10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934
	For the fiscal year ended December 28, 2002
	OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________to_________
	Commission File Number 1-5039

WEIS MARKETS, INC.
(Exact name of registrant as specified in its charter)

PENNSYLVANIA (State or other jurisdiction of incorporation or organization)	24-0755415 (I.R.S. Employer Identification No.)
1000 S. Second Street P. O. Box 471 Sunbury, Pennsylvania (Address of principal executive offices)	17801-0471 (Zip Code)

Registrant's telephone number, including area code: (570) 286-4571         Registrant's web address: www.weismarkets.com

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

Title of each class
Common stock, no par value Name of each exchange on which registered
New York Stock Exchange

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

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

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12-b-2).   Yes [X]  No   [   ]

The aggregate market value of Common Stock held by non-affiliates of the Registrant is approximately $421,798,000.
Shares of common stock outstanding as of March 7, 2003 - 27,193,537.

DOCUMENTS INCORPORATED BY REFERENCE:  Selected portions of the Weis Markets, Inc. definitive proxy statement dated March 7, 2003 are incorporated by reference in Part III of this Form 10-K.

  WEIS MARKETS, INC.

TABLE OF CONTENTS

FORM 10-K			Page
Part I
	Item 1. Business		1
	Item 2. Properties		3
	Item 3. Legal Proceedings		3
	Item 4. Submission of Matters to a Vote of Security Holders		3
Part II
	Item 5. Market for Registrant's Common Equity and Related Stockholder Matters		4
	Item 6. Selected Financial Data		4
	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations		5
		Item 7a. Quantitative and Qualitative Disclosures about Market Risk	9
	Item 8. Financial Statements and Supplementary Data		10
	Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		27
Part III
	Item 10. Directors and Executive Officers of the Registrant		28
	Item 11. Executive Compensation		28
	Item 12. Security Ownership of Certain Beneficial Owners and Management		28
	Item 13. Certain Relationships and Related Transactions		28
	Item 14. Controls and Procedures		28
Part IV
	Item 15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K		29
Signatures			30
Certification - CEO			31
Certification - CFO			32
Exhibit 21
Exhibit 99.1
Exhibit 99.2

WEIS MARKETS, INC.

PART I

Item 1.      Business:

Weis Markets, Inc. is a Pennsylvania business founded by Harry and Sigmund Weis in 1912 and incorporated in 1924. The company is engaged principally in the retail sale of food and pet supplies in Pennsylvania and surrounding states. There was no material change in the nature of the company's business during fiscal 2002. The company's stock has been traded on the New York Stock Exchange since 1965 under the symbol "WMK." The Weis family currently owns approximately 62% of the outstanding shares. Robert F. Weis serves as Chairman of the Board of Directors, and Jonathan H. Weis, son of Robert F. Weis, serves as Vice President and Secretary. Both are involved in the day-to-day operations of the business.

On May 7, 2001, the company repurchased approximately 14.5 million shares of its common stock from the family of the late Sigfried Weis for approximately $434.3 million in cash. The company sold Weis Food Service, its regional food service division, in April of 2000.

The company's retail food stores sell groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, prescriptions, deli/bakery products, prepared foods, fuel and general merchandise items, such as health and beauty care and household products. In addition, customer convenience is addressed at many locations by offering services such as company-operated photo labs and third parties providing in-store banks, laundry services and take-out restaurants. The company advertises through various media, including circulars, newspapers, radio and television. Printed circulars are used extensively on a weekly basis to advertise featured items. The company utilizes a loyalty card program, "Weis Club Preferred Shopper," which provides shoppers with an opportunity to receive discounts, promotions and rewards. The company owns and operates 160 retail food stores and owns SuperPetz, LLC, a chain of 33 pet supply stores.

The percentage of net sales contributed by each class of similar products for each of the previous five fiscal years was:

Year	Grocery	Meat	Produce	Pharmacy	Pet Supply	Other
1998	56.00	13.84	11.69	5.99	4.00	8.48
1999	55.86	13.97	12.05	6.66	3.28	8.18
2000	57.61	15.22	12.75	7.82	3.17	3.43
2001	57.74	15.54	12.95	8.89	3.25	1.63
2002	55.39	15.29	14.73	9.83	3.28	1.48

Retail food store locations by state and by trade name are as follows:

			Mr. Z's	King's	Cressler's	Scot's
State	Total	Weis Markets	Food Mart	Supermarkets	Marketplace	Lo-Cost	Save-A-Lot
Pennsylvania	132	103	17	6	1	3	2
Maryland	21	21
New Jersey	3	3
New York	2	2
Virginia	1	1
West Virginia	1	1
Total	160	131	17	6	1	3	2

Page 1 of 32 (Form 10-K)

WEIS MARKETS, INC.

Item 1. Business (continued)

All trade names, except Scot's Lo-Cost and Save-A-Lot, operate as conventional supermarkets. Scot's Lo-Cost operates under a warehouse format, while Save-A-Lot's format caters to the price motivated consumer. The retail food stores range in size from 8,000 to 65,000 square feet, with an average size of approximately 45,000 square feet. The following summarizes the number of stores by size categories:

Square feet	Number of stores
55,000 to 65,000	18
45,000 to 54,999	77
35,000 to 44,999	37
25,000 to 34,999	19
Under 25,000	9
Total	160

The following schedule shows the changes in the number of retail food stores, total square footage and store additions/remodels:

(square feet in thousands)	2002		2001		2000		1999		1998
Beginning store count	163		163		163		158		154
New stores	1		2		2		5		4
Relocations	3		---		3		---		1
Acquistions	---		---		4		4		1
Closed stores	(2	)	(2	)	(4	)	(3	)	(1	)
Relocated stores	(3	)			(5	)	(1	)	(1	)
Sold	(2	)	---		---		---		---
Ending store count	160		163		163		163		158
Total square feet, at year-end	7,154		7,168		7,087		6,909		6,527
Additions/major remodels	5		6		6		6		13

The company supports the retail operations through a centrally located distribution facility, its own transportation fleet and three manufacturing facilities.  The company is required to use a significant amount of working capital to provide for the necessary amount of inventory to meet demand for its products through efficient use of buying power and effective utilization of space in the warehouse facilities. The manufacturing facilities consist of a meat processing plant, an ice cream plant, an ice plant and a milk processing plant.

At year-end, SuperPetz, LLC operated 2 stores in Alabama, 1 store in Georgia, 1 store in Indiana, 1 store in Kentucky, 1 store in Maryland, 2 stores in Michigan, 8 stores in Ohio, 1 store in North Carolina, 7 stores in Pennsylvania, 5 stores in South Carolina, and 4 stores in Tennessee.

The business of the company is highly competitive. The number of competitors and the variety of competition experienced by the company's stores vary by market area. National, regional and local food chains, as well as independent food stores comprise the company's principal competition, although the company also faces substantial competition from convenience stores, membership warehouse clubs, specialty retailers, supercenters and large-scale drug and pharmaceutical chains. The company competes based on price, quality, location and service.

The company has approximately 19,000 full-time and part-time associates.

Page 2 of 32 (Form 10-K)

WEIS MARKETS, INC.

Item 2.      Properties:

The company owns and operates 81 of its retail food stores, and leases and operates 79 stores under operating leases that expire at various dates up to 2024. SuperPetz leases all 33 of its retail store locations. The company owns all of its trade fixtures and equipment in its stores and several parcels of vacant land, which are available as locations for possible future stores or other expansion.

The company owns and operates one warehouse in Milton, Pennsylvania of approximately 1,109,000 square feet, and one in Northumberland, Pennsylvania totaling approximately 76,000 square feet. The company also owns one warehouse in Sunbury, Pennsylvania totaling approximately 564,000 square feet of which 290,000 is sublet. The company operates an ice cream plant, meat processing plant, ice plant and milk processing plant in the remaining 274,000 square feet at its Sunbury location.

Item 3.      Legal Proceedings:

Neither the company nor any subsidiary is presently a party to, nor is any of their property subject to, any pending legal proceedings, other than routine litigation incidental to the business.

Item 4.      Submission of Matters to a Vote of Security Holders:

There were no matters submitted to a vote of security holders during the fourth quarter of 2002.

Page 3 of 32 (Form 10-K)

WEIS MARKETS, INC.

PART II

Item 5.      Market for Registrant's Common Equity and Related Stockholder Matters:

The company's stock is traded on the New York Stock Exchange (ticker symbol WMK). The approximate number of shareholders including individual participants in security position listings on December 28, 2002 as provided by the company's transfer agent was 5,614. High and low stock prices and dividends paid per share for the last two fiscal years were:

	2002			2001
	Stock Price		Dividend	Stock Price		Dividend
Quarter	High	Low	Per Share	High	Low	Per Share
First	$30.62	$26.90	$.27	$38.25	$32.48	$.27
Second	38.18	29.30	.27	35.70	31.45	.27
Third	39.50	31.03	.27	35.30	25.80	.27
Fourth	35.45	29.79	.27	29.76	26.52	.27

Item 6.      Selected Financial Data:

The following selected historical financial information has been derived from the company's audited consolidated financial statements. This information should be read in connection with the company's Consolidated Financial Statements and the Notes thereto, as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in Item 7.

Five Year Review of Operations

		52 Weeks		52 Weeks		53 Weeks		52 Weeks		52 Weeks
		Ended		Ended		Ended		Ended		Ended
(dollars in thousands, except per share amounts)		Dec. 28, 2002		Dec. 29, 2001		Dec. 30, 2000		Dec. 25, 1999		Dec. 26, 1998
Net sales	$	1,999,364	$	1,971,665	$	2,042,329	$	1,992,791	$	1,853,892
Costs and expenses		1,919,957		1,908,725		1,962,246		1,899,756		1,777,466
Income from operations		79,407		62,940		80,083		93,035		76,426
Other income and expense		15,279		18,907		36,729		30,980		58,072
Income before provision for income taxes		94,686		81,847		116,812		124,015		134,498
Provision for income taxes		35,537		31,792		42,989		44,290		50,815
Net income		59,149		50,055		73,823		79,725		83,683
Retained earnings, beginning of year		648,522		1,069,986		1,040,354		1,003,170		960,419
		707,671		1,120,041		1,114,177		1,082,895		1,044,102
Stock purchase and cancellation		---		434,317		---		---		---
Cash dividends		29,377		37,202		44,191		42,541		40,932
Retained earnings, end of year	$	678,294	$	648,522	$	1,069,986	$	1,040,354	$	1,003,170
Weighted-average shares outstanding		27,201,170		32,298,696		41,695,347		41,718,188		41,775,991
Cash dividends per share	$	1.08	$	1.08	$	1.06	$	1.02	$	0.98
Basic and diluted earnings per share	$	2.17	$	1.55	$	1.77	$	1.91	$	2.00
Working capital	$	114,937	$	102,331	$	496,906	$	481,728	$	489,475
Total assets	$	716,699	$	704,185	$	1,085,904	$	1,058,221	$	1,029,202
Long-term obligations	$	---	$	25,000	$	---	$	---	$	---
Shareholders' equity	$	552,432	$	525,364	$	947,886	$	918,477	$	890,641
Number of grocery stores		160		163		163		163		158
Number of pet supply stores		33		33		33		34		36

Page 4 of 32 (Form 10-K)

WEIS MARKETS, INC.

Item 7.      Management's Discussion and Analysis of Financial Condition and Results of Operations:

Results of Operations

Sales increased 1.4% or $27.7 million to $1.999 billion for the 52-week fiscal year ended December 28, 2002 compared to sales of $1.972 billion for the 52 weeks of fiscal 2001. Sales decreased $70.7 million in 2001 from the 53 weeks of fiscal 2000. Same store sales increased 1.4% in 2002, decreased 1.4% in 2001, and increased 2.3% in 2000.

The company's 2002 sales results were affected by a softening economy; deflation in many categories, particularly meat, dairy and key grocery categories; and intensified competition throughout its market. Total sales in 2001 compared to 2000 decreased as a result of the sale of the company's regional food service division in the second quarter and an additional week of business in 2000. Excluding sales from year-over-year comparisons that were generated from the food service division and from the additional week in 2000, the company's sales increased .3%. Adjusting for the extra week of sales, same store sales increased .6% in 2001 and .2% in 2000.

Gross profit as a percentage of sales increased from 25.7% in 2000 to 26.1% in 2001 and to 26.4% in 2002. Gross profit dollars realized on sales in 2002 increased $13.2 million, or 2.6%, to $527.9 million compared to 2001 and decreased $9.5 million in 2001 compared to 2000. Improvements in the company's supply chain network favorably impacted the gross profit rate in 2002. The gross profit rate increase from 2000 to 2001 was attributable to a decline in product costs in key categories and the impact of lower gross profits realized in the food service division.

Operating, general and administrative expenses in 2002 totaled $448.5 million or 22.4% of sales, compared to 22.9% in 2001 and 21.7% in 2000. Several factors contributed to the reduction in expense as a percentage of sales in 2002 as compared to 2001. The company incurred $5.3 million in expenses associated with the stock repurchase in 2001. With the implementation of Statement 142 in 2002 (see Footnote 11), amortization of intangibles was reduced by $2.0 million. The company also realized success in several expense control initiatives throughout the organization.

In 2002, the company's investment income totaled $879,000, a decrease of $9.0 million or 91.1% compared to the same period a year ago. The company sold the majority of its investment portfolio in the first half of 2001 in order to complete its all cash stock repurchase transaction. In 2001, the company earned $9.9 million in investment income, an $8.7 million decrease from 2000. The company realized gains on the sale of marketable securities of $.6 million in 2001 and $1.3 million in 2000.

The company's other income and expense is primarily generated from rental payments, coupon-handling fees, lottery commissions, cardboard salvage, gain or loss on the sale of fixed assets and interest expense. Other income in 2002 totaled $14.8 million or .7% of sales, a $4.4 million or 42.3% increase compared to 2001. Gains realized on the sale of assets in 2002, consisting primarily of closed store facilities, were $3.6 million. In 2000, the company realized $5.8 million in other income from the sale of its food service division.

Interest expense in 2002 totaled $394,000 compared to $1.4 million in 2001 and $0 interest expense in 2000. In 2002, the company entered into a $100 million unsecured revolving credit facility to provide funds for general corporate purposes. As of the end of the year, the company had not borrowed any funds under this loan facility.

Page 5 of 32 (Form 10-K)

WEIS MARKETS, INC.

Item 7.      Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)

The company's combined federal and state effective tax rate was 37.5% in 2002, 38.8% in 2001 and 36.8% in 2000. The tax rate increased in 2001 after the company sold its large position in tax-free investments in order to complete its stock repurchase. The company's federal income tax returns for the years 1997 through 1999 are under a routine audit by the Internal Revenue Service. The Internal Revenue Service has provided the company with a number of preliminary notices of proposed adjustment. The Internal Revenue Service has not completed its audit; however, if it were to propose a deficiency, the amount may be material to the overall financial position of the company. The company believes that it has meritorious defenses and would vigorously contest these matters.

Net income in 2002 was $59.1 million or 3.0% of sales compared to $50.1 million or 2.5% of sales in 2001 and $73.8 million or 3.6% of sales in 2000. Basic and diluted earnings per share of $2.17 in 2002 compared to $1.55 in 2001 and $1.77 in 2000. The impact from the company's large stock repurchase was fully realized in the company's earnings per share results for 2002 and partially realized in 2001. At the end of 2002, the company had 27.2 million shares of common stock outstanding. Basic and diluted earnings per share are computed using weighted-average shares outstanding, which were 27.2 million in 2002, 32.3 million in 2001, and 41.7 million in 2000.

As of the end of the fiscal year, Weis Markets, Inc. operated 160 retail food stores and 33 SuperPetz pet supply stores. The company currently operates supermarkets in Pennsylvania, Maryland, New Jersey, New York, Virginia and West Virginia. SuperPetz operates stores in Alabama, Georgia, Indiana, Kentucky, Maryland, Michigan, North Carolina, Ohio, Pennsylvania, South Carolina and Tennessee.

Liquidity and Capital Resources

Net cash provided by operating activities totaled $106.5 million in 2002 compared with $113.9 million in 2001 and $125.6 million in 2000. Working capital increased 12.3% in 2002, decreased 79.4% in 2001, and increased 3.2% in 2000. The considerable decline in working capital in 2001 was the result of the sale of most of the company's investment portfolio in order to fund the large repurchase of common stock.

Net cash used in investing activities during 2002 was $51.1 million compared to $332.8 million provided by investing activities in 2001 and $82.4 million used in 2000. In 2002 and 2000, these funds were used primarily for the purchase of new securities and the purchase of property and equipment. Property and equipment purchases during fiscal 2002 totaled $46.1 million compared to $48.1 million in 2001 and $56.3 million in 2000. Intangible and other assets increased $13.4 million in 2000 due to grocery store acquisitions. As a percentage of sales, capital expenditures were 2.3%, 2.4% and 2.8% in 2002, 2001 and 2000, respectively.

The company's capital expansion program includes the construction of new superstores, the expansion and remodeling of existing units, the acquisition of sites for future expansion, new technology purchases and the continued upgrade of the company's processing and distribution facilities. Company management estimates that its current development plans will require an investment of approximately $72.4 million in 2003.

Net cash used in financing activities during 2002 was $54.7 million compared to $446.8 million in 2001 and $44.4 million in 2000. During 2002, the company cancelled its bridge credit agreement and established a three-year unsecured revolving credit facility in the amount of $100 million to provide funds for general corporate purposes including working capital and letters of credit. In 2001, the company purchased and cancelled 14.5 million shares of common stock for $434.3 million.

Page 6 of 32 (Form 10-K)

WEIS MARKETS, INC.

Item 7.      Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)

Total cash dividend payments on common stock amounted to $1.08 per share in 2002 and 2001 compared to $1.06 in 2000. Treasury stock purchases in the last three years were minimal. The Board of Directors' 1996 resolution authorizing the purchase of 1,000,000 shares of treasury stock has a remaining balance of 546,707 shares. The company has no other commitment of capital resources as of December 28, 2002, other than the lease commitments on its store facilities under operating leases that expire at various dates up to 2024.

The company's earnings and cash flows are subject to fluctuations due to changes in interest rates as they relate to available-for-sale securities and long-term debt. The company's marketable securities currently consist of Pennsylvania tax-free state and municipal bonds, U.S. Treasury securities, equity securities and other short-term investments.

By their nature, these financial instruments inherently expose the holders to market risk. The extent of the company's interest rate and other market risk is not quantifiable or predictable with precision due to the variability of future interest rates and other changes in market conditions. However, the company believes that its exposure in this area is not material.

Under its current policies, the company invests primarily in high-grade marketable securities and does not use interest rate derivative instruments to manage exposure to interest rate fluctuations. Historically, the company's principal investment strategy of obtaining marketable securities with maturity dates between one and five years helps to minimize market risk and to maintain a balance between risk and return. The equity securities owned by the company consist primarily of stock held in large capitalized companies trading on public security exchange markets. Weis Markets' management continually monitors the risk associated with its marketable securities. A quantitative tabular presentation of risk exposure is located in Item 7a.

Critical Accounting Policies

The company has chosen accounting policies that it believes are appropriate to accurately and fairly report its operating results and financial position, and the company applies those accounting policies in a consistent manner. The significant accounting policies are summarized in Note 1 to the consolidated financial statements.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires that the company makes estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The company evaluates these estimates and assumptions on an ongoing basis and may retain outside consultants, lawyers and actuaries to assist in its evaluation. The company believes the following accounting policies are the most critical because they involve the most significant judgments and estimates used in preparation of its consolidated financial statements.

Vendor Allowances

Vendor rebates, credits and promotional allowances that relate to the company's buying and merchandising activities, including lump-sum payments associated with long-term contracts, are recorded as a component of cost of sales as they are earned, in accordance with its underlying agreement.

Page 7 of 32 (Form 10-K)

WEIS MARKETS, INC.

Item 7.      Management's Discussion and Analysis of Financial Condition and Results of Operations: (continued)

Accrued Store Closing Costs

The company provides for closed store liabilities relating to the estimated post-closing lease liabilities and related other exit costs associated with the store closing commitments. The closed store liabilities are usually paid over the lease terms associated with the closed stores having remaining terms ranging from one to eight years. At December 28, 2002, closed store lease liabilities totaled $3.1 million. The company estimates the lease liabilities, net of sublease income, using the undiscounted rent payments of closed stores. Other exit costs include estimated real estate taxes, common area maintenance, insurance and utility costs to be incurred after the store closes over the remaining lease term. Store closings are generally completed within one year after the decision to close. Adjustments to closed store liabilities and other exit costs primarily relate to changes in subtenants and actual exit costs differing from original estimates. Adjustments are made for changes in estimates in the period in which the change becomes known. Any excess store closing liability remaining upon settlement of the obligation is reversed to income in the period that such settlement is determined. Inventory write-downs, if any, in connection with store closings, are classified in cost of sales. Costs to transfer inventory and equipment from closed stores are expensed as incurred. Store closing liabilities are reviewed quarterly to ensure that any accrued amount that is no longer needed for its originally intended purpose is reversed to income in the proper period.

Self-Insurance

The company is self-insured for a majority of its workers' compensation, general liability, vehicle accident and associate medical benefit claims. The self-insurance liability for most of the workers' compensation is determined based on historical data and an estimate of claims incurred but not reported. The other self-insurance liabilities are determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. The company is liable for associate health claims up to a lifetime aggregate of $1,000,000 per member and for workers compensation claims up to $1,000,000 per claim. Property and casualty insurance coverage is maintained with outside carriers at deductible or retention levels ranging from $100,000 to $500,000. Significant assumptions used in the development of the actuarial estimates include reliance on our historical claims data including average monthly claims and average lag time between in currence and payment.

Forward-Looking Statements

In addition to historical information, this Annual Report may contain forward-looking statements. Any forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. For example, risks and uncertainties can arise with changes in: general economic conditions, including their impact on capital expenditures; business conditions in the retail industry; the regulatory environment; rapidly changing technology and competitive factors, including increased competition with regional and national retailers; and price pressures. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management's analysis only as of the date hereof. The company undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should ca refully review the risk factors described in other documents the company files periodically with the Securities and Exchange Commission.

Page 8 of 32 (Form 10-K)

WEIS MARKETS, INC.

Item 7a.      Quantitative and Qualitative Disclosures about Market Risk:

(dollars in thousands)		Expected Maturity Dates														Fair Value
December 28, 2002		2003		2004		2005		2006		2007		Thereafter		Total		Dec. 28, 2002
Rate sensitive assets:
Fixed interest rate securities	$	6,000	$	1,500	$	---	$	---	$	---	$	---	$	7,500	$	7,567
Average interest rate		1.98	%	4.40	%	---		---		---		---		2.17	%
Variable interest rate securities	$	25,764	$	---	$	---	$	---	$	---	$	---	$	25,764	$	25,764
Average interest rate		1.23	%	---		---		---		---		---		1.23	%
(dollars in thousands)		Expected Maturity Dates														Fair Value
December 29, 2001		2002		2003		2004		2005		2006		Thereafter		Total		Dec. 29, 2001
Rate sensitive assets:
Fixed interest rate securities	$	15	$	1,000	$	1,500	$	---	$	---	$	---	$	2,515	$	2,584
Average interest rate		4.97	%	4.48	%	4.40	%	---		---		---		4.73	%
Variable interest rate securities	$	11,930	$	---	$	---	$	---	$	---	$	---	$	11,930	$	11,930
Average interest rate		2.80	%	---		---		---		---		---		2.80	%
Rate sensitive liabilities:
Variable interest rate securities	$	25,000	$	---	$	---	$	---	$	---	$	---	$	25,000	$	25,000
Average interest rate		3.00	%	---		---		---		---		---		3.00	%

Other Relevant Market Risks
The company's equity securities at December 29, 2001 had a cost basis of $3,125,000 and a fair value of $14,161,000. The dividend yield realized on these equity investments was 2.90% in 2001. The company's equity securities at December 28, 2002 had a cost basis of $3,125,000 and a fair value of $10,179,000. The dividend yield realized on these equity investments was 4.07% in 2002. Market risk, as it relates to equities owned by the company, is discussed within the "Liquidity and Capital Resources" section of "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained within this report.

Page 9 of 32 (Form 10-K)

WEIS MARKETS, INC.

Item 8.      Financial Statements and Supplementary Data:

WEIS MARKETS, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

December 28, 2002 and December 29, 2001

		2002			2001
Assets
Current:
Cash	$	3,929		$	3,255
Marketable securities		43,510			28,675
Accounts receivable, net		30,188			26,530
Inventories		182,832			169,952
Prepaid expenses		3,980			8,294
Income taxes recoverable		---			3,395
Total current assets		264,439			240,101
Property and equipment, net		428,153			439,977
Intangible and other assets		24,107			24,107
	$	716,699		$	704,185
Liabilities
Current:
Accounts payable	$	101,917		$	98,382
Accrued expenses		15,704			11,043
Accrued self-insurance		16,117			15,040
Payable to employee benefit plans		8,950			8,672
Income taxes payable		6,112			---
Deferred income taxes		702			4,633
Total current liabilities		149,502			137,770
Deferred income taxes		14,765			16,051
Long-term debt		---			25,000
Shareholders' Equity
Common stock, no par value, 100,800,000 shares authorized,
32,986,337 and 32,978,037 shares issued, respectively		7,882			7,630
Retained earnings		678,294			648,522
Accumulated other comprehensive income		4,145			6,479
		690,321			662,631
Treasury stock at cost, 5,792,800 and 5,774,830 shares, respectively		(137,889	)		(137,267	)
Total shareholders' equity		552,432			525,364
	$	716,699		$	704,185
See accompanying notes to consolidated financial statements.

Page 10 of 32 (Form 10-K)

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share amounts)

For the Fiscal Years Ended December 28, 2002,

December 29, 2001 and December 30, 2000

		2002		2001		2000
Net sales	$	1,999,364	$	1,971,665	$	2,042,329
Cost of sales, including warehousing and distribution expenses		1,471,479		1,457,002		1,518,136
Gross profit on sales		527,885		514,663		524,193
Operating, general and administrative expenses		448,478		451,723		444,110
Income from operations		79,407		62,940		80,083
Investment income		879		9,860		18,557
Other income and expense		14,400		9,047		18,172
Income before provision for income taxes		94,686		81,847		116,812
Provision for income taxes		35,537		31,792		42,989
Net income	$	59,149	$	50,055	$	73,823
Weighted-average shares outstanding		27,201,170		32,298,696		41,695,347
Cash dividends per share	$	1.08	$	1.08	$	1.06
Basic and diluted earnings per share	$	2.17	$	1.55	$	1.77
See accompanying notes to consolidated financial statements.

Page 11 of 32 (Form 10-K)

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(dollars in thousands)

For the Fiscal Years Ended December 28, 2002,

December 29, 2001 and December 30, 2000

						Accumulated
						Other				Total
		Common		Retained		Comprehensive		Treasury		Shareholders'
		Stock		Earnings		Income		Stock		Equity
Balance at December 25, 1999	$	7,559	$	1,040,354	$	7,343	$	(136,779	)  $	918,477
Net income		---		73,823		---		---		73,823
Other comprehensive income		---		---		(59	)			(59	)
Comprehensive income										73,764
Shares issued for options (1,250 shares)		35		---		---		---		35
Treasury stock purchased (5,268 shares)		---		---		---		(199	)	(199	)
Dividends paid		---		(44,191	)	---		---		(44,191	)
Balance at December 30, 2000		7,594		1,069,986		7,284		(136,978	)	947,886
Net income		---		50,055		---		---		50,055
Other comprehensive income		---		---		(805	)	---		(805	)
Comprehensive income										49,250
Shares issued for options (1,300 shares)		36		---		---		---		36
Shares purchased and cancelled (14,477,242     shares)		---		(434,317	)	---		---		(434,317	)
Treasury stock purchased (8,708 shares)		---		---		---		(289	)	(289	)
Dividends paid		---		(37,202	)	---		---		(37,202	)
Balance at December 29, 2001		7,630		648,522		6,479		(137,267	)	525,364
Net income		---		59,149		---		---		59,149
Other comprehensive income		---		---		(2,334	)	---		(2,334	)
Comprehensive income										56,815
Shares issued for options (8,300 shares)		252		---		---		---		252
Treasury stock purchased (17,970 shares)		---		---		---		(622	)	(622	)
Dividends paid		---		(29,377	)	---		---		(29,377	)
Balance at December 28, 2002	$	7,882	$	678,294	$	4,145	$	(137,889	) $	552,432
See accompanying notes to consolidated financial statements.

Page 12 of 32 (Form 10-K)

Table of Contents

WEIS MARKETS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

For the Fiscal Years Ended December 28, 2002,

December 29, 2001 and December 30, 2000

		2002		2001		2000
Cash flows from operating activities:
Net income	$	59,149	$	50,055	$	73,823
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation		41,885		43,755		44,169
Amortization		5,797		7,222		6,682
(Gain) loss on sale of fixed assets		(3,620	)	1,629		(5,913	)
Gain on sale of marketable securities		---		(570	)	(1,279	)
Changes in operating assets and liabilities:
Inventories		(12,880	)	(1,411	)	(1,395	)
Accounts receivable and prepaid expenses		656		(2,923	)	8,508
Income taxes recoverable		3,395		(251	)	1,194
Accounts payable and other liabilities		9,551		14,993		(2,696	)
Income taxes payable		6,112		---		---
Deferred income taxes		(3,561	)	1,381		2,472
Net cash provided by operating activities		106,484		113,880		125,565
Cash flows from investing activities:
Purchase of property and equipment		(46,056	)	(48,046	)	(56,331	)
Proceeds from the sale of property and equipment		14,520		86		11,714
Purchase of marketable securities		(21,754	)	(299,064	)	(259,574	)
Proceeds from maturities of marketable securities		2,929		556,141		108,154
Proceeds from sale of marketable securities		---		123,660		127,043
Increase in intangible and other assets		(702	)	(19	)	(13,379	)
Net cash provided by (used in) investing activities		(51,063	)	332,758		(82,373	)
Cash flows from financing activities:
Proceeds (payments) of long-term debt, net		(25,000	)	25,000		---
Proceeds from issuance of common stock		252		36		35
Dividends paid		(29,377	)	(37,202	)	(44,191	)
Purchase and cancellation of stock		---		(434,317	)	---
Purchase of treasury stock		(622	)	(289	)	(199	)
Net cash used in financing activities		(54,747	)	(446,772	)	(44,355	)
Net increase (decrease) in cash		674		(134	)	(1,163	)
Cash at beginning of year		3,255		3,389		4,552
Cash at end of year	$	3,929	$	3,255	$	3,389

See accompanying notes to consolidated financial statements.

Page 13 of 32 (Form 10-K)

WEIS MARKETS, INC.

Notes to Consolidated Financial Statements

Note 1 Summary of Significant Accounting Policies

The following is a summary of the significant accounting policies utilized in preparing the company's consolidated financial statements:

(a) Description of Business
Weis Markets, Inc. is a Pennsylvania business corporation formed in 1924. The company is engaged principally in the retail sale of food and pet supplies in Pennsylvania and surrounding states. There was no material change in the nature of the company's business during fiscal 2002.

(b) Definition of Fiscal Year
The company's fiscal year ends on the last Saturday in December. Fiscal 2002, 2001 and 2000 were comprised of 52 weeks, 52 weeks and 53 weeks, respectively.

(c) Principles of Consolidation
The consolidated financial statements include the accounts of the company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

(d) Marketable Securities
Marketable securities consist of Pennsylvania tax-free state and municipal bonds, U.S. Treasury securities, U.S. Government federal agency notes, equity securities and other short-term investments. By policy, the company invests primarily in high-grade marketable securities. The company classifies all of its marketable securities as available-for-sale.

Available-for-sale securities are recorded at fair value as determined by quoted market price based on national markets. Unrealized holding gains and losses, net of the related tax effect, are excluded from earnings and are reported as a separate component of shareholders' equity until realized. A decline in the market value below cost that is deemed other than temporary results in a charge to earnings and the establishment of a new cost basis for the security. Dividend and interest income is recognized when earned. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of securities.

(e) Inventories
Inventories are valued at the lower of cost or market, using both the last-in, first-out (LIFO) and average cost methods.

(f) Property and Equipment
Property and equipment are carried at cost. Depreciation is provided on the cost of buildings and improvements and equipment principally using accelerated methods. Leasehold improvements are amortized over the terms of the leases or the useful lives of the assets, whichever is shorter.

Maintenance and repairs are expensed and renewals and betterments are capitalized. When assets are retired or otherwise disposed of, the assets and accumulated depreciation are removed from the respective accounts and any profit or loss on the disposition is credited or charged to income.

Page 14 of 32 (Form 10-K)

WEIS MARKETS, INC.

Note 1 Summary of Significant Accounting Policies (continued)

(g) Store Closing Costs
The company provides for closed store liabilities relating to the estimated post-closing lease liabilities and related other exit costs associated with the store closing commitments. The closed store liabilities are usually paid over the lease terms associated with the closed stores having remaining terms ranging from one to eight years. At December 28, 2002, closed store lease liabilities totaled $3.1 million. The company estimates the lease liabilities, net of sublease income, using the undiscounted rent payments of closed stores.

(h) Intangible Assets
Intangible assets are generally amortized over periods ranging from 15 to 20 years.

(i) Insurance Programs
The company maintains self-insurance programs for the majority of its associate health care benefits and workers compensation claims. Self-insurance costs are accrued based upon the aggregate of the liability for reported claims and an estimated liability for claims incurred but not reported. The company is liable for associate health claims up to a lifetime aggregate of $1,000,000 per member and for workers compensation claims up to $1,000,000 per claim. Property and casualty insurance coverage is maintained with outside carriers at deductible or retention levels ranging from $100,000 to $500,000.

(j) Incentive Plans
The company has elected to follow the intrinsic value method of accounting as detailed in the Accounting Principles Board's Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related Interpretations in accounting for its associate stock options because the alternative fair value accounting provided for under FASB Statement No. 123, "Accounting for Stock-Based Compensation," (Statement No. 123) requires use of option valuation models that were not developed for use in valuing associate stock options. The effect of applying Statement No. 123's fair value method to the company's stock-based awards results in pro forma net income and earnings per share that are not materially different from amounts reported.

(k) Income Taxes
Under the asset and liability method of the FASB Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (Statement No. 109), deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

(l) Revenue Recognition
Revenues from the sale of products to the company's customers are recognized at the point of sale.

(m) Vendor Allowances
Vendor rebates, credits and promotional allowances that relate to the company's buying and merchandising activities, including lump-sum payments associated with long-term contracts, are recorded as a component of cost of sales as they are earned, in accordance with its underlying agreement.

Page 15 of 32 (Form 10-K)

WEIS MARKETS, INC.

Note 1 Summary of Significant Accounting Policies (continued)

(n) Advertising Costs
The company expenses advertising costs as incurred. The company recorded advertising expense of $23.6 million in 2002, $26.3 million in 2001 and $25.4 million in 2000.

