AGWAY INC, S-8, 1994-06-10

AGWAY INC
S-8, 1994-06-10
PETROLEUM BULK STATIONS & TERMINALS

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<PAGE>1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 10, 1994
Registration No. 33-
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- ----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-8
REGISTRATION STATEMENT under THE SECURITIES ACT OF 1933

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

AGWAY INC.
(Exact name of registrant as specified in its charter)
DELAWARE 15-0277720
(State of incorporation) (I.R.S. Employer Identification Number)

333 Butternut Drive, DeWitt, New York 13214
(Address of principal executive offices)

AGWAY INC. EMPLOYEES' THRIFT INVESTMENT PLAN
(Full title of the plan)
Copy to:
NELS G. MAGNUSON, Esq. DAVID M. HAYES, Esq.
AGWAY INC. AGWAY INC.
BOX 4933 BOX 4933
Syracuse, New York 13221-4933 Syracuse, New York 13221-4933
(Name and address of agent for service)
315-449-6412
(Telephone number, including area code,
of agent for service)
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>

Proposed maximum Proposed maximum
Title of each class of Amount to be offering price aggregate offering Amount of
securities to be registered registered per unit price registration fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

Participations in Agway Inc.
Employees' Thrift Investment Plan . . $ 12,000,000 $ 1.00 $ 12,000,000 $ 4,137.96

</TABLE>
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PAGE 1 OF 68. EXHIBIT INDEX APPEARS ON SEQUENTIALLY NUMBERED PAGE 3.
<PAGE>2
The purpose of this Registration Statement is to register
additional participations in the Agway Inc. Employees' Thrift
Investment Plan. Participations were previously registered on Form
S-8 on November 30, 1990 (Registration No. 33-38053).

PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by Agway and the Plan with the
Securities and Exchange Commission pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 are incorporated herein by
reference:

a) The Annual Report on Form 10-K of Agway Inc. and
consolidated subsidiaries for the year ended
June 30, 1993.

b) The Plan's Annual Report on Form 11-K filed as an
Exhibit to the Annual Report of Agway Inc. on Form
10-K for the fiscal year ended June 30, 1993.

c) All other reports filed by Agway or the Plan pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of
1934 subsequent to June 30, 1993.

All documents filed by Agway or the Plan pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 from
the date hereof and prior to the filing of a post-effective amendment,
which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date
of filing of such documents.

Item 4. DESCRIPTION OF SECURITIES

Not applicable.

Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

Legal matters in connection with the securities offered by the
Plan have been passed upon for Agway by Nels G. Magnuson, Esq.,
Associate General Counsel and Assistant Secretary of the Company;
Mr. Magnuson is also a member of the Employee Benefit Plans
Administration Committee for the Agway Inc. Employees' Thrift
Investment Plan. Agway has received an opinion from Mr. Magnuson
that the Plan is qualified under Section 401(a) of the Internal Revenue
Code and complies with the provisions of ERISA.

Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS:

Article 12 of Agway's By-Laws states as follows:

"12. INDEMNIFICATION - To the fullest extent possible
under the provisions of the Delaware General Corporation Law
and in the manner provided for thereunder, the Corporation
shall indemnify any person, who is or was a director, officer,
employee or agent of the corporation or any person who is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise."

Section 145 of the Delaware General Corporation Law permits
a corporation to indemnify its officers and directors against liabilities
as provided for in Agway's By-Laws. Under the terms of a directors
and officers liability and corporation reimbursement policy purchased
by Agway, each of the directors and officers of Agway is insured
against loss arising from any claim or claims which may be made
during the policy period by reason of any wrongful act (as defined in
the policy) in their capacities as directors or officers. In addition,
Agway is insured against loss arising from any claim or claims which
may be made during the policy period against any director or officer
of Agway by reason of any wrongful act (as defined in the policy) in
their capacities as directors or officers, but only when the directors or
officers shall have been entitled to indemnification by Agway.
<PAGE>3

Item 7. EXEMPTION FROM REGISTRATION CLAIMED

Not applicable.

Item 8. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4 Agway Inc. Employees' Thrift Investment Plan

5 Copy of Opinion of Counsel, Nels G. Magnuson,
Esq., as to compliance with ERISA

15 Inapplicable

23 Consent of experts and counsel

24 Inapplicable

27 Inapplicable

28 Inapplicable

29 Inapplicable
</TABLE>
<PAGE>4

UNDERTAKINGS

The undersigned registrant hereby undertakes:

A. 1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

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

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

c. To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement, including (but
not limited to) any addition or deletion of a managing
underwriter;

2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof;

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

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

C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

<PAGE>5
SIGNATURES

The Registrant. Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the Town of DeWitt, and
the State of New York, on the 8th day of June 1994.

AGWAY INC.
(Registrant)

By CHARLES F. SAUL
President, CEO and
General Manager
(Principal Executive Officer)

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

Signature Title Date

<S> <C> <C>
CHARLES F. SAUL President, CEO and June 8, 1994
General Manager
(Principal Executive Officer)

PETER J. O'NEILL Senior Vice President, June 8, 1994
Finance & Control
(Principal Financial Officer
& Principal Accounting Officer)

RALPH. HEFFNER Chairman of the June 8, 1994
Board and Director

CHARLES C. BROSIUS Vice Chairman of the June 8, 1994
Board and Director

RICHARD C. CALL Director June 8, 1994

VYRON M. CHAPMAN Director June 8, 1994

EUGENE FREUND Director June 8, 1994

</TABLE>
<PAGE>6
<TABLE>
<CAPTION>
Signature Title Date

<S> <C> <C>
PETER D. HANKS Director June 8, 1994

FREDERICK A. HOUGH Director June 8, 1994

STEPHEN P. JAMES Director June 8, 1994

ROBERT L. MARSHMAN Director June 8, 1994

SAMUEL F. MINOR Director June 8, 1994

DONALD E. PEASE Director June 8, 1994

JOHN H. ROSS Director June 8, 1994

CARL D. SMITH Director June 8, 1994

THOMAS E. SMITH Director June 8, 1994

JOHN H. TALMAGE Director June 8, 1994

JOEL L. WENGER Director June 8, 1994

CHRISTIAN F. WOLFF, JR. Director June 8, 1994

WILLIAM W. YOUNG Director June 8, 1994
</TABLE>
<PAGE>7

The Plan. Pursuant to the requirements of the Securities Act of
1933, the trustees (or other persons who administer the Plan) duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of DeWitt, and State of New York, on
the 8th day of June 1994.

AGWAY INC. EMPLOYEES' THRIFT INVESTMENT PLAN

By ROBERT T. ENGFER
Chairman, Administration Committee

<PAGE>1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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EXHIBITS

filed with

Form S-8

REGISTRATION STATEMENT

under

THE SECURITIES ACT OF 1933

AGWAY INC.

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<PAGE>2

EXHIBIT INDEX

EXHIBIT NUMBER

(4) Instruments defining the rights of security holders:
Agway Inc. Employees' Thrift Investment Plan . . . . . . . . .Page 3

(5) Opinion of counsel. . . . . . . . . . . . . . . . . . . . . . Page 4

(15) Letter re unaudited interim financial information . . . Inapplicable

(23) Consents of experts and counsel . . . . . . . . . . . . . . . Page 5

(24) Power of attorney . . . . . . . . . . . . . . . . . . . Inapplicable

(27) Financial data schedule . . . . . . . . . . . . . . . . Inapplicable

(28) Information from reports furnished to state
insurance regulatory authorities. . . . . . . . . . . . Inapplicable

(29) Additional exhibits . . . . . . . . . . . . . . . . . . Inapplicable

<PAGE>3

EXHIBIT 4

<PAGE>4

AGWAY, INC.

EMPLOYEES' THRIFT INVESTMENT PLAN

<PAGE>5

AGWAY, INC.

EMPLOYEES' THRIFT INVESTMENT PLAN

TABLE OF CONTENTS

Page

Section 1 - Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .1

Section 2 - Participation and Enrollment. . . . . . . . . . . . . . . . . . 8

Section 3 - Participants' Investments . . . . . . . . . . . . . . . . . . . 8

Section 4 - Company Contributions . . . . . . . . . . . . . . . . . . . . 10

Section 5 - Limitations on Contributions. . . . . . . . . . . . . . . . . 11

Section 6 - Investment of Participants' Investments
and Company Contributions . . . . . . . . . . . . . . . . . . 22

Section 7 - Investment Funds. . . . . . . . . . . . . . . . . . . . . . . 23

Section 8 - Maintenance and Valuation of Participants' Accounts . . . . . 24

Section 9 - Vesting of Participants' Investments
and Company Contributions . . . . . . . . . . . . . . . . . . 24

Section 10 - Withdrawal or Suspension of Participants'Investments
and Company Contributions While Employed . . . . . . . . . . 27

Section 11 - Loans to Participants. . . . . . . . . . . . . . . . . . . . 29

Section 12 - Withdrawal of Participants' Investments & Company
Contributions Upon Termination of Employment . . . . . . . . 31

Section 13 - Disbursements From Funds . . . . . . . . . . . . . . . . . . 34

Section 14 - Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . 35

Section 15 - Administration . . . . . . . . . . . . . . . . . . . . . . . 35

Section 16 - General Provisions . . . . . . . . . . . . . . . . . . . . . 38

Section 17 - Qualified Domestic Relations Orders. . . . . . . . . . . . . 39

Section 18 - Top-Heavy Requirements . . . . . . . . . . . . . . . . . . . 42

<PAGE>1

AGWAY, INC.
EMPLOYEES' THRIFT INVESTMENT PLAN

Originally effective as of October 1, 1965, Agway, Inc.
established a savings plan for Employees known as the Agway
Employees' Incentive Thrift Plan. The name of the plan was changed
in 1984 to the Agway, Inc. Employees' Thrift Investment Plan (the
Plan). The purposes of the Plan are to stimulate personal savings on
the part of the employees by furnishing them with an incentive through
contributions by the Company matching a portion of their savings, to
give employees an opportunity to acquire securities of the Company
and become more interested in Company affairs, to provide additional
funds at retirement to supplement the benefits provided under any
Agway retirement plan and to provide an additional source of funds
prior to retirement in the event of need. Agway, Inc. hereby amends
and restates the Plan, effective as of July 1, 1989, unless otherwise
stated, in accordance with the following terms and conditions. The
Plan is intended to qualify as a profit sharing plan that includes a cash
or deferred arrangement within the meaning of Code Section 401(k).

Section 1 - Definitions
- -----------------------

1.01 "Additional Contributions" shall mean that portion of a
Participant's Investments made on a Compensation deduction
basis prior to July 1, 1984, which were in excess of 6% of
his Compensation and which were not matched by Company
Contributions. Effective July 1, 1987, Additional Contri-
butions also shall include that portion of a Participant's
Investments made on a Compensation deduction basis on and
after July 1, 1987, which were in excess of 6% of his
Compensation and which are not matched by Company
Contributions.

1.02 "Additional Investments" shall mean that portion of a
Participant's Investments made on a Compensation reduction
basis on and after July 1, 1984, which were in excess of 6%
of his Compensation and which are not matched by Company
Contributions.

1.03 "Administration Committee" means the Employee Benefit
Plans Administration Committee of Agway, Inc., which is
the committee responsible for the general administration of
the Plan as provided in Section 15.

1.04 "After-Tax Investments" means the contributions made by a
Participant to the Plan on a Compensation deduction basis
pursuant to Section 3.01(a).

1.05 "Board of Directors" means the Board of Directors of
Agway, Inc.

1.06 "Bond Fund" means the Investment Fund described in
Section 7.03.

1.07 "Bonus Contribution" means the discretionary Company
Contribution in excess of 10% of a Participant's Regular
Investments that may be made pursuant to Section 4.01.

1.08 "Cash Fund" means the Investment Fund described in
Section 7.04.

1.09 "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and applicable implementing
regulations and rulings. References to any section of the
Code shall include any applicable successor section or
provision.

1.10 "Company" means Agway, Inc. and any successor by
purchase, merger or otherwise; and any such of its subsid-
iaries and affiliates as shall, from time to time, be authorized
by the Board of Directors to participate in the Plan, provided
such subsidiary or affiliate is authorized by its board of
directors to participate and makes or causes to be made
contributions as provided herein with respect to each Partici-

<PAGE>2

pant in the Plan who is its employee. Entities participating
in the Plan shall be identified on Appendix A to the Plan.

1.11 "Company Contributions" means the amount of Guaranteed
Contributions and Bonus Contributions which the Company
pays into the Plan in accordance with the terms of Section
4.01.

1.12 "Company Security Fund" means the Investment Fund
described in Section 7.01.

1.13 "Compensation"

(a) Generally, Compensation means an Employee's
base pay, plus commissions, paid to the Employee
for services rendered to the Company, excluding
overtime pay, bonuses or other extra or special pay,
all as determined prior to any reduction pursuant to
Sections 3.01(b) and 3.02.

(b) For purposes of determining the base pay for an
Employee who is a commission salesperson, the
following formula is to apply:

(i) At the time of entry into the Plan, the
Employee's base pay shall be the annual
equivalent of total compensation received
for the previous 24 months or fraction
thereof, based on the average total monthly
compensation (base pay plus commission)
for such period.

(ii) After having been a Participant in the Plan
for one year, the Employee's base pay
shall thereafter be adjusted on January first
of each year and shall be the annual aver-
age of total compensation (base pay plus
commissions) received for the previous 24
months period or fraction thereof.

(c) The base pay for Employees paid on an hourly
basis shall be the annual equivalent determined by
multiplying the base hourly rate by the regular
schedule of hours per week in effect for the unit or
for the job, whichever is less. Premium rates are
to be used in computing the annual equivalent
where the regularly scheduled work week is in
excess of 40 hours.

(d) Income derived from incentive payments qualifies
as Compensation if it results from:

(i) Straight commission or piece work rate.

(ii) Straight commission or piece work rate
with a drawing account or minimum guarantee

(iii) Base salary plus commission or piece work
rate on volume in excess of a stated vol-
ume level. Rates may be on ascending or
descending scale or vary with stipulated
volume brackets.

As a basic rule, incentive payments described in
this subsection (d) must result from a continuing,
year-round wage agreement.

(e) The following types of payments are excluded from
Compensation:

(i) Payments for achieving or exceeding goals
in connection with a special program on
sales, credit, costs or other items (i.e.,
booster programs).

(ii) Special payments or prizes made under a
competitive formula (i.e., booster pro-
grams).

<PAGE>3

(iii) Any trip or merchandise payment.

(iv) Special payments for activities unrelated to
the regular job (i.e., Member Insurance
referral incentive).

(v) Special payments made to exempt Employ-
ees exclusive of commissions or piece
work rates.

(vi) Special payments made from profit-sharing
arrangements, or the equivalent.

(f) During an Employee's first year of employment,
the Employee's Compensation will be:

(i) The amount specified as the Employee's
base pay, or

(ii) The amount based on estimated earnings
specified by the Employee's personnel
manager consisting of base pay and a
conservative commission estimate.

(g) For an Employee transferred from a straight salary
position to a commission program, the Employee's
Compensation following the transfer will be deter-
mined as follows:

(i) Until the Employee completes the first full
calendar year following the transfer, the
Employee's Compensation shall equal the
Employee's annual base pay determined
immediately before the transfer.

(ii) At the end of the first full calendar year
following the transfer, the Employee's
Compensation for the second calendar year
shall equal the Employee's actual base pay
and commission of the first full year, with
the new amount effective January 1.

(iii) The Employee's Compensation for all
succeeding years shall be determined in
accordance with Section 1.13(b)(ii).

(h) In addition to other applicable limitations which
may be set forth in the Plan and notwithstanding
any other contrary provision of the Plan, Compen-
sation taken into account for any purpose under the
Plan for any Plan Year shall not exceed $200,000.
As of January 1 of each calendar year, beginning
with 1990, the applicable limitation as determined
by the Commissioner of Internal Revenue for that
calendar year shall become effective as the maxi-
mum compensation to be taken into account for
Plan purposes for the Plan Year that begins in that
calendar year, in lieu of the $200,000 limitation set
forth in the preceding sentence. In applying this
limitation, the Compensation of a Participant who
is (i) a five percent owner, or (ii) a Highly Com-
pensated Employee and one of the ten most highly-
paid Highly Compensated Employees, ranked on
the basis of compensation (within the meaning of
Code Section 414(q)(6)) paid by the Company
during the Plan Year, shall be treated as including
the Compensation of his spouse and any lineal
descendants who have not attained age 19 before
the close of the Plan Year. If the limitation is
exceeded, it shall be prorated among the affected
individuals, in proportion to the Compensation of
each individual, prior to the application of the
limitation.

1.14 "Current Market Value" of securities held by the Trustee
under the Plan shall be determined by the Trustee at their
last published sale price on the New York Stock Exchange
or any other stock exchange or exchanges, or, if no sale
shall have been recorded in the case of over-the-counter
quotations, the last bid price at the close of business on the
day as of which the valuation is made or, if it be a holiday,
on the last business day preceding or as reported by a report
of such transactions in common use. If a security is listed on
two or more exchanges, the Trustee shall determine from
time to time the particular

<PAGE>4

exchange which shall be used for purposes of this paragraph.
The value of any security which is not listed or dealt in on
any exchange shall be determined from any published quotations of
sale price or bid price which may be available to the Trustee, or,
in the discretion of the Trustee, quotations by a reputable broker
dealing in such securities may be used. Investments which are not
currently quoted shall be appraised at their fair market value
in the opinion of the Trustee. Any valuation made by the
Trustee as herein provided shall be conclusive as to the
value of the trust (subject to deduction of expenses or other
obligations of the trust fund) and shall be binding upon all
persons interested in the Plan.

