printer-friendly

Sample Business Contracts

401(k) Plan, Employee Thrift Plan, Profit-Sharing Plan and Adoption Agreement - Aastrom Biosciences Inc.

Sponsored Links

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

                                 MERRILL LYNCH

                                  ----------
                                    SPECIAL
                                  ----------

                               PROTOTYPE DEFINED

                               CONTRIBUTION PLAN

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

                                  401(k) PLAN

                              EMPLOYEE THRIFT PLAN

                              PROFIT-SHARING PLAN

                               ADOPTION AGREEMENT



THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL INSTRUMENTS WITH
LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR, MERRILL LYNCH, PIERCE, FENNER
& SMITH, INCORPORATED DOES NOT ASSUME RESPONSIBILITY. THE EMPLOYER IS URGED TO
CONSULT WITH ITS OWN ATTORNEY WITH REGARD TO THE ADOPTION OF THIS PLAN AND ITS
SUITABILITY TO ITS CIRCUMSTANCES.
<PAGE>
 
 
ADOPTION OF PLAN
----------------

        The Employer named below hereby establishes or restates a profit-sharing
plan that includes a [X] 401(k), [_] profit-sharing and/or [_] thrift plan 
feature (the "Plan") by adopting the Merrill Lynch Special Prototype Defined
Contribution Plan and Trust as modified by the terms and provisions of this
Adoption Agreement.

EMPLOYER AND PLAN INFORMATION
-----------------------------

        Employer Name:*    Aastrom Biosciences. Inc.
                           -----------------------------
        Business Address:  P.O. Box 376
                           -----------------------------
                           Ann Arbor. MI 48106
                           -----------------------------
        Telephone Number:  (313) 930-5555
                           -----------------------------
        Employer Taxpayer I.D. Number: 94-3096597
                                       -----------------
        Employer Taxable Year ends on: June 30th
                                       -----------------
        Plan Name: Aastrom Biosciences, Inc. 401(k) Plan
                   -------------------------------------
        Plan Number: 001
                     ---
 
 
                                      401(k)    PROFIT-   THRIFT
                                                SHARING
                                               
        Effective Date of Adoption:  01/01/94   
                                     --------   -------   -------
        Tax Reform Act of 1986
          Restatement Date:          
                                     --------   -------   -------
        Original Effective Date:
                                     --------   -------   -------


IF THIS PLAN IS A CONTINUATION OR AN AMENDMENT OF A PRIOR PLAN, ALL OPTIONAL
FORMS OF BENEFITS PROVIDED IN THE PRIOR PLAN MUST BE PROVIDED UNDER THIS PLAN TO
ANY PARTICIPANT WHO HAD AN ACCOUNT BALANCE, WHETHER OR NOT VESTED, IN THE PRIOR
PLAN.


-----------------
*   If there are any Participating Affiliates in this Plan, list below the
    proper name of each Participating Affiliate.

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

                                      -2-
<PAGE>
 
                             ARTICLE I. DEFINITIONS
                                        -----------
A.  "COMPENSATION"
     -------------

    (1) With respect to each Participant except as provided below, Compensation
        shall mean the (select all those applicable for each column):

 
 
401(k) AND/   PROFIT
 OR THRIFT    SHARING
                
  [X]          [_] (a) amount reported in the "Wages Tips and Other
                       Compensation" Box on Form W-2 for the applicable period
                       selected in Item 5 below.

  [_]          [_] (b) compensation for Code Section 415 safe-harbor purposes
                       (as defined in section 3.9.1(H)(i) of basic plan
                       document #03) for the applicable period selected in Item
                       5 below.

  [_]          [_] (c) amount reported pursuant to Code Section 3401 (a) for the
                       applicable period selected in Item 5 below.

  [_]          [_] (d) all amounts received (under either option (a) or (b)
                       above) for personal services rendered to the Employer but
                       excluding (select one):

                       [_] overtime
                       [_] bonuses 
                       [_] commissions
                       [_] amounts in excess of $
                                                 ----------------------
                       [_] other (specify)
                                           -----------------------------------.


    (2)  Treatment of Elective Contributions (select one):

         [X] (a)  For purposes of contributions, Compensation shall include
                  Elective Deferrals and amounts excludable from the gross
                  income of the Employee under Code Section 125, Code Section
                  402(e)(3), Code Section 402(h) or Code Section 403(b)
                  ("elective contributions").

         [_] (b)  For purposes of contributions, Compensation shall not include
                  "elective contributions."

    (3)  CODA Compensation (select one):

         [X] (a)  For purposes of the ADP and ACP Tests, Compensation shall
                  include "elective contributions."

         [_] (b)  For purposes of the ADP and ACP Tests, Compensation shall not
                  include "elective contributions."

                                       3
<PAGE>
 
    (4)  With respect to Contributions to an Employer Contributions Account,
         Compensation shall include all Compensation (select one):


         [_]  (a) during tile Plan Year in which the Participant enters the 
                  Plan.

         [X]  (b) after the Participant's Entry Date.

    (5)  The applicable period for determining Compensation shall be (select
         one):

          [X]  (a) the Plan Year.

          [_]  (b) the Limitation Year.

          [_]  (c) the consecutive 12-month period ending on _________________.

B.  "DISABILITY"
    ------------

    (1)  Definition
          ----------

    Disability shall mean a condition which results in the Participant's
    (select one):

    [_]  (a)  inability to engage in any substantial gainful activity by reason
              of any medically determinable physical or mental impairment that
              can be expected to result in death or which has lasted or can be
              expected to last for a continuous period of not less than 12
              months.