(o) New Accounting Standards
As of December 30, 2001, the company adopted Emerging Issues Task Force Issue Nos. 00-14, "Accounting for Certain Sales Incentives;" 00-22, "Accounting for 'Points' and Certain Other Time-Based or Volume-Based Sales Incentives Offers, and Offers for Free Products or Services to Be Delivered in the Future;" and 00-25, "Vendor Income Statement Characterization of Consideration from a Vendor to a Retailer" (EITF Issues). These EITF Issues establish new rules for accounting for certain sales incentives, loyalty programs and vendor contracts; however, the adoption of these EITF Issues do not have an impact on the company's net income or shareholders' equity. These EITF Issues require certain sales incentives, which prior to adoption were reported as expenses or costs of goods sold, to be classified as a reduction of revenue. Prior year financial statements were reclassified to conform to the requirements of these EITF Issues.

In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, "Business Combinations" (Statement No. 141) and No. 142, "Goodwill and Other Intangible Assets" (Statement No. 142) effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subjected to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives.

The company applied Statement No. 142 in the first quarter of fiscal 2002. Application of the Statement resulted in an increase in pre-tax net income of approximately $2.0 million for fiscal 2002 due to the elimination of amortization of goodwill. The company performed the required impairment tests of goodwill and determined that the company's goodwill was not impaired.

(p) Earnings Per Share
Basic and diluted earnings per share are the same amounts for each period presented.

(q) Use of Estimates
Management of the company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

Page 16 of 32 (Form 10-K)

Table of Contents

WEIS MARKETS, INC.

Note 2 Marketable Securities
Marketable securities, as of December 28, 2002 and December 29, 2001, consisted of:

				Gross		Gross
				Unrealized		Unrealized
(dollars in thousands)		Amortized		Holding		Holding		Fair
December 28, 2002		Cost		Gains		Losses		Value
Available-for-sale:
Pennsylvania state and municipal bonds	$	6,514	$	26	$	---	$	6,540
U.S. Treasury securities		1,023		4		---		1,027
Equity securities		3,125		7,064		10		10,179
Other short-term investments		25,764		---		---		25,764
	$	36,426	$	7,094	$	10	$	43,510

				Gross		Gross
				Unrealized		Unrealized
(dollars in thousands)		Amortized		Holding		Holding		Fair
December 29, 2001		Cost		Gains		Losses		Value
Available-for-sale:
Pennsylvania state and municipal bonds	$	1,524	$	---	$	---	$	1,524
U.S. Treasury securities		1,022		38		---		1,060
Equity securities		3,125		11,036		---		14,161
Other short-term investments		11,930		---		---		11,930
	$	17,601	$	11,074	$	---	$	28,675

Maturities of marketable securities classified as available-for-sale at December 28, 2002, were as follows:

		Amortized		Fair
(dollars in thousands)		Cost		Value
Available-for-sale:
Due within one year	$	31,787	$	31,791
Due after one year through five years		1,514		1,540
Equity securities		3,125		10,179
	$	36,426	$	43,510
See additional disclosures regarding marketable securities in notes 1(d) and 13.

Page 17 of 32 (Form 10-K)

Table of Contents

WEIS MARKETS, INC.

Note 3 Inventories
Merchandise inventories, as of December 28, 2002 and December 29, 2001, were valued as follows:

(dollars in thousands)		2002		2001
LIFO	$	145,138	$	134,544
Average cost		37,694		35,408
	$	182,832	$	169,952

If all inventories were valued on the average cost method, which approximates current cost, total inventories would have been $39,006,000 and $41,014,000 higher than as reported on the above methods as of December 28, 2002 and December 29, 2001, respectively.

Although management believes the use of the LIFO method for valuing certain inventories represents the most appropriate matching of costs and revenues in the company's circumstances, the following summary of net income and per share amounts based on the use of the average cost method for valuing all inventories is presented for comparative purposes.

(dollars in thousands, except per share amounts)		2002		2001		2000
Net income	$	57,975	$	48,947	$	73,477
Basic and diluted earnings per share	$	2.13	$	1.52	$	1.76

Note 4 Property and Equipment
Property and equipment, as of December 28, 2002 and December 29, 2001, consisted of:

	Useful Life
(dollars in thousands)	(in years)		2002		2001
Land		$	64,209	$	69,103
Buildings and improvements	10-60		335,224		325,775
Equipment	3-12		478,570		475,472
Leasehold improvements	5-20		99,690		99,692
Total, at cost			977,693		970,042
Less accumulated depreciation and amortization			549,540		530,065
		$	428,153	$	439,977

Page 18 of 32 (Form 10-K)

WEIS MARKETS, INC.

Note 5 Lease Commitments
At December 28, 2002, the company leased approximately 58% of its open store facilities under operating leases that expire at various dates up to 2024. These leases generally provide for fixed annual rentals; however, several provide for minimum annual rentals plus contingent rentals as a percentage of annual sales and a number of leases require the company to pay for all or a portion of insurance, real estate taxes, water and sewer rentals, and repairs, the cost of which is charged to the related expense category rather than being accounted for as rent expense. Most of the leases contain multiple renewal options, under which the company may extend the lease terms from 5 to 20 years.

Rent expense on all leases consisted of:

(dollars in thousands)		2002		2001		2000
Minimum annual rentals	$	29,291	$	29,706	$	27,685
Contingent rentals		274		219		297
	$	29,565	$	29,925	$	27,982

The following is a schedule by year of future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 28, 2002.

(dollars in thousands)
2003	$	28,781
2004		27,521
2005		24,279
2006		22,068
2007		19,475
Thereafter		141,213
	$	263,337

The company has $3,101,000 accrued for future minimum rental payments due on previously closed stores, reduced by the estimated sublease income to be received. The future minimum rental payments required under operating leases for these locations are included in the above schedule.

As of December 28, 2002, the future minimum rentals to be received under non-cancelable leases and subleases were $5,321,000.

Page 19 of 32 (Form 10-K)

WEIS MARKETS, INC.

Note 6 Retirement Plans
The company has a contributory retirement savings plan (401(k)) covering substantially all full-time associates, a noncontributory profit-sharing plan covering eligible associates, a noncontributory associate stock bonus plan covering eligible associates and two supplemental retirement plans covering certain officers of the company. An eligible associate as defined in the Weis Markets, Inc. Profit Sharing Plan includes salaried associates, store management and administrative support personnel. The company's policy is to fund 401(k), profit-sharing and stock bonus costs as accrued, but not supplemental retirement costs. Contributions to the 401(k) plan, the profit-sharing plan and the stock bonus plan are made at the sole discretion of the company.

The company's supplemental retirement plans provide for the payment of specific amounts of annual retirement benefits to the officers or to their beneficiaries over an actuarially computed normal life expectancy. The actuarial present value of accumulated benefits amounted to $7,824,000 and $7,551,000 at December 28, 2002 and December 29, 2001, respectively.

Retirement plan costs amounted to:

(dollars in thousands)		2002		2001		2000
Retirement savings plan	$	987	$	955	$	945
Profit-sharing plan		850		850		850
Employee stock bonus plan		40		40		40
Supplemental retirement plans		400		303		617
	$	2,277	$	2,148	$	2,452

The company has no other post-retirement benefit plans.

Page 20 of 32 (Form 10-K)

WEIS MARKETS, INC.

Note 7 Incentive Plans
(a) Stock Option Plan
The company has an incentive stock option plan for officers and other key associates under which 185,480 shares of common stock are reserved for issuance at December 28, 2002. Under the terms of the plan, option prices are 100% of the "fair market value" of the shares on the date granted. Options granted are immediately exercisable and expire ten years after date of grant.

Changes during the three years ended December 28, 2002, in options outstanding under the plan were as follows:

	Weighted-Average	Shares
	Exercise Price	Under Option
Balance, December 25, 1999	$34.37	85,720
Granted	$35.13	35,450
Exercised	$27.30	(1,250	)
Forfeited	$33.53	(3,400	)
Balance, December 30, 2000	$34.70	116,520
Granted	$32.72	5,750
Exercised	$27.81	(1,300	)
Forfeited	$35.40	(950	)
Balance, December 29, 2001	$34.68	120,020
Granted	$35.73	750
Exercised	$30.40	(8,300	)
Forfeited	$35.93	(1,200	)
Balance, December 28, 2002	$34.99	111,270

Exercise prices for options outstanding as of December 28, 2002 ranged from $26.25 to $37.94. The weighted-average remaining contractual life of those options is 5.7 years. As of December 28, 2002, all options are exercisable.

(b) Company Appreciation Plan
Under the company appreciation plan, officers and other associates are awarded rights equivalent to shares of company common stock. At the maturity date, usually one year after the date of award, the value of any appreciation from the original date of issue is paid in cash to the participants.

During 2002, 2001 and 2000, 13,500, 20,100 and 56,750 rights, respectively, were awarded under the program. Earnings were charged $37,000 in 2002, credited $188,000 in 2001 and credited $95,000 in 2000 for appropriate changes to the accrued expense for this plan.

Page 21 of 32 (Form 10-K)

WEIS MARKETS, INC.

Note 8 Long-Term Debt
In October 2002, the company entered into a three-year unsecured Revolving Credit Agreement (the "Credit Agreement") in the amount of $100 million to provide funds for general corporate purposes including working capital and letters of credit. The Credit Agreement requires the maintenance of affirmative and negative covenants, which among other things restrict stock purchases, capital expenditures, and asset dispositions. The covenants include the preservation of a minimum consolidated net worth and a fixed charge coverage ratio. Borrowings under the Credit Agreement bear interest at a Base-Rate Option or Euro-Rate Option at the discretion of the company. The Base Rate is the greater of Prime Rate or 0.50% plus the Federal Funds Effective Rate. The Euro-Rate is based upon the London interbank market plus an Applicable Margin. The Applicable Margin equals 0.625% plus a Usage Fee of 0.125% when borrowings exceed 33% of the aggregate committed amounts, or 0.25% when borrowings exceed 67% of the a ggregate committed amounts, or 0% in all other cases. The company also pays a commitment fee equal to 0.15% per annum on the unused portion of the Credit Agreement. At December 28, 2002, the company had no cash borrowings but had outstanding letters of credit of approximately $18 million under the Credit Agreement. The letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions.

The company entered into an unsecured $60 million bridge credit agreement on May 7, 2001, to provide funds for general corporate purposes. The availability under the bridge credit agreement was reduced to $45 million on November 15, 2001, $30 million on March 29, 2002, $25 million on May 31, 2002, and cancelled on August 30, 2002. The weighted-average interest rate for funds borrowed via the bridge credit agreement was 2.9% and 3.0% in 2002 and 2001, respectively.

Page 22 of 32 (Form 10-K)

WEIS MARKETS, INC.

Note 9 Income Taxes
The provision for income taxes consists of:

(dollars in thousands)		2002		2001		2000
Currently payable:
Federal	$	34,665	$	26,637	$	31,367
State		4,433		3,773		9,150
Deferred:
Federal		(2,150	)	1,005		2,151
State		(1,411	)	377		321
	$	35,537	$	31,792	$	42,989

The following is a reconciliation between the applicable income tax expense and the amount of income taxes that would have been provided at the Federal statutory rate. The statutory rate was 35% in 2002, 2001 and 2000.

(dollars in thousands)		2002		2001		2000
Tax at statutory rate	$	33,140	$	28,646	$	40,884
State income taxes, net of federal income tax benefit		1,964		2,697		5,204
Other (principally tax-exempt investment income in 2000)		433		449		(3,099	)
Actual provision (effective tax rate 37.5%, 38.8% and 36.8%, respectively)	$	35,537	$	31,792	$	42,989

Cash paid for income taxes was $29,960,000, $30,051,000 and $39,729,000 in 2002, 2001 and 2000, respectively.

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 28, 2002 and December 29, 2001, are presented below:

(dollars in thousands)		2002			2001
Deferred tax assets:
Accounts receivable	$	517		$	675
Compensated absences		511			680
Employee benefit plans		6,060			4,852
General liability insurance		1,584			1,699
Nondeductible accruals and other		1,200			310
Total deferred tax assets		9,872			8,216
Deferred tax liabilities:
Inventories		(7,635	)		(8,254	)
Unrealized gain on marketable securities		(2,939	)		(4,595	)
Depreciation		(14,765	)		(16,051	)
Total deferred tax liabilities		(25,339	)		(28,900	)
Net deferred tax liability	$	(15,467	)	$	(20,684	)
Current deferred liability - net	$	(702	)	$	(4,633	)
Noncurrent deferred liability - net		(14,765	)		(16,051	)
Net deferred tax liability	$	(15,467	)	$	(20,684	)

Page 23 of 32 (Form 10-K)

WEIS MARKETS, INC.

Note 10 Comprehensive Income

(dollars in thousands)		2002		2001		2000
Net income	$	59,149	$	50,055	$	73,823
Other comprehensive income by component, net of tax:
Unrealized holding gains (losses) arising during period (Net of deferred taxes of       $1,655, $335 and $488, respectively)		(2,334	)	(471	)	690
Reclassification adjustment for gains included in net income (Net of deferred       taxes of $0, $236 and $530, respectively)		---		(334	)	(749	)
Other comprehensive income, net of tax		(2,334	)	(805	)	(59	)
Comprehensive income	$	56,815	$	49,250	$	73,764

Note 11 Goodwill and Other Intangible Assets - Adoption of Statement 142
The effect of goodwill amortization on net income and earnings per share for 2002, 2001 and 2000, is as follows:

(dollars in thousands, except per share amounts)		2002		2001		2000
Net income	$	59,149	$	50,055	$	73,823
Add: Goodwill amortization, net of tax		---		1,618		1,438
Adjusted net income	$	59,149	$	51,673	$	75,261
Basic and diluted earnings per share	$	2.17	$	1.55	$	1.77
Add: Goodwill amortization, net of tax		---		.05		.03
Adjusted basic and diluted earnings per share	$	2.17	$	1.60	$	1.80

Note 12 Summary of Quarterly Results (Unaudited)
Quarterly financial data for 2002 and 2001 are as follows:

(dollars in thousands,	Thirteen Weeks Ended
except per share amounts)		Mar. 30, 2002		June 29, 2002		Sep. 28, 2002		Dec. 28, 2002
Net sales	$	504,423	$	491,865	$	495,891	$	507,185
Gross profit on sales		131,683		131,718		132,071		132,413
Net income		14,776		13,553		14,846		15,974
Basic and diluted earnings per share		.54		.50		.55		.58

(dollars in thousands,
except per share amounts)		Mar. 31, 2001		June 30, 2001		Sep. 29, 2001		Dec. 29, 2001
Net sales	$	485,695	$	488,915	$	493,401	$	503,654
Gross profit on sales		126,907		127,570		130,380		129,806
Net income		17,194		8,706		11,703		12,452
Basic and diluted earnings per share		.41		.26		.43		.46

Page 24 of 32 (Form 10-K)

WEIS MARKETS, INC.

Note 13 Fair Value Information
The carrying amounts for cash, accounts receivable and accounts payable approximate fair value because of the short maturities of these instruments. The fair values of the company's marketable securities, as disclosed in Note 2, are based on quoted market prices. The carrying amount for any long-term debt outstanding approximates fair value based upon the company's incremental borrowing rates.

Note 14 Acquisitions
During fiscal 2000, the company acquired two stores located in central Pennsylvania and two stores in Maryland from Fleming Food Companies, Inc. This acquisition was a cash-only transaction accounted for by the purchase method.

Note 15 Contingencies
The company is involved in various legal actions arising out of the normal course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the company's consolidated financial position, results of operations or liquidity.

Page 25 of 32 (Form 10-K)

WEIS MARKETS, INC.

Report of Independent Auditors

The Board of Directors and Shareholders
Weis Markets, Inc.
Sunbury, Pennsylvania

We have audited the accompanying consolidated balance sheets of Weis Markets, Inc. as of December 28, 2002 and December 29, 2001, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 28, 2002. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Weis Markets, Inc. at December 28, 2002 and December 29, 2001, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 28, 2002, in conformity with accounting principles generally accepted in the United States.

Harrisburg, PA
January 31, 2003

Page 26 of 32 (Form 10-K)

WEIS MARKETS, INC.

Item 9.      Changes in and Disagreements With Accountants on Accounting and Financial Disclosure:

None.

Page 27 of 32 (Form 10-K)

WEIS MARKETS, INC.

PART III

Item 10.      Directors and Executive Officers of the Registrant:

"Election of Directors" on pages 4 and 5 of the Weis Markets, Inc. definitive proxy statement dated March 7, 2003 is incorporated herein by reference.

Officers not listed in the Weis Markets, Inc. definitive proxy statement dated March 7, 2003:

Edward W. Rakoskie, Jr. The company has employed Mr. Rakoskie since 1962 in various operations positions. Mr. Rakoskie served as Vice President Store Operations from 1995 through 1997 and was promoted to Vice President of Operations in 1998.

Item 11.      Executive Compensation:

"Committees of the Board and Meeting Attendance," "Compensation Committee Interlocks and Insider Participation," "Summary Compensation Table," "Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values," "Board Compensation Committee Report on Executive Compensation," "Shareholder Return Performance," "Comparative Five-Year Total Returns" and "Retirement Plans" on pages 5 through 10 of the Weis Markets, Inc. definitive proxy statement dated March 7, 2003 are incorporated herein by reference.

Item 12.      Security Ownership of Certain Beneficial Owners and Management:

"Outstanding Voting Securities and Voting Rights" on page 3 and 4 of the Weis Markets, Inc. definitive proxy statement dated March 7, 2003 is incorporated herein by reference.

Item 13.      Certain Relationships and Related Transactions:

Other Arrangements: Central Properties, Inc., a Pennsylvania corporation ("Central Properties"), owns the land under a company store and an adjacent parking lot in Lebanon, Pennsylvania. Central Properties leased these properties to the company for $80,301 in fiscal 2002. The stockholders of Central Properties include Michael M. Apfelbaum and certain of his family members, Jonathan H. Weis and Robert F. Weis, each of whom is a director of the company.

Item 14.       Controls and Procedures:

The Chief Executive Officer and the Chief Financial Officer of the company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of a date within 90 days prior to the date of the filing of this Report, that the company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the company in such reports is accumulated and communicated to the company's management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There were no significant changes in the company's internal controls or in other factors that could significantly affect these controls subsequent to the date of such evaluation.

Page 28 of 32 (Form 10-K)

WEIS MARKETS, INC.

PART IV

Item 15.      Exhibits, Financial Statements, Schedules and Reports on Form 8-K:

(a)  See Part II Item 8 "Financial Statements and Supplementary Data" contained within this document. All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.

(b)  There were no reports on Form 8-K filed during the quarter ended December 28, 2002.

(c)  A listing of exhibits filed or incorporated by reference is as follows:

Exhibit No.	Exhibits
3-A	Articles of Incorporation
3-B	By-Laws
10-A	Profit Sharing Plan
10-B	Stock Bonus Plan
10-C	Company Appreciation Plan
10-D	Stock Option Plan
10-E	Supplemental Employee Retirement Plan
10-F	Executive Employment Contract - CEO
10-G	Executive Employment Contract - CFO
10-H	Revolving Credit Agreement
21	Subsidiaries of the Registrant
99.1	Certification of Chief Executive Officer
99.2	Certification of Chief Financial Officer

Exhibit 3-A has been filed as exhibit 4.1 in Form S-8 on September 13, 2002 and is incorporated herein by reference.

Exhibit 10-D has been filed on Form S-8 on September 13, 2002 and is incorporated herein by reference.

Exhibits 3-B, 10-C, 10-E and 10-F have been filed as exhibits under Part IV, Item 14(c) in Form 10-K for the fiscal year ended December 29, 2001 and are incorporated herein by reference.

The foregoing exhibits are available upon request from the Secretary of the company at a fee of $10.00 per copy.

Page 29 of 32 (Form 10-K)

WEIS MARKETS, INC.

SIGNATURES

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

	WEIS MARKETS, INC.
	(Registrant)
Date         03/11/2003	/S/Norman S. Rich
	Norman S. Rich
	President / Chief Executive Officer
	and Director

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

Date         03/11/2003	/S/Robert F. Weis
	Robert F. Weis
	Chairman of the Board of Directors
Date         03/11/2003	/S/Norman S. Rich
	Norman S. Rich
	President / Chief Executive Officer
	and Director
Date         03/11/2003	/S/William R. Mills
	William R. Mills
	Senior Vice President and Treasurer /
	Chief Financial Officer / Chief Accounting Officer
	and Director
Date         03/11/2003	/S/Jonathan H. Weis
	Jonathan H. Weis
	Vice President and Secretary
	and Director
Date         03/11/2003	/S/Richard E. Shulman
	Richard E. Shulman
	Director
Date         03/11/2003	/S/Michael M. Apfelbaum
	Michael M. Apfelbaum
	Director
Date         03/11/2003	/S/Steven C. Smith
	Steven C. Smith
	Director

Page 30 of 32 (Form 10-K)

WEIS MARKETS, INC.

CERTIFICATION- CEO

I, Norman S. Rich, President / CEO of Weis Markets, Inc., certify that:

1.  I have reviewed this annual report on Form 10-K of Weis Markets, Inc.;

2.  Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit
     to state a material fact necessary to make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the periods covered by this annual report;

3.  Based on my knowledge, the financial statements, and other financial information included in this annual
     report, fairly present in all material respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.  The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
     controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a)  designed such disclosure controls and procedures to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
               particularly during the period in which this annual report is being prepared;

         b)  evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90
              days prior to the filing date of this annual report (the "Evaluation Date"); and

         c)  presented in this annual report our conclusions about the effectiveness of the disclosure controls and
              procedures based on our evaluation as of the Evaluation Date;

5.  The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
      registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
      equivalent function):

         a)  all significant deficiencies in the design or operation of internal controls which could adversely affect
              the registrant's ability to record, process, summarize and report financial data and have identified for the
              registrant's auditors any material weaknesses in internal controls; and

         b)  any fraud, whether or not material, that involves management or other employees who have a significant
               role in the registrant's internal controls; and

6.  The registrant's other certifying officers and I have indicated in this annual report whether or not there were
     significant changes in internal controls or in other factors that could significantly affect internal controls
     subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant
     deficiencies and material weaknesses.

Date: March 11, 2003                                                                                                    /S/ Norman S. Rich
                                                                                                                                         Norman S. Rich

                                                                                                                                          President / CEO

Page 31 of 32 (Form 10-K)

WEIS MARKETS, INC.

CERTIFICATION- CFO

I, William R. Mills, Senior Vice President and Treasurer / CFO of Weis Markets, Inc., certify that:

1.  I have reviewed this annual report on Form 10-K of Weis Markets, Inc.;

2.  Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit
     to state a material fact necessary to make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the periods covered by this annual report;

3.  Based on my knowledge, the financial statements, and other financial information included in this annual
     report, fairly present in all material respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.  The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
     controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a)  designed such disclosure controls and procedures to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
               particularly during the period in which this annual report is being prepared;

         b)  evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90
              days prior to the filing date of this annual report (the "Evaluation Date"); and

         c)  presented in this annual report our conclusions about the effectiveness of the disclosure controls and
              procedures based on our evaluation as of the Evaluation Date;

5.  The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
      registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
      equivalent function):

         a)  all significant deficiencies in the design or operation of internal controls which could adversely affect
              the registrant's ability to record, process, summarize and report financial data and have identified for the
              registrant's auditors any material weaknesses in internal controls; and

         b)  any fraud, whether or not material, that involves management or other employees who have a significant
               role in the registrant's internal controls; and

6.  The registrant's other certifying officers and I have indicated in this annual report whether or not there were
     significant changes in internal controls or in other factors that could significantly affect internal controls
     subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant
     deficiencies and material weaknesses.

Date: March 11, 2003                                                                                                  /S/ William R. Mills
                                                                                                                                         William R. Mills
                                                                                                                                      Senior Vice President
                                                                                                                                         and Treasurer / CFO

 Page 32 of 32 (Form 10-K)

EXHIBIT 21

WEIS MARKETS, INC.

SUBSIDIARIES OF THE REGISTRANT

	State of Incorporation	Percent Owned by Registrant
Albany Public Markets, Inc.	New York	100%
Dutch Valley Food Company, Inc.	Pennsylvania	100%
King's Supermarkets, Inc.	Pennsylvania	100%
Martin's Farm Market, Inc.	Pennsylvania	100%
Shamrock Wholesale Distributors, Inc.	Pennsylvania	100%
SuperPetz, LLC	Pennsylvania	100%
Weis Transportation, Inc.	Pennsylvania	100%
WMK Financing, Inc.	Delaware	100%
The consolidated financial statements include the accounts of the company and its subsidiaries.

EXHIBIT 99.1

WEIS MARKETS, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the 10-K Report of Weis Markets, Inc. (the "company") on Form 10-K for the year ending December 28, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Norman S. Rich, President / Chief Executive Officer of the company, certify, pursuant to and for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company.

/S/ Norman S. Rich
Norman S. Rich
President / CEO
03/11/2003

EXHIBIT 99.2

WEIS MARKETS, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the 10-K Report of Weis Markets, Inc. (the "company") on Form 10-K for the year ending December 28, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William R. Mills, Senior Vice President and Treasurer / Chief Financial Officer of the company, certify, pursuant to and for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company.

/S/ William R. Mills
William R. Mills
Senior Vice President and Treasurer / CFO
03/11/2003