1.15 "Employee" means any person who receives compensation
from the Company other than a pension, retirement allow-
ance, retainer or fee under contract, which compensation is
reported to the Internal Revenue Service on Form W-2.
Such term shall not include any Employee included in a
collective bargaining unit unless the collective bargaining
agent for that unit has agreed to coverage under the Plan for
one or more persons in that unit. In the case of any person
who is a "leased employee" of the Company, as that term is
defined under Code Section 414(n), the entire period during
which he has performed services for the Company, a
Subsidiary or an Affiliate in such capacity shall be treated as
continuous service hereunder for purposes of determining
eligibility for participation and vesting under the Plan, except
that he shall not by reason of such status become a Partici-
pant under the Plan.

1.16 "Enrollment Date" means the first day of any month during
which a Compensation deduction and/or reduction is made.

1.17 "Guaranteed Contribution" means the Company Contribution
of 10% of a Participant's Regular Investments that will be
made pursuant to Section 4.01.

1.18 "Highly Compensated Employee" shall mean a highly
compensated employee within the meaning of Code Section
414(q), for Plan Years beginning after December 31, 1986.
As set forth below, the term "Highly Compensated Employ-
ee" includes highly compensated active employees and highly
compensated former employees. In the following subsec-
tions, the term "determination year" means the current Plan
Year.

(a) Highly Compensated Active Employee: A highly
compensated active employee includes any Employ-
ee who performs service for the Company during
the determination year and who:

(i) Received compensation in excess of $75,0-
00, as indexed pursuant to Code Section
414(q), during the determination year;

(ii) Received compensation in excess of $50,0-
00, as indexed pursuant to Code Section
414(q), during the determination year, and
was a member of the top-paid group for
such year (generally, the top 20 percent of
employees ranked on the basis of compen-
sation);

(iii) Was an officer (as defined in Code Section
416(i)) of the Company and received
compensation during the determination
year that is greater than 50 percent of the
dollar limitation in effect under Code
Section 415(b)(1)(A) during the year (if no
officer has satisfied this compensation
requirement, the highest-paid officer shall
be treated as a Highly Compensated Em-
ployee); or

(iv) Was a five-percent owner (as defined in
Code Section 416(i)(1)) of the Company at
any time during the determination year.

(b) Highly Compensated Former Employee: A highly
compensated former employee includes any Employee who
separated from service (or was deemed to have separated)
prior to the determination year, performs no service
for the Company during the determination year and was

<PAGE>5

a highly compensated active employee for either the
separation year or any determination year ending on or
after the Employee's 55th birthday.

(c) Family Member Aggregation Rule: If an Employee
is, during a determination year, a family member of
either: (i) a five-percent owner who is an active or
former Employee or (ii) a Highly Compensated
Employee who is one of the ten most highly-paid
Highly Compensated Employees ranked on the basis
of compensation paid by the Company during such
year, then the family member and the five-percent
owner or top-ten Highly Compensated Employee
shall be aggregated. In such case, the family
member and five-percent owner or top-ten Highly
Compensated Employee shall be treated as a single
Employee receiving compensation and Plan contri-
butions or benefits equal to the sum of such com-
pensation and contributions or benefits of the family
member and five-percent owner or top-ten Highly
Compensated Employee.

(d) Incorporation of Section 414(q): The determination
of who is a Highly Compensated Employee under
the above rules, including the determinations of the
number and identity of employees in the top-paid
group, the top 100 employees, the number of
employees treated as officers, the number and
identity of family members, and the compensation
that is considered, shall be made in accordance with
the terms of Code Section 414(q), which are hereby
incorporated by reference.

(e) Calendar Year Election: The Company has elected
the above definition of Highly Compensated Em-
ployee pursuant to Treasury Regulation Section
1.414(q)-1T, Q&A-14.

1.19 "Hour of Service" shall mean, with respect to any applicable
computation period, (i) each hour for which the Employee
is paid or entitled to payment for the performance of duties
for the Company, a Subsidiary or an Affiliate, (ii) each hour
for which the Employee is paid or entitled to payment by the
Company, a Subsidiary or an Affiliate on account of a
period during which no duties are performed, but not in
excess of 501 hours for any such single continuous period,
and (iii) each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Company, a Subsidiary or an Affiliate, excluding any hour
credited under (i) or (ii). No hours shall be credited on
account of any period during which the Employee performs
no duties and receives payment solely for the purpose of
complying with worker's compensation, unemployment
compensation or disability insurance laws.

The Hours of Service to be so credited shall be determined
pursuant to 29 Code of Federal Regulations Section 2530.20-
0b-2(b) and (c) as promulgated by the United States Depart-
ment of Labor.

1.20 "Investment Committee" means the Employee Benefit Plans
Investment Committee of Agway, Inc., which is the commit-
tee responsible for the management of the assets of the Plan
as provided in Section 15.

1.21 "Investment Fund" means the Company Security Fund, the
Stock Fund, the Bond Fund, and/or the Cash Fund, as the
context may require.

1.22 "Job Disability" or "Job Disabled" means a disability from
bodily injury or disease by reason of which the Employee is
totally incapacitated, mentally or physically, for the further
performance of his duty with the Company, provided that a
physician or physicians as may be designated by the Admini-
stration Committee shall certify, and the Administration
Committee shall find, that such incapacity is likely to be
permanent.

1.23 "Notification"

(a) For purposes of changing the amount of Participant
Investments pursuant to Section 3.04, Notification
means Administration Committee receipt at least
5 business days prior to the month

<PAGE>6

in which the change will be effective of (i) a properly
completed form (provided by the Administration Committee),
or (ii) a properly completed instruction pursuant to
the telephone instruction system ("voice mail"
system) established by the Administration Committee.

(b) For purposes of changing the Investment Fund into
which Participant Investments are directed pursuant
to Section 6.02, Notification means Administration
Committee receipt of (i) a properly completed form
(provided by the Administration Committee) at least
5 business days prior to the Enrollment Date on
which the change will be effective, or (ii) a proper-
ly completed instruction pursuant to the telephone
instruction system ("voice mail" system) established
by the Administration Committee at least one
business day prior to the Enrollment Date on which
the change will be effective.

(c) For purposes of making transfers between Invest-
ment Funds pursuant to Sections 6.04 and 6.05,
Notification means Administration Committee
receipt at least one business day prior to the date on
which the transfer will be effective of (i) a properly
completed form (provided by the Administration
Committee), or (ii) a properly completed instruction
pursuant to the telephone instruction system ("voice
mail" system) established by the Administration
Committee.

(d) For purposes of benefit withdrawals and distribu-
tions pursuant to Section 10 and Section 12, Notifi-
cation means Administration Committee receipt of
a properly completed form (provided by the Admin-
istration Committee) at least 5 business days prior
to the first day of the calendar month during which
the withdrawal or distribution will be paid.

1.24 "Parental Leave" shall mean a period commencing on or
after July 1, 1985, in which the Employee is absent from
work because of the pregnancy of the Employee, the birth of
a child of the Employee or the placement of a child with the
Employee in connection with adoption proceedings, or for
purposes of caring for that child for a period beginning
immediately following such birth or placement.

1.25 "Participant" means any Employee or former Employee who
has elected to participate in the Plan as provided in Section
2, and who (as of the date of determination) has not with-
drawn, or received a distribution of, his entire vested interest
in the Plan.

1.26 "Participant's Investments" or "his Investments" shall mean
a Participant's Regular Investments, Additional Investments,
Additional Contributions, Rollover Investments, and Trans-
ferred Investments, if any.

1.27 "Part-time Employee" means any Employee who, on the
basis of his stated work schedule, is classified as other than
a Regular Employee by the Company.

1.28 "Plan Year" means a twelve (12) month period from July 1
through June 30.

1.29 "Pre-Tax Investments" means the contributions made by a
Participant on a Compensation reduction basis pursuant to
Section 3.01(b).

1.30 "Regular Employee" means any Employee who, on the basis
of his regular, stated work schedule is classified as a
"Regular Employee" by the Company in accordance with
Agway, Inc. Personnel Policy No. 107.

1.31 "Regular Investments" shall mean that portion of the
Participant's contributions as provided in Section 3.01,
which are matched by Company Contributions as provided
in Section 4.01.

<PAGE>7

1.32 "Retirement" means a Participant's separation from service
with the Company (a) upon or after the Participant's attain-
ment of age 55, and (b) after the Participant has qualified for
benefits under the Employees' Retirement Plan of Agway,
Inc.

1.33 "Rollover Investments" shall mean that portion of a Partici-
pant's Investments which were transferred to this Plan either
from another qualified plan or from a rollover individual
retirement account pursuant to Section 3.06.

1.34 "Severance from Service Date" shall mean the earlier of (i)
the date on which an Employee quits, retires, is discharged,
or dies, or (ii) the first anniversary of the first date of an
Employee's absence from service with the Company, a
Subsidiary or an Affiliate for any reason other than (i)
above.

1.35 "Spousal Consent" shall mean written consent given by a
Participant's spouse to a designation by the Participant of a
specified person as beneficiary, other than his spouse, to
receive a benefit under the Plan following the Participant's
death. Such consent must be duly witnessed by a Plan
representative or notary public and shall acknowledge the
effect on the spouse of the Participant's election. A spouse
may not waive the right to consent to future changes in a
Participant's designation of another beneficiary with respect
to which the spouse's consent was obtained initially. A valid
consent with respect to a specified beneficiary cannot be
revoked. The requirement for Spousal Consent may be
waived by the Administration Committee in accordance with
applicable law.

1.36 "Stock Fund" means the Investment Fund described in
Section 7.02.

1.37 "Subsidiary" or "Affiliate" means any company not partici-
pating in the Plan which is (a) a member of a controlled
group of corporations or a group of trades or businesses
under common control (as defined in Code Sections 414(b)
and (c)) of which the Company is a member, (b) a member
of an affiliated service group (as defined in Code Section
414(m)) which includes the Company, and (c) any other
entity that must be aggregated with the Company under Code
Section 414(o). The term controlled group of corporations
has the meaning given in Code Section 1563(a), determined
without regard to subsections (a)(4) and (e)(3)(C).

1.38 "Transferred Investments" shall mean that portion of a
Participant's Investments which were transferred to this Plan
from another qualified plan of the Company pursuant to
Section 3.07. Transferred Investments shall include amounts
received by the Plan form the Retirement Plan for Salaried
Employees of Eastern States Farmers' Exchange Incorporat-
ed.

1.39 "Trustee" means the Trustee provided for in Section 14.

1.40 "Valuation Date" means the last business day of any month.

1.41 "Vesting Service," for an Employee or former Employee
who ceases to be a Participant prior to July 1, 1993, means
service recognized for purposes of vesting under Section 9.
An Employee's Vesting Service shall be a period of service
commencing on his employment or reemployment com-
mencement date, that is the date on which he first performs
an Hour of Service with the Company, a Subsidiary, or an
Affiliate and ending on his Severance from Service Date,
including any period of absence between his Severance from
Service Date and his date of reemployment if such date of
reemployment is within twelve months of his Severance from
Service Date, but excluding any period of service during
which an Employee had the opportunity to make contribu-
tions to the Plan and either (i) failed to file a timely election
to do so, or (ii) elected to withdraw or suspend his Regular
Investments.

<PAGE>8

Section 2 - Participation and Enrollment
- ----------------------------------------

2.01 Continued Participation. Any Employee who was a Partici-
pant in the Plan on June 30, 1976 shall continue to be a
Participant, subject to the other terms and conditions of the
Plan.

2.02 Regular Employees. Upon employment with the Company,
any Regular Employee may become a Participant on any
Enrollment Date following the date of filing of an enrollment
form with the Administration Committee in accordance with
Section 2.04.

2.03 Part-time Employees. Any Part-time Employee who has
satisfied the eligibility and participation requirements under
the Employees' Retirement Plan of Agway, Inc. may
become a Participant on any Enrollment Date following the
date of filing of an enrollment form with the Administration
Committee in accordance with Section 2.04.

2.04 Enrollment Forms. Original enrollment forms (provided by
the Administration Committee) must be received by the
Administration Committee not later than 5 business days
prior to the Enrollment Date described in Section 2.02 or
Section 2.03 (as applicable). Enrollment forms received
later than 5 business days prior to such Enrollment Date will
become effective with the next ensuing Enrollment Date.

2.05 Termination of Participation. A Participant shall cease to be
a Participant on the date he terminates employment with the
Company, a Subsidiary or an Affiliate unless the Participant
is entitled to benefits under the Plan, in which event his
participation shall terminate when those benefits are distrib-
uted to him.

2.06 Effect of Leave of Absence.
(a) An Employee shall retain the status of a Participant
in the Plan, even though not contributing to the
Plan, while on an approved leave of absence as
defined in Agway, Inc. Personnel Policy No. 700.

(b) Upon return from such an approved leave of ab-
sence, the Participant's Investments shall be re-
sumed immediately without election on the Parti-
cipant's part, subject to the suspension provisions of
Section 10.

2.07 Change of Employment Status. A Participant who remains
in the employ of the Company, a Subsidiary, or an Affiliate
but ceases to be an Employee shall continue to be a Partici-
pant in the Plan but shall not be eligible to make any
Participant Investments or receive allocations of Company
Contributions while his employment status is other than as
an Employee.

Section 3 - Participants' Investments
- -------------------------------------

3.01 Regular Investments. Subject to the limitations of Section 5,
a Participant may elect to make Regular Investments to the
Plan of 2% to 6%, in multiples of 1%, of his Compensation.
A Participant's Regular Investments shall be made to the
Plan in one, or a combination, of the following methods as
shall be elected by the Participant:

(a) After-Tax Investments. Under this method, the
Participant's Regular Investments shall be made by
way of Compensation deductions in a manner to be
determined by the Administration Committee.

(b) Pre-Tax Investments. Under this method, a Partici-
pant may, in lieu of making all or a percentage of
his Regular Investments as After-Tax Investments
under paragraph (a) above, elect to have his subse-
quent Compensation reduced, and have that amount
contributed to the Plan by the Company.

<PAGE>9

3.02 Additional Investments. Subject to the limitations of Section
5, a Participant who has elected to make the maximum
amount of Regular Investments under Section 3.01 may elect
to make Additional Investments of not less than 1% and not
more than 9% (14% prior to January 1, 1993), in multiples
of 1%, of his Compensation, as elected by the Participant,
or in such additional amounts above 9% as allowed under
rules adopted by the Administration Committee and uniform-
ly applicable to all Participants similarly situated, provided
that the Additional Investments so elected, when added to the
Regular Investments elected under Section 3.01 and the
Additional Contributions elected under Section 3.03 do not
exceed 15% (20% prior to January 1, 1993) of the Partici-
pant's Compensation, in the aggregate. Such Additional
Investments shall be made by Compensation reduction and
shall be contributed to the Plan by the Company. A Partici-
pant may not make Additional Investments during a payroll
period unless he also is making the maximum amount of
Regular Investments under Section 3.01.

3.03 Additional Contributions. Subject to the limitations of
Section 5, a Participant who has elected to make the full
amount of Regular Investments under Section 3.01 may elect
to make Additional Contributions of not less than 1% and
not more than 9% (14% prior to January 1, 1993), in
multiples of 1%, of his Compensation, as elected by the
Participant, or in such additional amounts above 9% as
allowed under rules adopted by the Administration Commit-
tee and uniformly applicable to all Participants similarly
situated, provided that the Additional Contributions so
elected, when added to the Regular Investments elected
under Section 3.01 and the Additional Investments elected
under Section 3.02 do not exceed 15% (20% prior to
January 1, 1993) of the Participant's Compensation, in the
aggregate. Such Additional Contributions shall be made by
Compensation deduction and shall be contributed to the Plan
by the Company. A Participant may not make Additional
Contributions during a payroll period unless he also is
making the maximum amount of Regular Investments under
Section 3.01.

3.04 Change of Participant Investments. A Participant may
change the amount of his Investments by providing the
Administration Committee with Notification. The effective
date for a change in a Participant's Investments shall be the
beginning of the pay period immediately following the first
day of the ensuing month. A change in a Participant's
Investments pursuant to this Section 3.04 shall not effect any
Compensation deduction required to repay a Plan loan.

3.05 Payment to Trustee. Participant Investments for any month
will be paid by or in respect of the Company to the Trustee
as soon as feasible, but in no event later than 90 days
following the date the Compensation deduction or reduction
is made.

3.06 Rollover Investments. With the permission of the Adminis-
tration Committee granted under rules adopted by said
Committee and uniformly applicable to all Participants
similarly situated, and without regard to any limitations on
contributions set forth in Section 5, the Plan may receive
from or on behalf of a Participant, in cash, any amount
distributable to or previously received by him from a
qualified plan, either directly from such qualified plan,
directly from the Participant within 60 days after such
receipt, or indirectly from a rollover individual retirement
account within the time prescribed by applicable law,
provided that (i) such amount includes no assets other than
those attributable to employer contributions and earnings on
employee contributions under plans qualified under Section
401(a) of the Code, (ii) such amount includes no assets
which are attributable to contributions made while the
Participant was a key employee in a top-heavy plan, as those
terms are defined in Section 416 of the Code; and (iii) such
amount is not subject to the joint and survivor annuity or
pre-retirement survivor annuity requirements of Code
Section 401(a)(11).

3.07 Transferred Investments. With the permission of the
Administration Committee granted under rules adopted by
said Committee and uniformly applicable to all Participants
similarly situated, and without regard to any limitations on
contributions set forth in Section 5, the Plan may accept
from another qualified plan of the Company an amount
which either is transferred to this Plan for the account of the
Participant or which the Participant elects to have transferred
for his account. Such a Transferred

<PAGE>10

Investment will be accepted by the Plan only if the transferred
amount is not subject to the joint and survivor annuity or
pre-retirement survivor annuity requirements of Code Section
401(a)(11).