    [_]  (b)  total and permanent inability to meet the requirements of the
              Participant's customary employment which can be expected to last
              for a continuous period of not less than 12 months.

    [_]  (c)  qualification for Social Security disability benefits.

    [X]  (d)  qualification for benefits under the Employer's long-term
              disability plan.

    (2)  Contributions Due to Disability (select one):
         -------------------------------
    [X] (a)  No contributions to an Employer Contributions Account will be made
              on behalf of a Participant due to his or her Disability.

    [_] (b)  Contributions to an Employer Contributions Account will be made on
             behalf of a Participant due to his or her Disability provided that
                                                                  -------------
             the Employer elected option (a) or (c) above as the definition of
             Disability, contributions are not made on behalf of a Highly
             Compensated Employee, the contribution is based on the Compensation
             each such Participant would have received for the Limitation Year
             if the Participant had been paid at the rate of Compensation paid
             immediately before his or her Disability, and contributions made on
             behalf of such Participant will be nonforfeitable when made.

                                       4
<PAGE>
 
C  "EARLY RETIREMENT" is (select one):
    --------------------

   [_]  (1)  not permitted.

   [X]  (2)  permitted if a Participant terminates Employment before Normal
             Retirement Age and has (select one):

             [_] (a)  attained age     .
                                  -----
             [X] (b)  attained age 55 and completed 10 Years of Service.
                                   --               --
             [_] (c)  attained age       and completed      Years of Service
                                   -----               -----
                      as a Participant.

D.  "ELIGIBLE EMPLOYEES" (select one):
    -------------------

    [X]  (1)  All Employees are eligible to participate in the Plan.

    [_]  (2)  The following Employees are not eligible to participate in the
              Plan (select all those applicable):

           [_] (a)  Employees included in a unit of Employees covered by a
                    collective bargaining agreement between the Employer or a
                    Participating Affiliate and the Employee representatives
                    (not including any organization more than half of whose
                    members are Employees who are owners, officers, or
                    executives of the Employer or Participating Affiliate) in
                    the negotiation of which retirement benefits were the
                    subject of good faith bargaining, unless the bargaining
                    agreement provides for participation in the Plan.

           [_] (b)  non-resident aliens who received no earned income from the
                    Employer or a Participating Affiliate which constitutes 
                    income from sources within the United States.

           [_] (c)  Employees of an Affiliate.

           [_] (d)  Employees employed in or by the following specified
                    division, plant, location, job category or other 
                    identifiable individual or group of Employees:
                    
                    -----------------------------------------------------
                    -----------------------------------------------------

                                       5
<PAGE>
 
B.  "ENTRY DATE"
    ------------

    Entry Date shall mean (select as applicable):



 
401(k)
AND/OR  PROFIT-
THRIFT  SHARING
     
 [_]      [_]  (1) If the initial Plan Year is less than twelve months, the 
                           day of      and thereafter:
                    ------        -----
 [_]      [_]  (2) the first day of the Plan Year following the date the
                   Employee meets the eligibility requirements. if the Employer
                   elects this option (2) establishing only one Entry Date, the
                   eligibility "age and service" requirements elected in Article
                   II must be no more than age 20-1/2 and 6 months of service.

 [X]      [_]  (3) the first day of the month following the date the Employee
                   meets the eligibility requirements.

 [_]      [_]  (4) the first day of the Plan Year and the first day of the
                   seventh month of the Plan Year following the date the
                   Employee meets the eligibility requirements.

 [_]      [_]  (5) the first day of the Plan Year, the first day of the fourth
                   month of the Plan Year, the first day of the seventh month of
                   the Plan Year, and the first day of the tenth month of the
                   Plan Year following the date the Employee meets the
                   eligibility requirements.

 [_]      [_]  (6) other: 
                          ------------------------------------------------------
                   -------------------------------------------------------------
                   provided that the Entry Date or Dates selected are no later
                   than any of the options above.


F.  "HOURS OF SERVICE"
    ------------------

    Hours of Service for the purpose of determining a Participant's Period of
    Severance and Year of Service shall be determined on the basis of the method
    specified below:

    (1) Eligibility Service: For purposes of determining whether a Participant
        -------------------  
        has satisfied the eligibility requirements, the following method shall
        be used (select one):

401(k)
AND/OR  PROFIT-
THRIFT  SHARING

  [X]     [_]  (a) elapsed time method
  [_]     [_]  (b) hourly records method


                                       6
<PAGE>
 
    (2)  Vesting Service: A Participant's nonforfeitable interest shall be
         ----------------
         determined on the basis of the method specified below (select one):

         [_] (a)  elapsed time method
         [X] (b)  hourly records method
         [_] (c)  if this item (c) is checked, the Plan only provides for
                  contributions that are always 100% vested and this item (2)
                  will not apply.

    (3) Hourly Records: For the purpose of determining Hours of Service under
        --------------
        the hourly record method (select one):

        [X] (a)  only actual hours for which an Employee is paid or entitled to
                 payment shall be counted.

        [_] (b)  an Employee shall be credited with 45 Hours of Service if such
                 Employee would be credited with at least 1 Hour of Service 
                 during the week.

G. "INTEGRATION LEVEL"
   -------------------

           [X] (1) This Plan is not integrated with Social Security.

           [_] (2) This Plan is integrated with Social Security. The Integration
                   Level shall be (select one):

               [_] (a) the Taxable Wage Base.
               [_] (b) $      (a dollar amount less than the Taxable Wage Base).
                        ------
               [_] (c)      % of the Taxable Wage Base (not to exceed 100%). 
                      ------
               [_] (d) the greater of $10,000 or 20% of the Taxable Wage Base.