GRAPHIC 3 ey6d1853.jpg E&Y SIGNATURE begin 644 ey6d1853.jpg M_]C_X``02D9)1@`!`@```0`!``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+ M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#]M6EH*N5=B*M>-+6ZW,;[Z$Y/ M&Q[]@$@`>/=-P1[5M>H5N26I$1K42/SJ[)3V/&5&19^HT["KE1N2R*96*M&1 M&F2DJ6IMM"D)TZSTF1*WW3@_U`20```````````````````````%/WCQ%N&? M=LRT['\"TN`US:C59+B-$,(SA62,^^W2+@'*%;H27G):M2E]O[D+GM,K3>IZI]ILTI,9_3S%T]I",GC)$O'8RU=C MW+(KMNMVS3Z6['I_!NOF?(Y6AV@)^=C!DEQ>YGNE)Y//;.XAD>@\18ET2WK8 MME^VHES-:";)[4W#+I4I9F7W1^;&4D9:U$DL@+OBW]0YU\/6E$6_(GL-&MUQ MIO4RV9=T&HNQ_P"/3.K8>A4+IH=*KD"BSJDPQ49_^W85W5_\SV+/<]B%`56R M)_#WB3;;=KTB=5Y*(',YG6A+TC4M!K4:?*A.MK*1W)3D? MS51N>>_XN56D$M,:)@\()+NV,8-1].V&R1_4'1[=6ISM4=IC=0BKJ#*=;D5+ MR3=0G;VXJ MC^"-[1;IGL0Z\@Z?46-$RK.'AQU"EI-Q!HR:M62SWPHNZMS(1NS+7X@T*[6Y M4*T'UU"F-.(8.0VEEC)F:5&I>Q/;+5C"L^7?2G`"9W=QVIUPVW+H=N4>HNU" MI).&126D^5PM)Z20HS4K?!%]?T.><(O&PK%I=)E6]5:=R&G#4[--O"ERDGMD51QRX=46AQW;LB2934B?-PY%TDMM3J^HSSG*/*L_P`6YEV(2O@? 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MV_F[[;W0^PU*CN1Y#2'674FAQMQ.4J2??85 MCM612Y31S5U&H37SD2YSJ,+=5_D_W,]S4?J)8``````````````````````` D`````````````````````````````````````````````/_9 ` end EX-10 4 psplan.txt EXHIBIT 10-A PROFIT SHARING PLAN Weis Markets, Inc. Profit Sharing Plan Originally Effective December 31, 1952 As Amended And Restated Effective January 1, 1997 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- TABLE OF CONTENTS PREAMBLE 1 ARTICLE I - DEFINITIONS 2 Section 1.1 - References Section 1.2 - Compensation Section 1.3 - Dates Section 1.4 - Employee Section 1.5 - Employer Section 1.6 - Fiduciaries Section 1.7 - Participant/Beneficiary Section 1.8 - Participant Accounts Section 1.9 - Plan Section 1.10 - Service Section 1.11 - Trust ARTICLE II - PARTICIPATION 8 Section 2.1 - Eligibility Service Section 2.2 - Plan Participation Section 2.3 - Termination of Participation Section 2.4 - Re-Participation (Break in Service Rules) ARTICLE III - ALLOCATIONS TO PARTICIPANT ACCOUNTS 10 Section 3.1 - General Provisions Section 3.2 - Profit Sharing Contributions Section 3.3 - Qualified Nonelective Contributions Section 3.4 - Employee 401(k) Elective Deferral Contributions Section 3.5 - Employee Nondeductible Contributions Section 3.6 - Employer Matching Contributions Section 3.7 - Rollover/Transfer Account Section 3.8 - Allocation of Investment Results ARTICLE IV - PAYMENT OF PARTICIPANT ACCOUNTS 14 Section 4.1 - Vesting Service Rules Section 4.2 - Vesting of Participant Accounts Section 4.3 - Payment of Participant Accounts Section 4.4 - In-Service Payments Section 4.5 - Distributions Under Domestic Relations Orders ARTICLE V - ADDITIONAL QUALIFICATION RULES 20 Section 5.1 - Limitations on Allocations Under Code Section 415 Section 5.2 - Joint and Survivor Annuity Requirements Section 5.3 - Distribution Requirements Section 5.4 - Top-Heavy Provisions Section 5.5 - Reserved ARTICLE VI - ADMINISTRATION OF THE PLAN 35 Section 6.1 - Fiduciary Responsibility Section 6.2 - Plan Administrator Section 6.3 - Claims Procedure Section 6.4 - Trust Fund ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN 38 Section 7.1 - Right to Discontinue and Amend Section 7.2 - Amendments Section 7.3 - Protection of Benefits in Case of Plan Merger Section 7.4 - Termination of Plan ARTICLE VIII - MISCELLANEOUS PROVISIONS 40 Section 8.1 - Exclusive Benefit - Non-Reversion Section 8.2 - Inalienability of Benefits Section 8.3 - Employer-Employee Relationship Section 8.4 - Binding Agreement Section 8.5 - Separability Section 8.6 - Construction Section 8.7 - Copies of Plan Section 8.8 - Interpretation Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- PREAMBLE This amended and restated plan, executed on the date indicated at the end hereof, is made effective as of January 1, 1997, except as provided otherwise in Section 1.3(c), by Weis Markets, Inc., a corporation, with its principal office located in Sunbury, Pennsylvania. W I T N E S S E T H : WHEREAS, effective December 31, 1952, the employer established the plan for its employees and desires to continue to maintain a permanent qualified plan in order to provide its employees and their beneficiaries with financial security in the event of retirement, disability, or death; and WHEREAS, it is desired to amend said plan; NOW THEREFORE, the premises considered, the original plan is hereby replaced by this amended and restated plan, and the following are the provisions of the qualified plan of the employer as restated herein; provided, however, that each employee who was previously a participant shall remain a participant, and no employee who was a participant in the plan before the date of amendment shall receive a benefit under this amended plan which is less than the benefit he was then entitled to receive under the plan as of the day prior to the amendment. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 1 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- ARTICLE I - DEFINITIONS Section 1.1 - References (a) Code means the Internal Revenue Code of 1986, as it may be amended from time to time. (b) ERISA means the Employee Retirement Income Security Act of 1974, as amended. Section 1.2 - Compensation (a) Compensation means, except as provided in Section 1.2(b) hereof, any earnings reportable as W-2 wages for federal income tax withholding purposes and earned income, plus elective contributions, for the plan year. However, compensation shall not include any earnings reportable as W-2 wages that are payable following the termination of employment pursuant to a severance agreement. Elective contributions are amounts excludable from the employee's gross income and contributed by the employer, at the employee's election to: A cafeteria plan (excludable under Code section 125); A Code section 401(k) arrangement (excludable under Code section 402(e)(3)); A simplified employee pension (excludable under Code section 402(h)); A tax sheltered annuity (excludable under Code section 403(b)); or Effective for plan years beginning on or after January 1, 1998, a Code section 132(f)(4) qualified transportation fringe benefit plan. "Earned Income" means net earnings from self-employment in the trade or business with respect to which the employer has established the plan, provided that personal services of the individual are a material income producing factor. Net earnings shall be determined without regard to items excluded from gross income and the deductions allocable to those items. Net earnings shall be determined after the deduction allowed to the self-employed individual for all contributions made by the employer to a qualified plan and, for plan years beginning after December 31, 1989, the deduction allowed to the self-employed under Code section 164(f) for self-employment taxes. Any reference in this plan to compensation shall be a reference to the definition in this Section 1.2, unless the plan reference specifies a modification to this definition. The plan administrator shall take into account only compensation actually paid by the employer for the relevant period. A compensation payment includes compensation by the employer through another person under the common paymaster provisions in Code sections 3121 and 3306. Compensation from an employer that is not a participating employer under this plan shall be excluded. (b) Exclusions From Compensation - Notwithstanding the provisions of Section 1.2(a), the following types of remuneration shall be excluded from the participant's compensation: Compensation in excess of $22,000 for Pharmacists with less than 10 years of service. Compensation in excess of $24,000 for Pharmacists with 10 or more years of service. (c) Limitations on Compensation (1) Compensation Dollar Limitation - For any plan year beginning after December 31, 1993, the plan administrator shall take into account only the first $150,000 (or beginning January 1, 1995, such larger amount as the Commissioner of Internal Revenue may prescribe) of any participant's compensation for determining all benefits provided under the plan. For any plan year beginning after December 31, 1988 but before January 1, 1994, the plan administrator shall take into account only the first $200,000 (or, for plan years beginning after December 31, 1989 but before January 1, 1994, such larger amount as the Commissioner of Internal Revenue may prescribe) of any participant's compensation for determining all benefits provided under the plan. The compensation dollar limitation for a plan year shall be the limitation amount in effect on January 1 of the calendar year in which the plan year begins. For any plan year beginning before January 1, 1989, the $200,000 limitation (but not the family aggregation requirement described in Section 1.2(c)(2)) applies only if the plan is top-heavy for such plan year or operates as a deemed top-heavy plan for such plan year. If the plan should determine compensation on a period of time that contains less than 12 calendar months (such as for a short plan year), the annual compensation dollar limitation shall be an amount equal to the Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 2 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- compensation dollar limitation for the plan year multiplied by the ratio obtained by dividing the number of full months in the period by 12. (2) Application of Compensation Limitation to Certain Family Members - For any plan year beginning after December 31, 1988 but before January 1, 1997, the compensation dollar limitation shall apply to the combined compensation of the employee and of any family member who is either (A) the employee's spouse, or (B) the employee's lineal descendant under the age of 19 as described in this Section 1.2(c)(2). If, for such a plan year, the combined compensation of the employee and such family members who are participants entitled to an allocation for that plan year shall exceed the compensation dollar limitation, compensation for each such participant, for purposes of the contribution and allocation provisions of Article III, shall mean his adjusted compensation. Adjusted compensation shall mean the amount that bears the same ratio to the compensation dollar limitation as the affected participant's compensation (without regard to the compensation dollar limitation) bears to the combined compensation of all the affected participants in the family unit. If the plan uses permitted disparity, the plan administrator shall determine the integration level of each affected family member participant using actual compensation. The total of the affected participants' compensations equal to or less than the applicable integration levels may not exceed the compensation dollar limitation. The combined excess compensation of the affected participants in the family unit may not exceed the compensation dollar limitation minus the amount determined under the preceding sentence. If the combined excess compensation exceeds this limitation, the plan administrator shall prorate the limitation on the excess compensation among the affected participants in the family unit in proportion to each such individual's actual compensation minus his integration level. (d) Compensation for Nondiscrimination Testing - For purposes of determining whether the plan discriminates in favor of highly compensated employees, compensation means compensation as defined in this Section 1.2, except that the employer will not give effect to any exclusion from compensation specified in Section 1.2(b). Notwithstanding the above, the employer may amend this plan to exclude from this nondiscrimination definition of compensation any items of compensation excludable under Code section 414(s) and the applicable Treasury regulations, provided such adjusted definition conforms to the nondiscrimination requirements of those regulations. Section 1.3 - Dates (a) Accounting Date means the date(s) on which investment results are allocated to participants' accounts as set forth below: December 31 (b) Allocation Date means the date(s) as of which any contribution is allocated to participants' accounts. The profit sharing contribution and forfeitures shall be allocated as of December 31. (c) The Effective Date of the plan is December 31, 1952. The effective date of this amendment and restatement is January 1, 1997; provided, however, that the plan provision required to comply with the Family and Medical Leave Act shall be effective August 5, 1993, the plan provisions required to comply with the Uniformed Services Employment and Re-Employment Rights Act of 1994 shall be effective December 12, 1994, the plan provisions required to comply with the Retirement Protection Act of 1994 shall generally be effective on the first day of the first limitation year beginning after December 31, 1994, the plan provisions required to comply with the Small Business Job Protection Act of 1996 shall generally be effective on the first day of the plan year beginning after December 31, 1996, and the plan provisions required to comply with the Taxpayer Relief Act of 1997 shall generally be effective on the first day of the plan year beginning after August 5, 1997, except as specified otherwise in this plan or in said Acts. Notwithstanding anything herein to the contrary, the provisions noted below shall become effective on the date indicated. If such effective date is subsequent to the effective date of this restatement, the prior provisions of the plan shall continue in effect until such indicated effective date. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 3 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- Provision Effective Date Section 2.2(a)(2) Eligible Class of Employees January 1, 2002 Section 4.3(a)(3) Payment Upon Other Termination of Employment December 15, 2000 Section 4.5 Distributions under Domestic Relations Orders December 15, 2000 Effective for plan years beginning before January 1, 1998, the dollar amount appearing in Sections 4.2(b), 4.2(c), 4.3(d), 4.4(b), and 4.5 shall be $3,500 as provided under the prior provisions of the plan before this restatement. The $5,000 dollar amount in such Sections shall be effective for plan years beginning after December 31, 1997. (d) Plan Entry Date means the participation date(s) specified in Article II. (e) Plan Year means the 12-consecutive-month period beginning on January 1 and ending on December 31. (f) Limitation Year means the plan year. Section 1.4 - Employee (a) (1) Employee means any person employed by the employer, including an owner-employee or other self-employed individual (as defined in Section 1.4(a)(3)). The term employee shall include any employee of the employer maintaining the plan or of any other employer required to be aggregated with such employer under Code section 414(b), (c), (m), or (o). The term employee shall also include any leased employee deemed to be an employee of any such employer as provided in Code section 414(n) or (o) and as defined in Section 1.4(a)(2). (2) Leased Employee means an individual (who otherwise is not an employee of the employer) who, pursuant to a leasing agreement between the employer and any other person, has performed services for the employer (or for the employer and any persons related to the employer within the meaning of Code section 414(n)(6)) on a substantially full time basis for at least one year and such services are performed under the primary direction or control of the employer. If a leased employee is treated as an employee by reason of this Section 1.4(a)(2), compensation from the leasing organization that is attributable to services performed for the employer shall be considered as compensation under the plan. Contributions or benefits provided a leased employee by the leasing organization that are attributable to services performed for the employer shall be treated as provided by the employer. Safe harbor plan exception - The plan shall not treat a leased employee as an employee if the leasing organization covers the employee in a safe harbor plan and, prior to application of this safe harbor plan exception, 20% or less of the employer's nonhighly compensated employees are leased employees. A safe harbor plan is a money purchase pension plan providing immediate participation, full and immediate vesting, and a nonintegrated contribution formula equal to at least 10% of the employee's compensation without regard to employment by the leasing organization on a specified date. The safe harbor plan must determine the 10% contribution on the basis of compensation as defined in Section 1.2(a) without regard to Section 1.2(b). (3) Owner-Employee/Self-Employed Individual - Owner-employee means a self-employed individual who is a sole proprietor (if the employer is a sole proprietorship) or who is a partner (if the employer is a partnership) owning more than 10% of either the capital or profits interest of the partnership. Self-employed individual means an individual who has earned income for the taxable year from the trade or business for which the plan is established, or who would have had earned income but for the fact that the trade or business had no net profits for the taxable year. (b) Highly Compensated Employee means any employee who: (1) was a more than 5% owner of the employer (applying the constructive ownership rules of Code section 318, and applying the principles of Code section 318, for an unincorporated entity) at any time during the current or the preceding plan year; or (2) for the preceding plan year - (A) had compensation from the employer in excess of $80,000 (as adjusted by the Commissioner of Internal Revenue pursuant to Code section 415(d), except that the base period shall be the calendar quarter ending September 30, 1996), and (B) if the employer elects the application of this Subparagraph for such preceding plan year, was in the top-paid group of employees for such preceding plan year. For this purpose, an employee is in the top-paid group of employees for any plan year if such employee is in the group consisting of the top 20% of the employees when ranked on the basis of compensation paid during such plan year. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 4 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- The term highly compensated employee also includes any former employee who separated from service (or has a deemed separation from service, as determined under Treasury regulations) prior to the plan year, performs no service for the employer during the plan year, and was a highly compensated employee either for the separation plan year or any plan year ending on or after his 55th birthday, based on the applicable rules in effect for such plan year. For purposes of determining who is a highly compensated employee under this Section 1.4(b), compensation means compensation as defined in Section 1.2(a) without regard to Section 1.2(b). The plan administrator shall make the determination of who is a highly compensated employee, and, if the employer so amends this plan, this determination shall include the determination of the number and identity of the top-paid 20% group, consistent with Code section 414(q) and regulations issued thereunder. The employer may amend this plan to make a calendar year data election with regard to the plan year preceding the current plan year to determine the employees with compensation in excess of $80,000 and the top-paid 20% group, as prescribed by Treasury regulations. A top-paid 20% group election or a calendar year data election must apply to all plans and arrangements of the employer. This Section 1.4(b) is effective for plan years beginning after December 31, 1996, except that, in determining whether an employee is a highly compensated employee in 1997, this provision shall be treated as having been in effect for the last plan year beginning before January 1, 1997. (c) Nonhighly Compensated Employee means any employee who is not a highly compensated employee. Section 1.5 - Employer (a) Employer means Weis Markets, Inc. or any successor entity by merger, purchase, consolidation, or otherwise; or an organization affiliated with the employer that may assume the obligations of this plan with respect to its employees by becoming a party to this plan. Another employer, whether or not it is affiliated with the sponsor employer, may adopt this plan to cover its employees by filing with the sponsor employer a written resolution adopting the plan, upon which the sponsor employer shall indicate its acceptance of such employer as an employer under the plan. Each such employer shall be deemed to be the employer only as to persons who are on its payroll. The following employers have adopted this plan and have been accepted by the sponsor employer on or before the date this document is executed: Albany Public Markets, Inc. (b) Employer for Compliance Testing - For purposes of determining whether the plan satisfies the participation coverage requirements of Code section 410(b) and the limitations on benefits and allocations under Code section 415, employer shall mean the employer that adopts this plan, and all members of a controlled group of corporations (as defined in Code section 414(b)), all commonly controlled trades or businesses (as defined in Code section 414(c)) or affiliated service groups (as defined in Code section 414(m)) of which the adopting employer is a part, and any other entity required to be aggregated with the employer pursuant to regulations under Code section 414(o). Section 1.6 - Fiduciaries (a) Named Fiduciary means the person or persons having fiduciary responsibility for the management and control of plan assets. (b) Plan Administrator means the person or persons appointed by the named fiduciary to administer the plan. (c) Trustee means the trustee named in the trust agreement executed pursuant to this plan, or any duly appointed successor trustee. (d) Investment Manager means a person or corporation other than the trustee appointed for the investment of plan assets. Section 1.7 - Participant/Beneficiary (a) Participant means an eligible employee of the employer who becomes a member of the plan pursuant to the provisions of Article II, or a former employee who has an accrued benefit under the plan. (b) Beneficiary means a person designated by a participant who is or may become entitled to a benefit under the plan. A beneficiary who becomes entitled to a benefit under the plan remains a beneficiary under the plan until the trustee has fully distributed his benefit to him. A beneficiary's right to (and the plan administrator's, or a trustee's duty to provide to the beneficiary) information or data concerning the plan shall not arise until he first becomes entitled to receive a benefit under the plan. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 5 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- Section 1.8 - Participant Accounts (a) Profit Sharing Account means the balance of the separate account derived from employer's profit sharing contributions, including forfeitures (if any). (b) Employee Nondeductible Contribution Account means the balance of the separate account derived from the participant's non-deductible employee contributions (if so provided under Section 3.5). (c) Rollover/Transfer Account means the balance of the separate account derived from rollover contributions and/or transfer contributions (if so provided under Section 3.7). (d) Accrued Benefit means the total of the participant's account balances as of the accounting date falling on or before the day on which the accrued benefit is being determined. Section 1.9 - Plan Plan means Weis Markets, Inc. Profit Sharing Plan as set forth herein and as it may be amended from time to time. Section 1.10 - Service (a) Service means any period of time the employee is in the employ of the employer, including any period the employee is on an unpaid leave of absence authorized by the employer under a uniform, nondiscriminatory policy applicable to all employees. Separation from service means that the employee no longer has an employment relationship with the employer. (b) (1) Hour of Service means: (A) Each hour for which an employee is paid, or entitled to payment, for the performance of duties for the employer. These hours shall be credited to the employee for the computation period in which the duties are performed; and (B) Each hour for which an employee is paid, or entitled to payment, by the employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence. No more than 501 hours of service shall be credited under this Subparagraph (B) for any single continuous period (whether or not such period occurs in a single computation period). An hour of service shall not be credited to an employee under this Subparagraph (B) if the employee is paid, or entitled to payment, under a plan maintained solely for the purpose of complying with applicable worker's compensation or unemployment compensation or disability insurance laws. Hours under this Subparagraph (B) shall be calculated and credited pursuant to section 2530.200b-2 of the Department of Labor Regulations that are incorporated herein by this reference; and (C) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the employer. The same hours of service shall not be credited both under Subparagraph (A) or Subparagraph (B), as the case may be, and under this Subparagraph (C). These hours shall be credited to the employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement, or payment is made. Hours of service shall be determined on the basis of actual hours for which an employee is paid or entitled to payment. The above provisions shall be construed so as to resolve any ambiguities in favor of crediting employees with hours of service. If, for the purposes of the plan, an employee's records are maintained on other than an hourly basis, the plan administrator, according to uniform rules applicable to a class of employees, may apply the following equivalencies for the purpose of crediting hours of service: Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 6 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- Credit Granted to Individual if Basis Upon Which Records Individual Earns One or Are Maintained More Hours of Service During Period ------------------------ ----------------------------------- Shift Actual hours of full shift Day 10 hours of service Week 45 hours of service Semi-Monthly Payroll Period 95 hours of service Months of Employment 190 hours of service (2) Solely for purposes of determining whether a break in service for participation and vesting purposes has occurred in a computation period, an individual who is absent from work for maternity or paternity reasons shall receive credit for the hours of service that would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 hours of service per day of such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (A) by reason of the pregnancy of the individual, (B) by reason of a birth of a child of the individual, (C) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (D) for purposes of caring for such child for a period beginning immediately following such birth or placement. The hours of service credited under this paragraph shall be credited: (A) in the computation period in which the absence begins if the crediting is necessary to prevent a break in service in that period, or (B) in all other cases, in the following computation period. No more than 501 hours of service shall be credited under this paragraph for any single continuous period (whether or not such period occurs in a single computation period). (3) Solely for purposes of determining whether a break in service for participation and vesting purposes has occurred in a computation period, an individual who is absent from work on unpaid leave under the Family and Medical Leave Act shall receive credit for the hours of service that would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 hours of service per day of such absence. Such an individual shall be treated as actively employed for the purposes of participation and eligibility for an allocation of any employer contribution that may be provided under this plan. Notwithstanding the preceding, this paragraph shall not apply if the employer or the particular employee is not subject to the requirements of the Family and Medical Leave Act at the time of the absence. (4) Hours of service shall be credited for employment with other members of an affiliated service group (under Code section 414(m)), a controlled group of corporations (under Code section 414(b)), or a group of trades or businesses under common control (under Code section 414(c)), of which the adopting employer is a member. Hours of service shall also be credited for any leased employee who is considered an employee for purposes of this plan under Code section 414(n) or Code section 414(o). (c) (1) Year of Service means a 12-consecutive-month computation period during which the employee completes the required number of hours of service with the employer as specified in Sections 2.1 or 4.1. No more than one year of service will be credited for any 12-consecutive-month period unless otherwise required by Code section 410 or 411. (2) Service With Related Employers - For purposes of crediting years of service, hours of service credited in accordance with Section 1.10(b)(4) shall be taken into account. (3) Predecessor Service - If the employer maintains the plan of a predecessor employer, service with such predecessor employer shall be treated as service for the employer. If the employer does not maintain the plan of a predecessor employer, then service as an employee of a predecessor employer shall not be considered as service under the plan, except as noted below: No credit for predecessor service. The years of service to be taken into account shall be determined as of the effective date of this provision with respect to the particular predecessor employer. If the predecessor employer is not considered to be the sponsoring employer under the provisions of Section 1.5(b), the period taken into account for determining the years of service to be credited under this Section 1.10(c)(3) shall be the five year period ending as of the last day of the plan year immediately preceding the plan year containing the effective date of this provision and any years of service performed by the employee for the predecessor employer during any prior period shall not be taken into account. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 7 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (d) Break in Service (or One Year Break in Service) means a 12- consecutive-month computation period during which a participant or former participant does not complete the specified number of hours of service with the employer as set forth in Sections 2.1(b) and 4.1(b). (e) Qualified Military Service - Notwithstanding any provision of this plan to the contrary, effective December 12, 1994, contributions, benefits, and service credit with respect to qualified military service will be provided in accordance with Code section 414(u). Section 1.11 - Trust (a) Trust means the qualified trust created under the employer's plan. (b) Trust Fund means all property held or acquired by the plan. ARTICLE II - PARTICIPATION Section 2.1 - Eligibility Service (a) Eligibility Year of Service means an eligibility computation period during which the employee completes at least 1,000 hours of service with the employer. (b) One Year Break in Service means for the purposes of this Article II an eligibility computation period during which the participant or former participant does not complete more than 500 hours of service with the employer. (c) Eligibility Computation Period - The initial eligibility computation period shall be the 12-consecutive-month period beginning with the day on which the employee first performs an hour of service with the employer (employment commencement date). Succeeding eligibility computation periods shall coincide with the plan year, beginning with the first plan year that commences prior to the first anniversary of the employee's employment commencement date regardless of whether the employee is credited with the required number of hours of service during the initial eligibility computation period. An employee who is credited with the required number of hours of service in both the initial eligibility computation period and the first plan year that commences prior to the first anniversary of the employee's employment commencement date shall be credited with two years of service for purposes of eligibility to participate. Section 2.2 - Plan Participation (a) Eligibility (1) Age/Service Requirements - An employee who is a member of the eligible class of employees shall be eligible for plan participation after he has satisfied the following participation requirement(s): (A) Completion of 1 year of service. (B) No age requirement. (2) Eligible Class of Employees - All employees of the employer except those described in (i), (ii), (iii), (iv), (v), (vi), (vii), and (viii) below shall be eligible to be covered under the plan if employed in the following categories: Salaried Employee Assistant Head Pharmacist Foreman Store Manager Accounting Clerk Grocery Manager Department Assistant Level I Department Managers Head Pharmacist (i) Employees who benefit under other profit sharing arrangements and pay arrangements in the Mr. Z's Divisions shall not be eligible to participate in the plan prior to January 1, 2000. Head Pharmacists of Mr. Z's Divisions shall be eligible to be covered under the plan effective January 1, 2000. Assistant Head Pharmacists of Mr. Z's Divisions shall be eligible to be covered under the plan effective January 1, 2001. Supervisors, Store Managers, Non-Perishable Managers, and Front-End Managers of Mr. Z's Divisions shall be eligible to be covered under the plan effective January 1, 2002. Level I Department Managers of Mr. Z's Divisions shall be eligible to be covered under the plan effective January 1, 2003. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 8 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (ii) Employees, except for executive management, of the Weis Food Service Division shall not be eligible to participate in the plan. (iii) Employees of King's Markets shall not be eligible to participate in the plan prior to January 1, 1998. Salaried employees who are superintendents of King's Markets shall be eligible to be covered under the plan effective January 1, 1998. Store Managers of King's Markets shall be eligible to be covered under the plan effective January 1, 1999. Head Pharmacists, Assistant Head Pharmacists, Grocery Managers, and Assistant Managers of King's Markets shall be eligible to be covered under the plan effective January 1, 2000. Level I Department Managers of King's Markets shall be eligible to be covered under the plan effective January 1, 2001. (iv) Individuals not directly employed by the employer as defined in Section 1.5(a) shall not be eligible to participate in the plan. An employee of the employer as that term is defined in Section 1.5(b) with respect to the sponsoring employer shall not participate in this plan unless such employee's direct employer affirmatively elects to become a participating employer hereunder. (v) Employees included in a unit of employees covered by a collective bargaining agreement between the employer and employee representatives shall not be eligible to participate in the plan if retirement benefits were the subject of good faith bargaining and if less than 2% of the employees of the employer who are covered pursuant to that agreement are professionals as defined in Regulation section 1.410(b)-9(g). For this purpose, the term "employee representatives" does not include any organization more than half of whose members are employees who are owners, officers, or executives of the employer. (vi) Leased employees who are considered employees under the plan shall not be eligible to participate in the plan. (vii) Employees who are non-resident aliens (as defined in Code section 7701(b)(1)(B)) and who receive no earned income (as defined in Code section 911(d)(2)) from the employer that constitutes income from sources within the United States (as defined in Code section 861(a)(3)) shall not be eligible to participate in the plan. (viii) Highly compensated employees as defined in Section 1.4(b) shall not be eligible to participate in the plan. Notwithstanding the above eligible class of employees, the eligible class provisions of the plan before January 1, 1998 shall continue to apply to participants who participated in the Plan before January 1, 1998, and to employees who otherwise would have become participants in the Plan by December 31, 1998. (b) Entry Date - An eligible employee shall participate in the plan on the earlier of the June 30 or December 31 entry date coinciding with or immediately following the date on which he has met the age and service requirements. If an employee who is not a member of the eligible class of employees becomes a member of the eligible class, such employee shall participate immediately, if he has satisfied the age and service requirements and would have otherwise previously become a participant. Section 2.3 - Termination of Participation A participant shall continue to be an active participant of the plan so long as he is a member of the eligible class of employees and he does not incur a one-year break in service due to termination of employment. He shall become an inactive participant when he incurs a one-year break in service due to termination of employment, or at the end of the plan year during which he ceases to be a member of the eligible class of employees. He shall cease participation completely upon the later of his receipt of a total distribution of his nonforfeitable account balance(s) under the plan or the forfeiture of the nonvested portion of the account balance(s). Section 2.4 - Re-Participation (Break in Service Rules) (a) Vested Participant - A former participant who had a nonforfeitable right to all or a portion of his account balance derived from employer contributions at the time of his termination from service shall become a participant immediately upon returning to the employ of the employer, if he is a member of the eligible class of employees. (b) Nonvested Participant - In the case of a former participant who did not have any nonforfeitable right to his account balance derived from employer contributions at the time of his termination from service, years of service before a period of consecutive one-year breaks in service shall not be taken into account in computing service if the number of consecutive one-year breaks in service in such period equals or exceeds the greater of 5 or the aggregate number of years of service before such breaks in service. Such aggregate number of years of service shall not include any years of service disregarded under the preceding sentence by reason of prior breaks in service. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 9 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- If such former participant's years of service before termination from service are disregarded pursuant to the preceding paragraph, he shall be considered a new employee for eligibility purposes. If such former participant's years of service before termination from service may not be disregarded pursuant to the preceding paragraph, he shall participate immediately upon returning to the employ of the employer, if he is a member of the eligible class of employees. (c) Return to Eligible Class - If a participant becomes an inactive participant, because he is no longer a member of the eligible class of employees, but does not incur a break in service, such inactive participant shall become an active participant immediately upon returning to the eligible class of employees. If such participant incurs a break in service, eligibility shall be determined under the re-participation rules in Section 2.4(a) and (b) above. ARTICLE III - ALLOCATIONS TO PARTICIPANT ACCOUNTS Section 3.1 - General Provisions (a) Maintenance of Participant Accounts - The plan administrator shall maintain separate accounts covering each participant under the plan as herein described. Such accounts shall be increased by contributions, reallocation of forfeitures (if any), investment income, and market value appreciation of the fund. They shall be decreased by market value depreciation of the fund, forfeiture of nonvested amounts, benefit payments, withdrawals, and expenses. (b) Amount and Payment of Employer Contribution (1) Amount of Contribution - For each plan year, the employer contribution to the plan shall be the amount that is determined under the provisions of this Article; provided, however, that the employer may not make a contribution to the plan for any plan year to the extent the contribution would exceed the participants' maximum permissible amounts under Code section 415. Further, the employer contribution shall not exceed the maximum amount deductible under Code section 404. The employer contributes to this plan on the conditions that its contribution is not due to a mistake of fact and that the Internal Revenue Service will not disallow the deduction for its contribution. The trustee, upon written request from the employer, shall return to the employer the amount of the employer's contribution made due to a mistake of fact or the amount of the employer's contribution disallowed as a deduction under Code section 404. The trustee shall not return any portion of the employer's contribution under the provisions of this paragraph more than one year after the earlier of: (A) The date on which the employer made the contribution due to a mistake of fact; or (B) The time of disallowance of the contribution as a deduction, and then, only to the extent of the disallowance. The trustee will not increase the amount of the employer contribution returnable under this Section for any earnings attributable to the contribution, but the trustee will decrease the employer contribution returnable for any losses attributable to it. The trustee may require the employer to furnish whatever evidence it deems necessary to confirm that the amount the employer has requested be returned is properly returnable under ERISA. (2) Payment of Contribution - The employer shall make its contribution to the plan within the time prescribed by the Code or applicable Treasury regulations. Subject to the consent of the trustee, the employer may make its contribution in property rather than in cash, provided the contribution of property is not a prohibite d transaction under the Code or ERISA. (3) Omission of Eligible Employee - If, in any plan year, any employee who should be included as a participant in the plan is erroneously omitted and discovery of such omission is not made until after a contribution by the employer for the year has been made and allocated, the employer shall make a subsequent contribution with respect to (or credit an unallocated forfeiture to) the omitted employee in the amount that the employer would have contributed with respect to him had he not been omitted (plus any applicable interest). Such contribution shall be made regardless of whether or not it is deductible in whole or in part in any taxable year under applicable provisions of the Code. (4) Inclusion of Ineligible Employee - If, in any plan year, any person who should not have been included as a participant in the plan is erroneously included and discovery of such incorrect inclusion is not made until after a contribution for the year has been made, the employer shall not be entitled to recover the contribution made with respect to the ineligible person regardless of whether or not a deduction is allowable with respect to such contribution. In such event, the amount contributed with respect to the ineligible person shall constitute a forfeiture (except for deferred compensation that shall be distributed to the ineligible person) for the plan year in which the discovery is made. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 10 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (5) Allocation if More Than One Employer - If the employer consists of more than one entity, the contribution made by each such entity shall be allocated among the applicable accounts of the participants employed by the contributing employer. If a participant is employed by more than one entity during the applicable period, each such entity shall contribute with respect to the compensation earned by the participant while employed by that entity. (c) Limitations and Conditions - Notwithstanding the allocation procedures set forth in this Article, the allocations to participants' accounts shall be limited or modified to the extent required to comply with the provisions of Article V (limitations on allocations under Code section 415, top-heavy provisions under Code section 416, and related employer provisions under Code section 414). In any limitation year in which the allocation to one or more participants' accounts would be in excess of the limitations on allocations under Code section 415, the annual additions under the Weis Markets, Inc. Stock Bonus Plan that the employer also sponsors will be reduced to the extent necessary to comply with such limitations first. If any further reduction is required, the annual additions under the Weis Markets, Inc. Retirement Savings Plan will be reduced second with respect to such participants. If any further reduction is required, the annual additions under this plan will be reduced third with respect to such participants. Section 3.2 - Profit Sharing Contributions (a) Amount of Contribution - The employer shall determine, in its sole discretion, the amount of employer profit sharing contribution to be made to the plan each year; provided, however, that the employer shall contribute such amount as may be required for restoration of a forfeited amount under Section 4.2. (b) Conditions for Allocations - An active participant shall be eligible for an allocation of the employer profit sharing contribution and forfeitures as of an allocation date, provided that he satisfies the following conditions: (1) He completed at least 1,000 hours of service during the current plan year, except that the hours of service requirement shall not apply with respect to any minimum top-heavy allocation as provided in Section 5.4. AND (2) He is employed by the employer on the last day of the plan year. AND (3) He is not a Highly Compensated Employee as defined in Section 1.4(b). (c) (1) Allocation Formula The employer profit sharing contribution and forfeitures for the plan year shall be allocated to the profit sharing account of each eligible participant in the ratio that each participant's number of allocation units bears to the allocation units of all participants. A participant shall be credited with one allocation unit for each full $100.00 of compensation for the plan year, plus 1.5 units for each year of service. (2) Top-Heavy Plan Years In any plan year in which this plan is top-heavy (as defined in Section 5.4(e)(2)) when aggregated with the Weis Markets, Inc. Retirement Savings Plan and Weis Markets, Inc. Stock Bonus Plan that the employer also sponsors, the top-heavy minimum benefit requirement shall be met under the Weis Markets, Inc. Retirement Savings Plan. For such a plan year, the contribution on behalf of each participant who is a non-key employee and who participates in the aggregated plans shall be increased as necessary under such other sponsored defined contribution plan to equal 3% of such participant's compensation or the largest percentage of employee 401(k) elective deferral contribution, employer contribution, and forfeitures allocated under the aggregated plans on behalf of any key employee for that year, whichever is less. If a participant only participates in this plan, the contributions and forfeitures allocable to the profit sharing account shall be increased as necessary for compliance with the top-heavy minimum benefit requirement. The total of the contributions and forfeitures allocated to such account(s) for such a participant shall not be less than an amount equal to 3% of his compensation or the largest percentage of employee 401(k) elective deferral contribution, employer contribution, and forfeiture allocated under the aggregated plans on behalf of any key employee for that year, whichever is less. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 11 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (3) Compensation - For purposes of the allocation of the employer profit sharing contribution, compensation means compensation as defined in Section 1.2(a) and (b) for the entire plan year. However, for purposes of the top-heavy contribution, compensation means compensation as defined in Section 5.1(d)(2), subject to the limitations of Section 1.2(c). Section 3.3 - Qualified Nonelective Contributions Qualified nonelective contributions shall not be made under this plan and no amount shall be credited to the qualified nonelective contribution account. Any employer contributions shall be made as profit sharing contributions. In any plan year in which the plan is top-heavy (as defined in Section 5.4(e)(2)), the top-heavy minimum benefit requirement shall be met as provided in Section 3.2. Section 3.4 - Employee 401(k) Elective Deferral Contributions No contribution shall be made under this plan pursuant to either a salary reduction arrangement or a cash or deferred arrangement and no amount shall be credited to the employee 401(k) elective deferral account. Section 3.5 - Employee Nondeductible Contributions Employee nondeductible contributions are not permitted under this plan and no amount shall be credited to the employee nondeductible contribution account. A participant may not treat his excess contributions as an amount distributed to him and then contributed by him to the plan as an employee nondeductible contribution as described in Section 5.5(b)(3). Section 3.6 - Employer Matching Contributions Employer matching contributions shall not be made under this plan and no amount shall be credited to the employer matching contribution account. Section 3.7 - Rollover/Transfer Account (a) Rollover Contributions - A participant may contribute to his rollover/transfer account any amounts that he previously received either as a lump sum distribution (as defined in Code section 402(e)(4)(D)) or within one taxable year as a distribution from another qualified plan on account of termination of that plan provided that: (1) He transferred such distribution to an individual retirement account or annuity within sixty (60) days after receipt, or (2) He transferred such distribution to this plan within sixty (60) days after receipt. Before accepting a rollover contribution, the trustee may require an employee to furnish satisfactory evidence that the proposed transfer is in fact a "rollover contribution" which the Code permits an employee to make to a qualified plan. (b) Transfer Contributions - With the consent of the plan administrator, the participant may have funds transferred directly to this plan from another qualified plan. Consent shall not be given if the optional forms of payment to which the funds are subject under the prior plan are not properly disclosed by the prior plan or cannot be accommodated by this plan and trust. Further, this plan shall not accept any direct or indirect transfers (in a transfer after December 31, 1984) from a defined benefit plan, money purchase plan (including a target benefit plan), stock bonus or profit sharing plan that would otherwise have provided for a life annuity form of payment to the participant. (c) Contributions Before Plan Entry Date - An employee, (who is in the eligible class of employees) prior to satisfying the plan's eligibility conditions, may make a rollover or transfer contribution to the plan to the same extent and in the same manner as a participant. If an employee makes a rollover or transfer contribution to the plan before satisfying the plan's eligibility conditions, the plan administrator and trustee will treat the employee as a participant for all purposes of the plan, except the employee is not a participant for purposes of sharing in contributions or forfeitures under the plan until he actually becomes a participant in the plan. If the employee has a separation from service prior to becoming a participant, the trustee will distribute his rollover/transfer account to him. (d) Distribution - Withdrawals may be made from a rollover/transfer account under the terms and conditions set forth in Section 4.4. Section 3.8 - Allocation of Investment Results (a) General Allocation Procedures Investment income and market value appreciation or depreciation shall be allocated to each account of each participant who has accrued benefits in proportion to the respective account balances on each accounting date. For this purpose, each account balance shall be equal to the average balance for the period commencing on the day following the prior accounting date and ending on the current accounting date. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 12 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (b) Participant Investment Election A participant who has reached age 55 and is 100% vested may elect to have 50% or 100% of his account transferred to a separate interest bearing fund which is not subject to market value fluctuation (money market fund or similar investment) and to have the investment results allocated to his account based upon earnings and losses on such separate interest bearing fund. The participant may make such investment election at any time after he reaches age 55 and is 100% vested in his account by filing a written election with the plan administrator within 30 days after the first day of the plan year as of which such election is to be effective. The participant may change this election annually and such election is irrevocable until the first day of the plan year following the plan year as of which such election is to be effective. Participants who terminate employment with account balances in excess of $5,000 may make the same investment election as above at the time of termination. However, this one-time election is irrevocable until age 55. At that time, the participant may change this election annually as above. ARTICLE IV - PAYMENT OF PARTICIPANT ACCOUNTS Section 4.1 - Vesting Service Rules (a) Vesting Year of Service means a vesting computation period during which the employee completes at least 1,000 hours of service with the employer. All of an employee's years of service with the employer shall be counted to determine the nonforfeitable percentage in the employee's account balance(s) derived from employer contributions, except: (1) Years of service disregarded under the break in service rules in Section 4.1(d) below. (Post-ERISA break in service rules) (2) Years of service before the effective date of ERISA if such service would have been disregarded under the break in service rules of the prior plan in effect from time to time before such date. For this purpose, break in service rules are rules which result in the loss of prior vesting or benefit accruals, or which deny an employee eligibility to participate, by reason of separation or failure to complete a required period of service within a specified period of time. (Pre-ERISA break in service rules) (b) One Year Break in Service means for the purposes of this Article IV a vesting computation period during which the participant or former participant does not complete more than 500 hours of service with the employer. (c) Vesting Computation Period means the 12-consecutive-month period coinciding with the plan year. (d) Break in Service Rules (1) Vested Participant - A former participant who had a nonforfeitable right to all or a portion of his account balance(s) derived from employer contributions at the time of his termination from service shall retain credit for all vesting years of service prior to a break in service. (2) Nonvested Participant - In the case of a former participant who did not have any nonforfeitable right to his account balance(s) derived from employer contributions at the time of his termination from service, years of service before a period of consecutive one- year breaks in service shall not be taken into account in computing service if the number of consecutive one-year breaks in service in such period equals or exceeds the greater of 5 or the aggregate number of years of service before such breaks in service. Such aggregate number of years of service shall not include any years of service disregarded under the preceding sentence by reason of prior breaks in service. (3) Vesting for Pre-Break and Post-Break Accounts - In the case of a participant who has five or more consecutive one-year breaks in service, all years of service after such breaks in service shall be disregarded for the purpose of vesting the employer-derived account balance(s) that accrued before such breaks in service. Whether or not such participant's pre-break service counts in vesting the post-break employer-derived account balance(s) shall be determined according to the rules set forth in Section 4.1(d)(1) and (2) above. Separate accounts shall be maintained for each of the participant's pre-break and post-break employer-derived account balance(s). All accounts shall share in the investment earnings and losses of the fund. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 13 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- Section 4.2 - Vesting of Participant Accounts (a) Determination of Vesting (1) Normal Retirement - A participant's right to his account balance(s) shall be 100% vested and nonforfeitable upon the attainment of age 65, the normal retirement age. If the employer enforces a mandatory retirement age, the normal retirement age shall be the lesser of the mandatory age or the age specified herein. (2) Late Retirement - If a participant remains employed after his normal retirement age, his account balance(s) shall remain 100% vested and nonforfeitable. Such participant shall continue to receive allocations to his account as he did before his normal retirement age. (3) Early Retirement - In the case of a participant who has attained age 60 and completed 5 years of service before his normal retirement age, the participant's right to his account balance(s) shall be 100% vested and nonforfeitable. Such participant may retire before his normal retirement age without the consent of the employer and receive payment of benefits from the plan. If a participant separates from service before satisfying the age requirement for early retirement, but has satisfied the service requirement, the participant shall be entitled to elect an early retirement benefit upon satisfaction of such age requirement. (4) Disability - If a participant separates from service due to disability, such participant's right to his account balance(s) as of his date of disability shall be 100% vested and nonforfeitable. Disability means inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which 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. The permanence and degree of such impairment shall be supported by medical evidence. Notwithstanding such definition, a participant who is eligible for Social Security disability benefits shall automatically satisfy the definition of disability. Disability shall be determined by the plan administrator after consultation with a physician chosen by the plan administrator. In the administration of this section, all employees shall be treated in a uniform manner in similar circumstances. (5) (A) Death - In the event of the death of a participant who has an accrued benefit under the plan, (whether or not he is an active participant), 100% of the participant's account balance(s) as of the date of death shall be paid to his surviving spouse; except that, if there is no surviving spouse, or if the surviving spouse has already consented in a manner which is (or conforms to) a qualified election under the joint and survivor annuity provisions of Code section 417(a) and regulations issued pursuant thereto and as set forth in Section 5.2, then such balance(s) shall be paid to the participant's designated beneficiary. (B) Beneficiary Designation - Subject to the spousal consent requirements of Section 5.2, the participant shall have the right to designate his beneficiaries, including a contingent death beneficiary, and shall have the right at any time prior to his death to change such beneficiaries. The designation shall be effective only if made in writing on a form signed by the participant and supplied by and filed with the plan administrator prior to his death. If the participant fails to designate a beneficiary, or if the designated person or persons predecease the participant, "beneficiary" shall mean: (a) the spouse, (b) if no surviving spouse, then to the surviving children in equal shares, (c) if no surviving children, then to the surviving parents in equal shares, (d) if no surviving parents, then to the surviving brothers and sisters in equal shares, (e) if no surviving brothers and sisters, then (f) to the participant's estate if an estate is opened within 2 years of the participant's death; and otherwise to a charity selected in the sole discretion of the plan administrator. If a designated beneficiary dies after the participant has died but before the plan has commenced or made distribution to the designated beneficiary, the plan shall be administered as set forth in this paragraph. The death benefit will be paid to the beneficiary's designated beneficiary, if any designated prior to such beneficiary's death in connection with the beneficiary's election of a form of payment of the participant's death benefit to which he is entitled; and if no such designation is on file with the plan administrator, then to the beneficiary's estate in a single lump sum payment if an estate is opened within 2 years of the participant's death; and otherwise to a charity selected in the sole discretion of the plan administrator. If the deceased designated beneficiary was not the participant's surviving spouse, distribution under this paragraph will be completed by December 31 of the fifth year following the participant's date of death. If the deceased designated beneficiary was the participant's surviving spouse, distribution under this paragraph will be completed by December 31 of the fifth year following the beneficiary's date of death. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 14 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- For purposes of this Section, if a spouse or beneficiary of the participant dies simultaneously with the participant, for purposes of the plan, the participant shall be deemed to be the survivor and to have died subsequent to such spouse or beneficiary. Likewise, if a beneficiary designated by a designated beneficiary dies simultaneously with a designated beneficiary, the designated beneficiary shall be deemed to be the survivor and to have died subsequent to the beneficiary designated by the designated beneficiary. (6) Termination From Service - If a participant separates from the service of the employer other than by retirement, disability, or death, his vested interest in his accounts shall be equal to the account balance multiplied by the vesting percentage determined below: (A) Profit Sharing Account - The vesting percentage applicable to the participant's profit sharing account shall be determined based on his vesting years of service as follows: Years of Service Vesting Percentage ---------------- ------------------ 0-2 Years 0% 3 20% 4 40% 5 60% 6 80% 7 or More Years 100% Transition Rule - Notwithstanding the above vesting schedule, the vesting provisions of the plan before July 31, 1993, the effective date of the amendment, shall continue to apply to participants who participated in the plan before the amendment date, if such prior vesting provisions are more favorable to particular participants than the vesting provisions set forth herein. (B) Employer Matching Contribution Account - No employer matching contribution account is provided under this plan. (C) Other Accounts - The participant shall always be 100% vested in his following accounts: employee nondeductible contribution account and rollover/transfer account. The accrued benefit in such accounts shall be nonforfeitable. (b) Forfeitures (1) Time of Forfeiture - If a participant terminates employment before his account balances derived from employer contributions are fully vested, the nonvested portion of his accounts shall be forfeited on the earlier of: (A) The last day of the vesting computation period in which the participant first incurs five consecutive one-year breaks in service, or (B) The date the participant receives his entire vested accrued benefit. (2) Cashout Distributions and Restoration (A) Cashout Distribution - If an employee terminates service and the value of his vested account balances derived from employer and employee contributions are not greater than $5,000, the employee shall receive a distribution of the value of the entire vested portion of such account balances and the nonvested portion will be treated as a forfeiture. For purposes of this section, if the value of an employee's vested account balances is zero, he shall be deemed to have received a distribution of such vested account balances. (Effective for distributions made on or after March 22, 1999, for the purpose of determining the value of a participant's vested account balance, prior distributions shall be disregarded if distributions have not commenced under an optional form of payment described in Section 4.3.) If an employee terminates service and the value of his vested account balances exceeds $5,000, he may elect to receive the value of his vested account balances after such termination as provided in Section 4.3. The nonvested portion shall be treated as a forfeiture as of the date of distribution. If the employee elects to have distributed less than the entire vested portion of the account balances derived from employer contributions, the part of the nonvested portion that will be treated as a forfeiture is the total nonvested portion multiplied by a fraction, the numerator of which is the amount of the distribution attributable to employer contributions and the denominator of which is the total value of the vested employer derived account balances. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 15 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (B) Restoration of Accounts - If an employee receives a cashout distribution pursuant to this section and resumes employment covered under this plan before he incurs five consecutive one- year breaks in service, his employer-derived account balances shall each be restored to the amount on the date of distribution, if he repays to the plan the full amount of the distribution attributable to employer contributions before the earlier of five years after the first date on which he is subsequently re-employed by the employer, or the date he incurs five consecutive one-year breaks in service following the date of the distribution. If an employee is deemed to receive a distribution pursuant to this Section 4.2(b)(2), and he resumes employment covered under this plan before he incurs five consecutive one-year breaks in service, upon the re-employment of such employee his employer-derived account balances will be restored to the amount on the date of such deemed distribution. Any amount required to restore such forfeitures shall be deducted from forfeitures (including forfeitures of excess aggregate contributions) occurring in the plan year of restoration. If forfeitures are insufficient for the restoration, the employer may make a contribution to the plan for such plan year to satisfy the restoration. However, by the end of the plan year following the plan year of restoration, sufficient forfeitures or employer contributions shall be credited to the account to satisfy the restoration. (c) Disposition of Forfeitures (1) Profit Sharing Account - Forfeitures of profit sharing accounts shall be reallocated among the eligible active participants at the end of the plan year in which such forfeitures occur in accordance with the allocation procedures set forth in Section 3.2. (2) Employer Matching Contribution Account - No employer matching contribution account is provided under this plan. (d) Withdrawal of Employee Nondeductible Contributions - No forfeitures shall occur solely as a result of an employee's withdrawal of employee nondeductible contributions. (e) Unclaimed Benefits (1) Forfeiture - The plan does not require the trustee or the plan administrator to search for, or to ascertain the whereabouts of, any participant or beneficiary. At the time the participant's or beneficiary's benefit becomes distributable under the plan, the plan administrator, by certified or registered mail addressed to his last known address of record, shall notify any participant or beneficiary that he is entitled to a distribution under this plan. If the participant or beneficiary fails to claim his distributive share or make his whereabouts known in writing to the plan administrator within twelve months from the date of mailing of the notice, the plan administrator shall treat the participant's or beneficiary's unclaimed payable accrued benefit as forfeited and shall reallocate such forfeiture in accordance with Section 4.2(c). A forfeiture under this paragraph shall occur at the end of the notice period or, if later, the earliest date applicable Treasury regulations would permit the forfeiture. These forfeiture provisions apply solely to the participant's or beneficiary's accrued benefit derived from employer contributions. (2) Restoration - If a participant or beneficiary who has incurred a forfeiture of his accrued benefit under the provisions of this Subsection makes a claim, at any time, for his forfeited accrued benefit, the plan administrator shall restore the participant's or beneficiary's forfeited accrued benefit to the same dollar amount as the dollar amount of the accrued benefit forfeited, unadjusted for any gains or losses occurring after the date of the forfeiture. The plan administrator shall make the restoration during the plan year in which the participant or beneficiary makes the claim from forfeitures occurring in that plan year. If forfeitures are insufficient for the restoration, the employer shall make a contribution to the plan to satisfy the restoration. The plan administrator shall direct the trustee to distribute the participant's or beneficiary's restored accrued benefit to him not later than 60 days after the close of the plan year in which the plan administrator restores the forfeited accrued benefit. Section 4.3 - Payment of Participant Accounts (a) Time of Payment (1) Commencement of Benefits - Unless the participant elects otherwise, distribution of benefits shall begin no later than the 60th day after the latest of the close of the plan year in which: (A) The participant attains age 65 (or the plan's normal retirement age, if earlier); (B) Occurs the 10th anniversary of the year in which the participant commenced participation in the plan; or Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 16 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (C) The participant terminates service with the employer (i.e. late retirement). (2) Payment Upon Retirement, Disability, or Death - Subject to the provisions set forth in Section 4.3(a)(1), in the Joint and Survivor Requirements of Section 5.2, and in the Distribution Requirements of Section 5.3, if the participant terminates employment due to retirement, disability, or death, his account(s) shall be paid as soon as administratively possible after the occurrence of the event creating the right to a distribution. (3) Payment Upon Other Termination of Employment - Subject to the provisions set forth in Section 4.3(a)(1), and in the Distribution Requirements of Section 5.3, if the participant terminates employment other than by retirement, disability, or death, his account(s) shall be paid as soon as administratively possible after the end of the plan year in which severance of employment occurs. However, if the vested profit sharing, employer matching and qualified nonelective contribution accounts exceed $25,000, no distribution shall be made until the participant attains age 65 or until the participant meets the early retirement requirements, if earlier. (4) Notwithstanding the foregoing, the failure of a participant (and spouse where the spouse's consent is required) to consent to a distribution while a benefit is immediately distributable, within the meaning of Section 5.2(c), shall be deemed to be an election to defer commencement of payment of any benefit sufficient to satisfy this section. (b) Optional Form(s) of Payment - A participant or beneficiary may elect to receive distribution of his account(s) in one of the optional forms of payment outlined below, provided that such distribution complies with the Distribution Requirements of Section 5.3. The participant or beneficiary shall file a written request for benefits with the plan administrator before payments will commence. If a distribution is required under Section 5.3, the vested balance of the account(s) exceeds $5,000, and the participant fails to elect a form of payment, the trustee shall pay the benefit in installment payments that meet the requirements of Section 5.3 over the joint life and last survivor expectancy of the participant and his designated beneficiary. Optional forms of payment include: (1) Lump Sum Payment - A lump sum benefit payment may be made in cash from the fund or by distribution of assets in kind, provided that the participant or beneficiary agrees to such distribution in kind and the trustee determines a current fair market value of the assets to be distributed. However, if the vested accrued benefit is no more than $5,000, benefits shall automatically be paid in a lump sum. (2) Installment Payments over a period of years that meets the Distribution Requirements of Section 5.3. Installment payments may be made in cash from the fund or by distribution of an annuity term certain contract. If installment payments are made from the fund, the plan administrator shall direct the trustee to segregate the participant's accrued benefit in a separate account. The trustee will invest such participant's segregated account in federally insured interest bearing savings accounts or time deposits (or a combination of both), or in other fixed income investments. A segregated account remains a part of the trust, but it alone shares in any income it earns, and it alone bears any expense or loss it incurs. (c) General Payment Provisions (1) All distributions due to be made under this plan shall be made on the basis of the amount to the credit of the participant as of the accounting date coincident with or immediately preceding the occurrence of the event calling for a distribution. For a lump sum distribution made to a participant in the same year as the participant's date of termination, such amount shall be increased with respect to investment results attributable thereto which accrue during the period following such accounting date until the participant's date of termination. If a distributable event occurs after an allocation date and before allocations have been made to the account of the participant, the distribution shall also include the amounts allocable to the account as of such allocation date. (2) If any person entitled to receive benefits hereunder is physically or mentally incapable of receiving or acknowledging receipt thereof, and if a legal representative has been appointed for him, the plan administrator may direct the benefit payment to be made to such legal representative. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 17 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (3) Each optional form of benefit provided under the plan shall be made available to all participants on a nondiscriminatory basis. The plan may not retroactively reduce or eliminate optional forms of benefits and any other Code section 411(d)(6) protected benefits, except as provided in Regulation section 1.411(d)-4, Q&A-2(b) and in other relief granted statutorily or by the Commissioner of Internal Revenue. Any reduction or elimination of optional forms of benefits shall apply only to benefits accrued after the later of the effective date or adoption date of such change. (4) The participant's election of a form of benefit payment shall be irrevocable as of the annuity starting date, subject to the notice requirements contained in Section 4.3(e). (5) Any annuity contract distributed herefrom shall be nontransferable. The terms of any such annuity contract purchased and distributed by the plan shall comply with the requirements of this plan. The ownership of the annuity contract shall reside with the participant. Any dividend, refund or recovery on an annuity contract shall be credited to the participant or beneficiary for whom the annuity contract was purchased. (d) Eligible Rollover Distributions Effective for distributions made on or after January 1, 1993, notwithstanding the optional forms of payment listed in Section 4.3(b), a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (1) Eligible Rollover Distribution - An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code section 401(a)(9), the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities), and a hardship withdrawal made on or after January 1, 1999 from a participant's employee 401(k) elective deferral account before he has attained age 591/2. (2) Eligible Retirement Plan - An eligible retirement plan is an individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), or a qualified trust described in Code section 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (3) Distributee - A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code section 414(p), are distributees with regard to the interest of the spouse or former spouse. (4) Direct Rollover - A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee. (e) Payment Election Procedures As described in Section 5.2(c), an account balance in excess of $5,000 shall not be immediately distributed without the consent of the participant. The participant shall receive the notice required under Regulation section 1.411(a)-11(c) no less than 30 days and no more than 90 days before the annuity starting date with respect to the distribution. Effective for distributions made on or after January 1, 1993, for any distribution in excess of $200, the plan administrator shall give the participant notice of his eligible rollover distribution rights. The participant shall receive such notice in the same time period as the 411 notice is required to be provided. Effective for distributions made on or after January 1, 1994, if a distribution is one to which Code sections 401(a)(11) and 417 do not apply, such distribution may commence less than 30 days after the 411 notice is given, provided that: (1) The plan administrator clearly informs the participant that the participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and (2) The participant, after receiving the notice, affirmatively elects a distribution. Section 4.4 - In-Service Payments (a) Withdrawals - A participant may withdraw amounts from his account(s) before his separation from service only under the circumstances and only to the extent provided below. No payments shall be made before separation from service. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 18 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (b) Participant Loans No participant loans shall be permitted under this plan. Section 4.5 - Distributions Under Domestic Relations Orders Nothing contained in this plan prevents the trustee, in accordance with the direction of the plan administrator, from complying with the provisions of a qualified domestic relations order (as defined in Code section 414(p)). A distribution will not be made to an alternate payee until the participant attains (or would have attained) his earliest retirement age. For this purpose, earliest retirement age means the earlier of: (1) the date on which the participant is entitled to a distribution under this plan; or (2) the date the participant attains age 50. Any restriction on the account balance payable before the participant satisfies the early retirement requirements shall not apply to an alternate payee. Nothing in this Section gives a participant a right to receive distribution at a time otherwise not permitted under the plan nor does it permit the alternate payee to receive a form of payment not otherwise permitted under the plan. The plan administrator shall establish reasonable procedures to determine the qualified status of a domestic relations order. Upon receiving a domestic relations order, the plan administrator promptly will notify the participant and any alternate payee named in the order, in writing, of the receipt of the order and the plan's procedures for determining the qualified status of the order. Within a reasonable period of time after receiving the domestic relations order, the plan administrator shall determine the qualified status of the order and shall notify the participant and each alternate payee, in writing, of its determination. The plan administrator shall provide notice under this paragraph by mailing to the individual's address specified in the domestic relations order, or in a manner consistent with Department of Labor regulations. If any portion of the participant's nonforfeitable accrued benefit is payable during the period the plan administrator is making its determination of the qualified status of the domestic relations order, the plan administrator shall make a separate accounting of the amounts payable. If the plan administrator determines the order is a qualified domestic relations order within 18 months of the date amounts first are payable following receipt of the order, it shall direct the trustee to distribute the payable amounts in accordance with the order. If the plan administrator does not make its determination of the qualified status of the order within the 18-month determination period, it shall direct the trustee to distribute the payable amounts in the manner the plan would distribute if the order did not exist and shall apply the order prospectively if it later determines the order is a qualified domestic relations order. ARTICLE V - ADDITIONAL QUALIFICATION RULES Section 5.1 - Limitations on Allocations Under Code Section 415 (a) Single Plan Limitations (1) If the participant does not participate in, and has never participated in another qualified plan maintained by the employer, a welfare benefit fund (as defined in Code section 419(e)) maintained by the employer, or an individual medical account (as defined in Code section 415(l)(2)) maintained by the employer, that provides an annual addition as defined in Section 5.1(d)(1), the amount of annual additions that may be credited to the participant's account for any limitation year will not exceed the lesser of the maximum permissible amount or any other limitation contained in this plan. If the employer contribution that would otherwise be contributed or allocated to the participant's account would cause the annual additions for the limitation year to exceed the maximum permissible amount, the amount contributed or allocated will be reduced so that the annual additions for the limitation year will equal the maximum permissible amount. (2) Prior to determining the participant's actual compensation for the limitation year, the employer may determine the maximum permissible amount for a participant on the basis of a reasonable estimation of the participant's compensation for the limitation year, uniformly determined for all participants similarly situated. (3) As soon as is administratively feasible after the end of the limitation year, the maximum permissible amount for the limitation year will be determined on the basis of the participant's actual compensation for the limitation year. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 19 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (4) If pursuant to Section 5.1(a)(3) or as a result of either the allocation of forfeitures or a reasonable error in determining the amount of elective deferrals that may be made with respect to a participant, there is an excess amount, the excess will be disposed of as follows: (A) Any employee nondeductible contributions (and any gain attributable thereto), to the extent they would reduce the excess amount, will be returned to the participant. (B) If after the application of Subparagraph (A) an excess amount still exists, any elective deferrals (and any gain attributable thereto), to the extent they would reduce the excess amount, will be distributed to the participant. (C) If after the application of Subparagraph (B) an excess amount still exists, the excess amount shall be allocated and reallocated to the profit sharing account or qualified nonelective contribution account of the other participants in the plan to the extent permissible under the limitations of this Section 5.1. (D) If after the application of Subparagraph (C) an excess amount still exists, the excess amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future employer contributions for all active participants in the next limitation year, and each succeeding limitation year if necessary. (E) If a suspense account is in existence at any time during a limitation year pursuant to this Section 5.1(a)(4), it will not participate in the allocation of the trust's investment gains and losses. If a suspense account is in existence at any time during a particular limitation year, all amounts in the suspense account must be allocated and reallocated to participants' accounts before any employer, elective deferral, or employee nondeductible contributions may be made to the plan for that limitation year. Excess amounts may not be distributed to participants or former participants. (b) Combined Limitations - Other Defined Contribution Plan (1) This Section 5.1(b) applies if, in addition to this plan, the participant is covered under another qualified defined contribution plan maintained by the employer, a welfare benefit fund (as defined in Code section 419(e)) maintained by the employer, or an individual medical account (as defined in Code section 415(l)(2)), maintained by the employer, that provides an annual addition as defined in Section 5.1(d)(1), during any limitation year. The annual additions that may be credited to a participant's account under this plan for any such limitation year will not exceed the maximum permissible amount reduced by the annual additions credited to a participant's account under the other plans and welfare benefit funds for the same limitation year. If the annual additions with respect to the participant under other defined contribution plans and welfare benefit funds maintained by the employer are less than the maximum permissible amount and the employer contribution that would otherwise be contributed or allocated to the participant's account under this plan would cause the annual additions for the limitation year to exceed this limitation, the amount contributed or allocated will be reduced so that the annual additions under all such plans and funds for the limitation year will equal the maximum permissible amount. If the annual additions with respect to the participant under such other defined contribution plans and welfare benefit funds in the aggregate are equal to or greater than the maximum permissible amount, no amount will be contributed or allocated to the participant's account under this plan for the limitation year. (2) Prior to determining the participant's actual compensation for the limitation year, the employer may determine the maximum permissible amount for a participant in the manner described in Section 5.1(a)(2). (3) As soon as is administratively feasible after the end of the limitation year, the maximum permissible amount for the limitation year will be determined on the basis of the participant's actual compensation for the limitation year. (4) If, pursuant to Section 5.1(b)(3) or as a result of the allocation of forfeitures, a participant's annual additions under this plan and such other plans would result in an excess amount for a limitation year, the excess amount will be deemed to consist of the annual additions last allocated, except that annual additions attributable to a welfare benefit fund or individual medical account will be deemed to have been allocated first regardless of the actual allocation date. (5) If an excess amount was allocated to a participant on an allocation date of this plan that coincides with an allocation date of another plan, the excess amount will be disposed of in the manner provided in Section 3.1(c). (6) Any excess amount attributed to this plan will be disposed of in the manner described in Section 5.1(a)(4). Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 20 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (c) Combined Limitations - Other Defined Benefit Plan If the employer maintains, or at any time maintained, a qualified defined benefit plan covering any participant in this plan, the sum of the participant's defined benefit plan fraction and defined contribution plan fraction will not exceed 1.0 in any limitation year. Any excess amounts shall be disposed of in the manner provided in Section 3.1(c). Any excess amount attributed to this plan will be disposed of in the manner described in Section 5.1(a)(4). Effective with respect to limitation years beginning after December 31, 1999, this Section 5.1(c) shall no longer be in effect. The following definitions in Section 5.1(d) shall no longer apply: defined benefit plan fraction, defined contribution plan fraction, highest average compensation, projected annual benefit. (d) Definitions (Code Section 415 Limitations) (1) Annual Additions - The sum of the following amounts credited to a participant's account for the limitation year: (A) employer contributions, (B) employee contributions, (C) forfeitures, and (D) amounts allocated, after March 31, 1984, to an individual medical account, as defined in Code section 415(l)(2), that is part of a pension or annuity plan maintained by the employer are treated as annual additions to a defined contribution plan. Also, amounts derived from contributions paid or accrued after December 31, 1985 (in taxable years ending after such date), that are attributable to postretirement medical benefits, allocated to the separate account of a key employee (as defined in Code section 419A(d)(3)) under a welfare benefit fund (as defined in Code section 419(e)) maintained by the employer are treated as annual additions to a defined contribution plan. For this purpose, any excess amount applied under Section 5.1(a)(4) or (b)(6) in the limitation year to increase the accounts of participants who did not have an excess amount or to reduce employer contributions will be considered annual additions for such limitation year. (2) Compensation - A participant's earned income and any earnings reportable as W-2 wages for federal income tax withholding purposes. W-2 wages means wages as defined in Code section 3401(a) but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2)). For limitation years beginning after December 31, 1991, for purposes of applying the limitations of this Section 5.1, compensation for a limitation year is the compensation actually paid or includable in gross income during such limitation year. For limitation years beginning after December 31, 1997, compensation shall include elective contributions as defined in Section 1.2(a) and elective contributions under a Code section 457 plan or a Code section 501(c)(18) plan. Notwithstanding the preceding, compensation for a participant in a defined contribution plan who is permanently and totally disabled (as defined in Code section 22(e)(3)) is the compensation such participant would have received for the limitation year if the participant had been paid at the rate of compensation paid immediately before becoming permanently and totally disabled; such imputed compensation for the disabled participant may be taken into account only if contributions made on behalf of such participant are nonforfeitable when made. (3) Defined Benefit Fraction - A fraction, the numerator of which is the sum of the participant's projected annual benefits under all the defined benefit plans (whether or not terminated) maintained by the employer, and the denominator of which is the lesser of 125% of the dollar limitation determined for the limitation year under Code sections 415(b) and (d) or 140% of the highest average compensation, including any adjustments under Code section 415(b). Notwithstanding the above, if the participant was a participant as of the first day of the first limitation year beginning after December 31, 1986, in one or more defined benefit plans maintained by the employer which were in existence on May 6, 1986, the denominator of this fraction will not be less than 125% of the sum of the annual benefits under such plans that the participant had accrued as of the close of the last limitation year beginning before January 1, 1987, disregarding any changes in the terms and conditions of the plan after May 5, 1986. The preceding sentence applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of Code section 415 for all limitation years beginning before January 1, 1987. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 21 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (4) Defined Contribution Dollar Limitation - $30,000, as adjusted under Code section 415(d) for limitation years beginning after December 31, 1994. (5) Defined Contribution Fraction - A fraction, the numerator of which is the sum of the annual additions to the participant's account under all the defined contribution plans (whether or not terminated) maintained by the employer for the current and all prior limitation years (including the annual additions attributable to the participant's nondeductible employee contributions to all defined benefit plans, whether or not terminated, maintained by the employer, and the annual additions attributable to all welfare benefit funds, as defined in Code section 419(e), and individual medical accounts, as defined in Code section 415(l)(2), maintained by the employer), and the denominator of which is the sum of the maximum aggregate amounts for the current and all prior limitation years of service with the employer (regardless of whether a defined contribution plan was maintained by the employer). The maximum aggregate amount in any limitation year is the lesser of 125% of the dollar limitation determined under Code sections 415(b) and (d) in effect under Code section 415(c)(1)(A) or 35% of the participant's compensation for such year. If the employee was a participant as of the end of the first day of the first limitation year beginning after December 31, 1986, in one or more defined contribution plans maintained by the employer that were in existence on May 6, 1986, the numerator of this fraction will be adjusted if the sum of this fraction and the defined benefit fraction would otherwise exceed 1.0 under the terms of this plan. Under the adjustment, an amount equal to the product of (1) the excess of the sum of the fractions over 1.0 times (2) the denominator of this fraction, will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last limitation year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the plan made after May 5, 1986, but using the Code section 415 limitation applicable to the first limitation year beginning on or after January 1, 1987. The annual addition for any limitation year beginning before January 1, 1987, shall not be recomputed to treat all employee contributions as annual additions. (6) Employer - For purposes of this Section 5.1, employer shall mean the employer as defined in Section 1.5(b) but including all members of a controlled group of corporations as defined in Code section 414(b) as modified by Code section 415(h) and all commonly controlled trades or businesses as defined in Code section 414(c) as modified by Code section 415(h). (7) Excess Amount - The excess of the participant's annual additions for the limitation year over the maximum permissible amount. (8) Highest Average Compensation - The average compensation for the three consecutive years of service with the employer that produces the highest average. A year of service with the employer is the 12-consecutive-month period coinciding with the plan year. (9) Limitation Year - The 12-consecutive-month period defined in Section 1.3(f). All qualified plans maintained by the employer must use the same limitation year. If the limitation year is amended to a different 12-consecutive-month period, the new limitation year must begin on a date within the limitation year in which the amendment is made. (10) Maximum Permissible Amount - The maximum annual addition that may be contributed or allocated to a participant's account under the plan for any limitation year shall not exceed the lesser of: (A) the defined contribution dollar limitation as defined in Section 5.1(d)(4); or (B) 25% of the participant's compensation for the limitation year. The compensation limitation referred to in (B) shall not apply to any contribution for medical benefits (within the meaning of Code section 401(h) or Code section 419A(f)(2)) that is otherwise treated as an annual addition under Code section 415(l)(1) or 419A(d)(2). If a short limitation year is created because of an amendment changing the limitation year to a different 12-consecutive-month period, the maximum permissible amount will not exceed the defined contribution dollar limitation multiplied by the following fraction: Number of months in the short limitation year --------------------------------------------- 12 (11) Projected Annual Benefit - The annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) to which the participant would be entitled under the terms of the plan assuming: (A) the participant will continue employment until normal retirement age under the plan (or current age, if later); and Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 22 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (B) the participant's compensation for the current limitation year and all other relevant factors used to determine benefits under the plan will remain constant for all future limitation years. Section 5.2 - Joint and Survivor Annuity Requirements No annuity form of payment is provided under Section 4.3(b) and no direct or indirect transfer is accepted under Section 3.7 from a defined benefit plan, money purchase pension plan (including a target benefit plan), stock bonus or profit sharing plan that would otherwise have provided for a life annuity form of payment to any participant; therefore, this Section 5.2 shall not apply to this plan, except for the provisions of Section 5.2(c) and (f). (a) Qualified Joint and Survivor Annuity - Unless an optional form of benefit is selected pursuant to a qualified election within the 90- day period ending on the annuity starting date, a married participant's vested account balance will be paid in the form of a qualified joint and survivor annuity and an unmarried participant's vested account balance will be paid in the form of a life annuity with a ten-year guaranteed period. The participant may elect to have such annuity distributed upon attainment of the earliest retirement age under the plan. (b) Qualified Preretirement Survivor Annuity - Unless an optional form of benefit or another beneficiary has been selected within the election period pursuant to a qualified election, if a participant dies before the annuity starting date, 100% of the participant's vested account balance shall be applied toward the purchase of an annuity for the life of the surviving spouse. The surviving spouse may elect to have such annuity distributed within a reasonable period after the participant's death. (c) Restrictions on Immediate Distributions - If the value of a participant's vested account balance derived from employer and employee contributions exceeds (or at the time of any prior distribution (1) in plan years beginning before January 1, 1998, exceeded $3,500 or (2) in plan years beginning after December 31, 1997, exceeded) $5,000, and the account balance is immediately distributable, the participant and the participant's spouse (or where either the participant or the spouse has died, the survivor) must consent to any distribution of such account balance. Effective for distributions made on or after March 22, 1999, for the purpose of determining the value of a participant's vested account balance, prior distributions shall be disregarded if distributions have not commenced under an optional form of payment described in Section 4.3. The consent of the participant and the participant's spouse shall be obtained in writing within the 90-day period ending on the annuity starting date. The annuity starting date is the first day of the first period for which an amount is paid as an annuity or in any other form. The plan administrator shall notify the participant and the participant's spouse of the right to defer any distribution until the participant's account balance is no longer immediately distributable. Such notification shall include a general description of the material features, and an explanation of the relative values of, the optional forms of benefit available under the plan in a manner that would satisfy the notice requirements of Code section 417(a)(3), and shall be provided no less than 30 days and no more than 90 days prior to the annuity starting date. Notwithstanding the foregoing, only the participant need consent to the commencement of a distribution in the form of a qualified joint and survivor annuity while the account balance is immediately distributable. Furthermore, if payment in the form of a qualified joint and survivor annuity is not required with respect to the participant pursuant to Section 5.2(f), only the participant need consent to the distribution of an account balance that is immediately distributable. Neither the consent of the participant nor the participant's spouse shall be required to the extent that a distribution is required to satisfy Code section 401(a)(9) or section 415. In addition, upon termination of this plan if the plan does not offer an annuity option (purchased from a commercial provider) and if the employer or any entity within the same controlled group as the employer does not maintain another defined contribution plan (other than an employee stock ownership plan as defined in Code section 4975(e)(7)), the participant's account balance may, without the participant's consent, be distributed to the participant. However, if any entity within the same controlled group as the employer maintains another defined contribution plan (other than an employee stock ownership plan), the participant's account balance will be transferred, without the participant's consent, to the other plan if the participant does not consent to an immediate distribution. An account balance is immediately distributable if any part of the account balance could be distributed to the participant (or surviving spouse) before the participant attains (or would have attained if not deceased) the later of normal retirement age or age 62. (d) Definitions (Code Section 417 Requirements) (1) Election Period - The period that begins on the first day of the plan year in which the participant attains age 35 and ends on the date of the participant's death. If a participant separates from service prior to the first day of the plan year in which age 35 is attained, with respect to the account balance as of the date of separation, the election period shall begin on the date of separation. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 23 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (2) Pre-Age 35 Waiver - A participant who will not yet attain age 35 as of the end of any current plan year may make a special qualified election to waive the qualified preretirement survivor annuity for the period beginning on the date of such election and ending on the first day of the plan year in which the participant will attain age 35. Such election shall not be valid unless the participant receives a written explanation of the qualified preretirement survivor annuity in such terms as are comparable to the explanation required under Section 5.2(e)(1). Qualified preretirement survivor annuity coverage will be automatically reinstated as of the first day of the plan year in which the participant attains age 35. Any new waiver on or after such date shall be subject to the full requirements of this Section 5.2. (3) Earliest Retirement Age - The earliest date on which, under the plan, the participant could elect to receive retirement benefits. (4) Qualified Election - A waiver of a qualified joint and survivor annuity or a qualified preretirement survivor annuity. Any waiver of a qualified joint and survivor annuity or a qualified preretirement survivor annuity shall not be effective unless: (a) the participant's spouse consents in writing to the election; (b) the election designates a specific beneficiary, including any class of beneficiaries or any contingent beneficiaries, that may not be changed without spousal consent (or the spouse expressly permits designations by the participant without any further spousal consent); (c) the spouse's consent acknowledges the effect of the election; and (d) the spouse's consent is witnessed by a plan representative or notary public. Additionally, a participant's waiver of the qualified joint and survivor annuity shall not be effective unless the election designates a form of benefit payment that may not be changed without spousal consent (or the spouse expressly permits designations by the participant without any further spousal consent). If it is established to the satisfaction of a plan representative that there is no spouse or that the spouse cannot be located, a waiver will be deemed a qualified election. Any consent by a spouse obtained under this provision (or establishment that the consent of a spouse may not be obtained) shall be effective only with respect to such spouse. A consent that permits designations by the participant without any requirement of further consent by such spouse must acknowledge that the spouse has the right to limit consent to a specific beneficiary, and a specific form of benefit where applicable, and that the spouse voluntarily elects to relinquish either or both of such rights. A revocation of a prior waiver may be made by a participant without the consent of the spouse at any time before the commencement of benefits. The number of revocations shall not be limited. No consent obtained under this provision shall be valid unless the participant has received notice as provided in Section 5.2(e). (5) Qualified Joint and Survivor Annuity - An immediate annuity for the life of the participant with a survivor annuity for the life of the spouse that is not less than 50% and not more than 100% of the amount of the annuity which is payable during the joint lives of the participant and the spouse and which is the amount of benefit that can be purchased with the participant's vested account balance. The percentage of the survivor annuity under the plan shall be 50% (unless a different percentage is elected by the participant). (6) Spouse (Surviving Spouse) - The spouse or surviving spouse of the participant, provided that a former spouse will be treated as the spouse or surviving spouse and a current spouse will not be treated as the spouse or surviving spouse to the extent provided under a qualified domestic relations order as described in Code section 414(p). (7) Annuity Starting Date - The first day of the first period for which an amount is paid as an annuity or any other form. (8) Vested Account Balance - The aggregate value of the participant's vested account balances derived from employer and employee contributions (including rollovers), whether vested before or upon death, including the proceeds of insurance contracts, if any, on the participant's life. The provisions of this Section 5.2 shall apply to a participant who is vested in amounts attributable to employer contributions, employee contributions, or both at the time of death or distribution. (e) Notice Requirements (1) In the case of a qualified joint and survivor annuity, the plan administrator shall no less than 30 days and no more than 90 days prior to the annuity starting date provide each participant a written explanation of: (i) the terms and conditions of a qualified joint and survivor annuity; (ii) the participant's right to make and the effect of an election to waive the qualified joint and survivor annuity form of benefit; (iii) the rights of a participant's spouse; and (iv) the right to make, and the effect of, a revocation of a previous election to waive the qualified joint and survivor annuity. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 24 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (2) In the case of a qualified preretirement survivor annuity as described in Section 5.2(b), the plan administrator shall provide each participant within the applicable period for such participant a written explanation of the qualified preretirement survivor annuity in such terms and in such manner as would be comparable to the explanation provided for meeting the requirements of Section 5.2(e)(1) applicable to a qualified joint and survivor annuity. The applicable period for a participant is whichever of the following periods ends last: (i) the period beginning with the first day of the plan year in which the participant attains age 32 and ending with the close of the plan year preceding the plan year in which the participant attains age 35; (ii) a reasonable period ending after the individual becomes a participant; (iii) a reasonable period ending after Section 5.2(e)(3) ceases to apply to the participant; (iv) a reasonable period ending after this Section 5.2 first applies to the participant. Notwithstanding the foregoing, notice must be provided within a reasonable period ending after separation from service in the case of a participant who separates from service before attaining age 35. For purposes of applying the preceding paragraph, a reasonable period ending after the enumerated events described in (ii), (iii), and (iv) is the end of the two-year period beginning one year prior to the date the applicable event occurs, and ending one year after that date. In the case of a participant who separates from service before the plan year in which he attains age 35, notice shall be provided within the two-year period beginning one year prior to separation and ending one year after separation. If such a participant thereafter returns to employment with the employer, the applicable period for such participant shall be redetermined. (3) Notwithstanding the other requirements of this Section 5.2(e), the respective notices prescribed by this Subsection need not be given to a participant if (1) the plan "fully subsidizes" the costs of a qualified joint and survivor annuity or qualified preretirement survivor annuity, and (2) the plan does not allow the participant to waive the qualified joint and survivor annuity or qualified preretirement survivor annuity and does not allow a married participant to designate a nonspouse beneficiary. For purposes of this Section 5.2(e)(3), a plan fully subsidizes the costs of a benefit if no increase in cost, or decrease in benefits to the participant may result from the participant's failure to elect another benefit. (f) Safe Harbor Rules This Section 5.2(f) shall apply to a participant in a profit-sharing plan, and to any distribution, made on or after the first day of the first plan year beginning after December 31, 1988, from or under a separate account attributable solely to accumulated deductible employee contributions, as defined in Code section 72(o)(5)(B), and maintained on behalf of a participant in a money purchase pension plan, (including a target benefit plan) if the following conditions are satisfied: (1) the participant does not or cannot elect payments in the form of a life annuity; and (2) on the death of a participant, the participant's vested account balance will be paid to the participant's surviving spouse, but if there is no surviving spouse, or if the surviving spouse has consented in a manner conforming to a qualified election, then to the participant's designated beneficiary. The surviving spouse may elect to have distribution of the vested account balance commence within the 90-day period following the date of the participant's death. The account balance shall be adjusted for gains or losses occurring after the participant's death in accordance with the provisions of the plan governing the adjustment of account balances for other types of distributions. This Subsection (f) shall not be operative with respect to a participant in a profit-sharing plan if the plan is a direct or indirect transferee of a defined benefit plan, money purchase plan, a target benefit plan, stock bonus, or profit-sharing plan that is subject to the survivor annuity requirements of Code section 401(a)(11) and section 417. If this Subsection (f) is operative, then the provisions of this Section 5.2, other than Subsections (c) and (f) shall be inoperative. (1) The participant may waive the spousal death benefit described in this Subsection (f) at any time provided that no such waiver shall be effective unless it satisfies the conditions of Section 5.2(d)(4) (other than the notification requirement referred to therein) that would apply to the participant's waiver of the qualified preretirement survivor annuity. (2) For purposes of this Subsection (f), vested account balance shall mean, in the case of a money purchase pension plan or a target benefit plan, the participant's separate account balance attributable solely to accumulated deductible employee contributions within the meaning of Code section 72(o)(5)(B). In the case of a profit-sharing plan, vested account balance shall have the same meaning as provided in Section 5.2(d)(8). (g) Transitional Rules (1) Any living participant not receiving benefits on August 23, 1984, who would otherwise not receive the benefits prescribed by the previous paragraphs of this Section 5.2 must be given the opportunity to elect to have the prior paragraphs of this Section apply if such participant is credited with at least one hour of service under this plan or a predecessor plan in a plan year beginning on or after January 1, 1976, and such participant had at least 10 years of vesting service when he or she separated from service. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 25 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (2) Any living participant not receiving benefits on August 23, 1984, who was credited with at least one hour of service under this plan or a predecessor plan on or after September 2, 1974, and who is not otherwise credited with any service in a plan year beginning on or after January 1, 1976, must be given the opportunity to have his or her benefits paid in accordance with Section 5.2(f)(4). (3) The respective opportunities to elect (as described in Section 5.2(f)(1) and (2)) must be afforded to the appropriate participants during the period commencing on August 23, 1984, and ending on the date benefits would otherwise commence to said participants. (4) Any participant who has elected pursuant to Section 5.2(f)(2) and any participant who does not elect under Section 5.2(f)(1) or who meets the requirements of Section 5.2(f)(1) except that such participant does not have at least ten years of vesting service when he or she separates from service, shall have his or her benefits distributed in accordance with all of the following requirements if benefits would have been payable in the form of a life annuity: (A) Automatic Joint and Survivor Annuity - If benefits in the form of a life annuity become payable to a married participant who: (i) begins to receive payments under the plan on or after normal retirement age; or (ii) dies on or after normal retirement age while still working for the employer; or (iii) begins to receive payments on or after the qualified early retirement age; or (iv) separates from service on or after attaining normal retirement age (or the qualified early retirement age) and after satisfying the eligibility requirements for the payment of benefits under the plan and thereafter dies before beginning to receive such benefits; then such benefits will be received under this plan in the form of a qualified joint and survivor annuity, unless the participant has elected otherwise during the election period. The election period must begin at least 6 months before the participant attains qualified early retirement age and end not more than 90 days before the commencement of benefits. Any election hereunder will be in writing and may be changed by the participant at any time. (B) Election of Early Survivor Annuity - A participant who is employed after attaining the qualified early retirement age will be given the opportunity to elect, during the election period, to have a survivor annuity payable on death. If the participant elects the survivor annuity, payments under such annuity must not be less than the payments that would have been made to the spouse under the qualified joint and survivor annuity if the participant had retired on the day before his or her death. Any election under this provision will be in writing and may be changed by the participant at any time. The election period begins on the later of (1) the 90th day before the participant attains the qualified early retirement age, or (2) the date on which participation begins, and ends on the date the participant terminates employment. (C) For purposes of this Section 5.2(f)(4), qualified early retirement age is the latest of: (i) the earliest date, under the plan, on which the participant may elect to receive retirement benefits; (ii) the first day of the 120th month beginning before the participant reaches normal retirement age; or (iii) the date the participant begins participation. Further, for purposes of this Section 5.2(f)(4), a qualified joint and survivor annuity is an annuity for the life of the participant with a survivor annuity for the life of the spouse as described in Section 5.2(d)(5). (h) Loans If required under Section 4.4(b) of the plan, a participant must obtain the consent of his spouse, if any, to use his account balances as security for a loan. Spousal consent shall be obtained no earlier than the beginning of the 90-day period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan, and must be witnessed by a plan representative or notary public. Such consent shall thereafter be binding with respect to the consenting spouse or any subsequent spouse with respect to that loan. A new consent shall be required if the account balances are used for renegotiation, extension, renewal, or other revision of the loan. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 26 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- Once a valid spousal consent has been obtained in compliance with this provision; then, notwithstanding any other provision of this plan, the portion of the participant's vested account balances used as a security interest held by the plan by reason of a loan outstanding to the participant shall be taken into account for purposes of determining the amount of the account balances payable at the time of death or distribution, but only if the reduction is used as repayment of the loan. If less than 100% of the participant's vested account balances (determined without regard to the preceding sentence) is payable to the surviving spouse, then the account balances shall be adjusted by first reducing the vested account balances by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving spouse. Section 5.3 - Distribution Requirements Subject to Section 5.2 Joint and Survivor Annuity Requirements, the requirements of this Section 5.3 shall apply to any distribution of a participant's interest and will take precedence over any inconsistent provisions of this plan. The provisions of this Section shall apply to calendar years beginning after December 31, 1984. All distributions required under this Section shall be determined and made in accordance with the proposed regulations under Code section 401(a)(9), including the minimum distribution incidental benefit requirement of Proposed Regulation section 1.401(a)(9)-2. With respect to distributions under the plan made for calendar years beginning on or after January 1, 2002, the plan will apply the minimum distribution requirements of Code section 401(a)(9) in accordance with the regulations under section 401(a)(9) that were proposed in January 2001, notwithstanding any provision of the plan to the contrary. This preceding sentence shall continue in effect until the end of the last calendar year beginning before the effective date of final regulations under Code section 401(a)(9) or such other date specified in guidance published by the Internal Revenue Service. (a) Required Beginning Date - The entire interest of a participant must be distributed or begin to be distributed no later than the participant's required beginning date. (b) Limits on Distribution Periods - As of the first distribution calendar year, distributions, if not made in a single sum, may only be made over one of the following periods (or a combination thereof): (1) the life of the participant; (2) the life of the participant and a designated beneficiary; (3) a period certain not extending beyond the life expectancy of the participant; or (4) a period certain not extending beyond the joint life and last survivor expectancy of the participant and a designated beneficiary. (c) Determination of Amount to Be Distributed Each Year - If the participant's interest is to be distributed in other than a single sum, the following minimum distribution rules shall apply on or after the required beginning date. (1) Individual Account (A) If a participant's benefit is to be distributed over (1) a period not extending beyond the life expectancy of the participant or the joint life and last survivor expectancy of the participant and the participant's designated beneficiary (2) a period not extending beyond the life expectancy of the designated beneficiary, the amount required to be distributed for each calendar year, beginning with distributions for the first distribution calendar year, must at least equal the quotient obtained by dividing the participant's benefit by the applicable life expectancy. (B) For calendar years beginning before January 1, 1989, if the participant's spouse is not the designated beneficiary, the method of distribution selected must assure that at least 50% of the present value of the amount available for distribution is paid within the life expectancy of the participant. (C) For calendar years beginning after December 31, 1988, the amount to be distributed each year, beginning with distributions for the first distribution calendar year shall not be less than the quotient obtained by dividing the participant's benefit by the lesser of (1) the applicable life expectancy or (2) if the participant's spouse is not the designated beneficiary, the applicable divisor determined from the table set forth in Q&A-4 of Proposed Regulation section 1.401(a)(9)-2. Distributions after the death of the participant shall be distributed using the applicable life expectancy in Section 5.3(c)(1)(A) above as the relevant divisor without regard to Proposed Regulation section 1.401(a)(9)-2. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 27 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (D) The minimum distribution required for the participant's first distribution calendar year must be made on or before the participant's required beginning date. The minimum distribution for other calendar years, including the minimum distribution for the distribution calendar year in which the employee's required beginning date occurs, must be made on or before December 31 of that distribution calendar year. (2) Other Forms - If the participant's benefit is distributed in the form of an annuity purchased from an insurance company, distributions thereunder shall be made in accordance with the requirements of Code section 401(a)(9) and the proposed regulations thereunder. (d) Death Distribution Provisions (1) Distribution Beginning Before Death - If the participant dies after distribution of his interest has begun, the remaining portion of such interest will continue to be distributed at least as rapidly as under the method of distribution being used prior to the participant's death. (2) Distribution Beginning After Death - If the participant dies before distribution of his interest begins, distribution of the participant's entire interest shall be completed by December 31 of the calendar year containing the fifth anniversary of the participant's death except to the extent that an election is made to receive distributions in accordance with (A) or (B) below: (A) If any portion of the participant's interest is payable to a designated beneficiary, distributions may be made over the life or over a period certain not greater than the life expectancy of the designated beneficiary commencing on or before December 31 of the calendar year immediately following the calendar year in which the participant died; (B) If the designated beneficiary is the participant's surviving spouse, the date distributions are required to begin in accordance with (A) above shall not be earlier than the later of (i) December 31 of the calendar year immediately following the calendar year in which the participant died and (ii) December 31 of the calendar year in which the participant would have attained age 701/2. If the participant has not made an election pursuant to this Section 5.3 by the time of his death, the participant's designated beneficiary must elect the method of distribution no later than the earlier of (1) December 31 of the calendar year in which distributions would be required to begin under this Section 5.3(d)(2), or (2) December 31 of the calendar year that contains the fifth anniversary of the date of death of the participant. If the participant has no designated beneficiary, or if the designated beneficiary does not elect a method of distribution, distribution of the participant's entire interest must be completed by December 31 of the calendar year containing the fifth anniversary of the participant's death. (3) For purposes of Section 5.3(d)(2) above, if the surviving spouse dies after the participant, but before payments to such spouse begin, the provisions of Section 5.3(d)(2) with the exception of Section 5.3(d)(2)(B) therein, shall be applied as if the surviving spouse were the participant. (4) For purposes of this Section 5.3(d), any amount paid to a child of the participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. (5) For the purposes of this Section 5.3(d), distribution of a participant's interest is considered to begin on the participant's required beginning date (or, if Section 5.3(d)(3) above is applicable, the date distribution is required to begin to the surviving spouse pursuant to Section 5.3(d)(2)(B) above). If distribution in the form of an annuity irrevocably commences to the participant before the required beginning date, the date distribution is considered to begin is the date distribution actually commences. (e) Definitions (Code Section 401(a)(9) Requirements) (1) Applicable Life Expectancy - The life expectancy (or joint life and last survivor expectancy) calculated using the attained age of the participant (or designated beneficiary) as of the participant's (or designated beneficiary's) birthday in the applicable calendar year reduced by one for each calendar year that has elapsed since the date life expectancy was first calculated. If life expectancy is being recalculated, the applicable life expectancy shall be the life expectancy as so recalculated. The applicable calendar year shall be the first distribution calendar year, and if life expectancy is being recalculated such succeeding calendar year. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 28 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (2) Designated Beneficiary - The individual who is designated as the beneficiary under the plan in accordance with Code section 401(a)(9) and the proposed regulations thereunder. (3) Distribution Calendar Year - A calendar year for which a minimum distribution is required. For distributions beginning before the participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year that contains the participant's required beginning date. For distributions beginning after the participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to Section 5.3(d) above. (4) Life Expectancy - Life expectancy and joint life and last survivor expectancy are computed by use of the expected return multiples in Tables V and VI of section 1.72-9 of the Income Tax Regulations. Unless otherwise elected by the participant (or spouse, in the case of distributions described in Section 5.3(d)(2)(B) above) by the time distributions are required to begin, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the participant (or spouse) and shall apply to all subsequent years. The life expectancy of a nonspouse beneficiary may not be recalculated. (5) Participant's Benefit (A) The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. (B) Exception for Second Distribution Calendar Year - If any portion of the minimum distribution for the first distribution calendar year is made in the second distribution calendar year on or before the required beginning date, the amount of the minimum distribution made in the second distribution calendar year shall be treated as if it had been made in the immediately preceding distribution calendar year. (6) Required Beginning Date (A) Non-5% Owner - The required beginning date is April 1 of the calendar year following the later of: (i) the calendar year in which the participant attains age 701/2, or (ii) the calendar year in which the participant retires. If a participant who is not a 5% owner attains age 701/2 after December 31, 1995 and before January 1, 2003, the participant shall be permitted to elect to commence the distribution of his benefits as if his required beginning date were April 1 of the calendar year following the calendar year in which he attains age 701/2. If an annuity form of payment is elected, the date as of which such distributions commence shall be his annuity starting date for all purposes. If an installment form of payment is elected, the participant shall have a new annuity starting date as of the date payments are elected to commence following his termination of employment. (B) 5% Owner - The required beginning date for a participant who is a 5% owner is April 1 of the calendar year following the calendar year in which the participant attains age 701/2. A participant is treated as a 5% owner for purposes of this Section 5.3(e)(6) if such participant is a 5% owner as defined in Code section 416(i) (determined in accordance with section 416 but without regard to whether the plan is top- heavy) at any time during the plan year ending with or within the calendar year in which such participant attains age 701/2. (C) Once distributions have begun to a 5% owner under this Section 5.3(e)(6), they must continue to be distributed, even if the participant ceases to be a 5% owner in a subsequent year. (f) Transitional Rule (1) Notwithstanding the other requirements of this Section 5.3 and subject to the requirements of Section 5.2, Joint and Survivor Annuity Requirements, distribution on behalf of any employee, including a 5% owner, may be made in accordance with all of the following requirements (regardless of when such distribution commences). (A) The distribution by the trust is one that would not have disqualified such trust under Code section 401(a)(9) as in effect prior to amendment by the Deficit Reduction Act of 1984. (B) The distribution is in accordance with a method of distribution designated by the employee whose interest in the trust is being distributed or, if the employee is deceased, by a beneficiary of such employee. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 29 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (C) Such designation was in writing, was signed by the employee or the beneficiary, and was made before January 1, 1984. (D) The employee had accrued a benefit under the plan as of December 31, 1983. (E) The method of distribution designated by the employee or the beneficiary specifies the time at which distribution will commence, the period over which distributions will be made, and in the case of any distribution upon the employee's death, the beneficiaries of the employee listed in order of priority. A distribution upon death will not be covered by this transitional rule unless the information in the designation contains the required information described above with respect to the distributions to be made upon the death of the employee. (2) For any distribution that commences before January 1, 1984, but continues after December 31, 1983, the employee, or the beneficiary, to whom such distribution is being made, will be presumed to have designated the method of distribution under which the distribution is being made if the method of distribution was specified in writing and the distribution satisfies the requirements in this Section 5.3(f). (3) If a designation is revoked any subsequent distribution must satisfy the requirements of Code section 401(a)(9) and the proposed regulations thereunder. If a designation is revoked subsequent to the date distributions are required to begin, the trust must distribute by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed that would have been required to have been distributed to satisfy Code section 401(a)(9) and the proposed regulations thereunder, but for the election made under Tax Equity and Fiscal Responsibility Act of 1982 section 242(b)(2). For calendar years beginning after December 31, 1988, such distributions must meet the minimum distribution incidental benefit requirements in Proposed Regulation section 1.401(a)(9)-2. Any changes in the designation will be considered to be a revocation of the designation. However, the mere substitution or addition of another beneficiary (one not named in the designation) under the designation will not be considered to be a revocation of the designation, so long as such substitution or addition does not alter the period over which distributions are to be made under the designation, directly or indirectly (for example, by altering the relevant measuring life). In the case in which an amount is transferred or rolled over from one plan to another plan, the rules in Proposed Regulation section 1.401(a)(9)-1 Q&A J-2 and Q&A J-3 shall apply. Section 5.4 - Top-Heavy Provisions (a) Application of Provisions - If the plan is or becomes top-heavy in any plan year beginning after December 31, 1983, the provisions of Section 5.4 will supersede any conflicting provisions in the plan. (b) Minimum Allocation (1) Except as otherwise provided in Section 5.4(b)(3) and (4) below, the employer contributions and forfeitures allocated on behalf of any participant who is not a key employee shall not be less than the lesser of 3% of such participant's compensation or in the case where the employer has no defined benefit plan which designates this plan to satisfy Code section 401, the largest percentage of employer contributions and forfeitures, as a percentage of the key employee's compensation that may be taken into account under Section 1.2(c), allocated on behalf of any key employee for that year. For this purpose, amounts contributed to the key employee's employee 401(k) elective deferral account shall be included as allocations on his behalf for that year. However, amounts contributed to a non-key employee's employee 401(k) elective deferral account shall not be taken into account in determining whether he has received his minimum allocation. The minimum allocation is determined without regard to any Social Security contribution. This minimum allocation shall be made even though, under other plan provisions, the participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of (i) the participant's failure to complete 1,000 hours of service (or any equivalent provided in the plan), or (ii) the participant's failure to make mandatory employee contributions to the plan, or (iii) compensation less than a stated amount. (2) For purposes of computing the minimum allocation, compensation shall mean compensation as defined in Section 5.1(d)(2), subject to the limitations of Section 1.2(c). (3) The provision in Section 5.4(b)(1) above shall not apply to any participant who was not employed by the employer on the last day of the plan year. (4) The provision in Section 5.4(b)(1) above shall not apply to any participant to the extent the participant is covered under any other plan or plans of the employer and the employer has provided in Section 3.2 or 3.3 that the minimum allocation or benefit requirement applicable to top-heavy plans will be met in the other plan or plans. If this plan is intended to meet the minimum allocation or benefit requirement applicable to another plan or plans, the employer shall so provide in Section 3.2 or 3.3, as appropriate. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 30 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (5) The minimum allocation required (to the extent required to be nonforfeitable under Code section 416(b)) may not be forfeited under Code section 411(a)(3)(B) or 411(a)(3)(D). (c) Adjustments in Code Section 415 Limits - If the plan is top-heavy, the defined benefit fraction and the defined contribution fraction shall be computed by applying a factor of 1.0 (instead of 1.25) to the applicable dollar limits under Code section 415(b)(1)(A) and 415(c)(1)(A) for such year, unless the plan meets the following conditions: (1) Such plan would not be a top-heavy plan if "90%" were substituted for "60%" in the top-heavy tests; and (2) The minimum employer contribution percentage under Section 5.4(b) is 4% instead of 3%. (3) A non-key employee who participates in this plan and in a defined benefit plan aggregated herewith will receive in accordance with Section 3.2(c)(2) or Section 3.3(b) either (i) a minimum employer contribution of 7.5% under this plan or another defined contribution plan aggregated herewith or (ii) a minimum nonintegrated accrued benefit of 3% of average annual compensation, not to exceed a cumulative accrued benefit of 30% under the defined benefit plan. However, the reduced Code section 415 factor of 1.0 shall not apply under a top-heavy plan with respect to any individual so long as there are no employer contributions, forfeitures, or voluntary employee nondeductible contributions allocated to such individual. Effective with respect to limitation years beginning after December 31, 1999, this Section 5.4(c) shall no longer be in effect. (d) Minimum Vesting Schedule - For any plan year in which this plan is top-heavy, the following minimum vesting schedule shall automatically apply to the plan, if this schedule is more liberal than the schedule provided in Section 4.2(a)(6)(A) and (B): Years of Service Vesting Percentage ---------------- ------------------- 0-1 Year 0% 2 20% 3 40% 4 60% 5 80% 6 or More Years 100% The minimum vesting schedule shall apply to all benefits within the meaning of Code section 411(a)(7) except those attributable to employee contributions, including benefits accrued before the effective date of Code section 416 and benefits accrued before the plan became top-heavy. Further, no decrease in a participant's nonforfeitable percentage may occur in the event the plan's status as top-heavy changes for any plan year, and the provisions of Section 7.2(d) shall apply. However, this Section does not apply to the account balances of any employee who does not have an hour of service after the plan has initially become top-heavy and such employee's account balance attributable to employer contributions and forfeitures will be determined without regard to this Section. (e) Definitions (Code Section 416 Requirements) (1) Key Employee - Any employee or former employee (and the beneficiaries of such employee) who at any time during the determination period was an officer of the employer if such individual's annual compensation exceeds 50% of the dollar limitation under Code section 415(b)(1)(A), an owner (or considered an owner under Code section 318) of one of the ten largest interests in the employer if such individual's compensation exceeds 100% of the dollar limitation under Code section 415(c)(1)(A), a 5% owner of the employer, or a 1% owner of the employer who has an annual compensation of more than $150,000. Annual compensation means compensation as defined in Section 5.1(d)(2), but including elective contributions as defined in Section 1.2(a) and elective contributions under a Code section 457 plan or a Code section 501(c)(18) plan for any plan year and subject to the limitations of Section 1.2(c). The determination period is the plan year containing the determination date and the four preceding plan years. The determination of who is a key employee will be made in accordance with Code section 416(i)(1) and the regulations thereunder. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 31 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (2) Top-Heavy Plan - For any plan year beginning after December 31, 1983, this plan is top-heavy if any of the following conditions exists: (A) If the top-heavy ratio for this plan exceeds 60% and this plan is not part of any required aggregation group or permissive aggregation group of plans. (B) If this plan is a part of a required aggregation group of plans but not part of a permissive aggregation group and the top-heavy ratio for the group of plans exceeds 60%. (C) If this plan is a part of a required aggregation group and part of a permissive aggregation group of plans and the top- heavy ratio for the permissive aggregation group exceeds 60%. (3) Top-Heavy Ratio (A) If the employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the employer has not maintained any defined benefit plan that 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 aggregation 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 determination 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 Code section 416 and the regulations thereunder. 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 and the regulations thereunder. (B) If the employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the employer maintains or has maintained one or more defined benefit plans that during the five-year period ending on the determination date(s) has or has had any accrued 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 account balances under the aggregated defined contribution plan or plans for all key employees, determined in accordance with (A) 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 (A) 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 and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the top-heavy ratio are increased for any distribution of an accrued benefit made in the five-year period ending on the determination date. (C) For purposes of Section 5.4(e)(3)(A) and (B) above the value of account balances and the present value of accrued benefits will be determined as of the most recent valuation date that falls within or ends with the 12-month period ending on the determination date, except as provided in Code section 416 and the regulations thereunder for the first and second plan years of a defined benefit plan. The account balances and accrued benefits of a participant (1) who is not a key employee but who was a key employee in a prior year, or (2) who has not been credited with at least one hour of service with any employer maintaining the plan at any time during the five-year period ending on the determination date will be disregarded. The calculation of the top-heavy ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made in accordance with Code section 416 and the regulations thereunder. Deductible employee contributions 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 (1) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the employer, or (2) 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). (4) Permissive Aggregation Group - The required aggregation group of plans plus any other plan or plans of the employer that, when considered as a group with the required aggregation group, would continue to satisfy the requirements of Code sections 401(a)(4) and 410. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 32 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (5) Required Aggregation Group - (1) Each qualified plan of the employer in which at least one key employee participates or participated at any time during the determination period (regardless of whether the plan has terminated), and (2) any other qualified plan of the employer that enables a plan described in (1) to meet the requirements of Code sections 401(a)(4) or 410. (6) Determination Date - For any plan year subsequent to the first plan year, the last day of the preceding plan year. For the first plan year of the plan, the last day of that year. (7) Valuation Date - The last day of the plan year shall be the date as of which account balances or accrued benefits are valued for purposes of calculating the top-heavy ratio. (8) Present Value - Present value shall be based only on the interest and mortality rates specified in the employer's defined benefit plan. (9) Non-Key Employee - Any employee who is not a key employee. Non-key employees include employees who are former key employees. Section 5.5 - Reserved ARTICLE VI - ADMINISTRATION OF THE PLAN Section 6.1 - Fiduciary Responsibility (a) Fiduciary Standards - A fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and - For the exclusive purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the plan; With the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; By diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and In accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of ERISA. (b) Allocation of Fiduciary Responsibility (1) It is intended to allocate to each fiduciary, either named or otherwise, the individual responsibility for the prudent execution of the functions assigned to him. None of the allocated responsibilities or any other responsibilities shall be shared by two or more fiduciaries unless specifically provided for in the plan. (2) When one fiduciary is required to follow the directions of another fiduciary, the two fiduciaries shall not be deemed to share such responsibility. Instead, the responsibility of the fiduciary giving the directions shall be deemed to be his sole responsibility and the responsibility of the fiduciary receiving directions shall be to follow those directions insofar as such instructions on their face are proper under applicable law. (3) Any person or group of persons may serve in more than one fiduciary capacity with respect to this plan. (4) A fiduciary under this plan may employ one or more persons, including independent accountants, attorneys and actuaries to render advice with regard to any responsibility such fiduciary has under the plan. (c) Indemnification by Employer - Unless resulting from the gross negligence, willful misconduct or lack of good faith on the part of a fiduciary who is an officer or employee of the employer, the employer shall indemnify and save harmless such fiduciary from, against, for and in respect of any and all damages, losses, obligations, liabilities, liens, deficiencies, costs and expenses, including without limitation, reasonable attorney's fees and other costs and expenses incident to any suit, action, investigation, claim or proceedings suffered in connection with his acting as a fiduciary under the plan. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 33 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (d) Named Fiduciary - The person or persons named by the employer as having fiduciary responsibility for the management and control of plan assets shall be known as the "named fiduciary" hereunder. Such responsibility shall include the appointment of the plan administrator (Section 6.2(a)), the trustee (Section 6.4(a)) and the investment manager (Section 6.4(b)), and the deciding of benefit appeals (Section 6.3). Section 6.2 - Plan Administrator (a) Appointment of Plan Administrator The named fiduciary shall appoint a plan administrator who may be a person or an administrative committee consisting of no more than five members. Vacancies occurring upon resignation or removal of a plan administrator or a committee member shall be filled promptly by the named fiduciary. Any plan administrator may resign at any time by giving notice of his resignation to the named fiduciary, and any plan administrator may be removed at any time by the named fiduciary. The named fiduciary shall review at regular intervals the performance of the plan administrator(s) and shall re-evaluate the appointment of such administrator(s). After the named fiduciary has appointed the plan administrator and has received a written notice of acceptance, the fiduciary responsibility for administration of the plan shall be the responsibility of the plan administrator or plan administrative committee. (b) Duties and Powers of Plan Administrator The plan administrator shall have the following duties and discretionary powers and such other duties and discretionary powers as relate to the administration of the plan: (1) To determine in a nondiscriminatory manner all questions relating to the eligibility of employees to become participants. (2) To determine in a nondiscriminatory manner eligibility for benefits and to determine and certify the amount and kind of benefits payable to participants. (3) To authorize all disbursements from the fund. (4) To appoint or employ any independent person to perform necessary plan functions and to assist in the fulfillment of administrative responsibilities as he deems advisable, including the retention of a third party administrator, custodian, auditor, accountant, actuary, or attorney. (5) When appropriate, to select an insurance company and annuity contracts that, in his opinion, will best carry out the purposes of the plan. (6) To construe and interpret any ambiguities in the plan and to make, publish, interpret, alter, amend or revoke rules for the regulation of the plan that are consistent with the terms of the plan and with ERISA. (7) To prepare and distribute, in such manner as determined to be appropriate, information explaining the plan. (c) Allocation of Fiduciary Responsibility Within Plan Administrative Committee If the plan administrator is a plan administrative committee, the committee shall choose from its members a chairperson and a secretary. The committee may allocate responsibility for those duties and powers listed in Section 6.2(b)(1) and (2) (except determination of qualification for disability retirement) and other purely ministerial duties to one or more members of the committee. The committee shall review at regular intervals the performance of any committee member to whom fiduciary responsibility has been allocated and shall re-evaluate such allocation of responsibility. After the plan administrative committee has made such allocations of responsibilities and has received written notice of acceptance, the fiduciary responsibilities for such administrative duties and powers shall then be considered as the responsibilities of such committee member(s). (d) Miscellaneous Provisions (1) Plan Administrative Committee Actions - The actions of such committee shall be determined by the vote or other affirmative expression of a majority of its members. Either the chairperson or the secretary may execute any certificate or other written direction on behalf of the committee. A member of the committee who is a participant shall not vote on any question relating specifically to himself. If the remaining members of the committee, by majority vote thereof, are unable to come to a determination of any such question, the named fiduciary shall appoint a substitute member who shall act as a member of the committee for the special vote. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 34 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (2) Expenses - The plan administrator shall serve without compensation for service as such. All reasonable expenses of the plan administrator shall be paid by the employer or from the fund. (3) Examination of Records - The plan administrator shall make available to any participant for examination during business hours such of the plan records as pertain only to the participant involved. (4) Information to the Plan Administrator - To enable the plan administrator to perform the administrative functions, the employer shall supply full and timely information to the plan administrator on all participants as the plan administrator may require. Section 6.3 - Claims Procedure (a) Notification - The plan administrator shall notify each participant in writing of his determination of benefits. If the plan administrator denies any benefit, such written denial shall include: The specific reasons for denial; Reference to provisions on which the denial is based; A description of and reason for any additional information needed to process the claim; and An explanation of the claims procedure. (b) Appeal - The participant or his duly authorized representative may: Request a review of the participant's case in writing to the named fiduciary; Review pertinent documents; Submit issues and comments in writing. The written request for review must be submitted no later than 60 days after receiving written notification of denial of benefits. (c) Review - The named fiduciary must render a decision no later than 60 days after receiving the written request for review, unless circumstances make it impossible to do so; but in no event shall the decision be rendered later than 120 days after the request for review is received. (d) Limitation on Time Period for Litigation of a Benefit Claim - Following receipt of the written rendering of the named fiduciary's decision under Section 6.3(c), the participant shall have 365 days in which to file suit in the appropriate court. Thereafter, the right to contest the decision shall be waived. Section 6.4 - Trust Fund (a) Appointment of Trustee The named fiduciary shall appoint a trustee for the proper care and custody of all funds, securities and other properties in the trust, and for investment of plan assets (or for execution of such orders as it receives from an investment manager appointed for investment of plan assets). The duties and powers of the trustee shall be set forth in a trust agreement executed by the employer, which is incorporated herein by reference. The named fiduciary shall review at regular intervals the performance of the trustee and shall re- evaluate the appointment of such trustee. After the named fiduciary has appointed the trustee and has received a written notice of acceptance of its responsibility, the fiduciary responsibility with respect to the proper care and custody of plan assets shall be considered as the responsibility of the trustee. Unless otherwise allocated to an investment manager, the fiduciary responsibility with respect to investment of plan assets shall likewise be considered as the responsibility of the trustee. (b) Appointment of Investment Manager The named fiduciary may appoint an investment manager who is other than the trustee, which investment manager may be a bank or an investment advisor registered with the Securities and Exchange Commission under the Investment Advisors Act of 1940. Such investment manager, if appointed, shall have sole discretion in the investment of plan assets, subject to the funding policy. The named fiduciary shall review at regular intervals no less frequently than annually, the performance of such investment manager and shall re- evaluate the appointment of such investment manager. After the named fiduciary has appointed an investment manager and has received a written notice of acceptance of its responsibility, the fiduciary responsibility with respect to investment of plan assets shall be considered as the responsibility of the investment manager. (c) Funding Policy The named fiduciary shall determine and communicate in writing to the fiduciary responsible for investment of plan assets the funding policy for the plan. The funding policy shall set forth the plan's short-range and long-range financial needs, so that said fiduciary may coordinate the investment of plan assets with the plan's financial needs. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 35 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (d) Valuation of the Fund The fund shall be valued by the trustee on the first day of each plan year and as of any interim allocation date determined by the plan administrator. The valuation shall be made on the basis of the current fair market value of all property in the fund. (e) Expenses The trust fund shall pay the expenses incurred in the administration of the plan and the investment of the fund, provided the cost is reasonable. Such expenses shall include legal fees incurred by the plan administrator or the trustee, provided such fiduciaries are not proven to have committed a prohibited transaction. ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN Section 7.1 - Right to Discontinue and Amend It is the expectation of the employer that it will continue this plan indefinitely and make the payments of its contributions hereunder, but the continuance of the plan is not assumed as a contractual obligation of the employer and the right is reserved by the employer, at any time, to reduce, suspend or discontinue its contributions hereunder. Section 7.2 - Amendments Except as herein limited, the employer shall have the right to amend this plan at any time to any extent that it may deem advisable. Such amendment shall be stated in writing. It shall be authorized by action of the board of directors under the corporate by-laws if the employer is a corporation, by action of the agreement of the partners as required under the partnership agreement if the employer is a partnership, or by action of the sole proprietor if the employer is a sole proprietorship. The authorization of an employer's board of directors shall designate the person to execute the amendment. The employer's right to amend the plan shall be limited as follows: (a) No amendment shall increase the duties or liabilities of the plan administrator, the trustee, or other fiduciary without their respective written consent. (b) No amendments shall have the effect of vesting in the employer any interest in or control over any contracts issued pursuant hereto or any other property in the fund. (c) 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 paragraph, 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. Furthermore, if the vesting schedule of a plan is amended, in the case of an employee who is a participant as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such employee's right to his employer-derived accrued benefit will not be less than his percentage computed under the plan without regard to such amendment. (d) No amendment to the vesting schedule adopted by the employer hereunder shall deprive a participant of his vested portion of his employer contribution accounts to the date of such amendment. If the plan's vesting schedule is amended, or the plan is amended in any way that directly or indirectly affects the computation of the participant's nonforfeitable percentage or if the plan is deemed amended by an automatic change to or from a top-heavy vesting schedule, each participant with at least 3 years of service with the employer may elect, within a reasonable period after the adoption of the amendment or change, to have the nonforfeitable percentage computed under the plan without regard to such amendment or change. For participants who do not have at least one hour of service in any plan year beginning after December 31, 1988, "5 years of service" shall be substituted for "3 years of service" in the preceding sentence. The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of: (1) 60 days after the amendment is adopted; (2) 60 days after the amendment becomes effective; or Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 36 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- (3) 60 days after the participant is issued written notice of the amendment by the employer or plan administrator. Section 7.3 - Protection of Benefits in Case of Plan Merger In the event of a merger or consolidation with, or transfer of assets to any other plan, each participant will receive a benefit immediately after such merger, consolidation or transfer (if the plan then terminated) which is at least equal to the benefit the participant was entitled to immediately before such merger, consolidation or transfer (if the plan had terminated). Section 7.4 - Termination of Plan (a) When Plan Terminates - This plan shall terminate upon the happening of any of the following events: legal adjudication of the employer as bankrupt; a general assignment by the employer to or for the benefit of its creditors; the legal dissolution of the employer; or termination of the plan by the employer. (b) Allocation of Assets - Upon termination, partial termination, or complete discontinuance of employer contributions, the account balance(s) of each affected participant who is an active participant or who is not an active participant but has neither received a complete distribution of his vested accrued benefit nor incurred five one-year breaks in service shall be 100% vested and nonforfeitable. The amount of the fund assets shall be allocated to each participant, subject to provisions for expenses of administration of the liquidation, in the ratio that such participant's account(s) bears to all accounts. If a participant under this plan has terminated his employment at any time after the first day of the plan year in which the employer made his final contribution to the plan, and if any portion of any account of such terminated participant was forfeited and reallocated to the remaining participants, such forfeiture shall be reversed and the forfeited amount shall be credited to the account of such terminated participant. ARTICLE VIII - MISCELLANEOUS PROVISIONS Section 8.1 - Exclusive Benefit - Non-Reversion The plan is created for the exclusive benefit of the employees of the employer and shall be interpreted in a manner consistent with its being a qualified plan as defined in section 401(a) of the Internal Revenue Code and with ERISA. The corpus or income of the trust may not be diverted to or used for other than the exclusive benefit of the participants or their beneficiaries (except for defraying reasonable expenses of administering the plan). Notwithstanding the above, a contribution paid by the employer to the trust may be repaid to the employer under the following circumstances: (a) Any contribution made by the employer because of a mistake of fact must be returned to the employer within one year of the contribution. (b) In the event the deduction of a contribution made by the employer is disallowed under Code section 404, such contribution (to the extent disallowed) must be returned to the employer within one year of the disallowance of the deduction. (c) If the Commissioner of Internal Revenue determines that the plan not initially qualified under the Internal Revenue Code, any contribution made incident to that initial qualification by the employer must be returned to the employer within one year after the date the initial qualification is denied, but only if the application for the qualification is made by the time prescribed by law for filing the employer's return for the taxable year in which the plan is adopted, or such later date as the Secretary of the Treasury may prescribe. Section 8.2 - Inalienability of Benefits No benefit or interest available hereunder including any annuity contract distributed herefrom shall be subject to assignment or alienation, either voluntarily or involuntarily. The preceding sentence shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a participant pursuant to a domestic relations order, unless such order is determined to be a qualified domestic relations order as defined in Code section 414(p), or any domestic relations order entered before January 1, 1985. A loan made to a participant and secured by his nonforfeitable account balance(s) under Section 4.4(b) will not be treated as an assignment or alienation and such securing account balance(s) shall be subject to attachment by the plan in the event of default. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 37 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- Notwithstanding the preceding paragraph, effective with respect to judgments, orders, and decrees issued, and settlement agreements entered into, on or after August 5, 1997, a participant's benefit (and that of his spouse) shall be reduced to satisfy liabilities of the participant to the plan due to (1) the participant being convicted of committing a crime involving the plan, (2) a civil judgment (or consent order or decree) entered by a court in an action brought in connection with a violation of the fiduciary provisions of part 4 of subtitle B of Title I of ERISA, or (3) a settlement agreement between the Secretary of Labor or the Pension Benefit Guaranty Corporation and the participant in connection with a violation of such fiduciary provisions of ERISA. No reduction shall be made pursuant to this paragraph, unless the judgment, order, decree, or settlement agreement shall expressly provide for the offset of all or part of the amount ordered or required to be paid to the Plan against the participant's benefits provided under the Plan. Section 8.3 - Employer-Employee Relationship This plan is not to be construed as creating or changing any contract of employment between the employer and its employees, and the employer retains the right to deal with its employees in the same manner as though this plan had not been created. Section 8.4 - Binding Agreement This plan shall be binding on the heirs, executors, administrators, successors and assigns as such terms may be applicable to any or all parties hereto, and on any participants, present or future. Section 8.5 - Separability If any provision of this plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof and this plan shall be construed and enforced as if such provision had not been included. Section 8.6 - Construction The plan shall be construed in accordance with the laws of the state in which the employer was incorporated (or is domiciled in the case of an unincorporated employer) and with ERISA. Section 8.7 - Copies of Plan This plan may be executed in any number of counterparts, each of which shall be deemed as an original, and said counterparts shall constitute but one and the same instrument that may be sufficiently evidenced by any one counterpart. Section 8.8 - Interpretation Wherever appropriate, words used in this plan in the singular may include the plural or the plural may be read as singular, and the masculine may include the feminine. Ammended Profit Sharing Plan:10/2/2002 Copyright 2001 by Conrad M. Siegel, Inc. 38 Weis Markets, Inc. Profit Sharing Plan - ------------------------------------------------------------------------------- IN WITNESS WHEREOF, the Employer has caused this plan to be executed this 12th day of November, 2002. Employer: Weis Markets, Inc. /S/William R. Mills ------------------- By: William R. Mills Title: Senior Vice President and Treasurer/ CFO EX-10 5 sbplan.txt EXHIBIT 10-B STOCK BONUS PLAN WEIS MARKETS, INC. STOCK BONUS PLAN Originally Effective January 1, 1978 As Amended And Restated Effective January 1, 1997 Blank page Weis Markets, Inc. Stock Bonus Plan TABLE OF CONTENTS PREAMBLE 1 ARTICLE I - DEFINITIONS 2 Section 1.1 - References 2 Section 1.2 - Compensation 2 Section 1.3 - Dates 3 Section 1.4 - Employee 4 Section 1.5 - Employer 5 Section 1.6 - Fiduciaries 5 Section 1.7 - Participant/Beneficiary 5 Section 1.8 - Participant Accounts 6 Section 1.9 - Plan 6 Section 1.10 - Service 6 Section 1.11 - Trust 7 Section 1.12 - Stock Bonus Plan Specific Definitions 8 ARTICLE II - PARTICIPATION 8 Section 2.1 - Eligibility Service 8 Section 2.2 - Plan Participation 8 Section 2.3 - Termination of Participation 9 Section 2.4 - Re-Participation (Break In Service Rules) 9 ARTICLE III - ALLOCATIONS TO PARTICIPANT ACCOUNTS 10 Section 3.1 - General Provisions 10 Section 3.2 - Employer Contributions 11 Section 3.3 - Employee Nondeductible Contributions 12 Section 3.4 - Rollover/Transfer Contributions 12 Section 3.5 - Allocation of Investment Results 12 ARTICLE IV - PAYMENT OF PARTICIPANT ACCOUNTS 13 Section 4.1 - Vesting Service Rules 13 Section 4.2 - Vesting of Participant Accounts 13 Section 4.3 - Payment of Participant Accounts 16 Section 4.4 - In-Service Payments 19 Section 4.5 - Distributions under Domestic Relations Orders 19 ARTICLE V - ADDITIONAL QUALIFICATION RULES 20 Section 5.1 - Limitations on Allocations under Code Section 415 20 Section 5.2 - Joint and Survivor Annuity Requirements 23 Section 5.3 - Distribution Requirements 25 Section 5.4 - Top Heavy Provisions 29 Section 5.5 - Deductible Voluntary Employee Contributions 33 Section 5.6 - Stock Bonus Plan Distribution Options 33 ARTICLE VI - ADMINISTRATION OF THE PLAN 35 Section 6.1 - Fiduciary Responsibility 35 Section 6.2 - Plan Administrator 36 Section 6.3 - Claims Procedure 37 Section 6.4 - Trust Fund 37 Section 6.5 - Investment Policy 38 Weis Markets, Inc. Stock Bonus Plan Section 6.6 - Prohibitions Against Allocations 38 Section 6.7 - Valuation of the Trust Fund 39 Section 6.8 - Voting Corporate Stock 39 ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN 40 Section 7.1 - Right to Discontinue and Amend 40 Section 7.2 - Amendments 40 Section 7.3 - Protection of Benefits in Case of Plan Merger 41 Section 7.4 - Termination of Plan 41 ARTICLE VIII - MISCELLANEOUS PROVISIONS 41 Section 8.1 - Exclusive Benefit - Non-Reversion 41 Section 8.2 - Inalienability of Benefits 41 Section 8.3 - Employer-Employee Relationship 42 Section 8.4 - Binding Agreement 42 Section 8.5 - Separability 42 Section 8.6 - Construction 42 Section 8.7 - Copies of Plan 42 Section 8.8 - Interpretation 42 Weis Markets, Inc. Stock Bonus Plan PREAMBLE This amended and restated plan, executed on the date indicated at the end hereof, is made effective as of January 1, 1997, except as provided otherwise in Section 1.3(c), by Weis Markets, Inc., a Corporation, with its principal office located in Sunbury, Pennsylvania. W I T N E S S E T H : WHEREAS, effective January 1, 1978, the employer established the employee stock ownership plan for its employees; and, WHEREAS, effective January 1, 1988, the employer amended the plan to a stock bonus plan and desires to continue to maintain a permanent qualified plan in order to enable its employees to share in the growth and prosperity of the Corporation and to provide its employees and their beneficiaries with financial security in the event of retirement, disability, or death; and WHEREAS, effective January 1, 2002, the employer, amended the plan in conformity with changes in federal law, and to clarify dispositions to beneficiaries by amending Section 4.2(a)(5)(B) in Article IV. WHEREAS, it is desired to amend said plan; NOW THEREFORE, the premises considered, the original plan is hereby replaced by this amended and restated plan, and the following are the provisions of the qualified plan of the employer as restated herein; provided, however, that each employee who was previously a participant shall remain a participant, and no employee who was a participant in the plan before the date of amendment shall receive a benefit under this amended plan which is less than the benefit he was then entitled to receive under the plan as of the day prior to the amendment. 1 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan ARTICLE I - DEFINITIONS Section 1.1 - References (a) Code means the Internal Revenue Code of 1986, as it may be amended from time to time. (b) ERISA means the Employee Retirement Income Security Act of 1974, as amended. Section 1.2 - Compensation (a) Compensation means, except as provided in Section 1.2(b) hereof, any earnings reportable as W-2 wages for Federal income tax withholding purposes and earned income, plus elective contributions, for the plan year. However, compensation shall not include any earnings reportable as W- 2 wages that are payable following the termination of employment pursuant to a severance agreement. Elective contributions are amounts excludible from the employee's gross income and contributed by the employer, at the employee's election to: * A cafeteria plan (excludible under Code section 125); * A Code section 401(k) arrangement (excludible under Code section 402(e)(3)); * A simplified employee pension (excludible under Code section 402(h)); * A tax sheltered annuity (excludible under Code section 403(b)); or * Effective for plan years beginning on or after January 1, 1998, a Code section 132(f)(4) qualified transportation fringe benefit plan. "Earned Income" means net earnings from self-employment in the trade or business with respect to which the employer has established the plan, provided that personal services of the individual are a material income producing factor. Net earnings shall be determined without regard to items excluded from gross income and the deductions allocable to those items. Net earnings shall be determined after the deduction allowed to the self-employed individual for all contributions made by the employer to a qualified plan and, for plan years beginning after December 31, 1989, the deduction allowed to the self-employed under Code section 164(f) for self-employment taxes. Any reference in this plan to compensation shall be a reference to the definition in this Section 1.2, unless the plan reference specifies a modification to this definition. The plan administrator shall take into account only compensation actually paid by the employer for the relevant period. A compensation payment includes compensation by the employer through another person under the common paymaster provisions in Code sections 3121 and 3306. Compensation from an employer that is not a participating employer under this plan shall be excluded. (b) Exclusions From Compensation - Notwithstanding the provisions of Section 1.2(a), the following types of remuneration shall be excluded from the participant's compensation: * Contributions to or benefits from this plan * Compensation in excess of $100,000 (for purposes of allocations in Section 3.2) 2 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan * Distributions from a nonqualified deferred compensation Plan (c) Limitations on Compensation (1) Compensation Dollar Limitation - For any plan year beginning after December 31, 2001, the plan administrator shall take into account only the first $200,000 (or beginning January 1, 2003, such larger amount as the Commissioner of Internal Revenue may prescribe) of any participant's compensation for determining all benefits provided under the plan. For any plan year beginning after December 31, 1993 but before January 1, 2002, the plan administrator shall take into account only the first $150,000 (or, for plan years beginning after December 31, 1994 but before January 1, 2002, such larger amount as the Commissioner of Internal Revenue may prescribe) of any participant's compensation for determining all benefits provided under the plan. For any plan year beginning after December 31, 1988 but before January 1, 1994, the plan administrator shall take into account only the first $200,000 (or, for plan years beginning after December 31, 1989 but before January 1, 1994, such larger amount as the Commissioner of Internal Revenue may prescribe) of any participant's compensation for determining all benefits provided under the plan. The compensation dollar limitation for a plan year shall be the limitation amount in effect on January 1 of the calendar year in which the plan year begins. For any plan year beginning before January 1, 1989, the $200,000 limitation (but not the family aggregation requirement described in Section 1.2(c)(2)) applies only if the plan is top heavy for such plan year or operates as a deemed top heavy plan for such plan year. If the plan should determine compensation on a period of time that contains less than 12 calendar months (such as for a short plan year), the annual compensation dollar limitation shall be an amount equal to the compensation dollar limitation for the plan year multiplied by the ratio obtained by dividing the number of full months in the period by 12. (2) Application of Compensation Limitation to Certain Family Members - For any plan year beginning after December 31, 1988 but before January 1, 1997, the compensation dollar limitation shall apply to the combined compensation of the employee and of any family member who is either (A) the employee's spouse, or (B) the employee's lineal descendant under the age of 19 as described in this Section 1.2(c)(2). If, for such a plan year, the combined compensation of the employee and such family members who are participants entitled to an allocation for that plan year shall exceed the compensation dollar limitation, compensation for each such participant, for purposes of the contribution and allocation provisions of Article III, shall mean his adjusted compensation. Adjusted compensation shall mean the amount that bears the same ratio to the compensation dollar limitation as the affected participant's compensation (without regard to the compensation dollar limitation) bears to the combined compensation of all the affected participants in the family unit. (d) Compensation for Nondiscrimination Testing - For purposes of determining whether the plan discriminates in favor of highly compensated employees, compensation means compensation as defined in this Section 1.2, except that the employer will not give effect to any exclusion from compensation specified in Section 1.2(b). Notwithstanding the above, the employer shall exclude from this nondiscrimination definition of compensation the following items of compensation excludible under Code section 414(s) and the applicable Treasury regulations: * Contributions to or benefits from this plan * Compensation in excess of $100,000 (for purposes of allocations in Section 3.2) * Distributions from a nonqualified deferred compensation Plan Section 1.3 - Dates (a) Accounting Date means the date(s) on which investment results are allocated to participants' accounts as set forth below: December 31 (b) Allocation Date means the date as of which any contribution is allocated to participants' accounts. The employer contribution and forfeitures shall be allocated as of December 31. (c) The Effective Date of the plan is January 1, 1978. The effective date of this amendment and restatement is January 1, 1997; provided, however that the plan provision required to comply with the Family and Medical Leave Act shall be effective August 5, 1993, the plan provisions required to comply with the Uniformed Services Employment and Reemployment Rights Act of 1994 shall be effective December 12, 1994, the plan provisions required to comply with the Retirement Protection Act of 1994 shall generally be effective on the first day of the first limitation year beginning after December 31, 1994, the plan provisions required to comply with the Small Business Job Protection Act of 1996 shall generally be effective on the first day of the plan year beginning after December 31, 1996, the plan provisions required to comply with the Taxpayer Relief Act of 1997 shall generally be effective on the first day of the plan year beginning after August 5, 1997, and the plan provisions 3 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan required to comply with the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) shall generally be effective on the first day of the plan year beginning after December 31, 2001, except as specified otherwise in this plan or in said Acts. The plan provisions amended to comply with EGTRRA are intended as good faith compliance with the requirements of EGTRRA and are to be construed in accordance with EGTRRA and guidance issued thereunder. Effective for plan years beginning before January 1, 1998, the dollar amount appearing in Sections 4.2(b), 4.2(c), 4.3(d), 4.4(b) and 4.5 shall be $3,500 as provided under the prior provisions of the plan before this restatement. The $5,000 dollar amount in such Sections shall be effective for plan years beginning after December 31, 1997. Effective as of January 1, 2002, the beneficiary designation section 4.2(a)(5)(B) has been amended. (d) Plan Entry Date means the participation date(s) specified in Article II. (e) Plan Year means the 12-consecutive month period beginning on January 1 and ending on December 31. (f) Limitation Year means the plan year. Section 1.4 - Employee (a) (1) Employee means any person employed by the employer, including an owner-employee or other self-employed individual (as defined in Section 1.4(a)(3)). The term employee shall include any employee of the employer maintaining the plan or of any other employer required to be aggregated with such employer under Code section 414 (b), (c), (m) or (o). The term employee shall also include any leased employee deemed to be an employee of any such employer as provided in Code section 414 (n) or (o) and as defined in Section 1.4(a)(2). (2) Leased Employee means an individual (who otherwise is not an employee of the employer) who, pursuant to a leasing agreement between the employer and any other person, has performed services for the employer (or for the employer and any persons related to the employer within the meaning of Code section 414(n)(6)) on a substantially full time basis for at least one year and such services are performed under the primary direction or control of the employer. If a leased employee is treated as an employee by reason of this Section 1.4(a)(2), compensation from the leasing organization that is attributable to services performed for the employer shall be considered as compensation under the plan. Contributions or benefits provided a leased employee by the leasing organization that are attributable to services performed for the employer shall be treated as provided by the employer. Safe harbor plan exception - The plan shall not treat a leased employee as an employee if the leasing organization covers the employee in a safe harbor plan and, prior to application of this safe harbor plan exception, 20% or less of the employer's nonhighly compensated employees are leased employees. A safe harbor plan is a money purchase pension plan providing immediate participation, full and immediate vesting, and a nonintegrated contribution formula equal to at least 10% of the employee's compensation without regard to employment by the leasing organization on a specified date. The safe harbor plan must determine the 10% contribution on the basis of compensation as defined in Section 1.2(a) without regard to Section 1.2(b). (3) Owner-Employee/Self Employed Individual - Owner-employee means a self-employed individual who is a sole proprietor, (if the employer is a sole proprietorship) or who is a partner (if the employer is a partnership) owning more than 10% of either the capital or profits interest of the partnership. Self-employed individual means an individual who has earned income for the taxable year from the trade or business for which the plan is established, or who would have had earned income but for the fact that the trade or business had no net profits for the taxable year. (b) Highly Compensated Employee means any employee who: (1) was a more than 5% owner of the employer (applying the constructive ownership rules of Code section 318, and applying the principles of Code section 318, for an unincorporated entity) at any time during the current or the preceding plan year; or (2) for the preceding plan year - (A) had compensation from the employer in excess of $80,000 (as adjusted by the Commissioner of Internal Revenue pursuant to Code section 415(d), except that the base period shall be the calendar quarter ending September 30, 1996), and (B) if the employer elects the application of this Subparagraph for such preceding plan year, was in the top-paid group of employees for such preceding plan year. For this purpose, an employee is in the top-paid group of employees for any plan year if such employee is in the group consisting of the top 20% of the employees when ranked on the basis of compensation paid during such plan year. 4 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan The term highly compensated employee also includes any former employee who separated from service (or has a deemed separation from service, as determined under Treasury regulations) prior to the plan year, performs no service for the employer during the plan year, and was a highly compensated employee either for the separation plan year or any plan year ending on or after his 55th birthday, based on the applicable rules in effect for such plan year. For purposes of determining who is a highly compensated employee under this Section 1.4(b), compensation means compensation as defined in Section 1.2(a) without regard to Section 1.2(b). The plan administrator shall make the determination of who is a highly compensated employee, and, if the employer so amends this plan, this determination shall include the determination of the number and identity of the top-paid 20% group, consistent with Code section 414(q) and regulations issued thereunder. The employer may amend this plan to make a calendar year data election with regard to the plan year preceding the current plan year to determine the employees with compensation in excess of $80,000 and the top-paid 20% group, as prescribed by Treasury regulations. A top-paid 20% group election or a calendar year data election must apply to all plans and arrangements of the employer. This Section 1.4(b) is effective for plan years beginning after December 31, 1996, except that, in determining whether an employee is a highly compensated employee in 1997, this provision shall be treated as having been in effect for the last plan year beginning before January 1, 1997. (c) Nonhighly Compensated Employee means any employee who is not a highly compensated employee. Section 1.5 - Employer (a) Employer means Weis Markets, Inc. or any successor entity by merger, purchase, consolidation, or otherwise; or an organization affiliated with the employer that may assume the obligations of this plan with respect to its employees by becoming a party to this plan. Another employer, whether or not it is affiliated with the sponsor employer, may adopt this plan to cover its employees by filing with the sponsor employer a written resolution adopting the plan, upon which the sponsor employer shall indicate its acceptance of such employer as an employer under the plan. Each such employer shall be deemed to be the employer only as to persons who are on its payroll. (b) Employer for Compliance Testing - For purposes of determining whether the plan satisfies the participation coverage requirements of Code section 410(b) and the limitations on benefits and allocations under Code section 415, employer shall mean the employer that adopts this plan, and all members of a controlled group of corporations (as defined in Code section 414(b)), all commonly controlled trades or businesses (as defined in Code section 414(c)) or affiliated service groups (as defined in Code section 414(m)) of which the adopting employer is a part, and any other entity required to be aggregated with the employer pursuant to regulations under Code section 414(o). Section 1.6 - Fiduciaries (a) Named Fiduciary means the person or persons having fiduciary responsibility for the management and control of plan assets. (b) Plan Administrator means the person or persons appointed by the named fiduciary to administer the plan. (c) Trustee means the trustee named in the trust agreement executed pursuant to this plan, or any duly appointed successor trustee. (d) Investment Manager means a person or corporation other than the trustee appointed for the investment of plan assets. Section 1.7 - Participant/Beneficiary (a) Participant means an eligible employee of the employer who becomes a member of the plan pursuant to the provisions of Article II, or a former employee who has an accrued benefit under the plan. (b) Beneficiary means a person designated by a participant who is or may become entitled to a benefit under the plan. A beneficiary who becomes entitled to a benefit under the plan remains a beneficiary under the plan until the trustee has fully distributed his benefit to him. A beneficiary's right to (and the plan administrator's, or a trustee's duty to provide to the beneficiary) information or data concerning the plan shall not arise until he first becomes entitled to receive a benefit under the plan. 5 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan Section 1.8 - Participant Accounts (a) Employer Contribution Account means the balance of the separate account derived from employer's contributions, including forfeitures (if any) (if so provided under Section 3.2). (b) Rollover/Transfer Account means the balance of the separate account derived from rollover contributions and/or transfer contributions (if so provided under Section 3.4). (c) Accrued Benefit means the total of the participant's account balances as of the accounting date falling on or before the day on which the accrued benefit is being determined. Section 1.9 - Plan Plan means Weis Markets, Inc. Stock Bonus Plan as set forth herein and as it may be amended from time to time. Section 1.10 - Service (a) Service means any period of time the employee is in the employ of the employer, including any period the employee is on an unpaid leave of absence authorized by the employer under a uniform, nondiscriminatory policy applicable to all employees. Separation from service means that the employee no longer has an employment relationship with the employer. (b) (1) Hour of Service means: (A) Each hour for which an employee is paid, or entitled to payment, for the performance of duties for the employer. These hours shall be credited to the employee for the computation period in which the duties are performed; and (B) Each hour for which an employee is paid, or entitled to payment, by the employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. No more than 501 hours of service shall be credited under this Subparagraph (B) for any single continuous period (whether or not such period occurs in a single computation period). An hour of service shall not be credited to an employee under this Subparagraph (B) if the employee is paid, or entitled to payment, under a plan maintained solely for the purpose of complying with applicable worker's compensation or unemployment compensation or disability insurance laws. Hours under this Subparagraph (B) shall be calculated and credited pursuant to section 2530.200b-2 of the Department of Labor Regulations that are incorporated herein by this reference; and (C) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the employer. The same hours of service shall not be credited both under Subparagraph (A) or Subparagraph (B), as the case may be, and under this Subparagraph (C). These hours shall be credited to the employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement, or payment is made. Hours of service shall be determined on the basis of actual hours for which an employee is paid or entitled to payment. The above provisions shall be construed so as to resolve any ambiguities in favor of crediting employees with hours of service. If, for the purposes of the plan, an employee's records are maintained on other than an hourly basis, the plan administrator, according to uniform rules applicable to a class of employees, may apply the following equivalencies for the purpose of crediting hours of service: Basis Upon Which Records Credit Granted to Individual if Are Maintained Individual Earns One or More Hours of Service During Period _______________________ _______________________________ Shift Actual hours of full shift 6 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan Day 10 hours of service Week 45 hours of service Semi-Monthly Payroll Period 95 hours of service Months of Employment 190 hours of service (2) Solely for purposes of determining whether a break in service for participation and vesting purposes has occurred in a computation period, an individual who is absent from work for maternity or paternity reasons shall receive credit for the hours of service that would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 hours of service per day of such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (A) by reason of the pregnancy of the individual, (B) by reason of a birth of a child of the individual, (C) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (D) for purposes of caring for such child for a period beginning immediately following such birth or placement. The hours of service credited under this paragraph shall be credited: (A) in the computation period in which the absence begins if the crediting is necessary to prevent a break in service in that period, or (B) in all other cases, in the following computation period. No more than 501 hours of service shall be credited under this paragraph for any single continuous period (whether or not such period occurs in a single computation period). (3) Solely for purposes of determining whether a break in service for participation and vesting purposes has occurred in a computation period, an individual who is absent from work on unpaid leave under the Family and Medical Leave Act shall receive credit for the hours of service that would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, 8 hours of service per day of such absence. Such an individual shall be treated as actively employed for the purposes of participation and eligibility for an allocation of any employer contribution that may be provided under this plan. Notwithstanding the preceding, this paragraph shall not apply if the employer or the particular employee is not subject to the requirements of the Family and Medical Leave Act at the time of the absence. (4) Hours of service shall be credited for employment with other members of an affiliated service group (under Code section 414(m)), a controlled group of corporations (under Code section 414(b)), or a group of trades or businesses under common control (under Code section 414(c)), of which the adopting employer is a member. Hours of service shall also be credited for any leased employee who is considered an employee for purposes of this plan under Code section 414(n) or Code section 414(o). (c) (1) Year of Service means a 12-consecutive month computation period during which the employee completes the required number of hours of service with the employer as specified in Sections 2.1 or 4.1. No more than one year of service will be credited for any 12 consecutive-month period unless otherwise required by Code section 410 or 411. (2) Service with Related Employers - For purposes of crediting years of service, hours of service credited in accordance with Section 1.10(b)(4) shall be taken into account. (3) Predecessor Service - If the employer maintains the plan of a predecessor employer, service with such predecessor employer shall be treated as service for the employer. If the employer does not maintain the plan of a predecessor employer, then service as an employee of a predecessor employer shall not be considered as service under the plan, except as noted below: * No credit for predecessor service. (d) Break in Service (or One Year Break in Service) means a 12- consecutive month computation period during which a participant or former participant does not complete the specified number of hours of service with the employer as set forth in Sections 2.1(b) and 4.1(b). (e) Qualified Military Service - Notwithstanding any provision of this plan to the contrary, effective December 12, 1994, contributions, benefits, and service credit with respect to qualified military service will be provided in accordance with Code section 414(u). 7 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan Section 1.11 - Trust (a) Trust means the qualified trust created under the employer's plan. (b) Trust Fund means all property held or acquired by the plan. Section 1.12 - Stock Bonus Plan Specific Definitions (a) Stock Bonus Plan means a stock bonus plan as defined in Regulation section 1.401-1(b)(1)(iii) that meets the requirements of ERISA section 407(d)(3). (b) Corporate Stock means common stock issued by the employer (or by a corporation that is a member of the controlled group of corporations of which the employer is a member) that is readily tradable on an established securities market. If there is no common stock that meets the foregoing requirement, the term corporate stock means common stock issued by the employer (or by a corporation that is a member of the same controlled group) having a combination of voting power and dividend rights equal to or in excess of: (1) that class of common stock of the employer (or of any other such corporation) having the greatest voting power, and (2) that class of stock of the employer (or of any other such corporation) having the greatest dividend rights. Noncallable preferred stock shall be deemed to be corporate stock if such stock is convertible at any time into stock that constitutes corporate stock hereunder and if such conversion is at a conversion price that (as of the date of the acquisition by the trust) is reasonable. For purposes of the preceding sentence, pursuant to Code regulations, preferred stock shall be treated as noncallable if after the call there will be a reasonable opportunity for a conversion that meets the requirements of the preceding sentence. (c) Corporation means the entity whose corporate stock is the subject of this stock bonus plan. (d) Investment Accounts - For investment purposes, a participant's accounts may be placed in the two accounts as described herein. (1) Corporate Stock Account means the investment account of a participant that is credited with the shares of corporate stock purchased and paid for by the trust fund or contributed to the trust fund. (2) Other Investment Account means the investment account of a participant that is credited with his share of the net gain (or loss) of the plan, forfeitures, and employer contributions in other than corporate stock and that is debited with payments made to pay for corporate stock. ARTICLE II - PARTICIPATION Section 2.1 - Eligibility Service (a) Eligibility Year of Service means an eligibility computation period during which the employee completes at least 1,000 hours of service with the employer. (b) One Year Break in Service means for the purposes of this Article II an eligibility computation period during which the participant or former participant does not complete more than 500 hours of service with the employer. (c) Eligibility Computation Period - The initial eligibility computation period shall be the 12-consecutive month period beginning with the day on which the employee first performs an hour of service with the employer (employment commencement date). Succeeding eligibility computation periods shall be the 12- consecutive month periods beginning on the first anniversary of the employee's employment commencement date and succeeding anniversaries thereof. Section 2.2 - Plan Participation (a) Eligibility (1) Age/service requirements - An employee who is a member of the eligible class of employees shall be eligible for plan participation after he has satisfied the following participation requirement(s): (A) Completion of 2 years of service. (B) No age requirement. (2) Eligible class of employees - All employees of the employer shall be eligible to be covered under the plan except for employees in the following categories: 8 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan * Individuals not directly employed by the employer as defined in Section 1.5(a). An employee of the employer as that term is defined in Section 1.5(b) with respect to the sponsoring employer shall not participate in this plan unless such employee's direct employer affirmatively elects to become a participating employer hereunder. * An employee prohibited from receiving an allocation of certain corporate stock pursuant to Section 6.6(a). * Leased employees who are considered employees under the plan. * Employees who are non-resident aliens (as defined in Code section 7701(b)(1)(B)) and who receive no earned income (as defined in Code section 911(d)(2)) from the employer that constitutes income from sources within the United States (as defined in Code section 861(a)(3)). * Employees included in a unit of employees covered by a collective bargaining agreement between the employer and employee representatives if retirement benefits were the subject of good faith bargaining and if less than two percent of the employees of the employer who are covered pursuant to that agreement are professionals as defined in Regulation section 1.410(b)-9(g). For this purpose, the term "employee representatives" does not include any organization more than half of whose members are employees who are owners, officers, or executives of the employer. * Commission salesmen. * Employees compensated on an hourly basis who are not employed in a clerical capacity. * Employees who are employed as pharmacists or grocery managers. * Highly compensated employees as defined in Section 1.4(b). (b) Entry Date - An eligible employee shall participate in the plan on the earlier of the January 1 or July 1 entry date coinciding with or immediately following the date on which he has met the age and service requirements. If an employee who is not a member of the eligible class of employees becomes a member of the eligible class, such employee shall participate immediately, if he has satisfied the age and service requirements and would have otherwise previously become a participant. Section 2.3 - Termination of Participation A participant shall continue to be an active participant of the plan so long as he is a member of the eligible class of employees and he does not incur a one-year break in service due to termination of employment. He shall become an inactive participant when he incurs a one-year break in service due to termination of employment, or at the end of the plan year during which he ceases to be a member of the eligible class of employees. He shall cease participation completely upon the later of his receipt of a total distribution of his nonforfeitable account balance(s) under the plan or the forfeiture of the nonvested portion of the account balance(s). Section 2.4 - Re-Participation (Break In Service Rules) (a) Vested Participant - A former participant who had a nonforfeitable right to all or a portion of his account balance derived from employer contributions at the time of his termination from service shall become a participant immediately upon returning to the employ of the employer, if he is a member of the eligible class of employees. (b) Nonvested Participant - In the case of a former participant who did not have any nonforfeitable right to his account balance derived from employer contributions at the time of his termination from service, years of service before a period of consecutive one-year breaks in service shall not be taken into account in computing service if the number of consecutive one-year breaks in service in such period equals or exceeds the greater of 5 or the aggregate number of years of service before such breaks in service. Such aggregate number of years of service shall not include any years of service disregarded under the preceding sentence by reason of prior breaks in service. 