Section 4 - Company Contributions
- ---------------------------------

4.01 Guaranteed Contributions and Bonus Contributions.

(a) Subject to the provisions of Section 16.03, relating
to the application of Company Contributions forfeit-
ed, the Company shall contribute to the Plan on
behalf of each of its participating Employees an
amount equal to at least 10%, but not more than
50% of the Regular Investments, not in excess of
6% of the Participant's Compensation, made for
each month by or on behalf of each such Partici-
pant. The Guaranteed Contribution of 10% of
Regular Investments for each month shall be paid to
the Trustee promptly after the payment of the
Participant's Investments for such month. The
discretionary Bonus Contribution, if any, above
10% of the Regular Investments shall be paid in
accordance with the terms and conditions described
in subsections (b) and (c) below and shall be paid
no later than the time prescribed by law for filing
the federal income tax return for the Company for
the applicable tax year (including extensions there-
of). The discretionary percentage contribution may
be paid without regard to current or accumulated
earnings and profits, as determined by the Board of
Directors.

(b) Bonus Contributions, if any, shall be allocated to
the Company Security Fund of each Participant who
made Participant Investments during the Plan Year
to which the Bonus Contribution relates and who
has not withdrawn (or received a distribution of) his
entire vested interest in the Plan as of the last day
of the month during which the Bonus Contribution
was authorized by the Board of Directors; provid-
ed, however, that a vested former Employee who
has withdrawn (or received a distribution of) his
entire interest in the Plan as of the last day of the
month during which the Bonus Contribution was
authorized shall receive an allocation of his alloca-
ble share of the Bonus Contribution, based upon his
Participant Investments made during the Plan Year
to which the Bonus Contribution relates.

(c) In the event that the Board of Directors authorizes
a Bonus Contribution to be applied prospectively
during any Plan Year, the Bonus Contribution rate
is to become effective beginning with the pay
period immediately following the first of the next
ensuing calendar month.

4.02 Additional Company Contributions.

(a) In addition to Company Contributions made pursu-
ant to Section 4.01, the Company shall contribute,
if necessary, an additional amount out of current or
accumulated earnings and profits. Such amount
will be that amount necessary to increase the
weighted average annual return on all investments
in the Company Security Fund (except Agway
Subordinated Money Market Certificates) to 1/2 of
1% less than the stated rate plus any declared extra
interest on Agway Member Subordinated Deben-
tures issued and outstanding.

(b) Any contributions made by the Company pursuant
to this Section 4.02 shall be paid as of each Decem-
ber 31 and June 30 (the "payment date") of each
Plan Year. Any such contribution to be made as of
a December 31 payment date shall be based on a
comparison of stated and actual rates of return as
described above for the period June 1 to November
30 inclusive, preceding the payment date. Any
such contribution to be made as of a June 30
payment date shall be based on a comparison of
stated and actual rates of return as described above
for the period December 1 to May 31 inclusive,
preceding the payment date.

<PAGE>11

(c) Subject to the limitations of Section 5.06, any
contributions described in this Section 4.02 shall be
made only with respect to persons who are Partici-
pants as of the relevant payment date and shall be
allocated only to such Participants' accounts and
only to the extent such amounts are invested in the
Company Security Fund on that payment date. For
purposes of maintaining the Company Security
Fund and distributing amounts therefrom, contribu-
tions made pursuant to this Section 4.02 shall be
credited as earnings to accounts invested in such
fund in accordance with Section 8.02.

4.03 Contributions in Stock. In satisfaction of its obligations
under Sections 4.01 and 4.02, the Company may, at its
option, deliver treasury stock or authorized and unissued
shares of cumulative preferred stock of the Company at the
aggregate Current Market Value of the stock so delivered on
the date of delivery.

Section 5 - Limitations on Contributions
- ----------------------------------------

5.01 Limitation on Pre-Tax and Additional Investments.

(a) Compensation Deferral Cap: This Plan shall not
accept Pre-Tax Investments or Additional Invest-
ments in excess of the "Compensation Deferral
Cap" for each Participant for his taxable year, for
taxable years beginning after December 31, 1986.

"Compensation Deferral Cap" means the limit on
Pre-Tax Investments, Additional Investments and
other elective deferrals that can be made for a
Participant for his taxable year. The Compensation
Deferral Cap is a base amount of $7,000, adjusted
as of each January 1 in accordance with Code
Section 402(g)(5).

As further set forth in Code Section 402(g), the
Compensation Deferral Cap applies to a Partici-
pant's total elective deferrals, not only Pre-Tax
Investments and Additional Investments. For this
purpose, the term "elective deferrals" means:

(i) Elective contributions under any qualified
cash or deferred arrangement within the
meaning of Code Section 401(k);

(ii) Company contributions to any simplified
employee pension plan within the meaning
of Code Sections 408(k) or 402(h)(1)(B);

(iii) Company contributions, pursuant to a
salary reduction agreement, to any annuity
contract within the meaning of Code Sec-
tion 403(b);

(iv) Deductible employee contributions to any
trust described in Code Section 501(c)(18);
and

(v) Compensation deferred under any deferred
compensation plan within the meaning of
Code Section 457(b).

The Compensation Deferral Cap applies to such
arrangements of all employers, not only to arrange-
ments of the Company and its Subsidiaries and
Affiliates. To the extent provided in proposed
Treasury regulation Section 1.402(g)-1, the Com-
pensation Deferral Cap can be increased (but not
above $9,500) for an Employee who makes elective
deferrals to an annuity within the meaning of Code
Section 403(b).

<PAGE>12

(b) Distribution of Excess Deferrals: Although the
Plan will not accept Pre-Tax Investments or Addi-
tional Investments above the Compensation Deferral
Cap, a Participant may have excess deferrals when
his elective deferrals under all the above arrange-
ments are added together at the end of his taxable
year. (Any excess amounts returned pursuant to
comply with Code Section 415 are not counted as
elective deferrals.) If this situation arises, the
excess deferrals shall be deemed to have been
distributed to the Participant and reinvested in the
Plan as After-Tax Investments to the extent re-
quired to obtain any Company matching contribu-
tions pursuant to Section 4.01. If there are remain-
ing excess deferrals, the Participant may request the
Administration Committee to distribute all or part
of the excess deferrals from this Plan. Any such
request shall be made and complied with in accor-
dance with the following terms and conditions:

(i) The Participant must request the distribu-
tion in writing, after his taxable year has
ended, but no later than the following
March 1. However, to the extent the
Participant has excess deferrals when only
deferrals under this Plan and any other
plans of the Company (and its Subsidiaries
and Affiliates) are taken into account, the
Participant will be deemed to have request-
ed a distribution of such excess deferrals.
The Administration Committee shall deter-
mine the amount of excess deferrals to be
distributed from each plan.

(ii) Any written request must specify the
amount of the Pre-Tax Investments and
Additional Investments that are being
designated as excess deferrals for distribu-
tion. The designated amount cannot be
greater than the Pre-Tax Investments and
Additional Investments that were made for
the taxable year in question.

(iii) Following a request that satisfies the above
requirements (including a deemed request
under subsection (i) above), the Adminis-
tration Committee shall distribute the
excess deferrals, and allocable income, to
the Participant by the first April 15 after
the Participant's taxable year ends.

(iv) For purposes of subsection (iii) above, the
income allocable to excess deferrals is
equal to the sum of the allocable gain or
loss for the taxable year of the Participant
plus the allocable gain or loss for the
period between the end of the taxable year
and the date of the distribution. The Plan
may use any reasonable method for com-
puting the income allocable to excess
deferrals provided that the method (A) d-
oes not violate Code Section 401(a)(4),
(B) is used consistently for all Participants
and for all corrective distributions under
the Plan for a Plan Year, and (C) is used
by the Plan for allocating income to Parti-
cipants' accounts. Alternatively, the Plan
may use any method for computing income
allocable to excess deferrals which is
specified in Treasury regulation Sec-
tion 1.402(g)-1(e)(5) or other guidance
issued by the Internal Revenue Service.
Any distribution of less than the Partici-
pant's full excess deferrals and allocable
income will be treated as a pro rata distri-
bution of excess deferrals and income.

(c) Coordination with Distribution of Excess Contribu-
tions: Notwithstanding the above provisions of this
Section, the amount of excess deferrals that may be
distributed to a Participant shall be reduced by any
Excess Contributions previously distributed to the
Participant or recharacterized pursuant to Section
5.03.

(d) Incorporation of Section 402(g) by Reference: In
addition to the specific provisions set forth above,
the terms of Code Section 402(g), and implement-
ing regulations are hereby incorporated by reference
into this Plan.

<PAGE>13

5.02 Application of Actual Deferral Percentage Test.

(a) Actual Deferral Percentage Test: For each Plan
Year beginning after December 31, 1986, the
Actual Deferral Percentage (see subsection (b)
below) for the group of Participants who are Highly
Compensated Employees and the Actual Deferral
Percentage for the group of Participants who are
not Highly Compensated Employees shall satisfy
one of the following two tests.

(i) General Rule: The Actual Deferral Per-
centage for the group of Participants who
are Highly Compensated Employees shall
not be more than 1.25 times the Actual
Deferral Percentage for the group of Parti-
cipants who are not Highly Compensated
Employees.

(ii) Alternative Test: The Actual Deferral
Percentage for the group of Participants
who are Highly Compensated Employees
shall not be more than two percentage
points greater than the Actual Deferral
Percentage for the group of Participants
who are not Highly Compensated Employ-
ees. In order to use this alternative test,
the Actual Deferral Percentage for the
group of Participants who are Highly
Compensated Employees must not be more
than twice the Actual Deferral Percentage
for the group of Participants who are not
Highly Compensated Employees.

Notwithstanding the above provisions, for Plan
Years beginning after December 31, 1988, the
terms of Treasury regulation Section 1.401(m)-2
shall be applied to prevent multiple use of the
alternative test in subsection (ii) above and Section
5.04(a)(ii) below to satisfy both the Actual Deferral
Percentage Test and Average Contribution Percent-
age Test.

(b) Actual Deferral Percentage: For both the above
tests, the Actual Deferral Percentage for the group
of Participants who are Highly Compensated Em-
ployees and the Actual Deferral Percentage for the
group of Participants who are not Highly Compen-
sated Employees shall be the average of the following
actual deferral ratios, calculated separately for
each Participant in the respective group:

(i) The amount of "Company contributions"
(as explained below) actually paid over to
the Plan on behalf of such Participant for
the Plan Year, to

(ii) The Participant's "Statutory Compensa-
tion" for the Plan Year.

In making the foregoing calculations, "Company
contributions" on behalf of any Participant shall
include Pre-Tax Investments and Additional Invest-
ments made pursuant to the Participant's deferral
election (including excess deferrals of Highly
Compensated Employees), but exclude (A) excess
deferrals of Participants who are not Highly Com-
pensated Employees that arise solely from Pre-Tax
Investments and Additional Investments and any
elective deferrals made under any other plans of the
Company, and (B) any Pre-Tax Investments and
Additional Investments that are taken into account
in the contribution percentage test described in
Section 5.04 if it needs to be performed (provided
the Actual Deferral Test is satisfied both with and
without excluding the Pre-Tax Investments and
Additional Investments).

"Statutory Compensation" means a Participant's
compensation, determined under any definition that
satisfies Code Section 414(s), and shall be used in
performing the actual deferral percentage test and
the average contribution percentage test. For any
given year, the same definition of Statutory Com-
pensation shall be applied to all Participants in
performing the tests.

In determining Actual Deferral Percentages, the
actual deferral ratio is zero for an Employee who is
eligible to elect, but who does not elect, Pre-Tax
Investments and Additional Investments

<PAGE>14

for a Plan Year. Statutory Compensation shall be taken
into account only for the part of a Plan Year in which
the Employee is eligible to participate in the Plan.
If the Actual Deferral Percentage Test is not satis-
fied initially, corrective actions shall be taken
pursuant to Section 5.03 until the test is satisfied.

(i) Calculation: For Plan Years beginning
after December 31, 1988, the actual defer-
ral ratio for each Participant and the Actu-
al Deferral Percentage for each group shall
be calculated to the nearest one-hundredth
percent.

(ii) Family Member Aggregation Rule: For
purposes of determining the actual deferral
ratio of a Participant who is a five-percent
owner or one of the ten most highly-paid
Highly Compensated Employees, the Pre-
Tax Investments, Additional Investments
and Compensation of such Participant shall
include the Pre-Tax Investments, Addition-
al Investments and Compensation for the
Plan Year of the Participant's family mem-
bers (as defined in Code Section 414(q)-
(6)). Family members with respect to
such Highly Compensated Employees shall
be disregarded as separate Employees in
determining the Actual Deferral Percentage
both for Participants who are not Highly
Compensated Employees and for Partici-
pants who are Highly Compensated Em-
ployees.

(iii) Aggregation of Plans: In the event that
this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4) or 410(b) only
if aggregated with one or more other
plans, or if one or more other plans satisfy
the requirements of such Code Sections
only if aggregated with this Plan, then this
Section 5 shall be applied by determining
the Actual Deferral Percentage of Employ-
ees as if all such plans were a single plan.
Plans may be aggregated in order to satis-
fy Code Section 401(k) only if they have
the same Plan Year. All cash or deferred
arrangements included in a plan are treated
as a single cash or deferred arrangement,
except as otherwise provided under Trea-
sury regulations.

(iv) Aggregation of Highly Compensated Parti-
cipant Contributions: The actual deferral
ratio for any Participant who is a Highly
Compensated Employee for the Plan Year
and who is eligible to have salary reduc-
tion contributions allocated to his account
under two or more arrangements described
in Code Section 401(k), that are main-
tained by the Company (or Subsidiary or
an Affiliate), shall be determined as if
such salary reduction contributions were
made under a single arrangement. If a
Highly Compensated Employee participates
in two or more cash or deferred arrange-
ments that have different plan years, all
cash or deferred arrangements ending with
or within the same calendar year shall be
treated as a single arrangement. Notwith-
standing the foregoing, certain plans shall
be treated as separate if mandatorily dis-
aggregated under Treasury regulations
promulgated under Code Section 401(k).

(v) Plan Year to which Contributions Relate:
For purpose of determining the Actual
Deferral Percentage test, salary reduction
contributions must be made before the last
day of the twelve-month period immedi-
ately following the Plan Year to which the
contributions relate.

(vi) Company Records: The Company shall
maintain records sufficient to demonstrate
satisfaction of the Actual Deferral Percent-
age test.

<PAGE>15

(vii) Other Requirements: The determination
and treatment of Actual Deferral Percent-
age amounts of any Participant shall satisfy
such other requirements as may be pre-
scribed by the Secretary of the Treasury.

(d) Incorporation of Section 401(k) by Reference: In
addition to the specific provisions set forth above,
the terms of Code Section 401(k) are hereby incor-
porated by reference.

5.03 Adjustments to Comply with the Actual Deferral Percentage
Test. The Administration Committee shall exercise one or
more of the following options, at its discretion, to assure the
Plan's compliance with the Actual Deferral Percentage test.
All such actions shall be taken in a uniform and nondis-
criminatory manner.

(a) Modification of Elections: The Administration
Committee may suspend or reduce Pre-Tax Invest-
ments and/or Additional Investments of Highly
Compensated Employees, despite their elections.

(b) Distribution of Excess Contributions: Pre-Tax
Investments and Additional Investments that exceed
the Actual Deferral Percentage allowable for Parti-
cipants who are Highly Compensated Employees
shall be referred to as "Excess Contributions." The
Administration Committee may distribute Excess
Contributions, and allocable income, to Participants
who are Highly Compensated Employees. The
Administration Committee shall designate any such
distribution as a distribution of Excess Contribu-
tions (and income). The distribution shall be done
as follows:

(i) The actual deferral ratio of the Participant
(who also is a Highly Compensated Em-
ployee) with the highest ratio shall be
reduced until the Actual Deferral Percent-
age test is satisfied, or until his ratio
equals that of the Participant (who also is
a Highly Compensated Employee) with the
next highest ratio, whichever occurs first.
The process is repeated until the Actual
Deferral Percentage test is satisfied.

(ii) If the actual deferral ratio for a Participant
who is a Highly Compensated Employee
was determined under the family member
aggregation rule in Section 5.02, Excess
Contributions shall be allocated among the
group (the Participant and family mem-
bers) in proportion to the Pre-Tax Invest-
ments and Additional Investments (and any
other amounts treated as elective deferrals
under Section 5.02) that were combined to
determine the ratio.

(iii) In determining Excess Contributions under
subsection (i), the amount shall be reduced
by any excess deferrals previously distrib-
uted to the Highly Compensated Partici-
pant for his taxable year ending with or
within the Plan Year of the Excess Contri-
bution.

(iv) The Administration Committee shall return
the Excess Contributions, including alloca-
ble income, to the Company solely for the
purpose of enabling the Company to with-
hold federal, state and local taxes due on
the amounts. The Company will then pay
all remaining amounts to the Participant by
the fifteenth day of the third month follow-
ing the close of the Plan Year to which the
distribution relates, if administratively
feasible. In no event shall the distribution
be made later than twelve months after the
close of that Plan Year. If the distribution
is made after the fifteenth day of the third
month following the close of the Plan Year
to which the distribution relates a ten
percent excise tax will be imposed on the
Company with respect to the distribution.

<PAGE>16

(v) For purposes of subsection (iv) above, the
income allocable to Excess Contributions
is the sum of the allocable gain or loss for
the Plan Year, plus the allocable gain or
loss for the period between the end of the
Plan Year and the date of the distribution.
The Plan may use any reasonable method
for computing the income allocable to
Excess Contributions, provided that the
method (A) does not violate Code Section
401(a)(4), (B) is used consistently for all
Participants and for all corrective distribu-
tions under the Plan for the Plan year, and
(C) is used by the Plan for allocating
income to Participants' accounts. Alterna-
tively, the Plan may use any method for
computing income allocable to Excess
Contributions which is specified in Trea-
sury regulation Section 1.401(k)-1(f)(4) or
other guidance issued by the Internal Reve-
nue Service.