H. "LIMITATION COMPENSATION"
   -------------------------

   For purposes of Code Section 415, Limitation Compensation shall be
   compensation as determined for purposes of (select one):

           [_] (1) Code Section 415 Safe-Harbor as defined in Section 
                   3.9.1(H)(i) of basic plan document #03.

           [X] (2) the "Wages, Tips and Other Compensation" Box on Form W-2.

           [_] (3)  Code Section 3401(a) Federal Income Tax Withholding.

I. "LIMITATION YEAR"
   -----------------

   For purposes of Code Section 415, the Limitation Year shall be (select one):

   [X] (1) the Plan Year.
   [_] (2) the twelve consecutive month period ending on the      day of the
                                                             ----
           month of       .
                    ------

                                       7
<PAGE>
 
J. "NET PROFITS" are (select one):
   -------------

         [X] (1) not necessary for any contribution. 

         [_] (2) necessary for (select all those applicable):

              [_] (a) Profit-Sharing Contributions. 
              [_] (b) Matching 401(k) Contributions. 
              [_] (c) Matching Thrift Contributions.

K. "NORMAL RETIREMENT AGE"
   -----------------------

   Normal Retirement Age shall be (select one):

     [X] (1)  attainment of age 65 (not more than 65) by the Participant.

     [_] (2)  attainment of age    (not more than 65) by the Participant or the
                               ----
                    anniversary (not more than the 5th) of the first day of the
              -----
              Plan Year in which the Eligible Employee became a Participant
              whichever is later.

     [_] (3)  attainment of age     (not more than 65) by the Participant or
                               ----
              the      anniversary (not more than the 5th) of the first day on
                 -----
              which the Eligible Employee performed an hour of Service, 
              whichever is later.

L. "PARTICIPANT DIRECTED ASSETS" are:
   ----------------------------------

 
 
401(k) AND/  PROFIT-
OR THRIFT    SHARING
          
   [X]        [_] (1) permitted.

   [_]        [_] (2) not permitted.


M. "PLAN YEAR"
   -----------

   The Plan Year shall end on the 31ST day of DECEMBER.

N. "PREDECESSOR SERVICE"
   ---------------------

   Predecessor service will be credited (select one):

      [X] (1) only as required by the Plan.

      [_] (2) to include, in addition to the Plan requirements and subject to
              the limitations set forth below, service with the following
              predecessor employer(s) determined as if such predecessors were 
              the Employer:
                           ------------------------------------------------

                                       8
<PAGE>
 
              Service with such predecessor employer applies [select either or
              both (a) and/or (b); (c) is only available in addition to (a)
              and/or (b)]:

                 [_] (a) for purposes of eligibility to participate;
                 [_] (b) for purposes of vesting;
                 [_] (c) except for the following service:
                                                          --------------------- 
O.  "VALUATION DATE"
    ----------------
 
    Valuation Date shall mean (select one for each column, as applicable):

 
 
401(k) AND/  PROFIT-
OR THRIFT    SHARING
          
   [_]         [_] (1) the last business day of each month.

   [_]         [_] (2) the last business day of each quarter within the Plan 
                       Year.

   [_]         [_] (3) the last business day of each semi-annual period within 
                       the Plan Year.

   [_]         [_] (4) the last business day of the Plan Year. 

   [X]         [_] (5) other: DAILY.


                           ARTICLE II. PARTICIPATION
                                       -------------
    PARTICIPATION REQUIREMENTS
    --------------------------
An Eligible Employee must meet the following requirements to become a
Participant (select one or more for each column, as applicable):

 
 
401(k) AND/   PROFIT-
OR THRIFT     SHARING
           
  [_]           [_] (1) Performance of one Hour of Service.

  [_]           [_] (2) Attainment of age   (maximum 20 1/2) and completion of
                                         ---
                              (not more than 1/2) Years of Service. If this 
                        -----
                        item is selected, no Hours of Service shall be counted.

  [X]           [_] (3) Attainment of age    (maximum 21) and completion of 1/4
                                         ---                                ---
                        Year(s) of Service. if more than one Year of Service is
                        selected, tile immediate 100% vesting schedule must be
                        selected in Article VII of this Adoption Agreement.


                                       9
<PAGE>
 
 
 
            
  [_]           [_] (4) Attainment of age     (maximum 21) and completion of
                                         ----
                            Years of Service. If more than one Year of Service
                        ---
                        is selected, the immediate 100% vesting schedule must be
                        selected in Article VII of this Adoption Agreement.

  [X]           [_] (5) Each Employee who is an Eligible Employee on 01/01/94 
                                                                     --------
                        will be deemed to have satisfied the participation
                        requirements on the effective date without regard to
                        such Eligible Employee's actual age and/ or service.



           ARTICLE III. 401(k) CONTRIBUTIONS AND ACCOUNT ALLOCATION
                        ------------------------------------------- 
A. ELECTIVE DEFERRALS
   ------------------

If selected below, a Participant's Elective Deferrals will be (select all
applicable):

   [X] (1) a dollar amount or a percentage of Compensation, as specified by
           the Participant on his or her 401(k) Election form, which may not
           exceed 15% of his or her Compensation.

   [_] (2) with respect to bonuses, such dollar amount or percentage as
           specified by the Participant on his or her 401(k) Election form with
           respect to such bonus.