9 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan If such former participant's years of service before termination from service are disregarded pursuant to the preceding paragraph, he shall be considered a new employee for eligibility purposes. If such former participant's years of service before termination from service may not be disregarded pursuant to the preceding paragraph, he shall participate immediately upon returning to the employ of the employer, if he is a member of the eligible class of employees. (c) Return to Eligible Class - If a participant becomes an inactive participant, because he is no longer a member of the eligible class of employees, but does not incur a break in service; such inactive participant shall become an active participant immediately upon returning to the eligible class of employees. If such participant incurs a break in service, eligibility shall be determined under the re-participation rules in Section 2.4(a) and (b) above. ARTICLE III - ALLOCATIONS TO PARTICIPANT ACCOUNTS Section 3.1 - General Provisions (a) Maintenance of Participant Accounts - The plan administrator shall maintain separate accounts covering each participant under the plan as herein described. Such accounts shall be increased by contributions, reallocation of forfeitures (if any), investment income, and market value appreciation of the fund. They shall be decreased by market value depreciation of the fund, forfeiture of nonvested amounts, benefit payments, withdrawals, and expenses. (b) Amount and Payment of Employer Contribution (1) Amount of Contribution - For each plan year, the employer contribution to the plan shall be the amount that is determined under the provisions of this Article; provided however, the employer may not make a contribution to the plan for any plan year to the extent the contribution would exceed fifteen percent of the aggregate participant compensation (as defined in Code section 415(c)(3)) for the plan year for plan years beginning before January 1, 2002. Effective for plan years beginning on or after January 1, 2002, the employer may not make a contribution to the plan for any plan year to the extent the contribution would exceed twenty-five percent of the aggregate participant compensation (as defined in Code section 415(c)(3)) for the plan year. Further, the employer contribution shall not exceed the maximum amount deductible under Code section 404. The employer contributes to this plan on the conditions that its contribution is not due to a mistake of fact and that the Internal Revenue Service will not disallow the deduction for its contribution. The trustee, upon written request from the employer, shall return to the employer the amount of the employer's contribution made due to a mistake of fact or the amount of the employer's contribution disallowed as a deduction under Code section 404. The trustee shall not return any portion of the employer's contribution under the provisions of this paragraph more than one year after the earlier of: (A) The date on which the employer made the contribution due to a mistake of fact; or (B) The time of disallowance of the contribution as a deduction, and then, only to the extent of the disallowance. The trustee will not increase the amount of the employer contribution returnable under this Section for any earnings attributable to the contribution, but the trustee will decrease the employer contribution returnable for any losses attributable to it. The trustee may require the employer to furnish whatever evidence it deems necessary to confirm that the amount the employer has requested be returned is properly returnable under ERISA. (2) Payment of Contribution - The employer shall make its contribution to the plan in cash or corporate stock within the time prescribed by the Code or applicable Treasury regulations. Subject to the consent of the trustee, the employer may make its contribution in other property, provided the contribution of such property is not a prohibited transaction under the Code or ERISA. Corporate stock and other property will be valued at fair market value at the time of actual contribution. Notwithstanding the preceding, the employer shall make its contribution solely in cash if it is obligated to contribute a specified dollar amount by an action of its board of directors. (3) Omission of Eligible Employee - If, in any plan year, any employee who should be included as a participant in the plan is erroneously omitted and discovery of such omission is not made until after a contribution by the employer for the year has been made and allocated, the employer shall make a subsequent contribution with respect to (or credit an unallocated forfeiture to) the omitted employee in the amount that the employer would have contributed with respect to him had he not been omitted (plus any applicable investment return). Such contribution shall be made regardless of whether or not it is deductible in whole or in part in any taxable year under applicable provisions of the Code. 10 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (4) Inclusion of Ineligible Employee - If, in any plan year, any person who should not have been included as a participant in the plan is erroneously included and discovery of such incorrect inclusion is not made until after a contribution for the year has been made, the employer shall not be entitled to recover the contribution made with respect to the ineligible person regardless of whether or not a deduction is allowable with respect to such contribution. In such event, the amount contributed with respect to the ineligible person shall constitute a forfeiture (except for deferred compensation that shall be distributed to the ineligible person) for the plan year in which the discovery is made. (5) Allocation If More Than One Employer - If the employer consists of more than one entity, the contribution made by each such entity shall be allocated among the applicable accounts of the participants employed by the contributing employer. If a participant is employed by more than one entity during the applicable period, the entity employing the participant on the last day of the plan year shall contribute with respect to the total plan year compensation earned by the participant while employed by any entity within the employer. (c) Limitations and Conditions - Notwithstanding the allocation procedures set forth in this Article, the allocations to participants' accounts shall be limited or modified to the extent required to comply with the provisions of Article V (limitations on allocations under Code section 415, top-heavy provisions under Code section 416, and related employer provisions under Code section 414). In any limitation year in which the allocation to one or more participants' accounts would be in excess of the limitations on allocations under Code section 415, the annual additions under this plan will be reduced to the extent necessary to comply with such limitations first. If any further reduction is required in any limitation year commencing before January 1, 2000, the annual additions or benefits under any other plan that the employer sponsors will then be reduced with respect to such participants. If any further reduction is required in any limitation year commencing on or after January 1, 2000, the annual additions under any other defined contribution plan that the employer sponsors will then be reduced with respect to such participants. (d) Recapture of Tax Credit - If any portion of the tax credit taken by the employer for a fiscal year prior to 1984 is subject to reduction or recapture, then such portion will remain in the trust fund and will be treated as a deductible contribution to a plan qualified under Code section 401. Section 3.2 - Employer Contributions (a) Amount of Contribution - The employer shall determine, in its sole discretion, the amount of employer contribution to be made to the plan each year; provided, however, that the employer shall contribute such amount as may be required for restoration of a forfeited amount under Section 4.2. (b) Conditions for Allocations - An active participant shall be eligible for an allocation of the employer contribution and forfeitures as of an allocation date, provided that he satisfies the following condition(s): (1) He completed at least 1,000 hours of service during the current plan year except that the hours of service requirement shall not apply with respect to any minimum top heavy allocation as provided in Section 5.4. AND (2) He is employed by the employer on the last day of the plan year. (c) (1) Allocation Formula The employer contribution and forfeitures for the plan year shall be allocated to the employer contribution account of each eligible participant in the ratio that such participant's compensation bears to the compensation of all participants. (2) Top-Heavy Plan Years In any plan year in which this plan is top-heavy (as defined in Section 5.4(e)(2) when aggregated with the Weis Markets, Inc. Profit Sharing Plan and the Weis Markets, Inc. Retirement Savings Plan that the employer also sponsors, the top-heavy minimum benefit requirement shall be met under the Weis Markets, Inc. Retirement Savings Plan. 11 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan For such a plan year, the contribution on behalf of each participant who is a non-key employee and who participates in both plans shall be increased as necessary under such other sponsored defined contribution plan to equal 3.00% of such participant's compensation or the largest percentage of employee 401(k) elective deferral contribution, employer contribution, and forfeitures allocated under the aggregated plans on behalf of any key employee for that year, whichever is less. If a participant only participates in this plan, the contributions and forfeitures allocable to the employer contribution account shall be increased as necessary for compliance with the top-heavy minimum benefit requirement. The total of the contributions and forfeitures allocated to such account for such a participant shall not be less than an amount equal to 3% of his compensation, or the largest percentage of employee 401(k) elective deferral contribution, employer contribution, and forfeiture allocated under the aggregated plans on behalf of any key employee for that year, whichever is less. (3) Compensation - For purposes of the allocation of the employer contribution, compensation means compensation as defined in Section 1.2 (a) and (b) for the entire plan year. However, for purposes of the top-heavy contribution, compensation means compensation as defined in Section 5.1(d)(2), subject to the limitations of Section 1.2(c). Section 3.3 - Employee Nondeductible Contributions Employee nondeductible contributions are not permitted under this plan and no amount shall be credited to the employee nondeductible contribution account. Section 3.4 - Rollover/Transfer Contributions Rollover and transfer contributions shall not be permitted under this plan and no amount shall be credited to the rollover/transfer account. Section 3.5 - Allocation of Investment Results (a) Corporate Stock Account - The corporate stock account of each participant shall be credited as of each allocation date with forfeitures of corporate stock and his allocable share of corporate stock (including fractional shares) purchased and paid for by the plan or contributed in kind by the employer. Stock dividends on corporate stock held in his corporate stock account shall be credited to his corporate stock account when paid. Promptly upon receipt of any cash contribution pursuant to Section 3.2, the trustee shall apply such contribution to the purchase, in one or more transactions, of the maximum number of whole shares obtainable at then prevailing prices, including any brokerage commissions and other reasonable expenses incurred in connection with such purchases. Such purchases may be made on any securities exchange where the corporate stock is traded, in the over-the-counter market, or in public or private negotiated transactions, and may be on such terms as to price, delivery and otherwise as the trustee may determine to be in the best interest of the participants. The trustee shall complete such purchases as soon as practical after receipt of each such contribution, have due regard for any applicable requirements of law affecting the timing or manner of such purchases. Any cash balance of any contribution received pursuant to Section 3.2, which shall remain after the maximum number of whole shares shall have been purchased pursuant to this Section 3.5(a), shall be held by the trustee to be invested with the next such contribution or dividends received by the trust. (b) Other Investments Account - As of each allocation date, prior to the allocation of employer contributions and forfeitures, any earnings or losses (net appreciation or net depreciation) of the trust fund shall be allocated in the same proportion that each participant's other investments account bears to the total of all participants' other investment accounts as of such date. For this purpose, each account balance shall be equal to the average balance for the period commencing on the day following the prior accounting date and ending on the current accounting date. Earnings or losses include the increase (or decrease) in the fair market value of assets of the trust fund (other than corporate stock in the participants' corporate stock accounts) since the preceding allocation date. 12 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (c) Dividends - Any cash dividends declared by the employer and applicable to shares held in the corporate stock account of a participant shall be converted to shares by the trustee in one or more transactions as soon as practical, having due regard for any applicable requirements of law affecting the time or manner of such purchases. Dividends shall be converted to the maximum number of whole shares which can be purchased at prevailing prices, including any brokerage charges and other reasonable expenses incurred in connection with such purchases, and such purchases may be made any may be on such terms as to price, delivery, and otherwise as the trustee may determine to be in the best interest of the participants. Notwithstanding the preceding paragraph, pursuant to the instructions of the employer, the trustee shall become a participant in the employer's Dividend Reinvestment and Stock Purchase Plan and all dividends will be reinvested pursuant to the provisions of that plan, to the maximum extent permitted. Any cash balance of any dividend received by the trustee that shall remain after the maximum number of whole shares shall have been purchased pursuant to the preceding paragraphs, shall be held by the trustee in the participant's other investment account to be invested with the next employer contribution or dividend received by the trustee. ARTICLE IV - PAYMENT OF PARTICIPANT ACCOUNTS Section 4.1 - Vesting Service Rules (a) Vesting Year of Service means a vesting computation period during which the employee completes at least 1,000 hours of service with the employer. All of an employee's years of service with the employer shall be counted to determine the nonforfeitable percentage in the employee's account balance(s) derived from employer contributions, except: (1) Years of service disregarded under the break in service rules in Section 4.1(d) below. (Post-ERISA break in service rules) (2) Years of service before the effective date of ERISA if such service would have been disregarded under the break in service rules of the prior plan in effect from time to time before such date. For this purpose, break in service rules are rules that result in the loss of prior vesting or benefit accruals, or that deny an employee eligibility to participate, by reason of separation or failure to complete a required period of service within a specified period of time. (Pre-ERISA break in service rules) (b) One Year Break in Service means for the purposes of this Article IV a vesting computation period during which the participant or former participant does not complete more than 500 hours of service with the employer. (c) Vesting Computation Period means the 12-consecutive month period coinciding with the plan year. (d) Break in Service Rules (1) Vested Participant - A former participant who had a nonforfeitable right to all or a portion of his account balance(s) derived from employer contributions at the time of his termination from service shall retain credit for all vesting years of service prior to a break in service. (2) Nonvested Participant - In the case of a former participant who did not have any nonforfeitable right to his account balance(s) derived from employer contributions at the time of his termination from service, years of service before a period of consecutive one- year breaks in service shall not be taken into account in computing service if the number of consecutive one-year breaks in service in such period equals or exceeds the greater of 5 or the aggregate number of years of service before such breaks in service. Such aggregate number of years of service shall not include any years of service disregarded under the preceding sentence by reason of prior breaks in service. (3) Vesting for Pre-Break and Post-Break Accounts - In the case of a participant who has 5 or more consecutive one-year breaks in service, all years of service after such breaks in service shall be disregarded for the purpose of vesting the employer-derived account balance(s) that accrued before such breaks in service. Whether or not such participant's pre-break service counts in vesting the post-break employer-derived account balance(s) shall be determined according to the rules set forth in Section 4.1(d)(1) and (2) above. Separate accounts shall be maintained for each of the participant's pre-break and post-break employer-derived account balance(s). All accounts shall share in the investment earnings and losses of the fund. 13 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan Section 4.2 - Vesting of Participant Accounts (a) Determination of Vesting (1) Normal Retirement - A participant's right to his account balance(s) shall be 100% vested and nonforfeitable upon the attainment of age 65, the normal retirement age. If the employer enforces a mandatory retirement age, the normal retirement age shall be the lesser of the mandatory age or the age specified herein. (2) Late Retirement - If a participant remains employed after his normal retirement age, his account balance(s) shall remain 100% vested and nonforfeitable. Such participant shall continue to receive allocations to his account as he did before his normal retirement age. (3) Early Retirement - Not applicable. (4) Disability - If a participant separates from service due to disability, such participant's right to his account balance(s) as of his date of disability shall be 100% vested and nonforfeitable. Disability means 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 that has lasted or can be expected to last for a continuous period of not less than 12 months. The permanence and degree of such impairment shall be supported by medical evidence. Notwithstanding such definition, a participant who is eligible for Social Security disability benefits shall automatically satisfy the definition of disability. Disability shall be determined by the plan administrator after consultation with a physician chosen by the plan administrator. In the administration of this section, all employees shall be treated in a uniform manner in similar circumstances. (5) (A) Death - In the event of the death of a participant who has an accrued benefit under the plan, (whether or not he is an active participant), 100% of the participant's account balance(s) as of the date of death shall be paid to his surviving spouse; except that, if there is no surviving sspouse, or if the surviving spouse has already consented in a manner that is (or conforms to) a qualified election under the joint and survivor annuity provisions of Code section 417(a) and regulations issued pursuant thereto and as set forth in Section 5.2, then such balance(s) shall be paid to the participant's designated beneficiary. (B) Beneficiary Designation - Subject to the spousal consent requirements of Section 5.2, the participant shall have the right to designate his beneficiaries, including a contingent death beneficiary, and shall have the right at any time prior to his death to change such beneficiaries. The designation shall be effective only if made in writing on a form signed by the participant and supplied by and filed with the plan administrator prior to his death. If the participant fails to designate a beneficiary, or if the designated person or persons predecease the participant, "beneficiary" shall mean: (a) the spouse, (b) if no surviving spouse, then to the surviving children in equal shares, (c) if no surviving children, then to the surviving parents in equal shares, (d) if no surviving parents, then to the surviving brothers and sisters in equal shares, (e) if no surviving brothers and sisters, then (f) to the participant's estate if an estate is opened within 2 years of the participant's death; and otherwise to a charity selected in the sole discretion of the plan administrator. If a designated beneficiary dies after the participant has died but before the plan has commenced or made distribution to the designated beneficiary, the plan shall be administered as set forth in this paragraph. The death benefit will be paid to the beneficiary's designated beneficiary, if any designated prior to such beneficiary's death in connection with the beneficiary's election of a form of payment of the participant's death benefit to which he is entitled; and if no such designation is on file with the plan administrator, then to the beneficiary's estate in a single lump sum payment if an estate is opened within 2 years of the participant's death; and otherwise to a charity selected in the sole discretion of the plan administrator. If the deceased designated beneficiary was not the participant's surviving spouse, distribution under this paragraph will be completed by December 31 of the fifth year following the participant's date of death. If the deceased designated beneficiary was the participant's surviving spouse, distribution under this paragraph will be completed by December 31 of the fifth year following the beneficiary's date of death. For purposes of this Section, if a spouse or beneficiary of the participant dies simultaneously with the participant, for purposes of the plan, the participant shall be deemed to be the survivor and to have died subsequent to such spouse or beneficiary. Likewise, if a beneficiary designated by a designated beneficiary dies simultaneously with a designated beneficiary, the designated beneficiary shall be deemed to be the survivor and to have died subsequent to the beneficiary designated by the designated beneficiary. 14 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (6) Termination From Service (A) If a portion of a participant's account is forfeited, corporate stock allocated to the participant's corporate stock account must be forfeited only after any other investment allocable to the participant has been depleted. If interest in more than one class of corporate stock has been allocated to a participant's account, the participant must be treated as forfeiting the same proportion of each such class. (B) A participant shall separate from the service of the employer without forfeiture of any portion of his employer contribution account. His employer contribution account shall be 100% immediately vested upon the date of his participation in the plan. (b) Forfeitures (1) Time of Forfeiture - If a participant terminates employment before his account balances derived from employer contributions are fully vested, the nonvested portion of his accounts shall be forfeited on the earlier of: (A) The last day of the vesting computation period in which the participant first incurs 5 consecutive one-year breaks in service, or (B) The date the participant receives his entire vested accrued benefit. (2) Cashout Distributions and Restoration (A) Cashout Distribution - If an employee terminates service and the value of his vested account balances derived from employer and employee contributions are not greater than $5,000, the employee shall receive a distribution of the value of the entire vested portion of such account balances and the nonvested portion will be treated as a forfeiture. For purposes of this section, if the value of an employee's vested account balances is zero, he shall be deemed to have received a distribution of such vested account balances. (Effective for distributions made on or after March 22, 1999, for the purpose of determining the value of a participant's vested account balance, prior distributions shall be disregarded if distributions have not commenced under an optional form of payment described in Section 4.3.) If an employee terminates service and the value of his vested account balances exceeds $5,000, he may elect to receive the value of his vested account balances after such termination as provided in Section 4.3. The nonvested portion shall be treated as a forfeiture as of the date of distribution. If the employee elects to have distributed less than the entire vested portion of the account balances derived from employer contributions, the part of the nonvested portion that will be treated as a forfeiture is the total nonvested portion multiplied by a fraction, the numerator of which is the amount of the distribution attributable to employer contributions and the denominator of which is the total value of the vested employer-derived account balances. (B) Restoration of Accounts - If an employee receives a cashout distribution pursuant to this section and resumes employment covered under this plan before he incurs 5 consecutive one-year breaks in service, his employer-derived account balances shall each be restored to the amount on the date of distribution, if he repays to the plan the full amount of the distribution attributable to employer contributions before the earlier of 5 years after the first date on which he is subsequently re-employed by the employer, or the date he incurs 5 consecutive one-year breaks in service following the date of the distribution. If an employee is deemed to receive a distribution pursuant to this Section 4.2(b)(2), and he resumes employment covered under this plan before he incurs 5 consecutive one-year breaks in service, upon the reemployment of such employee his employer-derived account balances will be restored to the amount on the date of such deemed distribution. 15 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan Any amount required to restore such forfeitures shall be deducted from forfeitures occurring in the plan year of restoration. If forfeitures are insufficient for the restoration, the employer may make a contribution to the plan for such plan year to satisfy the restoration. However, by the end of the plan year following the plan year of restoration, sufficient forfeitures or employer contributions shall be credited to the account to satisfy the restoration. (c) Disposition of Forfeitures - The employer contribution account is not subject to forfeiture. (d) Withdrawal of Employee Nondeductible Contributions - No forfeitures shall occur solely as a result of an employee's withdrawal of employee nondeductible contributions. (e) Unclaimed Benefits (1) Forfeiture - The plan does not require the trustee or the plan administrator to search for, or to ascertain the whereabouts of, any participant or beneficiary. At the time the participant's or beneficiary's benefit becomes distributable under the plan, the plan administrator, by certified or registered mail addressed to his last known address of record, shall notify any participant or beneficiary that he is entitled to a distribution under this plan. If the participant or beneficiary fails to claim his distributive share or make his whereabouts known in writing to the plan administrator within twelve months from the date of mailing of the notice, the plan administrator shall treat the participant's or beneficiary's unclaimed payable accrued benefit as forfeited and shall reallocate such forfeiture in accordance with Section 4.2(c). A forfeiture under this paragraph shall occur at the end of the notice period or, if later, the earliest date applicable Treasury regulations would permit the forfeiture. These forfeiture provisions apply solely to the participant's or beneficiary's accrued benefit derived from employer contributions. (2) Restoration - If a participant or beneficiary who has incurred a forfeiture of his accrued benefit under the provisions of this Subsection makes a claim, at any time, for his forfeited accrued benefit, the plan administrator shall restore the participant's or beneficiary's forfeited accrued benefit to the same dollar amount as the dollar amount of the accrued benefit forfeited, unadjusted for any gains or losses occurring after the date of the forfeiture. The plan administrator shall make the restoration during the plan year in which the participant or beneficiary makes the claim from forfeitures occurring in that plan year. If forfeitures are insufficient for the restoration, the employer shall make a contribution to the plan to satisfy the restoration. The plan administrator shall direct the trustee to distribute the participant's or beneficiary's restored accrued benefit to him not later than 60 days after the close of the plan year in which the plan administrator restores the forfeited accrued benefit. Section 4.3 - Payment of Participant Accounts (a) Time of Payment (1) Commencement of Benefits - Unless the participant elects otherwise, distribution of benefits shall begin no later than the 60th day after the latest of the close of the plan year in which: (A) The participant attains age 65 (or the plan's normal retirement age, if earlier); (B) Occurs the 10th anniversary of the year in which the participant commenced participation in the plan; or (C) the participant terminates service with the employer, (i.e. late retirement). (2) Payment Upon Retirement, Disability, or Death - Subject to the provisions set forth in Section 4.3(a)(1) and in the Distribution Requirements of Section 5.3, if the participant terminates employment due to retirement, disability, or death, his account(s) shall be paid as soon as administratively possible after the occurrence of the event creating the right to a distribution. (3) Payment Upon Other Termination of Employment - Subject to the provisions set forth in Section 4.3(a)(1), and in the Distribution Requirements of Section 5.3, if the participant terminates employment other than by retirement, disability, or death, his account(s) shall be paid as soon as administratively possible after the end of the plan year in which severance of employment occurs. (4) Notwithstanding the foregoing, the failure of a participant (or spouse where the spouse's consent is required) to consent to a distribution while a benefit is immediately distributable, within the meaning of Section 5.2(a), shall be deemed to be an election to defer commencement of payment of any benefit sufficient to satisfy this section. 16 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (b) Period for Distribution of Benefits (1) The plan administrator, pursuant to the written election of the participant (or if no election has been made prior to the participant's death, by his beneficiary), shall direct the trustee to distribute to a participant or his beneficiary any amount to which he is entitled under the plan in one of the following methods, provided that such distribution complies with the Distribution Requirements of Section 5.3. If a distribution is required under the Distribution Requirements of Section 5.3, the vested balance of the account(s) exceeds $5,000, and the participant fails to elect payment, the trustee shall pay the benefit in installment payments that meet the requirements of Section 5.3 over the joint life and last survivor expectancy of the participant and his designated beneficiary. However, if the vested accrued benefit is no more than $5,000, benefits shall automatically be paid in a cash lump sum. (A) A lump sum payment. (B) Instalment payments - Effective solely for distributions made before January 1, 2003, installment payments over a period of years that meets the Distribution Requirements of Section 5.3 in annual installments. The period over which such payment is to be made shall not extend beyond the limited distribution period provided for in Section 4.3(b)(2), if applicable. Effective solely for distributions made before January 1, 2002, installment payments may be made in monthly, quarterly, or semiannual installments. (2) Unless the participant elects in writing a longer distribution period, distributions to a participant or his beneficiary attributable to corporate stock shall be in substantially equal annual installments over a period not longer than five years. In the case of a participant with an account balance attributable to corporate stock in excess of $500,000, the five year period shall be extended one additional year (but not more than five additional years) for each $100,000 or fraction thereof by which such balance exceeds $500,000. The dollar limits shall be adjusted at the same time and in the same manner as provided in Code section 415(d). (c) General Payment Provisions (1) Any part of a participant's benefit that is retained in the plan after the allocation date on which his participation ends will continue to be treated as a corporate stock account or other investment account subject to Section 4.2(a)(6)(A). However, no further employer contributions or forfeitures will be credited. (2) All distributions due to be made under this plan shall be made on the basis of the amount to the credit of the participant as of the accounting date coincident with or immediately preceding the occurrence of the event calling for a distribution. If a distributable event occurs after an allocation date and before allocations have been made to the account of the participant, the distribution shall also include the amounts allocable to the account as of such allocation date. (3) If any person entitled to receive benefits hereunder is physically or mentally incapable of receiving or acknowledging receipt thereof, and if a legal representative has been appointed for him, the plan administrator may direct the benefit payment to be made to such legal representative. In the event a distribution is to be made to a minor, then the plan administrator may direct that such distribution be paid to the legal guardian, or if none, to a parent of such beneficiary or a responsible adult with whom the beneficiary maintains his residence, or to the custodian for such beneficiary under the Uniform Gift to Minors Act or the Gift to Minors Act, if such is permitted by the laws of the state in which said beneficiary resides. Such a payment to the legal guardian, custodian or parent of a minor beneficiary shall fully discharge the trustee, employer, plan administrator, and plan from further liability on account thereof. (4) Each optional form of benefit provided under the plan shall be made available to all participants on a nondiscriminatory basis. The plan may not retroactively reduce or eliminate optional forms of benefits and any other Code section 411(d)(6) protected benefits, except as provided in Regulation section 1.411(d)-4, Q&A-2(b) and in other relief granted statutorily or by the Commissioner of Internal Revenue. Any reduction or elimination of optional forms of benefits shall apply only to benefits accrued after the later of the effective date or the adoption date of such change. 17 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (5) The participant's election of a form of benefit payment shall be irrevocable as of the annuity starting date, subject to the notice requirements contained in Section 4.3(e). (d) Eligible Rollover Distributions Effective for distributions made on or after January 1, 1993, notwithstanding the optional forms of payment listed in Section 4.3(b), a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (1) Eligible Rollover Distribution - An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code section 401(a)(9), the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities), a hardship withdrawal made on or after January 1, 1999 from a participant's employee 401(k) elective deferral account before he has attained age 59 1/2, and any withdrawal made on or after January 1, 2002 from any account that is made upon hardship of the participant. (2) Eligible Retirement Plan - Effective for distributions made before January 1, 2002, an eligible retirement plan is an individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), or a qualified trust described in Code section 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. Effective for distributions made on or after January 1, 2002 whether made to the participant or his surviving spouse, an eligible retirement plan is an individual retirement account described in Code section 408(a), an individual retirement annuity described in Code section 408(b), an annuity plan described in Code section 403(a), a tax-sheltered annuity or account described in Code section 403(b), a 457 plan described in Code section 457, or a qualified trust described in Code section 401(a), that accepts the distributee's eligible rollover distribution. (3) Distributee - A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code section 414(p), are distributees with regard to the interest of the spouse or former spouse. (4) Direct Rollover - A direct rollover is a payment by the plan to the eligible retirement plan specified by the distributee. (e) Payment Election Procedures As described in Section 5.2(c), an account balance in excess of $5,000 shall not be immediately distributed without the consent of the participant. The participant shall receive the notice required under Regulation section 1.411(a)-11(c) no less than 30 days and no more than 90 days before the annuity starting date with respect to the distribution. Effective for distributions made on or after January 1, 1993, for any distribution in excess of $200, the plan administrator shall give the participant notice of his eligible rollover distribution rights. The participant shall receive such notice in the same time period as the 411 notice is required to be provided. Effective for distributions made on or after January 1, 1994, if a distribution is one to which Code sections 401(a)(11) and 417 do not apply, such distribution may commence less than 30 days after the 411 notice is given, provided that: (1) The plan administrator clearly informs the participant that the participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and (2) The participant, after receiving the notice, affirmatively elects a distribution. 18 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (f) Form of Distribution (1) Distribution of a participant's benefit may be made in cash or corporate stock or both, provided, however, that if a participant or beneficiary so demands, such benefit shall be distributed only in the form of corporate stock. Prior to making a distribution of benefits, the plan administrator shall advise the participant or his beneficiary, in writing, of the right to demand that benefits be distributed solely in corporate stock. (2) If a participant or beneficiary demands that benefits be distributed solely in corporate stock, distribution of a participant's benefit will be made entirely in whole shares or other units of corporate stock. If the corporate stock consists of more than one class, the participant will receive substantially the same proportion of each such class. Any balance in a participant's other investments account will be applied to acquire for distribution the maximum number of whole shares or other units of corporate stock at the then fair market value. Any fractional unit value unexpended will be distributed in cash. If corporate stock is not available for purchase by the trustee, then the trustee shall hold such balance until corporate stock is acquired and then make such distribution, subject to Sections 4.3(a)(1), 5.2 and 5.3. (3) The trustee shall make distribution from the trust only on instructions from the plan administrator. (4) Put Option - Shares of corporate stock are currently publicly traded securities. In the event the securities cease to be publicly traded or become subject to certain restrictions so that the securities are not freely tradable, then the employer will honor a put option for such securities. The employer's obligation to purchase distributed corporate stock shall be as described in Section 5.6(e). (5) Right of First Refusal - There is no right of first refusal at this time with respect to the corporate stock. Section 4.4 - In-Service Payments (a) Withdrawals - No payments shall be made before separation from service. (b) Participant Loans - No participant loans shall be permitted under this plan. Section 4.5 - Distributions under Domestic Relations Orders Nothing contained in this plan prevents the trustee, in accordance with the direction of the plan administrator, from complying with the provisions of a qualified domestic relations order (as defined in Code section 414(p)). A distribution will not be made to an alternate payee until the participant attains (or would have attained) his earliest retirement age. For this purpose, earliest retirement age means the earlier of: (1) the date on which the participant is entitled to a distribution under this plan; or (2) the later of the date the participant attains age 50 or the earliest date on which the participant could begin receiving benefits under this plan if the participant separated from service. Nothing in this Section gives a participant a right to receive distribution at a time otherwise not permitted under the plan nor does it permit the alternate payee to receive a form of payment not otherwise permitted under the plan. The plan administrator shall establish reasonable procedures to determine the qualified status of a domestic relations order. Upon receiving a domestic relations order, the plan administrator promptly will notify the participant and any alternate payee named in the order, in writing, of the receipt of the order and the plan's procedures for determining the qualified status of the order. Within a reasonable period of time after receiving the domestic relations order, the plan administrator shall determine the qualified status of the order and shall notify the participant and each alternate payee, in writing, of its determination. The plan administrator shall provide notice under this paragraph by mailing to the individual's address specified in the domestic relations order, or in a manner consistent with Department of Labor regulations. If any portion of the participant's nonforfeitable accrued benefit is payable during the period the plan administrator is making its determination of the qualified status of the domestic relations order, the plan administrator shall make a separate accounting of the amounts payable. If the plan administrator determines the order is a qualified domestic relations order within 18 months of the date amounts first are payable following receipt of the order, it shall direct the trustee to distribute the payable amounts in accordance with the order. If the plan administrator does not make its determination of the qualified status of the order within the 18-month determination period, it shall direct the trustee to distribute the payable amounts in the manner the plan would distribute if the order did not exist and shall apply the order prospectively if it later determines the order is a qualified domestic relations order. 