(vi) Any distribution of less than the full
amount of Excess Contributions and allo-
cable income shall be treated as a pro rata
distribution of Excess Contributions and
income.

(vii) Excess Contributions continue to count as
Annual Additions in applying the Code
Section 415 limitations under Section 5.06.

(viii) In the event any Pre-Tax Investments
returned to the Participant were matched
by Company Contributions, then vested
Company Contributions, together with
earnings attributable thereto, shall be
returned to the Participant, and nonvested
Company Contributions, together with
earnings attributable thereto, shall be
forfeited and used to reduce future Company
Contributions.

5.04 Application of Average Contribution Percentage Test.

(a) Average Contribution Percentage Test: For each
Plan Year beginning after December 31, 1986, the
"Average Contribution Percentage" for the group of
Participants who are Highly Compensated Employ-
ees and the "Average Contribution Percentage" for
the group of Participants who are not Highly
Compensated Employees shall satisfy one of the
two tests described in this subsection (a). The term
"Average Contribution Percentage" and other
defined terms used in performing the tests are
defined in subsection (b) below. All applicable
rules in subsection (c) below shall be followed in
performing the Average Contribution Percentage
test.

(i) General Rule: The Average Contribution
Percentage for Participants who are Highly
Compensated Employees shall not be more
than 1.25 times the Average Contribution
Percentage for the group of Participants
who are not Highly Compensated Employ-
ees for the same Plan Year.

(ii) Alternative Test: The Average Contribu-
tion Percentage for the group of Partici-
pants who are Highly Compensated Em-
ployees shall not be more than two per-
centage points greater than the Average
Contribution Percentage for the group of
Participants who are not Highly Compen-
sated Employees. In order to use this
alternative test, the Average Contribution
Percentage for the group of Participants
who are Highly Compensated Employees
must not be more than twice the Average
Contribution Percentage for the group of
Participants who are not Highly Compen-
sated Employees.

(b) Definitions: In performing the Average Contribu-
tion Percentage test, the following terms shall have
the following meanings:

(i) Aggregate Limit shall mean the sum of:
(A) 125 percent of the greater of the Actu-
al Deferral Percentage of the Participants
who are not Highly Compensated Employees for
the Plan Year or the Average Contribution
Percentage of Participants who are not

<PAGE>17

Highly Compensated Employees under the Plan
subject to Code Section 401(m) for the Plan
Year beginning with or within the Plan Year of
the cash or deferred arrangement; and (B) the
lesser of 200 percent or two plus the lesser of
such Actual Deferral Percentage or Average
Contribution Percentage. "Lesser" is
substituted for "greater" in "(A)" above,
and "greater" is substituted for "lesser"
after "two plus the" in "(B)" if it would
result in a larger Aggregate Limit.

(ii) Average Contribution Percentage shall
mean the average of the Contribution
Percentages of the Eligible Participants in
a group of Highly Compensated Employ-
ees or a group of Employees who are not
Highly Compensated Employees.

(iii) Contribution Percentage shall mean the
ratio (expressed as a percentage) of the
Participant's Contribution Percentage
Amounts to the Participant's Statutory
Compensation for the Plan Year.

(iv) Contribution Percentage Amounts shall
mean the sum of any After-Tax Invest-
ments, Additional Contributions and Com-
pany Contributions that are made under the
Plan on behalf of the Participant for the
Plan Year, subject to the following limita-
tion. Such Contribution Percentage
Amounts shall not include Company Con-
tributions that are forfeited either to cor-
rect Excess Aggregate Contributions or
because the contributions to which they
relate are excess deferrals, Excess Contri-
butions, or Excess Aggregate Contribu-
tions. The Company also may elect to use
Pre-Tax Investments and Additional Invest-
ments in the Contribution Percentage
Amounts so long as the Actual Deferral
Percentage test is met before the Pre-Tax
Investments and Additional Investments
are used in the Average Contribution Per-
centage test and continues to be met fol-
lowing the exclusion of those Pre-Tax
Investments and Additional Investments
that are used to meet the Average Con-
tribution Percentage test.

(v) Eligible Participant shall mean any Em-
ployee who is eligible to make After-Tax
Investments or Pre-Tax Investments (if
such contributions are taken into account
in the calculation of the Contribution
Percentage), or to receive a Company
Contribution (including forfeitures). Any
Employee who would be a Participant in
the Plan if such Employee made Pre-Tax
Investments shall be treated as an Eligible
Participant on behalf of whom no Pre-Tax
Investments are made.

(vi) Excess Aggregate Contributions shall mean
amounts that exceed the Average Contribu-
tion Percentage allowable for Participants
who are Highly Compensated Employees.

In performing the Average Contribution Percentage
test using the foregoing definitions and the rules in
subsection (c), (A) Statutory Compensation shall be
taken into account only for the part of the Plan
Year in which the Employee is eligible to partici-
pate in the Plan, and (B) an Employee shall be in-
cluded in the appropriate Eligible Participant group
regardless of whether the Employee waives partici-
pation in the Plan.

If the Average Contribution Percentage is not
satisfied initially, corrective actions shall be taken
pursuant to Section 5.05 until the test is satisfied.

<PAGE>18

(i) Calculation: For Plan Years beginning
after December 31, 1988, the Contribution
Percentage for each Participant shall be
calculated to the nearest one-hundredth
percent.

(ii) Multiple Use: If one or more Highly
Compensated Employees participates in
both a cash or deferred arrangement and a
plan subject to the Average Contribution
Percentage test maintained by the Compa-
ny, a Subsidiary or an Affiliate and the
sum of the Actual Deferral Percentage and
Average Contribution Percentage of those
Highly Compensated Employees subject to
either or both tests exceeds the Aggregate
Limit, then the Average Contribution
Percentage of those Highly Compensated
Employees who also participate in a cash
or deferred arrangement will be reduced
(beginning with such Highly Compensated
Employee whose Average Contribution
Percentage is the highest) so that the limit
is not exceeded. The amount by which
each Highly Compensated Employee's
Contribution Percentage Amounts is re-
duced shall be treated as an Excess Aggre-
gate Contribution. The Actual Deferral
Percentage and Average Contribution
Percentage of the Highly Compensated
Employees are determined after any cor-
rections required to meet the Actual Defer-
ral Percentage and Average Contribution
Percentage tests. Multiple use does not
occur if either the Actual Deferral Percent-
age or Average Contribution Percentage of
the Highly Compensated Employees does
not exceed 1.25 multiplied by the Actual
Deferral Percentage and Average Contri-
bution Percentage of the Employees who
are not Highly Compensated Employees.

(iii) Aggregation of Highly Compensated Par-
ticipant Contributions: For purposes of
this Section, the Contribution Percentage
for any Participant who is a Highly Com-
pensated Employee and who is eligible to
have Contribution Percentage Amounts
allocated to his account under two or more
plans described in Code Section 401(a), or
arrangements described in Code Section
401(k) that are maintained by the Compa-
ny, a Subsidiary or an Affiliate shall be
determined as if the total of such Contribu-
tion Percentage Amounts was made under
each plan. If a Highly Compensated
Employee participates in two or more cash
or deferred arrangements that have differ-
ent plan years, all cash or deferred ar-
rangements ending with or within the same
calendar year shall be treated as a single
arrangement. Notwithstanding the forego-
ing, certain plans shall be treated as sepa-
rate if mandatorily disaggregated under
regulations promulgated under Code Sec-
tion 401(m).

(iv) Aggregation of Plans: In the event that
this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4) or 410(b) only
if aggregated with one or more other
plans, or if one or more other plans satisfy
the requirements of such sections of the
Code only if aggregated with this Plan,
then this Section shall be applied by deter-
mining the Contribution Percentage of
Employees as if all such plans were a
single plan. Plans may be aggregated in
order to satisfy Code Section 401(m) only
if they have the same plan year.

(v) Family Member Aggregation Rules: For
purposes of determining the Contribution
Percentage of a Participant who is a five-
percent owner or one of the ten most
highly-paid Highly Compensated Employ-
ees, the Contribution Percentage Amounts
and Compensation of such Participant shall
include the Contribution Percentage
Amounts and Compensation for the Plan
Year of the Participant's family members
(as defined in Code Section 414(q)(6)).
Family members, with respect to Highly
Compensated Employees, shall be dis-
regarded as separate Employees in
determining the Contribution
<PAGE>19

Percentage both for Participants who are not
Highly Compensated Employees and for Participants
who are Highly Compensated Employees.

(vi) Recharacterized Contributions: Any ex-
cess deferrals that were recharacterized as
After-Tax Investments under Sec-
tion 5.01(b) must be included in the nu-
merator of a Participant's percentage, like
other After-Tax Investments.

(vii) Plan Year to which Contributions Relate:
For purposes of determining the Average
Contribution Percentage test, After-Tax
Investments and Additional Contributions
are considered to have been made in the
Plan Year in which contributed to the trust
for the Plan. Company Contributions will
be considered made for a Plan Year if
made no later than the end of the twelve-
month period beginning on the day after
the close of the Plan Year.

(viii) Company Records: The Company shall
maintain records sufficient to demonstrate
satisfaction of the Average Contribution
Percentage test.

(ix) Other Requirements: The determination
and treatment of the Contribution Percent-
age of any Participant shall satisfy such
other requirements as may be prescribed
by the Secretary of the Treasury.

(d) Incorporation of Section 401(m) by Reference: In
addition to the specific provisions set forth above,
the terms of Code Section 401(m) are hereby
incorporated by reference.

5.05 Adjustments to Comply with the Average Contribution Per-
centage Test. The Administration Committee shall take
actions in accordance with this Section to assure the Plan's
compliance with the Average Contribution Percentage test.

(a) Distribution of Excess Aggregate Contributions: If
there are Excess Aggregate Contributions, each
Participant who is a Highly Compensated Employee
shall receive a distribution of his share, plus alloca-
ble income, as follows:

(i) The Contribution Percentage of the Par-
ticipant (who is a Highly Compensated
Employee) with the highest percentage
shall be reduced until the Average Contri-
bution Percentage test is satisfied, or until
his percentage equals that of the Par-
ticipant (who is a Highly Compensated
Employee) with the next highest percent-
age, whichever occurs first. The process
is repeated until the Average Contribution
Percentage test is satisfied.

(ii) If the Contribution Percentage for a Partic-
ipant who is a Highly Compensated Em-
ployee was determined under the family
member aggregation rules in Section 5.04,
Excess Aggregate Contributions shall be
allocated among the group (the Participant
and family members) in proportion to the
contributions of each that were combined
to determine the percentage.

(iii) The Administration Committee shall direct
the Trustee to return the Excess Aggregate
Contributions, including allocable income,
to the Company solely for purposes of
enabling the Company to withhold federal,
state and local taxes due on the amounts
(when the distribution includes contribu-
tions other than After-Tax Investments or
Additional Contributions). The Company
will then pay all remaining amounts to the
Participant by the fifteenth day of the third
month following the close of the Plan Year
to which the distribution relates, if admini-
stratively feasible. In no event shall any

<PAGE>20

distribution be made later than twelve
months after the close of that Plan Year.
If the distribution is made after the fif-
teenth day of the third month following the
close of the Plan Year to which the distri-
bution relates, a ten percent excise tax will
be imposed on the Company with respect
to the distribution.

(iv) For purposes of subsection (iii) above, the
income allocable to Excess Aggregate
Contributions is the sum of the allocable
gain or loss for the Plan Year, plus the
allocable gain or loss for the period be-
tween the end of the Plan Year and the
date of the distribution. The Plan may use
any reasonable method for computing the
income allocable to Excess Aggregate
Contributions, provided that the method
(A) does not violate Code Section 401(a)-
(4), (B) is used consistently for all Partici-
pants and for all corrective distributions
under the Plan for the Plan Year, and
(C) is used by the Plan for allocating
income to Participants' accounts. Alter-
natively, the Plan may use any method for
computing income allocable to Excess
Aggregate Contributions which is specified
in Treasury regulation Section 1.401(m)-
1(e)(3) or other guidance issued by the
Internal Revenue Service.

(v) Any distribution of less than the full
amount of Excess Aggregate Contributions
and income to a Participant shall be con-
sidered a pro rata distribution of contribu-
tions and income.

(vi) To the extent possible, the distribution
shall be made first from Additional Contri-
butions and then from After-Tax Invest-
ments and corresponding Company Contri-
butions to the extent vested. Non-vested
Company Contributions shall be forfeited
and reallocated to Participants otherwise
eligible for Company Contributions.

(b) Limitation of After-Tax Investments and Additional
Contributions: The Administration Committee may
suspend or reduce After-Tax Investments and/or
Additional Contributions by Highly Compensated
Employees during the course of a Plan Year, below
the level otherwise allowed by the Plan, to further
comply with the Average Contribution Percentage
test.

5.06 Limit on Annual Additions.

(a) Code Section 415 Limitations: For Plan Years
beginning after December 31, 1986, the Annual
Additions for a Participant shall not exceed the
Maximum Annual Addition for any Plan Year, as
these terms are explained below. The Maximum
Annual Addition for a Plan Year is the lesser of:

(i) 25 percent of the Participant's wages,
salaries, fees and other amounts received
for services rendered that are treated as
wages within the meaning of Code Section
3401(a) for purposes of income tax with-
holding at the source (determined without
regard to any rules that limit the remuner-
ation included in wages based on the na-
ture or location of the services performed);
or

(ii) $30,000 or, if greater, 25 percent of the
dollar limitation in effect under Code
Section 415(b)(1)(A).

In applying the above formula, the limitation in
subsection (i) above shall not apply to any alloca-
tion for medical benefits (within the meaning of
Code Section 401(h) or Code Section 419A(f)(2))
which is otherwise treated as an Annual Addition
under Code Section 415(l)(1) or Code Section
419A(d)(2).

<PAGE>21

(b) Annual Additions: The Annual Additions of a
Participant are the sum of the following amounts
credited to the account of the Participant for the
Plan Year:

(i) Company contributions (including contri-
butions described in Section 4.02);

(ii) Employee contributions;

(iii) Forfeitures;

(iv) Amounts allocated after March 31, 1984 to
an individual medical account, as defined
in Code Section 415(l)(2) which is part of
a pension or annuity plan maintained by
the Company; and

(v) Amounts derived from contributions paid
or accrued after December 31, 1985, in
taxable years ending after such date, which
are attributable to post-retirement medical
benefits, allocated to the separate account
of a key employee (as defined in Code
Section 419A(d)(3)) under a welfare bene-
fit fund (as defined in Code Section 419-
(e)) maintained by the Company.

In determining Annual Additions under the above
definition, any mandatory employee contributions to
a defined benefit plan shall be treated as Annual
Additions to a defined contribution plan. (Howev-
er, Annual Additions for Plan Years beginning
before January 1, 1987 shall not be recomputed to
treat all such employee contributions as Annual
Additions.)

Contributions do not fail to be Annual Additions
merely because they are excess deferrals, Excess
Contributions or Excess Aggregate Contributions.
Further, Excess Contributions and Excess Aggre-
gate Contributions do not fail to be Annual Addi-
tions because corrected through distribution or
recharacterization. Excess deferrals that are distrib-
uted in accordance with Treasury regulation Section
1.402(g)-1(e)(2) or (3) are not Annual Additions.

(c) Incorporation of Code Section 415: In addition to
the specific provisions of this Section, the terms of
Code Section 415 are hereby incorporated by
reference and shall govern in determining the
allocations that can be made to the account of a
Participant.

(d) Aggregation of Employers and Plans: As further
set forth in this Section and Code Section 415, the
Maximum Annual Addition is an aggregate limita-
tion that applies to this Plan and any other plans,
described below, that are maintained by the Compa-
ny or any Subsidiary or Affiliate. Therefore, for
this Section:

(i) The term "Company" includes any affiliat-
ed employers, using the Code Section 415
definition of an affiliated employer.

(ii) All defined benefit plans ever maintained
by the Company shall be treated as one
defined benefit plan, whether or not termi-
nated. The same rule applies to all de-
fined contribution plans ever maintained by
the Company.

(iii) The term "contribution," standing alone,
refers both to all employee nondeductible
contributions and all Company contribu-
tions, including any forfeitures, to the
above plans.

(e) If the Annual Additions to a Participant's account
for any Plan Year, prior to the application of the
limitations set forth in this Section 5.06, exceed
those limitations, the amount of

<PAGE>22

contributions credited to the Participant's account in
that Plan Year shall be adjusted to the extent necessary
to satisfy that limitation in accordance with the follow-
ing order of priority:

(i) Company Contributions under Section 4.01
shall be reduced with respect to such
Participant and the amount of the reduction
shall be used to reduce future Company
Contributions.

(ii) The Participant's Pre-Tax and Additional
Investments under Sections 3.01(b) and
3.02 shall be reduced and held in a sus-
pense account for the Participant and shall
be allocated to his account as Pre-Tax
Investments in the next Plan Year and
succeeding years, as necessary, provided
that if a Participant's employment termi-
nates, any amount remaining in the sus-
pense account for his benefit after all
permitted allocations to his account as Pre-
Tax and Additional Investments have been
made shall be reallocated to other eligible
Participants based on the ratio of each
other eligible Participant's Compensation
during the Plan Year to the total Compen-
sation during that Plan Year for all other
eligible Participants.

Section 6 - Investment of Participants' Investments and Company Contributions
- -----------------------------------------------------------------------------

6.01 Allocation of Investments. All of a Participant's Investments
shall be invested, at the option of the Participant, (a) 100%
in the Company Security Fund, or (b) 100% in the Stock
Fund, or (c) 100% in the Bond Fund, or (d) 100% in the
Cash Fund, or (e) in a combination, as selected by the
Participant, of the Company Security Fund, Stock Fund,
Bond Fund, and/or Cash Fund allocated in increments as
may be established from time to time by the Administration
Committee.