B. MATCHING 401(k) CONTRIBUTIONS
   -----------------------------
   If selected below, the Employer may make Matching 401(k) Contributions for
   each Plan Year (select one):

   [X] (1) Discretionary Formula:

              Discretionary Matching 401(k) Contribution equal to such a dollar
              amount or percentage of Elective Deferrals, as determined by the
              Employer, which shall be allocated (select one):

              [_] (a) based on the ratio of each Participant's Elective Deferral
                      for the Plan Year to the total Elective Deferrals of all
                      Participants for the Plan Year. If inserted, Matching
                      40l(k) Contributions shall be subject to a maximum amount
                      of $         for each Participant or    % of each 
                          ---------                       ----
                      Participant's Compensation.

                                      10
<PAGE>
 
              [X] (b) in an amount not to exceed     % of each Participants
                                                 ----
                      first    % of Compensation contributed as Elective
                            ---
                      Deferrals for the Plan Year. If any Matching 40l(k)
                      Contribution remains, it is allocated to each such
                      Participant in an amount not to exceed     % of the next
                                                             ----
                          % of each Participant's Compensation contributed as 
                      ----
                      Elective Deferrals for the Plan Year.

    Any remaining Matching 40l(k) Contribution shall be allocated to each such
    Participant in the ratio that such Participant's Elective Deferral for the
    Plan Year bears to the total Elective Deferrals of all such Participants for
    the Plan Year. If inserted, Matching 40l(k) Contributions shall be subject
    to a maximum amount of $         for each Participant or     % of each
                            --------                        -----
    Participant's Compensation.

    [_] (2) Nondiscretionary Formula:

           A nondiscretionary Matching 40l(k) Contribution for each Plan Year
           equal to (select one):

              [_] (a)       % of each Participant's Compensation contributed as
                      ------
                      Elective Deferrals. If inserted, Matching 40l(k)
                      Contributions shall be subject to a maximum amount of 
                      $      for each Participant or     % of each Participant's
                       ------                       -----
                      Compensation.

              [_] (b)      % of the first      % of the Participant's
                      -----              ------
                      Compensation contributed as Elective Deferrals and      %
                                                                        ------
                      of the next      % of the Participant's Compensation
                                 ------
                      contributed as Elective Deferrals. If inserted, Matching
                      40l(k) Contributions shall be subject to a maximum amount
                      of $       for each Participant or      % of each 
                          -------                       ------
                      Participant's Compensation.

C. PARTICIPANTS ELIGIBLE FOR MATCHING 401(k) CONTRIBUTION ALLOCATION
   -----------------------------------------------------------------

   The following Participants shall be eligible for an allocation to their
   Matching 401(k) Contributions Account (select all those applicable):

   [_] (1) Any Participant who makes Elective Deferrals.

   [_] (2) Any Participant who satisfies those requirements elected by the
           Employer for an allocation to his or her Employer Contributions
           Account as provided in Article IV Section C.

   [_] (3) Solely with respect to a Plan in which Matching 40l(k)
           Contributions are made quarterly (or on any other regular interval
           that is more frequent than annually) any Participant whose 40l(k)
           Election is in effect throughout such entire quarter (or other
           interval).

                                       11
<PAGE>
 
D. QUALIFIED MATCHING CONTRIBUTIONS
   --------------------------------

   If selected below, the Employer may make Qualified Matching Contributions for
   each Plan Year (select all those applicable):

         (1) In its discretion, the Employer may make Qualified Matching
             Contributions on behalf of (select one):

              [_] (a) all Participants who make Elective Deferrals in that Plan
                      Year.

              [X] (b) only those Participants who are Nonhighly Compensated
                      Employees and who make Elective Deferrals for that Plan
                      Year.

         (2) Qualified Matching Contributions will be contributed and allocated
             to each Participant in an amount equal to:

              [_] (a)     % of the Participant's Compensation contributed as
                      ----
                      Elective Deferrals. If inserted, Qualified Matching
                      Contributions shall not exceed      % of the Participant's
                                                     -----
                      Compensation.

              [X] (b) Such an amount determined by the Employer, which is
                      needed to meet the ACP Test.

         (3) In its discretion, the Employer may elect to designate all or any
             part of Matching 401(k) Contributions as Qualified Matching
             Contributions that are taken into account as Elective Deferrals --
             included in the ADP Test and excluded from the ACP Test -- on 
             behalf of (select one):

              [_] (a) all Participants who make Elective Deferrals for that
                      Plan Year.

              [X] (b) Only Participants who are Nonhighly Compensated Employees
                      who make Elective Deferrals for that Plan Year.

E.  QUALIFIED NONELECTIVE CONTRIBUTIONS
    -----------------------------------

    If selected below, the Employer may make Qualified Nonelective Contributions
    for each Plan Year (select all those applicable):

    (1) In its discretion, the Employer may make Qualified Nonelective
        Contributions on behalf of (select one):

              [_] (a) all Eligible Participants.

              [X] (b) only Eligible Participants who are Nonhighly Compensated
                      Employees.

                                      12
<PAGE>
 
     (2) Qualified Nonelective Contributions will be contributed and allocated
         to each Eligible Participant in an amount equal to (select one):

         [_] (a)      % (no more than 15%) of the Compensation of each Eligible
                  ----
                  Participant eligible to share in the allocation.

         [X] (b) Such an amount determined by the Employer, which is needed to
                 meet either the ADP Test or ACP Test.

     (3) At the discretion of the Employer, as needed and taken into account
         as Elective Deferrals included in the ADP Test on behalf of (select
         one):

         [_] (a) all Eligible Participants.

         [X] (b) only those Eligible Participants who are Nonhighly Compensated
                 Employees.

