the parties will suffice. Should
CDE decide to exercise its option in advance, the expenses in explorations and
investments that have not been materialized until the date of such decision
must in any event be implemented according to the same schedule established
above, CDE being obliged to make the corresponding disbursements for the
minimum sums indicated in this clause, before CDE El Bronce can be required to
make new explorations and investments with own resources. Once the option has
been exercised and the expenses in explorations and investments committed by
CDE have materialized, any future expenditure in explorations shall be made by
mutual agreement of the parties.





                                       15
<PAGE>   16
         As compensation for the expenses and investments made by CDE in the
expansion of EL Bronce mine and its plant while this option is effective, CDE
has received the ownership of one preferent share in CDE El Bronce. Such share
will have a preference and will remain effective while this option is
effective, and which will consist in the right of CDE to propose the majority
of the members of the Board of Directors of CDE El Bronce, and in the
obligation of the Series A shareholders to appoint those persons proposed by
CDE and in the right to receive fifty one per cent of the profits of the
company. At the time CDE acquires fifty one per cent of the Company's shares,
the preferent share referred to shall lose its preferences and will become an
ordinary share. If CDE does not exercise the option during the period in which
the option is effective, on the business day following that on which the option
has fallen due, CDE will transfer such share to CompanIa Minera El Bronce or
whoever the latter may indicate for a value equivalent in national currency to
one dollar of the United States of America. If CDE does not fulfill its
obligation to transfer such share on the occasion indicated, the arbitrator
appointed in the thirteenth clause hereof shall be authorized to do it in its
name.

EIGHTH.          Should CDE exercise its option, in the form and conditions
indicated in the preceding clauses, the final purchase sale public deed must be
executed and the increase of the capital of CDE El Bronce, the issue and
subscription of the new shares corresponding to the capitalization referred to
above, shall be effected on the same day on which it exercises the option
before the same Notary attesting to this deed or whoever acts in her stead,
succeeds or replaces her. In this same event, the periods that are pending
expiration for the payment of the loans indicated in the sixth clause, shall
expire, and CDE will be obliged to make and CDE El Bronce





                                       16
<PAGE>   17
will be obliged to accept, all the loans that are outstanding at the time the
option is exercised in the way indicated in such clause, and to execute the
purchase sale deed and make the capital increase and the issue of CDE El Bronce
shares on the same day on which the option is exercised. Once CDE has validly
exercised the option, has made all the loans as indicated and has executed the
final purchase sale deed, Compania Minera El Bronce shall be obliged to concur
to execute such purchase-sale deed. If, notwithstanding the fulfillment of the
above conditions, Compania Minera El Bronce should refuse to or should not
concur to execute it on the occasion indicated previously in this clause, CDE
itself may execute an acceptance deed which, only in such case, shall cause the
effects indicated in the final paragraph of article 169 of the Mining Code.

         On the same date on which CDE acquires the twenty shares subject of
this option agreement, Compania Minera El Bronce and CDE as only shareholders
of CDE El Bronce, must concur to a general shareholders' meeting of this
company and agree on the capitalizations of loans and issues of shares
indicated in the fifth clause above that will enable CDE to become the owner of
fifty one percent of all the shares of CDE El Bronce and Compania Minera El
Bronce of the balance of forty nine per cent, in the terms referred to in such
clause.

         If the above is not fulfilled, the arbitrator appointed in the
thirteenth clause of this option agreement shall be authorized to concur and
vote on behalf of Compania Minera El Bronce and of CDE in the General
Shareholders' meeting of CDE El Bronce that has the purpose of increasing the
capital and issue the corresponding shares to be paid by the capitalization of
the credits of CDE and the balance of price of Compania Minera El Bronce within
a period of ten days since





                                       17
<PAGE>   18
the date of the purchase sale or of the unilateral acceptance of the option for
the twenty shares. If for any reason the capitalization of the loans in shares
cannot be made within the time period indicated and subject to such condition,
Compania Minera El Bronce unilaterally promises to sell to CDE thirty ordinary
shares in CDE El Bronce for a value of three hundred dollars of the United
States of America, which must be transferred on the business day following the
date of expiration of the period of ten days already mentioned, authorizing the
arbitrator to concur on behalf of Compania Minera El Bronce in the
corresponding purchase sale deed.