6.02 Change of Investment Election. A Participant may change
his election made pursuant to Section 6.01 effective on the
next Enrollment Date following the date the Administration
Committee receives Notification. Except as provided in
Section 6.04, such change in election shall be effective only
with respect to subsequent Participant Investments.

6.03 Participant Responsible for Investments. The selection of an
investment option is the sole responsibility of each Partici-
pant. Neither the Trustee, the Administration Committee,
the Investment Committee, the Company, a Subsidiary, an
Affiliate nor any officer or supervisor of the Company, a
Subsidiary or an Affiliate is empowered to advise a Partici-
pant as to the manner in which his account shall be invested.
The fact that a security is available to Participants for
investment under the Plan shall not be construed as a
recommendation for the purchase of that security, nor shall
the designation of any investment option impose any liability
on the Company, a Subsidiary, an Affiliate, its directors,
officers or employees, the Trustee, the Administration
Committee, the Investment Committee or any Participant in
the Plan.

6.04 Transfers of Investments. Except as provided in Section
6.06, a Participant may, not more than once a month, elect
to transfer all, or any part of his account balance in one
Investment Fund to one or more other Investment Fund. A
Participant shall make such election by providing the
Administration Committee with Notification. The minimum
amount which may be transferred from one Investment Fund
to the other shall be 1% of the total value of the Investment
Fund from which the transfer is to be made. Transfers in
excess of 1% may be made in any whole percentage.
Notwithstanding the foregoing, Investment Fund transfers
prior to January 1, 1993 may be made only once per
calendar quarter and the minimum amount transferred shall
be $200 or, if less, the total value of the Participant's
account in the Investment Fund from which the transfer is to
be made.

6.05 Valuation of Investments. The value of the account to be
transferred under Section 6.04 will be computed as of the
Valuation Date coinciding with or immediately following the
Administration

<PAGE>23

Committee's receipt of Notification. Transfers shall be
effective as of the first business day of the month following
the applicable Valuation Date.

6.06 Company Contributions Ineligible for Transfer. All Compa-
ny Contributions and earnings thereon shall be invested in
the Company Security Fund and may not be transferred
among the Plan's other Investment Funds.

Section 7 - Investment Funds
- ----------------------------

7.01 Company Security Fund. The Company Security Fund,
including earnings thereon, shall be invested by the Trustee
in securities of the Company, other than common stock or
membership debentures of the Company, which shall be
qualifying employer securities as defined in Section 407(d)
of the Employee Retirement Income Security Act, provided,
however, that if at any time when the Trustee has funds
available for such investment and such prescribed securities
cannot be purchased, the Trustee is authorized to hold such
funds in an interest bearing account or to invest such funds
in one or more securities of other corporations which, in the
Trustee's opinion, are comparable to the prescribed securi-
ties of the Company. It is explicitly provided that up to
100% of Plan assets may be invested in qualifying employer
securities.

7.02 Stock Fund. The Stock Fund, including earnings thereon,
shall be invested and reinvested only in common or capital
stocks or bonds, debentures or preferred stocks convertible
into common or capital stocks, or in other types of equity
investments. Short-term obligations of the U.S. government
or other investments of a short-term nature may
be purchased and held pending the selection and purchase of
suitable investments under the preceding sentence. Under
the terms of this Section 7.02, the Trustee may not invest in
shares of stock or other securities of the Company or any of
its Subsidiaries or Affiliates.

Additionally, up to one million ($1,000,000) of the assets in
the Stock Fund shall be invested in a portfolio of stock index
futures contracts and U.S. Treasury Bills whose return, in
the aggregate, will closely approximate the return of the
Standard and Poor's 500 Stock Index. The purpose of this
portfolio is to facilitate daily liquidity.

7.03 Bond Fund. The Bond Fund, which shall be available
effective January 1, 1993, shall consist primarily of fixed--
income obligations, including but not limited to government
and private bonds, debentures, notes, certificates of deposit,
participation in money market funds and other similar fixed-
income investments (which may include investment in any
commingled trust fund selected by the Trustee which meets
the requirements of Code Section 401(a) and is exempt from
taxation under Code Section 501(a), and which is invested
primarily in fixed income securities or fixed income invest-
ments). Pending the selection and purchase of suitable
investments, this fund may be invested in short-term obliga-
tions of the United States government and other short-term
investments selected by the Trustee.

7.04 Cash Fund. The Cash Fund, which shall be available
effective January 1, 1993, shall consist of short-term
obligations of the United States government, bank certificates
of deposit, commercial paper, bankers' acceptances, shares
of money market mutual funds and other similar types of
short-term investments (which may include investment in any
commingled trust fund selected by the Trustee which meets
the requirements of Code Section 401(a) and is exempt from
taxation under Code Section 501(a), and which is invested
primarily in similar types of securities).

<PAGE>24

Section 8 - Maintenance and Valuation of Participants' Accounts
- ---------------------------------------------------------------

8.01 Participant Accounts. Each Participant shall have established
for him an account in each of the Investment Funds in which
he participates which shall reflect separately his After-Tax
Investments, Pre-Tax Investments, Additional Investments,
Additional Contributions, Rollover Investments, Transferred
Investments, and the Company Contributions made on his
behalf, and the allocable share of earnings thereon.

8.02 Valuation. On each Valuation Date, the account of a
Participant in each Investment Fund shall equal:

(a) the Participant's account balance in the applicable
account as of the immediately preceding Valuation
Date; plus

(b) the net earnings thereon, after adjusting for expen-
ses and losses, if any, since the immediately pre-
ceding Valuation Date; plus

(c) the amount of the Investments or contributions, as
the case may be, made to that fund on the Partici-
pant's behalf and credited to the applicable account
since the immediately preceding Valuation Date.

8.03 Special Valuation July 1, 1989. On the first Valuation Date
after July 1, 1984, the account of a Participant in each
Investment Fund credited with Pre-Tax Investments, shall be
equal to the amount of the Pre-Tax Investments, if any,
made on the Participant's behalf to that account in that fund
during the period from July 1, 1984, through the first
Valuation Date.

8.04 Rollover and Transferred Investments. Notwithstanding the
foregoing of this Section 8, Rollover Investments and
Transferred Investments shall not be credited with earnings
until the first day of the month following the date the
Rollover Investment or Transferred Investment is received
by the Trustee.

Section 9 - Vesting of Participants' Investments and Company Contributions
- --------------------------------------------------------------------------

9.01 Vesting of Participant Investments. A Participant shall at all
times be 100% vested in his Participant Investments.

9.02 Vesting of Company Contributions after June 30, 1993. An
Employee who becomes a Participant on or after July 1,
1993 shall at all times be 100% vested in that part of the
Company Security Fund representing Company Contribu-
tions (and earnings thereon) made on behalf of the Partici-
pant. An Employee or former Employee who is a Partici-
pant as of July 1, 1993 shall be 100% vested, commencing
as of July 1, 1993, in that part of the Company Security
Fund representing Company Contributions (and earnings
thereon) made on behalf of the Participant.

9.03 Vesting of Company Contributions before July 1, 1993. An
Employee or former Employee who ceased to be a Partici-
pant prior to July 1, 1993 shall be vested in that part of the
Company Security Fund representing Company Contribu-
tions (and earnings thereon) made on behalf of the Employee
or former Employee according to the vesting provisions set
forth in Sections 9.04 through 9.10.

9.04 Thirty-six Months of Vesting Service. Except as provided
in Section 9.10, a Participant's interest in that part of the
Company Security Fund representing Company Contribu-
tions and earnings thereon shall become vested in such Par-
ticipant when he shall have completed a period of thirty-six
months of Vesting Service. Such thirty-six months of
Vesting Service shall include such Participant's period of
leave of absence for military service during which his re-
employment rights are guaranteed by law. Thereafter

<PAGE>25

all Company contributions and earnings thereon for such
Participant shall be immediately vested in such Participant.

9.05 Vesting Service Credit.

(a) An eligible Employee will be credited with months of
Vesting Service from the Employee's employment date to
the first subsequent Enrollment Date applicable to the
Employee.

(b) An Employee will earn Vesting Service for the period
following the first subsequent Enrollment Date applicable
to the Employee only if the Employee is eligible to, and
actually does, enroll in and make Participant Investments
in the Plan.

(c) A Participant will earn Vesting Service for all periods in
which the Participant makes Participant Investments to the
Plan.

(d) An eligible Employee will not earn Vesting Service for
the period following the first Enrollment Date applicable
to the Employee if the Employee is eligible, but fails, to
enroll in and make Participant Investments in the Plan.

(e) A Participant will not earn Vesting Service during a
period in which the Participant suspends Participant
Investments to the Plan.

9.06 Effect of Withdrawals.

(a) If a Participant withdraws 100% of the Participant's
Investments and earnings thereon, the Participant does not
lose any prior Vesting Service when reenrolled.

(b) If a vested Participant withdraws 100% of the Parti-
cipant's Investments, Company Contributions and earnings
thereon, the Participant will be immediately vested when
reenrolled.

9.07 Effect of Termination.

(a) An eligible Employee who (i) earns Vesting Service from
the date of employment to the first available Enrollment
Date, (ii) declines enrollment, (iii) terminates, and (iv)
returns to covered employment will be treated as a new
Employee.

(b) If a non-vested Participant terminates and is reemployed
within 12 months, the Participant's prior Vesting Service
will be restored immediately upon reenrollment. The
Participant also will receive vesting service for the period
between termination and reemployment.

(c) If a non-vested Participant terminates and is reemployed
after 12 months, the Participant's prior Vesting Service
will be restored when the Participant reenrolls for active
membership in the Plan.

(d) If a non-vested Participant terminates during layoff or
leave of absence of 12 months or less and returns within
12 months of the first day of layoff, the period from the
date of termination until the date of reemployment will be
counted toward Vesting Service.

(e) If a vested Participant is terminated and reemployed, the
Participant is immediately vested when reenrolled.

<PAGE>26

9.08 Effect of Layoff Approved Leave of Absence. Vesting service
will be counted during a period of layoff approved leave of
absence (as layoff approved leave of absence is defined in
Agway, Inc. Personnel Policy No. 700).

9.09 Vesting Schedule Amendments.

(a) No amendment to the Plan shall be effective to the extent
that it has the effect of decreasing a Participant's accrued
benefit. Notwithstanding the preceding sentence, a
Participant's account balance may be reduced to the extent
permitted under Code Section 412(c)(8). For purposes of
this subsection, a Plan amendment that has the effect of
decreasing a Participant's account balance or eliminating
an optional form of benefit, with respect to benefits
attributable to service before the amendment, shall be
treated as reducing an accrued benefit. In the case of an
Employee who is a Participant on (i) the date an amend-
ment changing the vesting schedule is adopted or (ii) if
later, the date the amendment is effective, the vested
percentage of an account balance (determined as of the
applicable date) shall not be less than the percentage
calculated under the terms of the Plan without regard to
the amendment.

(b) If the Plan's vesting schedule is amended, or the Plan is
amended in any way that, directly or indirectly, adversely
affects the computation of a Participant's nonforfeitable
percentage in any Company Contributions, a Participant
who is an Employee with at least three years of vesting
service may elect to have the nonforfeitable percentage of
his Company Contributions determined without regard to
the amendment. For Participants who do not have at least
one Hour of Service in a Plan Year beginning after
December 31, 1988, the preceding sentence shall be
applied by substituting "five years of vesting service" for
"three years of vesting service."

(i) the Administration Committee shall pro-
vide each affected Participant with written
notice and an election form regarding his
right to elect to remain under the former
vesting schedule.

(ii) The election period shall begin with the
date the amendment is adopted (or deemed
to be made) and shall end on the date
which is the latest of: (A) 60 days after
the date the amendment is adopted; (B) 60
days after the date the amendment be-
comes effective; or (C) 60 days after the
date the notice described in subsection (i)
above is issued by the Administration
Committee.

(iii) A Participant who does not timely file a
properly completed election form shall be
subject to the amended vesting schedule.

9.10 Accelerated Vesting. Notwithstanding the foregoing of this
Section 9, a Participant shall by fully vested in his account
attributable to Company Contributions if the Participant
terminates employment with the Company for any of the
following reasons:

(a) the Participant's early or normal retirement under
the Employees' Retirement Plan of Agway, Inc.;

(b) the Participant's Job Disability;

<PAGE>27

(c) the elimination of the Participant's employment
position with the Company, which shall be deemed
to have occurred when no layoff leave of absence
is involved and no recall or replacement is contem-
plated;

(d) the permanent shutdown of the Company facility or
operation in which the Participant was employed; or

(e) the Participant's death.

Section 10 - Withdrawal or Suspension of Participants' Investments and
- ----------------------------------------------------------------------
Company Contributions While Employed
------------------------------------

10.01 Withdrawals of Rollover and Transferred Investments. A
Participant may at any time withdraw a portion, or all,
stated in a fixed amount, as elected by the Participant, but
not less than $200 unless the balance is less than that
amount, of the total value of his Rollover Investments
and/or Transferred Investments, if any.

10.02 Withdrawals by Non-Vested Participant. A non-vested
Participant may, while employed, withdraw all, but not
part of, his Additional Contributions and After-Tax
Investments and all earnings thereon, if any. The Partici-
pant shall not be allowed to make Additional Contributions
or After-Tax Investments until six months from the
Enrollment Date next following the withdrawal. Should
the Participant not have a Pre-Tax Investment account in
the Plan at the time of the withdrawal, the Participant shall
forfeit the total value of his Company Contributions,
subject to the repayment provisions of Section 10.06.

10.03 Withdrawals by Vested Participants. A vested Participant
may, while employed, withdraw:

(a) A portion or all of his pre-1987 Additional Contri-
butions and/or After-Tax Investments and in such
event shall not be permitted to make Additional
Contributions or After-Tax Investments to the Plan
until six months (three months for withdrawals
made before January 1, 1993) from the next En-
rollment Date, provided, however, that the mini-
mum withdrawal under this paragraph (a) shall be
$200 or his pre-1987 Additional Contributions and
After-Tax Investments without earnings thereon, if
less;

(b) Any such Participant who has withdrawn all of his
pre-1987 Additional Contributions and After-Tax
Investments, may then withdraw a portion or all of
his post-1986 Additional Contributions and/or
After-Tax Investments and the earnings thereon,
and in such event shall not be permitted to make
Additional Contributions or After-Tax Investments
to the Plan until six months (three months for
withdrawals made before January 1, 1993) from
the next Enrollment Date, provided, however, that
the minimum withdrawal at any one time under this
paragraph (b) and paragraph (a) shall be $200 or
his post-1986 Additional Contributions and After-
Tax Investments and earnings thereon, if less;

(c) Any Participant who has withdrawn all of his Addi-
tional Contributions and After-Tax Investments
under paragraphs (a) and (b) and the earnings on
the post-1986 Additional Contributions and After-
Tax Investments under paragraph (b), may then
withdraw a portion or all of the earnings on his
pre-1987 Additional Contributions and After-Tax
Investments, and in such event shall not be permit-
ted to make Additional Contributions or After-Tax
Investments to the Plan until six months (12 months
for withdrawals made before January 1, 1993)
from the next Enrollment Date, provided, however,
that the minimum withdrawal at any time under this
paragraph (c) and paragraphs (a) and (b) shall be
$200 or the earnings on his pre-1987 Additional
Contributions and After-Tax Investments, if less;

<PAGE>28

(d) Any Participant who has withdrawn all of his Addi-
tional Contributions and After-Tax Investments and
the earnings thereon under paragraphs (a), (b), and
(c), may then withdraw 100% of his vested interest
in the Company Security Fund represented by
Company Contributions and in such event shall
receive all earnings thereon and shall not be per-
mitted to elect to make Additional Contributions,
After-Tax Investments, Pre-Tax Investments, or
Additional Investments to the Plan until 12 months
from the next Enrollment Date, and shall not be
eligible to withdraw any amount from the Plan
under Section 10.02 and this Section 10.03 until 12
months from the Enrollment Date on which he
again is eligible to make Additional Contributions,
After-Tax Investments, Pre-Tax Investments, and
Additional Investments to the Plan.

10.04 Withdrawals After Age 59.5. Effective as of July 1,
1987, a Participant who has attained age 59.5 as of the
effective date of any withdrawal may without penalty at
any time as may be permitted by the Administration
Committee under rules uniformly applicable to all Partici-
pants similarly situated, elect to withdraw a portion or all,
stated in a fixed amount, as elected by the Participant, but
not less than $200, or the total value, if less, of the sum of
his Pre-Tax Investments and Additional Investments and all
earnings thereon.

10.05 Hardship Withdrawals.

(a) A Participant who has withdrawn the total amount
available for withdrawal under Sections 10.01
through 10.04 may elect to withdraw all or part of
his Pre-Tax Investments and Additional Investments
and earnings thereon upon furnishing proof of
financial hardship satisfactory to the Administration
Committee. The amount to be withdrawn shall not
exceed the amount required to meet the immediate
and heavy financial need created by the hardship
and not reasonably available from other resources
of the Participant, as determined by the Adminis-
tration Committee.

(b) Immediate and Heavy Financial Need: The Ad-
ministration Committee shall authorize a withdraw-
al under this Section only if the Administration
Committee determines that the Participant has an
immediate and heavy financial need for the with-
drawal. The Administration Committee shall make
this determination on the basis of all relevant facts
and circumstances in each case.