F. ELECTIVE DEFERRALS USED IN ACP TEST (select one):
   -----------------------------------

   [X] (1) At the discretion of the Employer, Elective Deferrals may be used
           to satisfy tile ACP Test.

   [_] (2) Elective Deferrals may not be used to satisfy the ACP Test.

G. MAKING AND MODIFYING A 401(k) ELECTION
   --------------------------------------

   An Eligible Employee shall be entitled to increase, decrease or resume his or
   her Elective Deferral percentage with the following frequency during the Plan
   Year (select one):

        [_] (1) annually. 
        [_] (2) semi-annually.
        [X] (3) quarterly.
        [_] (4) monthly 
        [_] (5) other (specify):         .
                                 --------
   Any such increase, decrease or resumption shall be effective as of the first
   payroll period coincident with or next following the first day of each period
   set forth above. A Participant may completely discontinue making Elective
   Deferrals at any time effective for the payroll period after written notice
   is provided to the Administrator.

                                      13
<PAGE>
 
                   ARTICLE IV. PROFIT-SHARING CONTRIBUTIONS
                               ----------------------------
                             AND ACCOUNT ALLOCATION
                             ----------------------

A. PROFIT-SHARING CONTRIBUTIONS
   ----------------------------

   If selected below, the following contributions for each Plan Year will be
   made:

   Contributions to Employer Contributions Accounts (select one):

   [_] (a) Such an amount, if any, as determined by the Employer. 
   [_] (b)       % of each Participant's Compensation.
           ------

B. ALLOCATION OF CONTRIBUTIONS TO EMPLOYER CONTRIBUTIONS ACCOUNTS (select one):
   --------------------------------------------------------------

   [_] (1) Non-Integrated Allocation

           The Employer Contributions Account of each Participant eligible to
           share in the allocation for a Plan Year shall be credited with a
           portion of the contribution, plus any forfeitures if forfeitures are
           reallocated to Participants, equal to the ratio that the
           Participant's Compensation for the Plan Year bears to the
           Compensation for that Plan Year of all Participants entitled to share
           in the contribution.

   [_] (2) Integrated Allocation

           Contributions to Employer Contributions Accounts with respect to a
           Plan Year, plus any forfeitures if forfeitures are reallocated to
           Participants, shall be allocated to the Employer Contributions
           Account of each eligible Participant as follows:

                (a) First, in the ratio that each such eligible Participant's
                Compensation for the Plan Year bears to the Compensation for
                that Plan Year of all eligible Participants but not in excess of
                3% of each Participant's Compensation.

                (b) Second, any remaining contributions and forfeitures will be
                allocated in the ratio that each eligible Participant's
                Compensation for the Plan Year in excess of the Integration
                Level bears to all such Participants' excess Compensation for
                the Plan Year but not in excess of 3%.

                                     -14-
<PAGE>
 
                (c) Third, any remaining contributions and forfeitures will be
                allocated in the ratio that the sum of each Participant's
                Compensation and Compensation in excess of the Integration Level
                bears to the sum of all Participants' Compensation and
                Compensation in excess of the Integration Level, but not in
                excess of the Maximum Profit-Sharing Disparity Rate (defined
                below). 

                (d) Fourth, any remaining contributions or forfeitures
                will be allocated in the ratio that each Participant's
                Compensation for that year bears to all Participants'
                Compensation for that year.

            The Maximum Profit-Sharing Disparity Rate is equal to the lesser of:

                (a) 2.7% or 

                (b) Tile applicable percentage determined in accordance with the
                following table:

 
 
   IF THE INTEGRATION
   LEVEL IS (AS A % OF                   THE APPLICABLE
THE TAXABLE WAGE BASE ("TWB")).          PERCENTAGE IS:
                                      
20% (or $10,000 if greater)
or less of the TWB                             2.7%

More than 20% (but not less 
than $10,001 ) but not more
than 80% of the TWB                            1.3%

More than 80% but not less
than 100% of the TWB                           2.4%

100% of the TWB                                2.7%


                                      -15-
<PAGE>
 
C. PARTICIPANTS ELIGIBLE FOR EMPLOYER CONTRITION ALLOCATION
   --------------------------------------------------------

   The fo11owing Participants shall be eligible for an allocation to their
   Employer Contributions Account (select all those applicable):

   [_] (1) Any Participant who was employed during the Plan Year. 

   [_] (2) In the case of a Plan using the hourly record method for determining
           Vesting Service, any Participant who was credited with a Year of 
           Service during the Plan Year.

   [_] (3) Any Participant who was employed on the last day of the Plan Year. 

   [_] (4) Any Participant who was on a leave of absence on the last day of the
           Plan Year.

   [_] (5) Any Participant who during the Plan Year died or became Disabled
           while an Employee or terminated employment after attaining Normal
           Retirement Age.

   [_] (6) Any Participant who was credited with at least 501 Hours of Service
           whether or not employed on the last day of the Plan Year.

   [_] (7) Any Participant who was credited with at least 1,000 Hours of
           Service and was employed on the last day of the Plan Year.


                       ARTICLE V. THRIFT CONTRIBUTIONS 
                                  --------------------

                        THIS ARTICLE IS NOT APPLICABLE

A. EMPLOYEE THRIFT CONTRIBUTIONS
   -----------------------------

   If selected below, Employee Thrift Contributions, which are required for
   Matching Thrift Contributions, may be made by a Participant in an amount
   equal to (select one):

   [_] (1) A dollar amount or a percentage of the Participant's Compensation
           which may not be less than     % nor may not exceed   % of his or her
                                      ----                     --
           Compensation.

   [_] (2) An amount not less than    % of and not more than    % of each
                                   ---                       ---
           Participant's Compensation.