         In this same last event the capitalizations of the loans will be made
in any event, without issuing new shares.


NINTH:           The shares issued by CDE El Bronce subject of this agreement
shall be sold, if CDE elects to acquire them, free from encumbrances,
prohibitions, lawsuits, embargoes and rights of third parties. In the same way,
the mining claims identified in the first clause of this deed, must be free
from all encumbrances, mortgages, prohibitions, embargoes, lawsuits or rights
of third parties. Likewise, Compania Minera El Bronce binds itself to continue
diligently and at its full cost and responsibility, all the proceedings, works,
acts and formalities that may be necessary for the constitution and defense of
the exploitation mining concessions owned by it, located within the area of
interest identified in Annex D attached to this agreement. During the period of
effectiveness of the purchase option, the full and timely payment of the claim
fees for such mining claims shall be for account of CDE El Bronce. If CDE El
Bronce does not make timely payment,CDE shall be authorized to pay such claim
fees





                                       18
<PAGE>   19
directly, and to request the immediate reimbursement of the sums paid for this
purpose.


TENTH:           In the event CDE expressly gives notice of its decision not to
persevere in this option agreement, as provided for in the final part of the
preceding third clause, the option will lapse by law after ten calendar days
have run since the remittance of the certified letter mentioned in that clause.
In this event, CDE shall not be obliged to make any other loan or payment of
those detailed in the sixth clause, or make the investments and expenditures
detailed in the seventh clause that have not been made enforceable on the date
on which the purchase option has lapsed.

ELEVENTH:        Should CDE desist from its option as indicated in the
preceding clause, or for any other reason the option is understood to be
desisted or lapsed, all the sums that CDE El Bronce has received or could have
received as loans by virtue of this option agreement, shall remain in its full
benefit in the way of compensation and as only indemnification for the
facilities, rights and authorities given to CDE under the fourth clause hereof.
Before the expiration of the period of one hundred and twenty calendar days
since the date on which the option lapses or is understood to be desisted, CDE
must send to CDE El Bronce a report on the work performed and deliver to it,
without cost or charge for the latter, the data, background, results and
reports on the exploration work performed in the mining claims individualized
in the first clause, and those which are located within the area of interest
defined in the second clause. Within this same time period, CDE must remove, at
its exclusive cost, all the equipment, property, machinery and camps it may
have introduced in the mining claims, with





                                       19
<PAGE>   20
the exception only of those properties that, because of their nature and/or
destination cannot be removed from the mining claims, due the risk of causing
cave-ins or landslides, all of which shall inure to the benefit of the mining
claims, without charge or cost of reimbursement for CDE El Bronce. Likewise,
within the aforementioned period of one hundred and twenty days, CDE must
transfer to CDE El Bronce any mining manifestation, petition or concession that
it may have applied for, constituted or acquired in its own name within the
area of interest specified in Annex D hereof, with the exception of those that
it could have validly acquired in accordance with what is provided for in the
fourth clause of this document. The price or value of the transfer, if
pertinent, is established hereby in the sum corresponding to the rate of
manifestation, to the rate of petition, or to the last claim fee paid, as may
be the case.


TWELFTH.         CDE El Bronce binds itself not to encumber and/or alienate the
ownership of the mining claims or mining rights, nor to enter into any kind of
contract therein, and thus imposing on itself voluntary prohibition to encumber
and alienate them. In addition, COMPANIA Minera El Bronce binds itself not to
encumber and/or dispose of the shares of which it is the owner in CDE El
Bronce, while this option is in effect. The prohibitions consented by this
clause shall subsist while this agreement is in effect, and if such is the
case, until the execution and inscription of the final purchase sale deed as
well as the new shares issued after the CAPITAL increase of CDE El Bronce have
been registered in the name of CDE in the Shareholders' Register of CDE El
Bronce. Once the option has become extinguished or lapsed, or the public deed
of purchase sale of fifty one per cent of the mining claims subject thereof has
been executed, the





                                       20
<PAGE>   21
prohibitions mentioned before shall be understood to be automatically released,
without the need of a new declaration in this sense.  During the life of this
option agreement, furthermore, CDE El Bronce may not assign or transfer to
third parties in any way, the right to extract ore from the mining claims owned
by the company whose shares are the subject of this agreement.