(c) Necessity for Distribution: The Administration
Committee shall authorize a withdrawal under this
Section, only if the Administration Committee
determines that the amount is necessary to relieve
the Participant's immediate and heavy financial
need, and that the need cannot be satisfied from
other sources that are reasonably available to the
Participant. The Administration Committee shall
make this determination on the basis of all relevant
facts and circumstances in each case. In general,
a withdrawal will be treated as necessary to satisfy
the Participant's need if the Administration Com-
mittee reasonably relies on the Participant's written
statement that his need cannot be relieved:

(i) Through reimbursement or compensation by
insurance or otherwise;

(ii) By a reasonable liquidation of his assets that
would not itself cause an immediate and
heavy financial need;

(iii) By cessation of Participant Investments to
the Plan; or

<PAGE>29

(iv) By other distributions or nontaxable (at the
time of the loan) loans from this Plan, any
other plans of the Company, plans of anoth-
er employer, or commercial sources on
reasonable commercial terms.

For purposes of this subsection, the Participant's resources
shall be deemed to include assets of his spouse and minor
children that are reasonably available to him. In this
regard, property held for a child under an irrevocable trust
or under the Uniform Gifts to Minors Act shall not be
treated as a resource of the Participant.

(d) Effective as of July 1, 1989, a Participant receiving
a hardship withdrawal may only withdraw that
portion of his Pre-Tax Investment and Additional
Investment accounts attributable to Pre-Tax Invest-
ments and Additional Investments made on his
behalf and pre-1989 earnings thereon. Participants
receiving hardship withdrawals may not withdraw
earnings on Pre-Tax Investments or Additional
Investments credited after December 31, 1988.

(e) Procedures: The Administration Committee shall
require the Participant to certify compliance with
the preceding requirements before authorizing a
hardship withdrawal, and shall determine whether
to allow a withdrawal in a uniform and nondis-
criminatory manner for all Participants. Further,
notwithstanding any provisions of this Section, all
determinations shall be made in accordance with
Treasury regulation Section 1.401(k)-1(d), and any
further guidance regarding hardship distributions
that is promulgated by the Internal Revenue Ser-
vice.

10.06 Restoration of Forfeitures. A non-vested Participant who
forfeits Company Contributions as a result of a withdrawal
of his After-Tax Investments and all earnings thereon (as
provided in Section 10.02) may repay to the Plan the value
of his After-Tax Investments received, and upon such
repayment, the amount of his non-vested interest in the
Company Security Fund previously forfeited shall be
restored to his account; provided, that a Participant shall
not be allowed to make such repayment after the fifth
anniversary of the date of withdrawal under Section 10.02
or the date twelve months (five years, effective July 1,
1985) following his Severance from Service Date, which-
ever occurs first.

10.07 Notification Requirement. Except as provided in Sec-
tion 10.05, Participants may request withdrawals pursuant
to this Section 10 by providing the Administration Com-
mittee with Notification. Amounts withdrawn shall be
distributed in accordance with Section 13.03.

Section 11 - Loans to Participants
- ----------------------------------

11.01 Authorization. The Trustee is authorized by the Company
to establish a loan program in accordance with Section
408(b)(1) of the Employee Retirement Income Security
Act. The loan program shall be administered by the
Administration Committee, which has adopted separate
procedures to implement the loan program.

11.02 Application Requirement. The Administration Committee
may direct the Trustee to make a loan in accordance with
the provisions of this Section, only upon the written
application of a Participant. Loan applications may be
obtained pursuant to the loan program procedures. Action
by the Administration Committee in approving or denying
a loan application shall be final.

11.03 Criteria for Approval. The Administration Committee
shall approve or disapprove a loan application in accor-
dance with the following principles:

(a) Loans shall be available to all Participants on a
reasonably equivalent basis. In applying this
requirement:

<PAGE>30

(i) Loans shall be made available without
regard to the Participant's race, color,
religion, sex, age, national origin, or
disability; and

(ii) Consideration shall be given only to those
factors that would be considered in a
normal commercial setting by an entity in
the business of making similar loans,
including the Participant's financial need
and creditworthiness.

(b) Loans shall not be made available to Participants
who are Highly Compensated Employees in an
amount (when expressed as a percentage of the
vested amount in their account) greater than the
amount made available to other Participants (also
expressed as a percentage of the vested amount in
their account).

(d) Loans shall be adequately secured, provided that
not more than 50 percent of the Participant's vested
benefit under the Plan may be used as security for
a loan.

(e) Loans shall be made only in accordance with the
terms of this Section and the terms of the loan
program procedures adopted by the Administration
Committee.

11.04 Maximum Loan. The amount of any loan to a Participant
(when added to the outstanding balance of all other loans
from the Plan to the Participant whether made on, before
or after August 13, 1982) may not exceed, at any time, the
lesser of:

(a) $50,000, reduced by the excess (if any) of (i) the
highest outstanding balance of loans during the 12-
month period ending on the day before the date on
which the loan was made, over (ii) the outstanding
balance of loans from the Plan on the date on
which the loan is made; or

(b) 50 percent of the Participant's vested accrued
benefit. For purposes of this limitation, all loans
from all plans of the Company and any Subsidiary
or Affiliate are aggregated.

11.05 Minimum Loan. Subject to Section 11.04, the minimum
amount of any loan to a Participant shall be $500. Loans
in excess of $500 shall be made in increments of $100.

<PAGE>31

Section 12 - Withdrawal of Participants' Investments & Company
- --------------------------------------------------------------
Contributions Upon Termination of Employment
--------------------------------------------

12.01 Single Sum Payment.

(a) To the Participant. Subject to the provisions of
Section 12.03, a Participant whose employment
with the Company terminates may elect to receive,
in a single payment, his entire vested interest in the
funds represented by his Investments and earnings
thereon and Company Contributions and earnings
thereon. Such payment shall be made to the
Participant in the calendar month following the
Participant's termination and the Administration
Committee's receipt of Notification.

(b) Effect of Participant's Death After Election. In the
event of the death of a Participant who has request-
ed and is eligible to receive a single payment under
Section 12.01(a) prior to receipt of such single
payment, his entire interest shall be paid in a single
payment to the designated beneficiary, or if no
beneficiary has been designated or survives the
Participant, or if the designation is ineffective, to
the Participant's estate.

12.02 Installment Payments Following Retirement.

(a) To the Participant. Subject to the provisions of
Section 12.03, a Participant whose employment
terminates by reason of Retirement may elect, by
providing the Administration Committee with
Notification, to receive his entire interest in annual
installments commencing in the calendar month
following Administration Committee receipt of
Notification over a 5 or 10 year period (at his
election), or effective January 1, 1993, in annual or
monthly installments over a 5, 10, 15 or 20 year
period (at his election), in accordance with the
terms of a trust agreement to be entered into by the
Company in conjunction with the Plan under the
provisions of Section 14, provided that (i) the
installment period elected may not be greater than
the life expectancy of the Participant as determined
under Code Section 72, and (ii) the installment
period (once elected) may be changed only once,
provided the change is to extend the installment
period, (iii) the frequency of installments (i.e.,
annual or monthly), once elected, may be changed
only once, and (iv) any installment selected must
provide for installments of at least $50.

(b) Effect of the Participant's Death After Election. If
a Participant who has elected to receive installment
payments pursuant to Section 12.02(a) shall die
prior to receiving all installments, any amounts
remaining shall be paid in a lump sum to the
Participant's designated beneficiary or, if no
beneficiary has been designated or survives the
Participant, or if the beneficiary designation is
ineffective, to the Participant's estate; provided,
however, that if the designated beneficiary is the
Participant's spouse and the distribution is made in
installment payments, the surviving spouse may
elect to continue installments elected by the Partici-
pant during the Participant's life.

12.03 Cash-Outs, Forfeitures and Repayments.

(a) Cash-Out of Small Benefits. A Participant whose
employment terminates for any reason shall receive
his entire interest in the Plan represented by his
Investments and earnings thereon and Company
Contributions and earnings thereon in a single sum,
if the Participant has a vested balance not in excess
of $3,500 in all his Plan accounts at the time of his
termination of employment.

(b) Forfeitures and Repayments. Following a non-
vested Participant's termination of employment,
Company Contributions and earnings thereon shall
be forfeited. In the event a former non-vested
Participant again becomes employed by the Compa-
ny, a Subsidiary or an Affiliate within

<PAGE>32

twelve months of his Severance from Service Date (five
years, effective July 1, 1985) and if he shall repay
the entire amount attributable to his Regular Invest-
ments received, he shall have the amount of Com-
pany Contributions and earnings thereon which
were previously forfeited restored to his account.
Effective July 1, 1989, repayment of amounts
distributed upon the termination of service of a
non-vested Participant must be made within 5 years
after the date of the Participant's subsequent
employment in order to have the forfeited amounts
restored to the Participant's account in the Company
Security Fund. Effective July 1, 1985, if such
non-vested Participant's period of absence resulted
from Paternal Leave, the first year of such ab-
sence, measured from his Severance from Service
Date, shall not be considered in determining the
five year period in the first sentence of this para-
graph. Any repayment attributable to a distribution
of a Participant's Pre-Tax Investments shall be
considered as After-Tax Investments for purposes
of the Plan.

12.04 Random, Non-Periodic Withdrawals.

(a) To the Participant. Effective January 1, 1993, a
Participant may, if he has a vested balance of more
than $3,500 in all his Plan accounts at the time of
termination of employment, elect random, non-
periodic withdrawals subject to the requirements of
this subsection (a). The Participant may receive a
specific dollar amount, upon written request, once
during a calendar year. Withdrawals may not be
for less than $1,000 (or the Participant's entire
Plan interest, if less) and shall be distributed from
the Participant's Investment Funds following the
same withdrawal priority sequence as is described
in Section 10.03. Payments of random non-period-
ic withdrawals shall be made in the calendar month
following the Administration Committee's receipt
of Notification.

(b) Effect of Participant's Death Following Election.
In the event of the death of such a Participant
before receipt of all the payment(s) described in
subsection 12.04(a), remaining amounts shall be
paid in a single payment to the designated benefi-
ciary, or if no beneficiary has been designated or
survives the Participant, or if the designation is
ineffective, to the Participant's estate; provided,
however, that, if the designated beneficiary is the
Participant's spouse, the surviving spouse may
elect to make random non-periodic withdrawals
pursuant to this Section 12.04.

12.05 Effect of Plan Termination or Sale of Company. Pre-Tax
Investments and Additional Investments may be distributed
in a single sum in the event of (a) the termination of the
Plan without establishment of a successor plan, (b) the sale
by the Company of substantially all of its assets to an
unrelated corporation, or (c) the sale of a subsidiary of the
Company to an unrelated entity or individual; provided
that, in the case of a sale described in (b) or (c), the buyer
does not maintain the Plan, the Participant continues
employment with the buyer, and the distribution is made
in connection with the disposition of assets or the subsid-
iary. Such distribution will be in an amount equal to the
Participant's entire interest in the Plan. In the event the
Participant's entire interest in the Plan exceeds $3,500, the
distribution will not be made without the consent of the
Participant.

12.06 Effect of Participant's Death Prior to Election. In the
event of the death of a Participant prior to the Administra-
tion Committee's receipt of the Participant's election of a
form of payment provided in this Section 12, the Partici-
pant's Plan benefit shall be paid in a single payment to the
Participant's designated beneficiary, or if no beneficiary
has been designated or survives the Participant, or if the
designation is ineffective, to the Participant's estate;
provided, however, that, if the Participant's designated
beneficiary is the Participant's spouse, the surviving spouse
may elect any form of payment under this Section 12 that
was available to the Participant as of the date the Partici-
pant's employment terminated.

<PAGE>33

12.07 Required Beginning Date. Notwithstanding any contrary
Plan provision, the entire interest of a Participant must be
distributed, or begin to be distributed, no later than the
Participant's required beginning date, as defined below.

(a) For a Participant who attains age 70-1/2 on or after
January 1, 1988, the required beginning date is
April 1 of the calendar year following the calendar
year in which the Participant attains age 70-1/2,
with the following exception. For a Participant
who attains age 70-1/2 during 1988 and has not
retired as of January 1, 1989, the required begin-
ning date is April 1, 1990.

(b) For a Participant who attains age 70-1/2 before
January 1, 1988, the required beginning date shall
be determined as follows:

(i) For a Participant who is not a five percent
owner of the Company, the required be-
ginning date is April 1 of the calendar year
following the calendar year in which the
later of retirement or attainment of age 70-
1/2 occurs.

(ii) For a Participant who is a five percent
owner of the Company during any year
beginning after December 31, 1979, the
required beginning date is April 1 follow-
ing the later of: (A) the calendar year in
which the Participant attains age 70-1/2, or
(B) the earlier of the calendar year with or
within which ends the plan Year in which
the Participant becomes a five percent
owner, or the calendar year in which the
Participant retires.

For purposes of this Section, a Participant shall be treated
as a five percent owner if he is a five percent owner at any
time during the Plan Year ending with or within the
calendar year in which he attains age 66-1/2 or any
subsequent Plan Year. Once distributions have begun to
a five percent owner, they must continue even if the
Participant ceases to be a five percent owner in a subse-
quent year.

12.08 Eligible Rollover Distributions. This Section 12.08 applies
to distributions made on or after January 1, 1993. Not-
withstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the
manner prescribed by the Administration Committee, 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) 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 benefi-
ciary, or for a specified period of ten years or
more; any distribution to the extent such distribu-
tion is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includible in gross income (determined without
regard to the exclusion for net unrealized apprecia-
tion with respect to employer securities).

(b) An eligible retirement plan is an individual retire-
ment account described in Section 408(a) of the
Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan de-
scribed in Section 403(a) of the Code, or a quali-
fied trust described in Section 401(a) of the Code,
that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to the surviving spouse of a
Participant, an eligible retirement plan is an indi-
vidual retirement account or individual retirement
annuity.

<PAGE>34

(c) 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 Section
414(p) of the Code, are distributees with regard to
the interest of the spouse or former spouse.

(d) A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.

12.09 Beneficiary Designations. A Participant's beneficiary shall
be the person or persons designated by the Participant as
the beneficiary on the form provided by and filed with the
Administration Committee. The written designation of
beneficiary filed with the Administration Committee may
be changed or revoked by the sole action of the Participant
provided such change or revocation is filed with the
Administration Committee in writing on a form to be
provided by it. Upon the death of a Participant, the assets
in his accounts with respect to which such designation is
valid and enforceable shall be distributed in accordance
with the Plan to the beneficiary or beneficiaries designated.
If no beneficiary survives the Participant, or if the benefi-
ciary designation is ineffective, the assets in the Partici-
pant's accounts shall be distributed to the Participant's
estate. Notwithstanding the foregoing, effective August
23, 1984, the beneficiary of a married Participant shall be
deemed to be the Participant's spouse, unless a written
designation of another beneficiary is filed with the Admin-
istration Committee together with Spousal Consent thereto.

12.10 Payments on Behalf of Participants. In the event that the
Administration Committee shall find that a Participant or
any other person entitled to any payment under the Plan is
unable to care for his affairs because of illness or accident
or any other reason, any such payments due may, unless
claim shall have been made therefor by a duly appointed
guardian, conservator, committee, or other legal represen-
tative, be paid by the Administration Committee to the
spouse, child, parent, or other blood relative or to any
person deemed by the Administration Committee to have
incurred expenses for such Participant or other person
entitled to payments under the Plan, and any such payment
so made by the Administration Committee shall be a
complete discharge of the liabilities of the Plan therefor.

Section 13 - Disbursements From Funds
- -------------------------------------

13.01 Company Security Fund. Disbursements from the Compa-
ny Security Fund shall be made in money by check. The
amount to be distributed shall be determined on the
Valuation Date coinciding with or next preceding the date
of disbursement. A Participant may, with respect to
securities allocated to the Company Security Fund prior to
July 1, 1993, elect to receive in lieu of all cash a specified
number of such securities in the fund. The specified
number of such securities shall not be greater than the
number of full shares of stock or the number of bonds
which could be purchased at the Current Market Value by
the total amount of cash both determined on the Valuation
Date coinciding with or next preceding the date of dis-
bursement. The amount, if any, by which such total
amount of cash exceeds the total Current Market Value of
the specified number of securities shall be distributed in
money by check to the Participant.

13.02 Stock, Bond and Cash Funds. Disbursements from the
Stock Fund, Bond Fund and Cash Fund shall be made in
money by check. The amount to be distributed shall be
determined on the Valuation Date coinciding with or next
preceding the date of disbursement.

13.03 Time of Distribution. Where withdrawal of contributions
is requested by the Participant, such withdrawal shall be paid
as soon as administratively feasible after the close of the
calendar month in which the request is made; provided, however,
that the Administration Committee receives Notification

<PAGE>35

and provided that no Compensation deduction is made following
the calendar month in which the request is made.

Section 14 - Trust Fund
- -----------------------

14.01 Appointment of Trustees; Execution of Trust Agreements.
The Board of Directors of the Company shall appoint one
or more individuals and/or corporations to act as Trustee
under the Plan, and at any time may remove and appoint
a successor to any such person or corporation. The
Company may, without reference to any Participant or
other party in interest, enter into such trust agreement with
the Trustee and make such amendments to such trust
agreement or such further agreements as the Company in
its sole discretion may deem necessary or desirable to
carry out the Plan.

14.02 Investments by the Trustee. The Trustee shall invest
Participants' Investments and Company Contributions paid
to it and earnings thereon in accordance with the trust
agreement or agreements. The securities acquired and any
uninvested cash shall be held by the Trustee.