                                      -16-
<PAGE>
 
B. MAKING AND MODIFYING AN EMPLOYEE THRIFT CONTRIBUTION ELECTION
   -------------------------------------------------------------
 
   A Participant shall be entitled to increase, decrease or resume his or her
   Employee Thrift Contribution percentage with the following frequency during
   the Plan Year (select one):

   [_] (1) annually
   [_] (2) semi-annually
   [_] (3) quarterly
   [_] (4) monthly
   [_] (5) other (specify)
                          -----------------------

   Any such increase, decrease or resumption shall be effective as of the first
   payroll period coincident with or next following the first day of each period
   set forth above. A Participant may completely discontinue making Employee
   Thrift Contributions at any time effective for the payroll period after
   written notice is provided to the Administrator.

C. THRIFT MATCHING CONTRIBUTIONS
   -----------------------------

   If selected below, the Employer will make Matching Thrift Contributions for
   each Plan Year (select one):

   [_] (1) Discretionary Formula:

           A discretionary Matching Thrift Contribution equal to such a dollar
           amount or percentage as determined by the Employer, which shall be
           allocated (select one):    

           [_] (a) based on the ratio of each Participant's Employee Thrift
               Contribution for the Plan Year to the total Employee Thrift
               Contributions of all Participants for the Plan Year. If inserted,
               Matching Thrift Contributions shall be subject to a maximum
               amount of $        for each Participant or      % of each
                          -------                         -----
               Participant's Compensation.

           [_] (b) in an amount not to exceed      % of each Participant's first
                                              -----
                     % of Compensation contributed as Employee Thrift
               ------
               Contributions for the Plan Year. If any Matching Thrift
               Contribution remains, it is allocated to each such Participant
               in an amount not to exceed    % of the next    % of each
                                          ---              ---
               Participant's Compensation contributed as Employee Thrift
               Contributions for the Plan Year.

               Any remaining Matching Thrift Contribution shall be allocated to
               each such Participant in the ratio that such Participant's
               Employee Thrift Contributions for the Plan Year bears to the
               total Employee Thrift Contributions of all such Participants for
               the Plan Year. If inserted, Matching Thrift Contributions shall 
               be subject to a maximum amount of $      for each Participant or 
                                                  -----
                     % of each Participant's Compensation.
               ------

                                      -17-
<PAGE>
 
   [_] (2) Nondiscretionary Formula:

          A nondiscretionary Matching Thrift Contribution for each Plan Year
          equal to (select one):

          [_] (a)       % of each Participant's Compensation contributed as
                  ------
                  Employee Thrift Contributions. If inserted, Matching Thrift
                  Contributions shall be subject to a maximum amount of 
                  $      for each Participant or    % of each Participant's 
                   ------                       ----
                  Compensation.

          [_] (b)      % of the first    % of the Participant's Compensation
                  -----              ----
                  contributed as Employee Thrift Contributions and     % of the
                                                                   ----
                  next      % of the Participant's Compensation contributed as 
                      ------
                  Employee Thrift Contributions. If inserted, Matching Thrift 
                  Contributions shall be subject to a maximum amount of $
                                                                         ------
                  for each Participant or      % of each Participant's 
                                          -----
                  Compensation.

D. QUALIFIED MATCHING CONTRIBUTIONS
   --------------------------------

   If selected below, the Employer may make Qualified Matching Contributions
   for each Plan Year (select all those applicable):

         (1) In its discretion, the Employer may make Qualified Matching
             Contributions on behalf of (select one):

             [_] (a) all Participants who make Employee Thrift Contributions.

             [_] (b) only those Participants who are Nonhighly Compensated
                     Employees and who make Employee Thrift Contributions.

         (2) Qualified Matching Contributions will be contributed and allocated
             to each Participant in an amount equal to:

             [_] (a)     % of the Participant's Employee Thrift Contributions. 
                     ----
                     If inserted, Qualified Matching Contributions shall not 
                     exceed       % of the Participant's Compensation.
                            ------

             [_] (b) such an amount, determined by the Employer, which is
                     needed to meet the ACP Test.


                     ARTICLE VI. PARTICIPANT CONTRIBUTIONS
                                 -------------------------

PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS 
-------------------------------------------------
Participant Voluntary Nondeductible Contributions are (select one):

       [_] (a) permitted.

       [X] (b) not permitted.

                                       18
<PAGE>
 
                              ARTICLE VII. VESTING
                                           -------

A. EMPLOYER CONTRIBUTION ACCOUNTS
   ------------------------------

(1) A Participant shall have a vested percentage in his or her Profit-Sharing
    Contributions, Matching 401(k) Contributions and/or Matching Thrift
    Contributions, if applicable, in accordance with the following schedule
    (Select one):



 
 
MATCHING 401(k)
AND/OR MATCHING
THRIFT            PROFIT-SHARING
CONTRIBUTIONS     CONTRIBUTIONS
-------------     --------------
                    
   [_]            [_] (a) 100% vesting immediately upon participation.

   [_]            [_] (b) 100% after     (not more than 5) years of Vesting 
                                     ---
                          Service.

   [X]            [X] (c) Graded vesting schedule:

    0%             0% after 1 year of Vesting Service;
   --             --  
   20%            20% after 2 years of Vesting Service;
   --             --
   40%            40% (not less than 20%) after 3 years of Vesting Service;
   --             --
   60%            60% (not less than 40%) after 4 years of Vesting Service;
   --             --
   80%            80% (not less than 60%) after 5 years of Vesting Service;
   --             --
  100%           100% (not less than 80%) after 6 years of Vesting Service;
  ---            ---

                    100% after 7 years of Vesting Service.