THIRTEENTH:      In the event any difficulty, difference of opinions, dispute
or controversy should arise in relation to the stipulations of this agreement,
whether related with their validity, interpretation, performance of resolution,
such difficulty, difference, dispute or controversy shall be submitted to
arbitration. The parties hereby appoint Mr. Pedro Doren Swett as arbitrator and
if he should not be able to or should not wish to accept the office, they
appoint Mr. Ricardo Rivadeneira Montreal, who will have the nature of
arbitrators ex aequo et bono. Mr. Pedro Doren Swett or Mr. Ricardo Rivadneira
Montreal, as the case may be, are authorized to determine the rules of
procedure, including insofar as the form of notice to the parties is concerned,
but in any event the first notice must be served personally or in accordance
with what is provided in article 44 of the Code of Civil Procedure. If neither
of the persons mentioned above is available, the arbitrator will be appointed
by mutual agreement by the parties, and in the absence of such agreement, the
appointment will be made by the Civil Judge of Santiago sitting at the time,
but in this case the arbitrator, who will act without appeal, must be a lawyer
and shall act as arbitrator in the procedure and arbitrator at law in the
award. For this purpose the appointment may only fall on a person who has been
associate justice of the Supreme Court or of the Court of 1Appeals over at
least two





                                       21
<PAGE>   22
consecutive periods. The seat of the tribunal will be the city of Santiago.
There will be no appeal on the judgment, which is expressly waived by the
parties. Authorization is given hereby to the arbitrator in the event he should
be requested to (i) sign the public deed implementing the purchase sale of the
shares of CDE El Bronce on behalf of CDE and/or Compania Minera El Bronce, and
(ii) attend general shareholders' meetings of CDE El Bronce on behalf of CDE
and/or Compania Minera El Bronce and vote on the shares held by CDE or Compania
Minera El Bronce to increase the capital of CDE El Bronce and consider as paid
the shares issued by capitalization of the loans granted by CDE and Compania
Minera El Bronce.


FOURTEENTH:      For all purposes derived from this agreement, the parties
establish their domicile in the city and Commune of Santiago, Chile.

FIFTEENTH        The bearer of an authorized copy of this deed is authorized to
request and sign the inscriptions, subsinscriptions and annotations that may be
pertinent in the competent Custodians of Mines, as well as to sign and file the
memoranda that such Custodian may require for this purpose.

AUTHORITIES.     The authority of the directors of Compania Minera El Bronce to
represent this company is evidenced by the public deeds delivered before the
Notary Mr. Raul Perty Pefaur on June 23, 1993, on November 4, 1993 and on
September 30, 1994.





                                       22
<PAGE>   23
The authority of Mr. Michael Charles Tippett to represent CDE Chilean Mining
Corporation is evidenced by the power legalized in the Notary of Mrs. Maria
Gloria Acharan Toledo under number 1453 of January 22, 1991, which was
delivered on December 4, 1990 before the Notary Public of Idaho, Mrs. Mary
Eixenberger, in the city of Coeur D'Alene, Idaho, United States of America.

The authority of CDE Chilean Mining Corporation to represent Compania Minera
CDE El Bronce is evidenced by the public deed delivered before me on October
11, of this year. The aforementioned documents are not inserted as they are
known to the parties and the attesting notary.