Section 15 - Administration
- ---------------------------

15.01 Administration Committee. The responsibility for carrying
out all phases of the administration of the Plan, except
those phases connected with the management of assets,
shall be placed with the Administration Committee, which
shall consist of not less than four persons appointed from
time to time by the Board of Directors to serve at the
pleasure of the Board of Directors. The Board of Direc-
tors may also designate alternate members to act in the
absence of the regular members. The General Manager of
Agway, Inc. shall designate a Chairman of the Administra-
tion Committee from among the regular members and such
members shall elect a Secretary who may be, but need not
be, one of the members of the Administration Committee.
Any member of the Administration Committee may resign
by delivering his written resignation to the Board of
Directors and the Secretary of the Administration Committee

15.02 Investment Committee. The responsibility for the manage-
ment of the assets of the Plan shall be placed with the
Investment Committee, which shall consist of not less than
four persons appointed from time to time by the Board of
Directors to serve at the pleasure of the Board of Direc-
tors. The Board of Directors may also designate alternate
members to act in the absence of the regular members.
The General Manager of Agway, Inc. shall designate a
Chairman of the Investment Committee from among the
regular members and such members shall elect a Secretary
who may be, but need not be, one of the members of the
Investment Committee. Any member of the Investment
Committee may resign by delivering his written resignation
to the Board of Directors and the Secretary of the Invest-
ment Committee.

15.03 Named Fiduciaries. The Administration Committee and
the Investment Committee (hereinafter collectively referred
to as the "Committees"), and the Board of Directors are
designated as named fiduciaries within the meaning of
Section 402(a) of the Employee Retirement Income
Security Act.

15.04 Committee Action and Compensation. The Committees
shall hold meetings upon such notice, at such place or
places, and at such time or times as each may respectively
determine. The action of at least a majority of the mem-
bers, or alternate members, or a committee expressed from
time to time by a vote at a meeting or in writing without
a meeting, shall constitute the action of that Committee and
shall have the same effect for all purposes as if assented to
by all members of such Committee at the time in office.

<PAGE>36

No member of either Committee shall receive any compen-
sation for his service as such. However, Committee
members may be reimbursed for any expenses incurred by
them in the performance of their responsibilities to the
extent that such reimbursement is permitted by law.

15.05 Committee Authority and Delegation. Each Committee
may authorize one or more of its number or any agent to
execute or deliver any instrument or make any payment on
its behalf; may retain counsel, employ agents and such
clerical, accounting and actuarial services as it may require
in carrying out the provisions of the Plan for which it has
responsibility; may allocate among its members or to other
persons, including Employees, all or such portion of its
duties hereunder as it, in its sole discretion, shall decide.

15.06 Asset Management Authority of Investment Committee.
The Investment Committee shall be responsible for manag-
ing the assets under the Plan. If it deems such actions to
be advisable, the Committee, subject to the provisions of
the trust instruments adopted for use in implementing the
Plan pursuant to Section 14.01 hereof may

(a) provide direction to the Trustees including there-
under, but not by way of limitation, the direction
of investment of all or part of the Plan assets and
the establishment of investment criteria, and

(b) appoint and provide for use of investment advisors
and investment managers. In discharging its
responsibility, the Investment Committee shall
evaluate and monitor the investment performance
of the Trustees and investment managers, if any.

15.07 Discretionary Authority of Administration Committee.

(a) Notwithstanding any other provision in the Plan,
and to the full extent permitted by the Employee
Retirement Income Security Act and the Code, the
Administration Committee shall have exclusive
authority and discretion to construe any uncertain
or disputed term or provision in the Plan, includ-
ing, but not limited to, the following:

(i) determining whether any individual is
eligible for benefits under this Plan;

(ii) determining the amount of benefits, if any,
an individual is entitled to under this Plan;

(iii) interpreting all the provisions of this Plan;
and

(iv) interpreting all the terms used in this Plan.

(b) The Administration Committee's exercise of discre-
tionary authority to construe the terms of the Plan,
and all its determinations and interpretations, shall:

(i) be binding upon any individual claiming
benefits under this Plan, including, but not
limited to, an employee, former employee,
the estate of an employee or former em-
ployee, any beneficiary of an employee or
former employee, and any alternate payee;

(ii) be given deference in all courts of law to
the greatest extent allowable by applicable
law; and
(iii) not be overturned or set aside by any court
of law unless found to be arbitrary and
capricious, or made in bad faith.

<PAGE>37

(c) If the discretionary authority in this section is
exercised with respect to an individual who is a
member of the Administration Committee, the
authority shall be exercised solely and exclusively
by the other members.

(d) Any discretionary actions of the Administration
Committee or Board of Directors shall be taken in
a manner that does not discriminate in favor of
Highly Compensated Employees.

15.08 Standard of Committee Conduct. The members of the
Committees shall use that degree of care, skill, prudence,
and diligence under the circumstances then prevailing that
a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of
a like character and with like aims in accordance with the
documents and instruments governing the Plan and Title I
of the Employee Retirement Income Security Act.

15.09 Claims Procedures.

(a) Any claim for benefits by a Participant or benefi-
ciary shall be made in writing to the Administration
Committee. In this Section, Participants and
beneficiaries are referred to collectively as claim-
ants.

(b) If the Administration Committee denies a claim in
whole or in part, it shall send the claimant a writ-
ten notice of the denial within 90 days after the
date it receives a claim, unless it needs additional
time to make its decision. In that case, the Admin-
istration Committee may authorize an extension of
up to an additional 90 days, if it notifies the claim-
ant of the extension within the initial 90-day peri-
od. The extension notice shall state the reasons for
the extension and the expected decision date.

(i) The specific reason or reasons for the
denial of the claim;

(ii) Specific reference to pertinent Plan provi-
sions upon which the denial is based;

(iii) A description of any additional material or
information necessary to perfect the claim,
with an explanation of why the material or
information is necessary; and

(iv) An explanation of the review procedures
provided below.

(d) Within 60 days after the claimant receives a denial
notice, he may file a request for review with the
Administration Committee. Any such request must
be made in writing.

(e) A claimant who timely requests review shall have
the right to review documents affecting his claim,
to submit additional information or written com-
ments, and to be represented.

(f) The Administration Committee shall send the
claimant a written decision on any request for
review within 60 days after the date it receives a
request for review, unless an extension of time is
needed, due to special circumstances. In that case,
the Administration Committee may authorize an
extension of up to an additional 60 days, provided
it notifies the claimant of the extension within the
initial 60-day period.

<PAGE>38

(g) The review decision shall be written in a manner
calculated to be understood by the claimant and
shall contain:

(i) The specific reason or reasons for the
decision; and

(ii) Specific reference to the pertinent Plan
provisions upon which the decision is
based.

(h) If the Administration Committee does not send the
claimant a review decision within the applicable
time period, the claim shall be deemed denied on
review.

(i) The review decision (including a deemed
decision) shall be the final decision of the
Plan.

Section 16 - General Provisions
- -------------------------------

16.01 Exclusive Benefit. No part of the Trust Funds shall be
used for or diverted for purposes other than for the
exclusive benefit of Participants or their beneficiaries.

16.02 Account Statements. As soon as practicable after the close
of each Plan Year, the Trustee shall cause to be sent to
each Participant a written statement of his account.

16.03 Application of Forfeitures. Shares in the Company
Security Fund, which have been forfeited, shall be applied
to reduce subsequent Company Contributions required
under the Plan, by, or in respect of, the employer of the
Employee whose interest in the fund has been forfeited, at
the Current Market Value on the next Valuation Date or,
if the Plan should be terminated, any amount not previous-
ly so applied shall be credited on a pro rata basis to the
account of all Participants in the Company Security Fund
at the time of such termination attributable to his Regular
Investments, if any, and Company Contributions. Any
forfeitures which are to be restored to the account of a
Participant pursuant to Section 10.06 or Section 12.03 shall
be deducted from the amount of forfeitures otherwise
available to reduce Company Contributions under this
Section 16.03.

16.04 No Alienation or Assignment. No right or interest of any
Participant in the Plan, or in his account, shall be assign-
able or transferable, or subject to any lien, in whole or in
part, either directly or by operation of law, or otherwise,
including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy, or in any
other manner, and no right or interest of any participant in
the Plan or in his account shall be liable for, or be subject
to, any obligation or liability of such Participant. Notwith-
standing the foregoing, payment shall be made in accor-
dance with the provisions of a "qualified domestic relations
order," as provided in Section 17.

16.05 Risk Assumed by Participant. Each Participant assumes all
risk connected with any decrease in the market price of
any securities in the respective Investment Funds, and such
funds shall be the sole source of payments to be made
under this Plan. Further, Participants who request access
to the telephone instruction ("voice mail") system for the
Plan shall be responsible for maintaining the confidentiality
of their "personal identification numbers" by which
Participants gain access to account information and initiate
Plan transactions.

16.06 Plan Amendment or Termination. The Company reserves
the right to amend, modify, suspend, or terminate the
Plan, provided no amendment, modification, suspension,
or termination of the Plan shall have the effect of provid-
ing that the funds held in trust by the Trustee or the
earnings thereof may be used for or devoted to purposes
other than the Plan. In addition, and subject to the
foregoing limitation, the Administration Committee shall
have the authority to amend the Plan (a) to comply with

<PAGE>39

changes required by law, or (b) to make any other change
to the Plan, provided that any such change has no adverse
financial impact on the Company and no adverse impact on
the rights of Participants. In case the Plan is terminated or
in the event of a partial termination or a discontinuance of
Company Contributions having the effect of such termina-
tion, the interest of each Participant, so affected, in the
Company Security Fund shall vest immediately.

16.07 Plan Expenses. Brokerage commissions, investment
manager fees, transfer taxes and other charges and expenses
in connection with the purchase or sale of securities
shall be added to the cost of such securities or deducted
from the proceeds therefrom as the case may be. All other
costs and expenses incurred in administering the Plan shall
be paid by the Company; provided, however, that, effec-
tive July 1, 1991, all expenses of administration of the
Plan may be paid out of the funds held in trust by the
Trustee or the earnings thereof unless paid by the Company.
Such expenses shall include any expenses incident to
the functioning of the Committees, including, but not
limited to, fees for accountants, actuaries, counsel, and
other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall
constitute a liability of the Plan. However, the Company
may reimburse the Plan for any administration expense
incurred. Any administration expense paid to the Plan as
a reimbursement shall not be considered a Company
Contribution.

16.08 Effect of Plan on Employment Rights. The establishment
of the Plan shall not be construed as conferring any legal
rights upon any Employee or any person for a continuation
of employment nor shall it interfere with the rights of the
Company to discharge any Participant and to treat him
without regard to the effect which such treatment might
have upon him as a Participant.

16.09 Participant Information. Each Participant shall be required
to furnish the Administration Committee with such infor-
mation and data as may be considered necessary by the
Administration Committee for the proper administration of
the Plan. Evidence and data submitted in connection with
the retirement program of the Company may be accepted
and used by the Administration Committee under the Plan.

16.10 Plan Merger, Consolidation or Transfer. The Plan may
not be merged or consolidated with, nor may its assets or
liabilities be transferred to, any other plan unless each
Participant or beneficiary would if the resulting plan were
then terminated receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or
greater than the benefit he would have been entitled to
receive immediately before the merger, consolidation or
transfer if the Plan had then terminated.

Section 17 - Qualified Domestic Relations Orders
- ------------------------------------------------

17.01 General. Notwithstanding the restriction against alienation
and assignment stated in Section 16.04, the Administration
Committee shall comply with the terms of any Qualified
Domestic Relations Order.

(a) For purposes of this Plan, a "Qualified Domestic
Relations Order" means a Domestic Relations
Order that creates or recognizes the existence of an
Alternate Payee's right to, or assigns to an Alter-
nate Payee the right to, receive all or a portion of
the benefits that would otherwise be payable with
respect to a Participant under the Plan.

(b) For purposes of this Plan, a "Domestic Relations
Order" shall mean any judgment, decree or order
(including approval of a property settlement agree-
ment) which: (i) relates to the provision of child
support, alimony payments or marital property
rights to a spouse, child or other dependant of a
Participant; and (ii) is made pursuant to a state
domestic relations law (including a community
property law).

<PAGE>40

(c) For purposes of this Plan, the term "Alternate
Payee" shall mean any spouse, former spouse,
child or other dependant of a Participant who is
recognized by a Domestic Relations Order as
having a right to receive all, or a portion of, the
benefits payable under the Plan with respect to
such Participant.

17.02 Required Provisions. A Domestic Relations Order is a
Qualified Domestic Relations Order only if it clearly
specifies:

(a) The name and the last known mailing address (if
any) of the Participant and the name and mailing
address of each Alternate Payee covered by the
order;

(b) The amount or percentage of the Participant's
benefits the Plan shall pay to each Alternate Payee,
or the manner in which the amount or percentage
is to be determined;

(d) Each Plan to which the order applies.

Notwithstanding the preceding provisions, a Domestic
Relations Order that does not provide the specified address
information can be a Qualified Domestic Relations order,
if the Administration Committee has the necessary infor-
mation from other sources.

17.03 Prohibited Provisions. A Domestic Relations Order is a
Qualified Domestic Relations order only if it:

(a) Does not require the Plan to provide any type or
form of benefit, or any option, not otherwise
provided under the Plan, except as stated in Section
17.04 below;

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

(c) Does not require the payment of benefits to an
Alternate Payee that are required to be paid to
another Alternate Payee under an order previously
determined to be a Qualified Domestic Relations
Order.

17.04 Payments after Earliest Retirement Age.

(a) A Domestic Relations order shall not be treated as
failing to meet the requirements of Section 17.03-
(a), solely because the order requires payment to
an Alternate Payee:

(i) In the case of any payment before a Partic-
ipant has separated from service, on or
after the date on which the Participant
attains (or would have attained) the "earli-
est retirement age" as defined in subsection
(b) below;

(ii) As if the Participant had retired on the
date on which payment is to begin under
the order; and

(iii) In any form in which benefits may be paid
under the Plan to the Participant.

(b) For purposes of this Section, the term "earliest
retirement age" means the earlier of:

(i) The date on which the Participant is enti-
tled to a distribution under the Plan; or

<PAGE>41

(ii) The later of: (A) the date the Participant
attains age 50; or (B) the earliest date on
which the Participant could receive Plan
benefits if he had separated from service
with the Company.

17.05 Plan Procedures.

(a) The Administration Committee shall apply the
procedures in this Section, and may adopt addition-
al appropriate procedures, to determine the quali-
fied status of Domestic Relations Orders it receives
and to administer distributions under Qualified
Domestic Relations Orders.

(b) The Administration Committee shall promptly
notify the Participant and each Alternate Payee of
the receipt of the Domestic Relations Order, and
provide them with copies of the procedures the
Plan will use in determining the qualified status of
the order. If addresses are not specified in the
order, the Administration Committee shall send
notices to the last known addresses of these parties.
The Participant and any Alternate Payee may desig-
nate a representative to receive copies of future
communications from the Administration Commit-
tee regarding the order, by submitting a written
request to the Administration Committee.

(c) Within a reasonable period after receiving a Do-
mestic Relations Order, the Administration Com-
mittee shall determine whether it is a Qualified
Domestic Relations Order and shall notify the
Participant, each Alternate Payee and any designat-
ed representatives of the determination.

(d) During the period in which the issue of qualified
status is being determined by the Administration
Committee, by court of competent jurisdiction or
otherwise, the Administration Committee shall
separately account for the amounts which would
have been payable to the Alternate Payee during
the period if the order had been determined to be
a Qualified Domestic Relations Order. The sepa-
rate accounting is for record keeping and a segre-
gation of fund assets is not required. The separate-
ly accounted amounts shall be treated in the follow-
ing manner:

(i) If the Domestic Relations Order (or a
modification of it) is determined to be a
Qualified Domestic Relations Order within
eighteen (18) months of the date on which
the first payment would be required to be
made under the order, the Administration
Committee shall pay the amounts (includ-
ing any interest) to the person persons
entitled to the payment.

(ii) If the Domestic Relations Order is deter-
mined not to be a Qualified Domestic
Relations Order, or the issue is not re-
solved within the eighteen (18) month
period specified above, the Administration
Committee shall pay the amounts (includ-
ing any interest) to the person or persons
who would have been entitled to the
amounts if there had been no order. In
applying this provision, the Administration
Committee may delay payments for the
full eighteen (18) month period, even if an
earlier determination of non-qualified
status is made, if the Administration Com-
mittee has notice that the parties are at-
tempting to remedy the order's deficien-
cies.

(iii) Any determination of qualified status that
is made after the close of the eighteen (18)
month period shall be applied prospectively
only.

<PAGE>42

Section 18 - Top-Heavy Requirements
- -----------------------------------

18.01 General Rules.

(a) Notwithstanding any other Plan provisions to the
contrary, the Top-Heavy Rules of this Section shall
become effective for any Plan Year beginning after
December 31, 1983 in which the Plan is a Top-
Heavy Plan. The provisions of Code Section 416
are hereby incorporated by reference and control
the application of this Section.

(b) As stated in Section 1 in defining "Compensation",
not more than $200,000 of Compensation (as
adjusted) is taken into account under the Plan for a
Participant, for any Plan Year beginning after
December 31, 1988. This $200,000 limitation,
without any adjustment, shall also apply for any
earlier Plan Year in which the Plan is Top-Heavy.

(i) Whether the Plan is Top-Heavy, or Super
Top-Heavy, shall be determined by finding
the Top-Heavy Ratio in accordance with
Section 18.02.

(ii) If the Plan is Top-Heavy, or Super Top-
Heavy, for a Plan Year, Non-Key Employ-
ees must receive Minimum Required Con-
tributions and the Minimum Vesting Sche-
dule in Section 18.03 shall become appli-
cable.

(iii) If the Plan is Super Top-Heavy for a Plan
Year, the provisions of Section 18.05 shall
apply in determining Maximum Annual
Additions under Section 5 if the Employer
also maintains a Defined Benefit Plan.

(d) Notwithstanding the preceding provisions or any
other provisions of the Plan, any requirements
regarding a Top-Heavy vesting schedule and
Minimum Required Contributions shall not apply to
Employees covered by a collective bargaining
agreement. However, the accounts of these Em-
ployees (if any) are considered in determining the
Top-Heavy Ratio under Section 18.02.