                                       19
<PAGE>
 
(2) Top Heavy Plan

 
 
MATCHING 401(k)
AND/OR MATCHING
THRIFT            PROFIT-SHARING
CONTRIBUTIONS     CONTRIBUTIONS
-------------     --------------
               
                              Vesting Schedule (Select one):

    [_]           [_] (a) 100% vesting immediately upon participation.

    [_]           [_] (b) 100% after ___ (not more than 3) years of 
                          Vesting Service.

    [X]           [X] (c) Graded vesting schedule:

      0%           0% after 1 year of Vesting Service;
     --           --  
     20%          20% (not less than 20%) after 2 years of Vesting Service.
     --           --  
     40%          40% (not less than 40%) after 3 years of Vesting Service.
     --           --  
     60%          60% (not less than 60%) after 4 years of Vesting Service.
     --           --
     80%          80% (not less than 80%) after 5 years of Vesting Service.
     --           --

                    100% after 6 years of Vesting Service.

Top Heavy Ratio:

     (a) If the adopting Employer maintains or has ever maintained a qualified
         defined benefit plan, for purposes of establishing present value to
         compute the top-heavy ratio, any benefit shall be discounted only for
         mortality and interest based on the following:

                  Interest Rate:        8 %
                                    ------
                  Mortality Table:  UP' 84
                                    ------

      (b) For purposes of computing the top-heavy ratio, the valuation date
          shall be the last business day of each Plan Year.


                                       20
<PAGE>
 
B.  ALLOCATION OF FORFEITURES
    -------------------------

    Forfeitures shall be (select one from each applicable column):

 
 
MATCHING 401(k)
AND/OR MATCHING   
THRIFT             PROFIT-SHARING
CONTRIBUTIONS      CONTRIBUTIONS
-------------      -------------
               
     [X]           [_] (1) used to reduce Employer contributions for succeeding
                                Plan Year.

     [_]           [_] (2) allocated in the succeeding Plan Year in the ratio
                                which the Compensation of each Participant for
                                the Plan Year bears to the total Compensation of
                                all Participants entitled to share in the
                                Contributions. If the Plan is integrated with
                                Social Security, forfeitures shall be allocated
                                in accordance with the formula elected by the
                                Employer.


C. VESTING SERVICE
   ---------------

   For purposes of determining Years of Service for Vesting Service [select (1)
   or (2) and/or (3)]:

   [X] (1) All Years of Service shall be included.

   [_] (2) Years of Service before the Participant attained age 18 shall be
           excluded.

   [_] (3) Service with the Employer prior to the effective date of the Plan
           shall be excluded.

               ARTICLE VIII. DEFERRAL OF BENEFIT DISTRIBUTIONS,
                       IN-SERVICE WITHDRAWALS AND LOANS
                       --------------------------------

A. DEFERRAL OF BENEFIT DISTRIBUTIONS
   ---------------------------------
 
 
   401(k) AND/   PROFIT-
   OR THRIFT     SHARING
   -----------   -------
              
      [_]          [_] If this item is checked, a Participant's vested benefit
   in his or her Employer Accounts shall be payable as soon as practicable 
   after the earlier of: (1) the date the Participant terminates Employment 
   due to Disability or (2) the end of the Plan Year in which a terminated 
   Participant attains Early Retirement Age, if applicable, or Normal 
   Retirement Age.

                                       21
<PAGE>
 
B. IN-SERVICE DISTRIBUTIONS
   ------------------------

   [X] (1) In-service distributions may be made from any of the Participant's
           vested Accounts, at any time upon or after the occurrence of the
           following events (select all applicable):

           [X] (a) a Participant's attainment of age 59-1/ 2.
           [X] (b) due to hardships as defined in Section 5.9 of the Plan.

   [_] (2) In-service distributions are not permitted.

C.  LOANS ARE:
    ---------
 
 
401(k) AND/  PROFIT-
OR THRIFT    SHARING
-----------  -------
          
   [X]       [_] (1) permitted.

   [_]       [_] (2) not permitted.


                            ARTICLE IX. GROUP TRUST
                                        -----------

[_]  If this item is checked, the Employer elects to establish a Group Trust
     consisting of such Plan assets as shall from time to time be transferred to
     the Trustee pursuant to Article X of the Plan. The Trust Fund shall be a
     Group Trust consisting of assets of this Plan plus assets of the following
     plans of the Employer or of an Affiliate:

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

                           ARTICLE X. MISCELLANEOUS
                                      -------------

A. IDENTIFICATION OF SPONSOR
   -------------------------
   The address and telephone number of the Sponsor's authorized representative
   is 800 Scudders Mill Road, Plainsboro, New Jersey 08536; (609) 282-2272. This
                                                                  --------
   authorized representative can answer inquiries regarding the adoption of the
   Plan, the intended meaning of any Plan provisions, and the effect of the
   opinion letter.

   The Sponsor will inform the adopting Employer of any amendments made to the
   Plan or the discontinuance or abandonment of the Plan.

                                       22
<PAGE>
 
B. PLAN OF REGISTRATION
   --------------------
   1. Initial Registration
      --------------------

            This Plan must be registered with the Sponsor, Merrill Lynch,
      Pierce, Fenner & Smith Incorporated, in order to be considered a
      Prototype Plan by the Sponsor. Registration is required so that the
      Sponsor is able to provide the Administrator with documents, forms and
      announcements relating to the administration of the Plan and with Plan
      amendments and other documents, all of which relate to administering the
      Plan in accordance with applicable law and maintaining compliance of the
      Plan with the law.