IN WITNESS WHEREOF and after reading, the appearing parties sign. Copy is
given. ExemPt from taxes.  This deed was noted in the Digest of Public
Instruments on this same date. Attest


PP.         "COMPANIA MINERA EL BRONCE~

            MAXIMILIANO CALLEJAS CALLEJAS

            EDDA CALLEJAS MIRANDA

            VERONICA ROJAS CALLEJAS

PP.         CDE CHILEAN MINING CORPORATION AGENCIA CHILE

            MICHAEL CHARLES TIPPETT





                                       23

<PAGE>   1


                                                                     EXHIBIT  21



            LIST OF SUBSIDIARIES OF COEUR D ALENE MINES CORPORATION



The following is a list of the wholly owned subsidiaries of Coeur d'Alene Mines
Corporation.


<TABLE>
<CAPTION>
                       Name of Subsidiary                                 State of Incorporation
                       ------------------                                 ----------------------
             <S>                                                                    <C>
             Coeur Rochester, Inc.                                                  Delaware
             Coeur Bullion                                                           Idaho
             Coeur Explorations, Inc.                                                Idaho
             Coeur Alaska, Inc.                                                     Delaware
             Royal Apex Corporation                                                 Montana
             Coeur In Situ, Inc.                                                     Nevada
             CDE Chilean Mining Corp.                                               Delaware
             Callahan Mining Corporation                                            Arizona
</TABLE>




The following is a list of the subsidiaries of Callahan Mining Corporation:


<TABLE>
<CAPTION>
                                                              State of                     Percentage
              Name of Subsidiary                           Incorporation                  of Ownership
              ------------------                           -------------                  ------------
<S>                                                         <C>                              <C>
Coeur New Zealand, Inc.                                       Delaware                       100.0%
Flexaust Canada Limited                                       Ontario                        100.0%
Pinnacle Exploration, Inc.                                    Colorado                        87.2%
Livengood Placers, Inc.                                        Nevada                         79.5%
Flexaust, Incorporated *                                      Delaware                        50.0%
Flexaust Company *                                          West Germany                      50.0%
</TABLE>




* These companies are included in the consolidated financial statements under
the equity method of accounting.

<PAGE>   1

                                                                      EXHIBIT 23





                        CONSENT OF INDEPENDENT AUDITORS


We consent to the incorporation by reference in the Registration Statement
(Form S-3) and in the related prospectus of Coeur d'Alene Mines Corporation
pertaining to the registration of $100,000,000 of 6 3/8% Convertible
Subordinated Debentures Due 2004 and to the incorporation by reference in the
Registration Statement (Form S-8) pertaining to the Long-Term Incentive Plan of
Coeur d'Alene Mines Corporation, of our report dated February 10, 1995 with
respect to the consolidated financial statements and schedules of Coeur d'Alene
Mines Corporation included in the Annual Report (Form 10-K) for the year ended
December 31, 1994.




Seattle. Washington
March 24, 1995

<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
Hercules Incorporated 1994 10-K
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-END>                               DEC-31-1994
<CASH>                                      15,147,908
<SECURITIES>                               128,112,407
<RECEIVABLES>                               12,881,456
<ALLOWANCES>                                         0
<INVENTORY>                                 35,946,125
<CURRENT-ASSETS>                           192,087,896
<PP&E>                                      88,468,531
<DEPRECIATION>                              39,947,983
<TOTAL-ASSETS>                             412,842,683
<CURRENT-LIABILITIES>                       18,541,842
<BONDS>                                    225,000,000
<COMMON>                                    16,633,163
                                0
                                          0
<OTHER-SE>                                 143,659,119
<TOTAL-LIABILITY-AND-EQUITY>               412,842,683
<SALES>                                     91,022,592
<TOTAL-REVENUES>                           103,879,913
<CGS>                                       78,065,844
<TOTAL-COSTS>                               78,065,844
<OTHER-EXPENSES>                            29,493,327
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                          11,399,082
<INCOME-PRETAX>                            (3,679,258)
<INCOME-TAX>                                   263,306
<INCOME-CONTINUING>                        (3,942,564)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                               (3,942,564)
<EPS-PRIMARY>                                    (.26)
<EPS-DILUTED>                                        0
        

</TABLE>



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