18.02 Determination of Top-Heaviness.

(a) Top-Heavy Plan: The Plan shall be considered a
Top-Heavy Plan for a Plan Year if the Top-Heavy
Ratio exceeds 60 percent, applying the principles in
subsection (d) below.

(b) Super Top-Heavy Plan: The Plan shall be consid-
ered a Super Top-Heavy Plan for a Plan Year if
the Top-Heavy Ratio exceeds 90 percent, applying
the principles in subsection (d) below.

(i) If the Company maintains one or more
defined contribution plans (including any
simplified employee pension plan) and the
Company has not maintained any defined
benefit plan which during the five year
period ending on the Determination
Date(s) has or has had accrued benefits,
the Top-Heavy Ratio for this Plan alone or
for the Required or Permissive Aggrega-
tion Group, as appropriate, is a fraction,
the numerator of which is the sum of the
account balances of all Key Employees as
of the Determination Date(s) (including
any part of any account balance distributed
in the five year period ending on the De-
termination Date(s)), and the denominator
of which is the sum of all account balances
(including any part of any account balance
distributed in the five year period ending
on the Determination Date(s)), both
computed in accordance with
<PAGE>43

Code Section 416. Both the numerator and
denominator of the Top-Heavy Ratio are increased
to reflect any contribution not actually made
as of the Determination Date, but which is
required to be taken into account on that
date under Code Section 416.

(ii) If the Company maintains one or more
defined contribution plans (including any
simplified employee pension plan) and the
Company maintains or has maintained one
or more defined benefit plans which during
the five year period ending on the Deter-
mination Date(s) has or has had any ac-
crued benefits, the Top-Heavy Ratio for
any Required or Permissive Aggregation
Group, as appropriate, is a fraction, the
numerator of which is the sum of the
account balances under the aggregated
defined contribution plan or plans for all
Key Employees, determined in accordance
with (i) above, and the present value of
accrued benefits under the aggregated
defined benefit plan or plans for all Key
Employees as of the Determination
Date(s), and the denominator of which is
the sum of the account balances under the
aggregated defined contribution plan or
plans for all Participants, determined in
accordance with subsection (i) above, and
the present value of accrued benefits under
the defined benefit plan or plans for all
Participants as of the Determination
Date(s), all determined in accordance with
Code Section 416. The accrued benefits
under a defined benefit plan in both the
numerator and denominator of the Top-
Heavy Ratio are increased for any distribu-
tion of an accrued benefit, made in the
five year period ending on the Determina-
tion Date.

(iii) For purposes of subsections (i) and (ii)
above, the value of account balances and
the present value of accrued benefits will
be determined as of the most recent valua-
tion date that falls within or ends with the
twelve month period ending on the
Determination Date, except as provided in
Code Section 416 for the first and second
plan years of a defined benefit plan. The
account balances and accrued benefits of a
Participant: (i) who is not a Key Employ-
ee but who was a Key Employee in a prior
year, or (ii) who has not been credited
with at least one Hour of Service with any
employer maintaining the Plan at any time
during the five year period ending on the
Determination Date will be disregarded.
The calculation of the Top-Heavy Ratio,
and the extent to which distributions, and
any Rollover or Transferred Investments
are taken into account will be made in
accordance with Code Section 416. If any
deductible employee contributions were
made to the Plan, they will not be taken
into account for purposes of computing the
Top-Heavy Ratio. When aggregating
plans, the value of account balances and
accrued benefits will be calculated with
reference to the Determination Dates that
fall within the same calendar year.

The accrued benefit of a Participant other than a Key
Employee shall be determined under (i) the method, if any,
that uniformly applies for accrual purposes under all
defined benefit plans maintained by the Company; or (ii)
if there is no such method, as if such benefit accrued not
more rapidly than the slowest accrual rate permitted under
the fractional rule of Code Section 411(b)(1)(C).

(d) The Top-Heavy Ratio shall be determined in
accordance with the following principles:

(i) Accounts: Except as provided below in
subsection (viii) below, all of a Partici-
pant's accounts are considered in determin-
ing the Top-Heavy Ratio.

(ii) Determination Date: The Top-Heavy
Ratio is determined as of the Determina-
tion Date, which is the last day of the
preceding Plan Year (except for the first
Plan Year). For example, if the Top-
Heavy Ratio exceeds 60 percent on the last
day of the 1989 Plan Year, the Plan is
Top-Heavy for the 1990 Plan Year.

<PAGE>44

(iii) Valuation Date: Account balances shall be
valued as of the most recent Valuation
Date during the twelve-month period end-
ing on the Determination Date.

(iv) Prior Distributions: Amounts in the ac-
counts of a Participant include any distri-
bution with respect to the Participant dur-
ing the five-year period ending on the
Determination Date. This includes distri-
butions to Beneficiaries and distributions
before the 1984 Plan Year when the Top-
Heavy Rules became effective.

(v) Key Employee Status: The determination
as to whether an Employee is a Key Em-
ployee shall be made in accordance with
Code Section 416(i). If a Key Employee
ceases to be a Key Employee but continues
to be employed, he will be treated as a
non-Key Employee after the last year in
which he must be considered a Key Em-
ployee under the preceding sentence. As
of that date, his accounts will be disregard-
ed in computing the numerator and denom-
inator of the Top-Heavy Ratio.

(vi) Required Aggregation of Plans: If the
Plan is part of a Required Aggregation
Group, the Top-Heavy Ratio must be
determined by considering all plans in the
group. A Required Aggregation Group
consists of all qualified plans of the Com-
pany and any Subsidiary or Affiliate that
include a Key Employee, plus any other
plans that enable a Plan with a Key Em-
ployee to satisfy the nondiscrimination
rules of Code Sections 401(a)(4) or 410.

A. Except as may otherwise be
allowed under the permissive
aggregation rules in subsection
(vii) below, each plan in a
Required Aggregation Group
shall be considered Top-Heavy
if the Top-Heavy Ratio for the
group exceeds 60 percent.
Conversely, if the Top-Heavy
Ratio is 60 percent or less, no
plan in the Required Aggrega-
tion Group shall be considered
Top-Heavy.

B. The Top-Heavy Ratio is deter-
mined by adding the present
value of the accrued benefits
under all defined benefit plans
and the account balances under
all defined contribution plans in
both the numerator and denomi-
nator of the Top-Heavy Ratio.
If plans have different Determi-
nation Dates, the Determination
Dates within the same calendar
year are used in calculating the
Top-Heavy Ratio. The present
value of the accrued benefits
under a Defined Benefit Plan
shall be based only on the
interest and mortality rates
specified in that plan.

(vii) Permissive Aggregation Group: The
Company may, but is not required to,
determine the Top-Heavy Ratio on the
basis of a Permissive Aggregation Group.

A. A Permissive Aggregation
Group consists of all plans in a
Required Aggregation Group,
plus other plans that satisfy the
nondiscrimination requirements
of Code Sections 401(a)(4) and
410, when considered with the
Required Aggregation Group.

B. If the Top-Heavy Ratio for the
Permissive Aggregation Group
is 60 percent or less, no plan in
the group is Top-Heavy. If the
Top-Heavy Ratio is greater than
60 percent, the Top-Heavy
Rules apply to those plans that
are part of the Required Aggre-
gation Group, but not to the
other plans that were permis-
sively aggregated.

<PAGE>45

(viii) Rollover amounts and any plan-to-plan
transfer amounts held under this Plan or
any other plan, shall be taken into account
in determining the Top-Heavy Ratio only
if required by the following rules:

A. If a transfer is initiated by the
Employee and made between
plans maintained by different
employers, the transferring plan
continues to count the trans-
ferred amount under the rules
for counting distributions. The
receiving plan does not count
the amount if accepted after
December 31, 1983, but does
count the amount if accepted
prior to January 1, 1984.

B. If the transfer is not initiated by
the Employee or if it is made to
a plan maintained by the same
employer, the transferring plan
shall no longer count the
amount transferred and the
receiving plan shall count the
amount transferred.

C. For purposes of this subsection,
the Company, and any Subsid-
iary or Affiliate shall be treated
as the same employer.

18.03 Top-Heavy Vesting Schedule.

(a) For any Plan Year that the Plan must be considered
Top-Heavy, a Participant's vested interest in
Company Contributions shall be determined in
accordance with the following Minimum Vesting
Schedule rather than the vesting schedule in Section
9. As an exception, the Participant shall remain
under his previous vesting schedule to the extent
provided in Section 9.09. Any Minimum Required
Contribution described in Section 18.04 (to the
extent required to be nonforfeitable under the
Minimum Vesting Schedule below) may not be
forfeited under Code Sections 411(a)(3)(B) or
411(a)(3)(D).

(b) The Minimum Vesting Schedule is:
<TABLE>
<CAPTION>

Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 3 years 0%
3 years or more 100%
</TABLE>

(c) Once applicable for a Plan Year, the Minimum
Vesting Schedule applies to Company Contributions
accrued before or after the Plan became Top-
Heavy. This includes accruals before the 1984
Plan Year when the Top-Heavy Rules became
effective. Notwithstanding the preceding sentence:

(i) Accounts of a Participant who does not
have an Hour of Service after the Plan
becomes Top-Heavy shall not be subject to
the Minimum Vesting Schedule; and

(ii) Account balances which were forfeited
before the Plan became Top-Heavy do not
vest.

(d) The vesting schedule in Section 9 shall again
become applicable for Company Contributions that
are made for Plan Years after the Plan ceases to be
Top-Heavy. However, if this change in vesting
schedule occurs:

(i) The vested percentage of a Participant in
Company Contributions before the Plan
ceased to be Top-Heavy shall not be re-
duced; and

<PAGE>46

(ii) Participants described in Section 9.09 shall
be given the option to remain under the
Minimum Vesting Schedule, even for Plan
Years after the Plan is no longer Top-
Heavy, in accordance with the procedures
described in that Section.

18.04 Minimum Required Contribution.

(a) In General: If the Plan is Top-Heavy for a Plan
Year, each non-Key Employee described in subsec-
tion (b) below must receive the Minimum Required
Contribution described in subsection (c) below.
Further, such a minimum contribution cannot be
forfeited under Code Section 411(a)(3)(B) (sus-
pension of benefits to rehired retiree) or Code
Section 411(a)(3)(D) (forfeiture upon withdrawal of
mandatory Employee contributions), even if the
rules of those Code Sections would otherwise be
applicable under other provisions of the Plan.

(b) Non-Key Employees: The Minimum Required
Contribution shall be made for each non-Key
Employee who has not separated from the service
of the Employer as of the last day of the Top-
Heavy Plan Year, provided he has satisfied the
eligibility requirements in Section 2. Such an
Employee shall receive the Minimum Required
Contribution, without regard to his Hours of
Service or Compensation, and whether or not he
elects to make Regular Investments for the Plan
Year.

(i) Except as otherwise provided in subsection
(d) below, the Minimum Required Contri-
bution for each Top-Heavy Plan Year shall
be the lesser of:

A. Three percent of Compensation;
or

B. The highest percentage of Com-
pensation that is provided to any
Key Employee as contributions
by the Company.

The second alternative in the above formula cannot
be used if this Plan is used to enable a defined
benefit plan of the Company to satisfy Code Sec-
tions 401(a)(4) or 410(b).

(ii) All contributions by the Company to the
accounts of each Participant shall be con-
sidered in determining the highest percent-
age that was contributed for a Key Em-
ployee, and whether the non-Key Employ-
ee has received the Minimum Required
Contribution. This includes Pre-tax In-
vestments and Additional Investments.

(iii) However, Pre-tax Investments and Addi-
tional Investments that are made for a non-
Key Employee are not considered in deter-
mining whether the contributions for the
non-Key Employee equal the Minimum
Required Contribution.

(iv) If the non-Key Employee also participates
in another defined contribution plan of the
Company or a Subsidiary or Affiliate that
is Top-Heavy for the Plan Year, only one
plan must provide the Minimum Required
Contribution. In such a case, the Mini-
mum Required Contribution shall be made
under this Plan.

(d) Non-Key Employee in Defined Benefit Plan: If a
non-Key Employee participates in this Plan and a
defined benefit plan that is included in a Required
Aggregation Group that is Top-Heavy, the defined
benefit plan shall provide the minimum benefit
required by Code Section 416. This shall be done
as set forth in the defined benefit plan. Based on
this action by the defined benefit plan, no Mini-
mum Required Contribution will be made to this
Plan.

<PAGE>47

18.05 Maximum Annual Addition under Super Top-Heavy Plan.

(a) If the Plan is Super Top-Heavy for any Plan Year,
then for purposes of the Code Section 415 limita-
tion described in Section 5, the dollar limitations in
the denominator of the defined benefit fraction and
the defined contribution Fraction shall each be
multiplied by 1.0, not 1.25.

(b) If the reduction to 1.0 under subsection (a) above
would cause a Participant to exceed the combined
limit on contributions and benefits under Code Sec-
tion 415, the application of subsection (a) above
will be suspended as to such Participant until he no
longer exceeds the combined limitation, as modi-
fied by subsection (a) above. During such a
suspension period, the Participant will not accrue
benefits under any defined benefit plan or receive
contributions (or forfeitures) under this or any
other defined contribution plan of the Company or
a Subsidiary or Affiliate.

The Company has caused this Plan to be signed by
a duly authorized officer or member of the Administration Committee
on this 20th day of July, 1993.

AGWAY, INC.

By: ROBERT T.ENGFER

Title: V. P. Human Resources
<PAGE>48

APPENDIX A
----------

AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

Participating Employers
-----------------------

Agway, Inc.

<PAGE>4

EXHIBIT 5

<PAGE>1

(315) 449-6436

May 31, 1994

Agway Inc.
333 Butternut Drive
DeWitt, NY 13214

Gentlemen:

As Associate General Counsel of Agway Inc. (the "Company"), I am
acting as your legal counsel for the Agway Inc. Employees' Thrift
Investment Plan (the "Plan") in connection with the registration of
$12 million of participations in the Plan, being registered with
the Securities and Exchange Commission on Form S-8. I am familiar
with the relevant documents and materials used in preparing
such registration.

Based upon my review of the relevant documents and materials, it
is my opinion that:

(a) The Plan has been duly authorized for participation
by eligible employees of the Company in accordance
with the terms of the Plan;

(b) The interests in the Plan will be fully paid upon
receipt of employee contributions;

(c) The Plan has recently been restated using a 401(k)
profit sharing plan previously approved under the
Internal Revenue Service's "Volume Submitter" program.

The Company intends to submit the Plan to the District
Director of the Internal Revenue Service's Brooklyn
Key District and to request from the District Director
a favorable determination letter as to the Plan's
qualified status under Internal Revenue Code Section
401(a). Because we tailored the "Volume Submitter"
pattern plan to fit the Company's circumstances, the
Plan will be submitted as an individually designed plan
rather than a true "Volume Submitter" plan. The
Company, therefore, may have to make some modifications
to the Plan at the request of the Internal Revenue
Service in order to obtain a favorable

<PAGE>2

Agway Inc.
Page 2
May 31, 1994

determination
letter, but I do not expect any of these modifications to
be material. The Company will make any required
modifications.

Because the provisions of the enclosed restated Plan are
based upon an approved "Volume Submitter" plan and
because Agway will make any modifications required by
the Internal Revenue Service, it is my opinion that
the Internal Revenue Service will issue a favorable
determination letter as to the qualified status of the
Plan, as modified at the request of the Internal Revenue
Service, under Internal Revenue Code Section 401(a),
subject to the customary condition that continued
qualification of the Plan, as modified, will depend upon
its effect and operation.

This letter is written to be used as an exhibit in the filing the
Registration Statement. You may use my name under the caption "Legal
Opinion" in the Prospectus, which will be maintained by the Plan in
accordance with the rules in the filing of the Registration Statement
on Form S-8.
Very truly yours,

Nels G. Magnuson
Associate General Counsel

NGM/df

<PAGE>5

EXHIBIT 23

<PAGE>1
CONSENT OF COUNSEL

The consent of Nels G. Magnuson, Assistant General Coun-
sel of the Company, is included in his opinion, a copy of which is
filed as Exhibit 5.

<PAGE>2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this regis-
tration statement on Form S-8 of:

(1) Our report dated September 7, 1993 on our examination
of the Agway Inc. Employees' Thrift Investment Plan as of June 30,
1993 and 1992, and for the three years in the period ended June 30,
1993, filed as an exhibit to the Annual Report on Form 10-K (SEC
File No. 2-22791) of Agway Inc. and Consolidated Subsidiaries filed
with the Securities and Exchange Commission pursuant to the Secu-
rities Exchange Act of 1934.

(2) Our reports dated September 17, 1993 on our examina-
tions of the consolidated financial statements and financial statement
schedules of Agway Inc. and Consolidated Subsidiaries as of June
30, 1993 and 1992, and for the three years in the period ended June
30, 1993 appearing in the Annual Report on Form 10-K.

COOPERS & LYBRAND
Syracuse, New York
June 8, 1994

<PAGE>3
CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registra-
tion Statement on Form S-8 of our report dated August 4, 1993
relating to the consolidated financial statements of H. P. Hood, Inc.,
which appears on page 26 of Agway Inc.'s Annual Report on Form
10-K for the year ended June 30, 1993.

PRICE WATERHOUSE

Boston, Massachusetts
June 8, 1994

<PAGE>4

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registra-
tion Statement on Form S-8 of our report dated August 17, 1993,
relating to the June 26, 1993, June 26, 1992, and June 28, 1991
financial statements of Curtice Burns Foods, Inc. (including sched-
ules thereto) which report is included in Agway Inc.'s Annual Report
on Form 10-K for the year ended June 30, 1993.

PRICE WATERHOUSE

Rochester, New York
June 8, 1994