            The Employer must complete and sign the Adoption Agreement. Upon
      receipt of the Adoption Agreement, the Plan will be registered as a
      Prototype Plan of Merrill Lynch, Pierce, Fenner & Smith Incorporated. The
      Adoption Agreement will be countersigned by an authorized representative
      and a copy of the countersigned Adoption Agreement will be returned to the
      Employer.

   2. Registration Renewal
      --------------------

            Annual registration renewal is required in order for the Employer to
      continue to receive any and all necessary updating documents. There is an
      annual registration renewal fee in the amount set forth with the initial
      registration material. The adopting Employer authorizes Merrill Lynch,
      Pierce, Fenner & Smith Incorporated, to debit the account established for
      the Plan for payment of agreed upon annual fee; provided, however, if the
      assets of an account are invested solely in Participant-Directed Assets, a
      notice for this annual fee will be sent to the Employer annually. The
      Sponsor reserves the right to change this fee from time to time and will
      provide written notice in advance of any change.

C. PROTOTYPE REPLACEMENT PLAN
   --------------------------

        This Adoption Agreement is a replacement prototype plan for the (1)
   Merrill Lynch Special Prototype Defined Contribution Plan and Trust -
   40l(k) Plan #03-004 and (2) Merrill Lynch Asset Management, Inc., Special
   Prototype Defined Contribution Plan and Trust - 401 (k) Plan Adoption
   Agreement #03-004.

D. RELIANCE
   --------

        The adopting Employer may not rely on the opinion letter issued by the
    National Office of the Internal Revenue Service as evidence that this Plan
    is qualified under Code Section 401. In order to obtain reliance, the
    Employer must apply to the appropriate date Key District Director of the
    Internal Revenue Service for a determination letter with respect to the
    Plan.

                                      -23-
<PAGE>
 
                                          EMPLOYER
Dated:    1/3  , 1994        By: /s/ R. Douglas Armstrong
       --------    --                ------------------------------------------

                              To be executed by the sole proprietor, an
                              authorized partner or corporate officer, as
                              appropriate.


                                            R. DOUGLAS ARMSTRONG
                              -------------------------------------------------
                                                Print Name

                                             PRESIDENT and CEO 
                              -------------------------------------------------
                                      Title, if a corporate officer
                              -------------------------------------------------



SPONSOR ACCEPTANCE
------------------

    Subject to the terms and conditions of the Prototype Plan and this Adoption
Agreement, this Adoption Agreement is accepted by Merrill Lynch, Pierce, Fenner
& Smith Incorporated as the Prototype Sponsor.

Authorized Signature: /s/  Rebecca Freberg
                      ---------------------------------------------------------

                                      -24-
<PAGE>
 
                 MERRILL LYNCH TRUST COMPANY IS NOT A TRUSTEE

ACCEPTANCE BY TRUSTEE(S)

A. This Trustee Acceptance is to be completed only if the Employer appoints one
   or more Trustees and does not appoint a Merrill Lynch Trust Company as
   Trustee.

   The undersigned hereby accept all of the terms, conditions, and obligations
   of appointment as Trustee under the Plan. If the Employer has elected a Group
   Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the
   Trustee(s) of the Group Trust.

 
 
                                        
                                                 as TRUSTEE

     /s/ R. DOUGLAS R. ARMSTRONG           R. DOUGLAS ARMSTRONG
     ---------------------------           --------------------
 
          (Signature)                      (print or type name)

                                               as TRUSTEE

     /s/ TODD E. SIMPSON                    TODD E. SIMPSON
     ---------------------------           --------------------
           (Signature)                     (print or type name)

                                                as TRUSTEE

     ---------------------------           --------------------
           (Signature)                     (print or type name)

                                                as TRUSTEE

     ---------------------------           --------------------
           (Signature)                     (print or type name)



  Dated:            , 19
        ------------    --


                                     -25-
<PAGE>
 
                    MERRILL LYNCH TRUST COMPANY AS TRUSTEE

   This Trustee Acceptance and designation of Investment Committee are to be
   completed only when a Merrill Lynch Trust Company is appointed as Trustee.

   The undersigned hereby accept all of the terms, conditions, and obligations
   of appointment as Trustee under the Plan, If the Employer has elected a Group
   Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the
   Trustee(s) of the Group Trust.

   SEAL                                        MERRILL LYNCH TRUST COMPANY

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

Dated:           , 19                By:
      -----------    --                 -------------------------------



DESIGNATION OF INVESTMENT COMMITTEE

   The Investment Committee for the Plan is (print or type name):

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

                                     -26-
<PAGE>
 
               MERRILL LYNCH TRUST COMPANY IS ONE OF THE TRUSTEES

    This Trustee Acceptance is to be completed only if, in addition to a Merrill
    Lynch Trust Company as Trustee, the Employer appoints an additional Trustee
    of a second trust fund.

    The undersigned hereby accept all of the terms, conditions, and obligations
    of appointment as Trustee under the Plan. If the Employer has elected a
    Group Trust in this Adoption Agreement, the undersigned Trustee(s) shall
    be the Trustee(s) of the Group Trust.

                                                  as TRUSTEE

    --------------------------------     ----------------------------------
              (Signature)                      (print or type name)

   Dated:            , 19
         ------------     --

   SEAL                                  MERRILL LYNCH TRUST COMPANY

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

Dated:           , 19             By:
      -----------    ---              ---------------------------------


DESIGNATION OF INVESTMENT COMMITTEE

    The Investment Committee for the Plan is (print or type name):

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

                                      -27-