19 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan ARTICLE V - ADDITIONAL QUALIFICATION RULES Section 5.1 - Limitations on Allocations under Code Section 415 (a) Single Plan Limitations (1) If the participant does not participate in, and has never participated in another qualified plan maintained by the employer, a welfare benefit fund (as defined in Code section 419(e)) maintained by the employer, or an individual medical account (as defined in Code section 415(l)(2)) maintained by the employer, that provides an annual addition as defined in Section 5.1(d)(1), the amount of annual additions that may be credited to the participant's account for any limitation year will not exceed the lesser of the maximum permissible amount or any other limitation contained in this plan. If the employer contribution that would otherwise be contributed or allocated to the participant's account would cause the annual additions for the limitation year to exceed the maximum permissible amount, the amount contributed or allocated will be reduced so that the annual additions for the limitation year will equal the maximum permissible amount. (2) Prior to determining the participant's actual compensation for the limitation year, the employer may determine the maximum permissible amount for a participant on the basis of a reasonable estimation of the participant's compensation for the limitation year, uniformly determined for all participants similarly situated. (3) As soon as is administratively feasible after the end of the limitation year, the maximum permissible amount for the limitation year will be determined on the basis of the participant's actual compensation for the limitation year. (4) If pursuant to Section 5.1(a)(3) or as a result of either the allocation of forfeitures or a reasonable error in determining the amount of elective deferrals that may be made with respect to a participant, there is an excess amount, the excess will be disposed of as follows: (A) Any employee nondeductible contributions (and any gain attributable thereto), to the extent they would reduce the excess amount, will be returned to the participant. (B) If after the application of Subparagraph (A) an excess amount still exists, the excess amount shall be allocated and reallocated to the employer contribution account of the other participants in the plan to the extent permissible under the limitations of this Section 5.1. (C) If after the application of Subparagraph (B) an excess amount still exists, the excess amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future employer contributions for all active participants in the next limitation year, and each succeeding limitation year if necessary. (D) If a suspense account is in existence at any time during a limitation year pursuant to this Section 5.1(a)(4), it will not participate in the allocation of the trust's investment gains and losses. If a suspense account is in existence at any time during a particular limitation year, all amounts in the suspense account must be allocated and reallocated to participants' accounts before any employer, elective deferral, or employee nondeductible contributions may be made to the plan for that limitation year. Excess amounts may not be distributed to participants or former participants. (b) Combined Limitations - Other Defined Contribution Plan (1) This Section 5.1(b) applies if, in addition to this plan, the participant is covered under another qualified defined contribution plan maintained by the employer, a welfare benefit fund (as defined in Code section 419(e)) maintained by the employer, or an individual medical account (as defined in Code section 415(1)(2)), maintained by the employer, that provides an annual addition as defined in Section 5.1(d)(1), during any limitation year. The annual additions that may be credited to a participant's account under this plan for any such limitation year will not exceed the maximum permissible amount reduced by the annual additions credited to a participant's account under the other plans and welfare benefit funds for the same limitation year. If the annual additions with respect to the participant under other defined contribution plans and welfare benefit funds maintained by the employer are less than the maximum permissible amount and the employer contribution that would otherwise be contributed or allocated to the participant's account under this plan would cause the annual additions for the limitation year to exceed this limitation, the amount contributed or allocated will be reduced so that the annual additions under all such plans and funds for the limitation year will equal the maximum permissible amount. If the annual additions with respect to the participant under such other defined contribution plans and welfare benefit funds in the aggregate are equal to or greater than the maximum permissible amount, no amount will be contributed or allocated to the participant's account under this plan for the limitation year. 20 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (2) Prior to determining the participant's actual compensation for the limitation year, the employer may determine the maximum permissible amount for a participant in the manner described in Section 5.1(a)(2). (3) As soon as is administratively feasible after the end of the limitation year, the maximum permissible amount for the limitation year will be determined on the basis of the participant's actual compensation for the limitation year. (4) If, pursuant to Section 5.1(b)(3) or as a result of the allocation of forfeitures, a participant's annual additions under this plan and such other plans would result in an excess amount for a limitation year, the excess amount will be deemed to consist of the annual additions last allocated, except that annual additions attributable to a welfare benefit fund or individual medical account will be deemed to have been allocated first regardless of the actual allocation date. (5) If an excess amount was allocated to a participant on an allocation date of this plan that coincides with an allocation date of another plan, the excess amount will be disposed of in the manner provided in Section 3.1(c). (6) Any excess amount attributed to this plan will be disposed of in the manner described in Section 5.1(a)(4). (c) Combined Limitations - Other Defined Benefit Plan If the employer maintains, or at any time maintained, a qualified defined benefit plan covering any participant in this plan, the sum of the participant's defined benefit plan fraction and defined contribution plan fraction will not exceed 1.0 in any limitation year. Any excess amounts shall be disposed of in the manner provided in Section 3.1(c). Any excess amount attributed to this plan will be disposed of in the manner described in Section 5.1(a)(4). Effective with respect to limitation years beginning after December 31, 1999, this Section 5.1(c) shall no longer be in effect. The following definitions in Section 5.1(d) shall no longer apply: defined benefit plan fraction, defined contribution plan fraction, highest average compensation, projected annual benefit. (d) Definitions (Code Section 415 Limitations) (1) Annual Additions - The sum of the following amounts credited to a participant's account for the limitation year: (A) employer contributions, (B) employee contributions, (C) forfeitures, and (D) amounts allocated, after March 31, 1984, to an individual medical account, as defined in Code section 415(l)(2), that is part of a pension or annuity plan maintained by the employer are treated as annual additions to a defined contribution plan. Also, amounts derived from contributions paid or accrued after December 31, 1985 (in taxable years ending after such date), that 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 benefit fund (as defined in Code section 419(e)) maintained by the employer are treated as annual additions to a defined contribution plan. For this purpose, any excess amount applied under Section 5.1(a) (4) or (b)(6) in the limitation year to increase the accounts of participants who did not have an excess amount or to reduce employer contributions will be considered annual additions for such limitation year. Annual additions shall not include forfeitures of corporate stock purchased with the proceeds of an exempt loan and employer contributions applied to the payment of interest on an exempt loan if no more than one-third of the employer contribution for the year is allocated to the account of highly compensated employees. Annual additions may be calculated with respect to employer contributions used to repay an exempt loan rather than with respect to corporate stock allocated to participants. Further, annual additions shall not include proceeds from the sale of corporate stock as such proceeds constitute earnings on a plan asset and are allocable as such. 21 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (2) Compensation - A participant's earned income and any earnings reportable as W-2 wages for Federal income tax withholding purposes. W-2 wages means wages as defined in Code section 3401(a) but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code section 3401(a)(2)). For limitation years beginning after December 31, 1991, for purposes of applying the limitations of this Section 5.1, compensation for a limitation year is the compensation actually paid or includible in gross income during such limitation year. For limitation years beginning after December 31, 1997, compensation shall include elective contributions as defined in Section 1.2(a) and elective contributions under a Code section 457 plan or a Code section 501(c)(18) plan. Notwithstanding the preceding, compensation for a participant in a defined contribution plan who is permanently and totally disabled (as defined in Code section 22(e)(3)) is the compensation such participant would have received for the limitation year if the participant had been paid at the rate of compensation paid immediately before becoming permanently and totally disabled; such imputed compensation for the disabled participant may be taken into account only if contributions made on behalf of such participant are nonforfeitable when made. (3) Defined Benefit Fraction - A fraction, the numerator of which is the sum of the participant's projected annual benefits under all the defined benefit plans (whether or not terminated) maintained by the employer, and the denominator of which is the lesser of 125 percent of the dollar limitation determined for the limitation year under Code sections 415(b) and (d) or 140 percent of the highest average compensation, including any adjustments under Code section 415(b). Notwithstanding the above, if the participant was a participant as of the first day of the first limitation year beginning after December 31, 1986, in one or more defined benefit plans maintained by the employer which were in existence on May 6, 1986, the denominator of this fraction will not be less than 125 percent of the sum of the annual benefits under such plans which the participant had accrued as of the close of the last limitation year beginning before January 1, 1987, disregarding any changes in the terms and conditions of the plan after May 5, 1986. The preceding sentence applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of Code section 415 for all limitation years beginning before January 1, 1987. (4) Defined Contribution Dollar Limitation - $30,000, as adjusted under Code section 415(d) for limitation years beginning after December 31, 1994 and not beginning before January 1, 2002. For limitation years beginning after December 31, 2001, the defined contribution dollar limitation shall be $40,000, as adjusted under Code section 415(d) for limitation years beginning after December 31, 2002. (5) Defined Contribution Fraction - A fraction, the numerator of which is the sum of the annual additions to the participant's account under all the defined contribution plans (whether or not terminated) maintained by the employer for the current and all prior limitation years (including the annual additions attributable to the participant's nondeductible employee contributions to all defined benefit plans, whether or not terminated, maintained by the employer, and the annual additions attributable to all welfare benefit funds, as defined in Code section 419(e), and individual medical accounts, as defined in Code section 415(l)(2), maintained by the employer), and the denominator of which is the sum of the maximum aggregate amounts for the current and all prior limitation years of service with the employer (regardless of whether a defined contribution plan was maintained by the employer). The maximum aggregate amount in any limitation year is the lesser of 125 percent of the dollar limitation determined under Code sections 415(b) and (d) in effect under Code section 415(c)(1)(A) or 35 percent of the participant's compensation for such year. If the employee was a participant as of the end of the first day of the first limitation year beginning after December 31, 1986, in one or more defined contribution plans maintained by the employer which were in existence on May 6, 1986, the numerator of this fraction will be adjusted if the sum of this fraction and the defined benefit fraction would otherwise exceed 1.0 under the terms of this plan. Under the adjustment, an amount equal to the product of (1) the excess of the sum of the fractions over 1.0 times (2) the denominator of this fraction, will be permanently subtracted from the numerator of this fraction. The adjustment is calculated using the fractions as they would be computed as of the end of the last limitation year beginning before January 1, 1987, and disregarding any changes in the terms and conditions of the plan made after May 5, 1986, but using the Code section 415 limitation applicable to the first limitation year beginning on or after January 1, 1987. The annual addition for any limitation year beginning before January 1, 1987, shall not be recomputed to treat all employee contributions as annual additions. 22 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (6) Employer - For purposes of this Section 5.1, employer shall mean the employer as defined in Section 1.5(b) but including all members of a controlled group of corporations(as defined in Code section 414(b) as modified by Code section 415(h) and all commonly controlled trades or businesses as defined in Code section 414(c) as modified by Code section 415(h). (7) Excess Amount - The excess of the participant's annual additions for the limitation year over the maximum permissible amount. (8) Highest Average Compensation - The average compensation for the three consecutive years of service with the employer that produces the highest average. A year of service with the employer is the 12-consecutive month period coinciding with the plan year. (9) Limitation Year - The 12-consecutive month period defined in Section 1.3(f). All qualified plans maintained by the employer must use the same limitation year. If the limitation year is amended to a different 12-consecutive month period, the new limitation year must begin on a date within the limitation year in which the amendment is made. (10)Maximum Permissible Amount - The maximum annual addition that may be contributed or allocated to a participant's account under the plan for any limitation year shall not exceed the lesser of: (A) the defined contribution dollar limitation as defined in Section 5.1(d)(4); or (B) 25 percent of the participant's compensation for the limitation year for limitation years beginning before January 1, 2002; 100 percent of the participant's compensation for the limitation year for limitation years beginning after December 31, 2001. The compensation limitation referred to in (B) shall not apply to any contribution 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 419A(d)(2). For limitation years beginning prior to July 13, 1989, the dollar limitation referred to in (A) shall be increased by the lesser of the dollar amount determined under (A) or the amount of corporate stock contributed, or purchased with cash contributed. The dollar amount shall be increased provided no more than one-third of the employer's contributions for the year were allocated to highly compensated employees. If a short limitation year is created because of an amendment changing the limitation year to a different 12-consecutive month period, the maximum permissible amount will not exceed the defined contribution dollar limitation multiplied by the following fraction: Number of months in the short limitation year 12 (11)Projected Annual Benefit - The annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) to which the participant would be entitled under the terms of the plan assuming: (A) the participant will continue employment until normal retirement age under the plan (or current age, if later); and (B) the participant's compensation for the current limitation year and all other relevant factors used to determine benefits under the plan will remain constant for all future limitation years. 23 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan Section 5.2 - Joint and Survivor Annuity Requirements No annuity form of payment is provided under Section 4.3(b) and no direct or indirect transfer is accepted under Section 3.4 from a defined benefit plan, money purchase pension plan (including a target benefit plan), stock bonus or profit sharing plan which would otherwise have provided for a life annuity form of payment to any participant; therefore, the joint and survivor annuity requirements of Code section 401(a)(11) and 417 shall not apply to this plan, except for the provisions of this Section 5.2. (a) Restrictions on Immediate Distributions - If the value of a participant's vested account balance derived from employer and employee contributions exceeds (or at the time of any prior distribution (1) in plan years beginning before January 1, 1998, exceeded $3,500 or (2) in plan years beginning after December 31, 1997, exceeded) $5,000, and the account balance is immediately distributable, the participant (or where the participant has died, the participant's spouse) must consent to any distribution of such account balance. Effective for distributions made on or after March 22, 1999, for the purpose of determining the value of a participant's vested account balance, prior distributions shall be disregarded if distributions have not commenced under an optional form of payment described in Section 4.3. The consent of the participant (or the participant's surviving spouse) shall be obtained in writing within the 90-day period ending on the annuity starting date. The annuity starting date is the first day of the first period for which an amount is paid as an annuity or in any other form. The plan administrator shall notify the participant (or the participant's surviving spouse) of the right to defer any distribution until the participant's account balance is no longer immediately distributable. Such notification shall include a general description of the material features, and an explanation of the relative values of, the optional forms of benefit available under the plan in a manner that would satisfy the notice requirements of Code section 417(a)(3), and shall be provided no less than 30 days and no more than 90 days prior to the annuity starting date. If payment in the form of a qualified joint and survivor annuity is not required with respect to the participant pursuant to Section 5.2(b), only the participant need consent to the distribution of an account balance that is immediately distributable. Neither the consent of the participant nor the participant's spouse shall be required to the extent that a distribution is required to satisfy Code section 401(a)(9) or section 415. In addition, upon termination of this plan if the plan does not offer an annuity option (purchased from a commercial provider) and if the employer or any entity within the same controlled group as the employer does not maintain another defined contribution plan (other than an employee stock ownership plan as defined in Code section 4975(e)(7)), the participant's account balance may, without the participant's consent, be distributed to the participant. However, if any entity within the same controlled group as the employer maintains another defined contribution plan (other than an employee stock ownership plan), the participant's account balance will be transferred, without the participant's consent, to the other plan if the participant does not consent to an immediate distribution. An account balance is immediately distributable if any part of the account balance could be distributed to the participant (or surviving spouse) before the participant attains (or would have attained if not deceased) the later of normal retirement age or age 62. (b) Safe Harbor Rules This Section 5.2(b) shall apply to a participant in this stock bonus plan, and to any distribution, made on or after the first day of the first plan year beginning after December 31, 1988, from or under a separate account attributable solely to accumulated deductible employee contributions, as defined in Code section 72(o)(5)(B), and maintained on behalf of a participant in a money purchase pension plan, (including a target benefit plan). This plan satisfies and shall continue to satisfy the following conditions: (1) the participant cannot elect payments in the form of a life annuity; and (2) on the death of a participant, the participant's vested account balance will be paid to the participant's surviving spouse, but if there is no surviving spouse, or if the surviving spouse has consented in a manner conforming to a qualified election, then to the participant's designated beneficiary. The surviving spouse may elect to have distribution of the vested account balance commence within the 90-day period following the date of the participant's death. The account balance shall be adjusted for gains or losses occurring after the participant's death in accordance with the provisions of the plan governing the adjustment of account balances for other types of distributions. This Section 5.2(b) shall not be operative with respect to a participant in an employee stock ownership or stock bonus plan if the plan is a direct or indirect transferee of a defined benefit plan, money purchase plan, a target benefit plan, stock bonus, or profit-sharing plan which is subject to the survivor annuity requirements of Code section 401(a)(11) and section 417. 24 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (1) The participant may waive the spousal death benefit described in this Section 5.2(b) at any time provided that no such waiver shall be effective unless it satisfies the conditions of Section 5.2(c)(1) that would apply to the participant's waiver of the qualified preretirement survivor annuity. (2) For purposes of this Section 5.2(b), vested account balance shall mean, in the case of a money purchase pension plan or a target benefit plan, the participant's separate account balance attributable solely to accumulated deductible employee contributions within the meaning of Code section 72(o)(5)(B). In the case of a profit-sharing plan, stock bonus plan, or an employee stock ownership plan, vested account balance shall have the same meaning as provided in Section 5.2(c)(3). (c) Definitions (Code Section 417 Requirements) (1) Qualified Election - A waiver of a qualified preretirement survivor annuity. Any waiver of a qualified preretirement survivor annuity shall not be effective unless: (a) the participant's spouse consents in writing to the election; (b) the election designates a specific beneficiary, including any class of beneficiaries or any contingent beneficiaries, which may not be changed without spousal consent (or the spouse expressly permits designations by the participant without any further spousal consent); (c) the spouse's consent acknowledges the effect of the election; and (d) the spouse's consent is witnessed by a plan representative or notary public. If it is established to the satisfaction of a plan representative that there is no spouse or that the spouse cannot be located, a waiver will be deemed a qualified election. Any consent by a spouse obtained under this provision (or establishment that the consent of a spouse may not be obtained) shall be effective only with respect to such spouse. A consent that permits designations by the participant without any requirement of further consent by such spouse must acknowledge that the spouse has the right to limit consent to a specific beneficiary, and a specific form of benefit where applicable, and that the spouse voluntarily elects to relinquish either or both of such rights. A revocation of a prior waiver may be made by a participant without the consent of the spouse at any time before the commencement of benefits. The number of revocations shall not be limited. (2) Spouse (Surviving Spouse) - The spouse or surviving spouse of the participant, provided that a former spouse will be treated as the spouse or surviving spouse and a current spouse will not be treated as the spouse or surviving spouse to the extent provided under a qualified domestic relations order as described in Code section 414(p). (3) Vested Account Balance - The aggregate value of the participant's vested account balances derived from employer and employee contributions (including rollovers), whether vested before or upon death, including the proceeds of insurance contracts, if any, on the participant's life. The provisions of this Section 5.2 shall apply to a participant who is vested in amounts attributable to employer contributions, employee contributions, or both at the time of death or distribution. Section 5.3 - Distribution Requirements Subject to Section 5.2 Joint and Survivor Annuity Requirements, the requirements of this Section 5.3 shall apply to any distribution of a participant's interest and will take precedence over any inconsistent provisions of this plan. The provisions of this Section shall apply to calendar years beginning after December 31, 1984. All distributions required under this Section shall be determined and made in accordance with the proposed regulations under Code section 401(a)(9), including the minimum distribution incidental benefit requirement of Proposed Regulation section 1.401(a)(9)-2. With respect to distributions under the plan made in calendar years beginning on or after January 1, 2001, the Plan will apply the minimum distribution requirements of Code section 401(a)(9) in accordance with the regulations under section 401(a)(9) that were proposed in January 2001, notwithstanding any provision of the plan to the contrary. This preceding sentence shall continue in effect until the end of the last calendar year beginning before the effective date of final regulations under Code section 401(a)(9) or such other date specified in guidance published by the Internal Revenue Service. (a) Required Beginning Date - The entire interest of a participant must be distributed or begin to be distributed no later than the participant's required beginning date. (b) Limits on Distribution Periods - As of the first distribution calendar year, distributions, if not made in a single-sum, may only be made over one of the following periods (or a combination thereof): 25 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (1) the life of the participant; (2) the life of the participant and a designated beneficiary; (3) a period certain not extending beyond the life expectancy of the participant; or (4) a period certain not extending beyond the joint life and last survivor expectancy of the participant and a designated beneficiary. (c) Determination of Amount to Be Distributed Each Year - If the participant's interest is to be distributed in other than a single sum, the following minimum distribution rules shall apply on or after the required beginning date. (1) Individual Account (A) If a participant's benefit is to be distributed over (1) a period not extending beyond the life expectancy of the participant or the joint life and last survivor expectancy of the participant and the participant's designated beneficiary or (2) a period not extending beyond the life expectancy of the designated beneficiary, the amount required to be distributed for each calendar year, beginning with distributions for the first distribution calendar year, must at least equal the quotient obtained by dividing the participant's benefit by the applicable life expectancy. (B) For calendar years beginning before January 1, 1989, if the participant's spouse is not the designated beneficiary, the method of distribution selected must assure that at least 50% of the present value of the amount available for distribution is paid within the life expectancy of the participant. (C) For calendar years beginning after December 31, 1988, the amount to be distributed each year, beginning with distributions for the first distribution calendar year shall not be less than the quotient obtained by dividing the participant's benefit by the lesser of (1) the applicable life expectancy or (2) if the participant's spouse is not the designated beneficiary, the applicable divisor determined from the table set forth in Q&A-4 of Proposed Regulation section 1.401(a)(9)-2. Distributions after the death of the participant shall be distributed using the applicable life expectancy in Section 5.3(c)(1)(A) above as the relevant divisor without regard to Proposed Regulation section 1.401(a)(9)-2. (D) The minimum distribution required for the participant's first distribution calendar year must be made on or before the participant's required beginning date. The minimum distribution for other calendar years, including the minimum distribution for the distribution calendar year in which the employee's required beginning date occurs, must be made on or before December 31 of that distribution calendar year. (2) Other Forms - If the participant's benefit is distributed in the form of an annuity purchased from an insurance company, distributions thereunder shall be made in accordance with the requirements of Code section 401(a)(9) and the proposed regulations thereunder. (d) Death Distribution Provisions (1) Distribution beginning before death - If the participant dies after distribution of his interest has begun, the remaining portion of such interest will continue to be distributed at least as rapidly as under the method of distribution being used prior to the participant's death. (2) Distribution beginning after death - If the participant dies before distribution of his interest begins, distribution of the participant's entire interest shall be completed by December 31 of the calendar year containing the fifth anniversary of the participant's death except to the extent that an election is made to receive distributions in accordance with (A) or (B) below: (A) If any portion of the participant's interest is payable to a designated beneficiary, distributions may be made over the life or over a period certain not greater than the life expectancy of the designated beneficiary commencing on or before December 31 of the calendar year immediately following the calendar year in which the participant died; (B) If the designated beneficiary is the participant's surviving spouse, the date distributions are required to begin in accordance with (A) above shall not be earlier than the later of (i) December 31 of the calendar year immediately following the calendar year in which the participant died and (ii) December 31 of the calendar year in which the participant would have attained age 70 1/2. 26 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan If the participant has not made an election pursuant to this Section 5.3 by the time of his death, the participant's designated beneficiary must elect the method of distribution no later than the earlier of (1) December 31 of the calendar year in which distributions would be required to begin under this Section 5.3(d)(2), or (2) December 31 of the calendar year which contains the fifth anniversary of the date of death of the participant. If the participant has no designated beneficiary, or if the designated beneficiary does not elect a method of distribution, distribution of the participant's entire interest must be completed by December 31 of the calendar year containing the fifth anniversary of the participant's death. (3) For purposes of Section 5.3(d)(2) above, if the surviving spouse dies after the participant, but before payments to such spouse begin, the provisions of Section 5.3(d)(2) with the exception of Section 5.3(d)(2)(B) therein, shall be applied as if the surviving spouse were the participant. (4) For purposes of this Section 5.3(d), any amount paid to a child of the participant will be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. (5) For the purposes of this Section 5.3(d), distribution of a participant's interest is considered to begin on the participant's required beginning date (or, if Section 5.3(d)(3) above is applicable, the date distribution is required to begin to the surviving spouse pursuant to Section 5.3(d)(2)(B) above). If distribution in the form of an annuity irrevocably commences to the participant before the required beginning date, the date distribution is considered to begin is the date distribution actually commences. (e) Definitions (Code Section 401(a)(9) Requirements) (1) Applicable Life Expectancy - The life expectancy (or joint life and last survivor expectancy) calculated using the attained age of the participant (or designated beneficiary) as of the participant's (or designated beneficiary's) birthday in the applicable calendar year reduced by one for each calendar year which has elapsed since the date life expectancy was first calculated. If life expectancy is being recalculated, the applicable life expectancy shall be the life expectancy as so recalculated. The applicable calendar year shall be the first distribution calendar year, and if life expectancy is being recalculated such succeeding calendar year. (2) Designated Beneficiary - The individual who is designated as the beneficiary under the plan in accordance with Code section 401(a)(9) and the proposed regulations thereunder. (3) Distribution Calendar Year - A calendar year for which a minimum distribution is required. For distributions beginning before the participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the participant's required beginning date. For distributions beginning after the participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to Section 5.3(d) above. (4) Life Expectancy - Life expectancy and joint life and last survivor expectancy are computed by use of the expected return multiples in Tables V and VI of section 1.72-9 of the Income Tax Regulations. Unless otherwise elected by the participant (or spouse, in the case of distributions described in Section 5.3(d)(2)(B) above) by the time distributions are required to begin, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the participant (or spouse) and shall apply to all subsequent years. The life expectancy of a nonspouse beneficiary may not be recalculated. (5) Participant's Benefit (A) The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. (B) Exception for second distribution calendar year - If any portion of the minimum distribution for the first distribution calendar year is made in the second distribution calendar year on or before the required beginning date, the amount of the minimum distribution made in the second distribution calendar year shall be treated as if it had been made in the immediately preceding distribution calendar year. 27 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (6) Required Beginning Date (A) Non-5-percent owner - The required beginning date is April 1 of the calendar year following the later of: (i) the calendar year in which the participant attains age 70 1/2, or (ii) the calendar year in which the participant retires. If a participant who is not a 5-percent owner attains age 70 1/2 after December 31, 1995 and before January 1, 2002, the participant shall be permitted to elect to commence the distribution of his benefits as if his required beginning date were April 1 of the calendar year following the calendar year in which he attains age 70 1/2. Payments shall be in the form of installments elected; the participant shall have a new annuity starting date as of the date payments are elected to commence following his termination of employment. (B) 5-percent owner - The required beginning date for a participant who is a 5-percent owner is April 1 of the calendar year following the calendar year in which the participant attains age 70 1/2. A participant is treated as a 5-percent owner for purposes of this Section 5.3(e)(6) if such participant is a 5-percent owner as defined in Code section 416(i) (determined in accordance with section 416 but without regard to whether the plan is top-heavy) at any time during the plan year ending with or within the calendar year in which such participant attains age 70 1/2. (C) Once distributions have begun to a 5-percent owner under this Section 5.3(e)(6), they must continue to be distributed, even if the participant ceases to be a 5-percent owner in a subsequent year. (f) Transitional Rule (1) Notwithstanding the other requirements of this Section 5.3 and subject to the requirements of Section 5.2, Joint and Survivor Annuity Requirements, distribution on behalf of any employee, including a 5-percent owner, may be made in accordance with all of the following requirements (regardless of when such distribution commences). (A) The distribution by the trust is one which would not have disqualified such trust under Code section 401(a)(9) as in effect prior to amendment by the Deficit Reduction Act of 1984. (B) The distribution is in accordance with a method of distribution designated by the employee whose interest in the trust is being distributed or, if the employee is deceased, by a beneficiary of such employee. (C) Such designation was in writing, was signed by the employee or the beneficiary, and was made before January 1, 1984. (D) The employee had accrued a benefit under the plan as of December 31, 1983. (E) The method of distribution designated by the employee or the beneficiary specifies the time at which distribution will commence, the period over which distributions will be made, and in the case of any distribution upon the employee's death, the beneficiaries of the employee listed in order of priority. A distribution upon death will not be covered by this transitional rule unless the information in the designation contains the required information described above with respect to the distributions to be made upon the death of the employee. (2) For any distribution which commences before January 1, 1984, but continues after December 31, 1983, the employee, or the beneficiary, to whom such distribution is being made, will be presumed to have designated the method of distribution under which the distribution is being made if the method of distribution was specified in writing and the distribution satisfies the requirements in this Section 5.3(f). 28 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (3) If a designation is revoked any subsequent distribution must satisfy the requirements of Code section 401(a)(9) and the proposed regulations thereunder. If a designation is revoked subsequent to the date distributions are required to begin, the trust must distribute by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed which would have been required to have been distributed to satisfy Code section 401(a)(9) and the proposed regulations thereunder, but for the election made under Tax Equity and Fiscal Responsibility Act of 1982 section 242(b)(2). For calendar years beginning after December 31, 1988, such distributions must meet the minimum distribution incidental benefit requirements in Proposed Regulation section 1.401(a)(9)-2. Any changes in the designation will be considered to be a revocation of the designation. However, the mere substitution or addition of another beneficiary (one not named in the designation) under the designation will not be considered to be a revocation of the designation, so long as such substitution or addition does not alter the period over which distributions are to be made under the designation, directly or indirectly (for example, by altering the relevant measuring life). In the case in which an amount is transferred or rolled over from one plan to another plan, the rules in Proposed Regulation section 1.401(a)(9)-1 Q&A J-2 and Q&A J-3 shall apply. Section 5.4 - Top Heavy Provisions (a) Application of Provisions - If the plan is or becomes top-heavy in any plan year beginning after December 31, 1983, the provisions of Section 5.4 will supersede any conflicting provisions in the plan. (b) Minimum Allocation (1) Except as otherwise provided in Section 5.4(b)(3) and (4) below, the employer contributions and forfeitures allocated on behalf of any participant who is not a key employee shall not be less than the lesser of three percent of such participant's compensation or in the case where the employer has no defined benefit plan which designates this plan to satisfy Code section 401, the largest percentage of employer contributions and forfeitures, as a percentage of the key employee's compensation which may be taken into account under Section 1.2(c), allocated on behalf of any key employee for that year. The minimum allocation is determined without regard to any Social Security contribution. This minimum allocation shall be made even though, under other plan provisions, the participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of (i) the participant's failure to complete 1,000 hours of service (or any equivalent provided in the plan), or (ii) the participant's failure to make mandatory employee contributions to the plan, or (iii) compensation less than a stated amount. (2) For purposes of computing the minimum allocation, compensation shall mean compensation as defined in Section 5.1(d)(2), subject to the limitations of Section 1.2(c). (3) The provision in Section 5.4(b)(1) above shall not apply to any participant who was not employed by the employer on the last day of the plan year. (4) The provision in Section 5.4(b)(1) above shall not apply to any participant to the extent the participant is covered under any other plan or plans of the employer and the employer has provided in Section 3.2 that the minimum allocation or benefit requirement applicable to top-heavy plans will be met in the other plan or plans. If this plan is intended to meet the minimum allocation or benefit requirement applicable to another plan or plans, the employer shall so provide in Section 3.2. (5) The minimum allocation required (to the extent required to be nonforfeitable under Code section 416(b)) may not be forfeited under Code section 411(a)(3)(B) or 411(a)(3)(D). (6) Matching contributions - Employer matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Code section 416(c)(2) and the plan if so provided in Section 3.2 or 3.3. The preceding sentence shall apply with respect to matching contributions under the plan or, if the plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Code section 401(m). (c) Adjustments in Code Section 415 Limits - If the plan is top-heavy, the defined benefit fraction and the defined contribution fraction shall be computed by applying a factor of 1.0 (instead of 1.25) to the applicable dollar limits under Code section 415(b)(1)(A) and 415(c)(1)(A) for such year, unless the plan meets the following conditions: (1) Such plan would not be a top-heavy plan if "90%" were substituted for "60%" in the top-heavy tests; and (2) The minimum employer contribution percentage under Section 5.4(b) is 4 percent instead of 3 percent. 29 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (3) A non-key employee who participates in this plan and in a defined benefit plan aggregated herewith will receive in accordance with Section 3.2(c)(2) either (i) a minimum employer contribution of 7.5% under this plan or another defined contribution plan aggregated herewith or (ii) a minimum monthly nonintegrated accrued benefit of 3% of average annual compensation, not to exceed a cumulative accrued benefit of 30% under the defined benefit plan. However, the reduced Code section 415 factor of 1.0 shall not apply under a top-heavy plan with respect to any individual so long as there are no employer contributions, forfeitures, or voluntary employee non-deductible contributions allocated to such individual. Effective with respect to limitation years beginning after December 31, 1999, this Section 5.4(c) shall no longer be in effect. (d) Minimum Vesting Schedule - For any plan year in which this plan is top-heavy, the 100% immediately vesting as provided in Section 4.2(a)(6) shall continue to apply to the plan. (e) Definitions (Code Section 416 Requirements) (1) Key Employee (A) Effective for plan years beginning before January 1, 2002, any employee or former employee (and the beneficiaries of such employee) who at any time during the determination period was an officer of the employer if such individual's annual compensation exceeds 50 percent of the dollar limitation under Code section 415(b)(1)(A), an owner (or considered an owner under Code section 318) of one of the ten largest interests in the employer if such individual's compensation exceeds 100 percent of the dollar limitation under Code section 415(c)(1)(A), a 5-percent owner of the employer, or a 1-percent owner of the employer who has an annual compensation of more than $150,000. Annual compensation means compensation as defined in Section 5.1(d)(2), but including elective contributions as defined in Section 1.2(a) and elective contributions under a Code section 457 plan or a Code section 501(c)(18) plan for any plan year and subject to the limitations of Section 1.2(c). The determination period is the plan year containing the determination date and the four preceding plan years. The determination of who is a key employee will be made in accordance with Code section 416(i)(1) and the regulations thereunder. (B) Effective for plan years beginning on or after January 1, 2002, any employee or former employee (and the beneficiaries of such employee) who at any time during the determination period was an officer of the employer if such individual's annual compensation exceeds $130,000 (as adjusted under Code section 415(d) for plan years beginning after December 31, 2002), a 5-percent owner of the employer, or a 1- percent owner of the employer who has an annual compensation of more than $150,000. Annual compensation means compensation as defined in Section 5.1(d)(2), but including elective contributions as defined in Section 1.2(a) and elective contributions under a Code section 457 plan or a Code section 501(c)(18) plan for any plan year and subject to the limitations of Section 1.2(c). The determination period is the plan year containing the determination date. The determination of who is a key employee will be made in accordance with Code section 416(i)(1) and the regulations thereunder. This Section 5.4(e)(1)(B) is effective for plan years beginning on or after January 1, 2002, except that, in determining whether an employee is a key employee in 2002, this provision shall be treated as having been in effect for the last plan year beginning before January 1, 2002. (2) Top-Heavy Plan - For any plan year beginning after December 31, 1983, this plan is top-heavy if any of the following conditions exists: (A) If the top-heavy ratio for this plan exceeds 60 percent and this plan is not part of any required aggregation group or permissive aggregation group of plans. (B) If this plan is a part of a required aggregation group of plans but not part of a permissive aggregation group and the top-heavy ratio for the group of plans exceeds 60 percent. (C) If this plan is a part of a required aggregation group and part of a permissive aggregation group of plans and the top- heavy ratio for the permissive aggregation group exceeds 60 percent. 30 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (3) Top-Heavy Ratio (A) Effective for plan years beginning before January 1, 2002, the top-heavy ratio shall be determined as follows. (i) If the employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the employer has not maintained any defined benefit plan which during the 5-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 aggregation 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 5-year period ending on the determination date(s)), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the 5-year period ending on the determination date(s)), both computed in accordance with Code section 416 and the regulations thereunder. 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 and the regulations thereunder. (ii) If the employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the employer maintains or has maintained one or more defined benefit plans which during the 5-year period ending on the determination date(s) has or has had any accrued 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 account balances under the aggregated defined contribution plan or plans for all key employees, determined in accordance with Section 5.4(e)(3)(A)(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 Section 5.4(e)(3)(A)(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 and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the top-heavy ratio are increased for any distribution of an accrued benefit made in the five-year period ending on the determination date. (iii) For purposes of Section 5.4(e)(3)(A)(i) and (ii) above the value of account balances and the present value of accrued benefits will be determined as of the most recent valuation date that falls within or ends with the 12-month period ending on the determination date, except as provided in Code section 416 and the regulations thereunder for the first and second plan years of a defined benefit plan. The account balances and accrued benefits of a participant (1) who is not a key employee but who was a key employee in a prior year, or (2) who has not been credited with at least one hour of service with any employer maintaining the plan at any time during the 5-year period ending on the determination date will be disregarded. The calculation of the top-heavy ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made in accordance with Code section 416 and the regulations thereunder. Deductible employee contributions 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 (1) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the employer, or (2) 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). (B) Effective for plan years beginning on or after January 1, 2002, the top-heavy ratio shall be determined as follows. 31 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (i) If the employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the employer has not maintained any defined benefit plan which during the 1-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 aggregation 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 1-year period ending on the determination date(s) and any in- service distribution in the 5-year period ending on the determination date(s)), and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the 1-year period ending on the determination date(s) and any in-service distribution in the 5-year period ending on the determination date(s)), both computed in accordance with Code section 416 and the regulations thereunder. 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 and the regulations thereunder. (ii) If the employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the employer maintains or has maintained one or more defined benefit plans which during the 1-year period ending on the determination date(s) has or has had any accrued 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 account balances under the aggregated defined contribution plan or plans for all key employees, determined in accordance with Section 5.4(e)(3)(B)(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 Section 5.4(e)(3)(B)(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 and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the top-heavy ratio are increased for any distribution of an accrued benefit made in the one-year period ending on the determination date. (iii) For purposes of Section 5.4(e)(3)(B)(i) and (ii) above the value of account balances and the present value of accrued benefits will be determined as of the most recent valuation date that falls within or ends with the 12-month period ending on the determination date, except as provided in Code section 416 and the regulations thereunder for the first and second plan years of a defined benefit plan. The account balances and accrued benefits of a participant (1) who is not a key employee but who was a key employee in a prior year, or (2) who has not been credited with at least one hour of service with any employer maintaining the plan at any time during the 1-year period ending on the determination date will be disregarded. The calculation of the top-heavy ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made in accordance with Code section 416 and the regulations thereunder. Deductible employee contributions 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 (1) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the employer, or (2) 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). (4) Permissive Aggregation Group - The required aggregation group of plans plus any other plan or plans of the employer which, when considered as a group with the required aggregation group, would continue to satisfy the requirements of Code sections 401(a)(4) and 410. 32 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (5) Required Aggregation Group - (1) Each qualified plan of the employer in which at least one key employee participates or participated at any time during the determination period (regardless of whether the plan has terminated), and (2) any other qualified plan of the employer which enables a plan described in (1) to meet the requirements of Code sections 401(a)(4) or 410. (6) Determination Date - For any plan year subsequent to the first plan year, the last day of the preceding plan year. For the first plan year of the plan, the last day of that year. (7) Valuation Date - The last day of the plan year shall be the date as of which account balances or accrued benefits are valued for purposes of calculating the top-heavy ratio. (8) Present Value - Present value shall be based only on the interest and mortality rates specified in the employer's defined benefit plan. (9) Non-Key Employee - Any employee who is not a key employee. Non-key employees include employees who are former key employees. Section 5.5 - Deductible Voluntary Employee Contributions The plan administrator will not accept deductible employee contributions within the meaning of Code section 72(o)(5)(B). Section 5.6 - Stock Bonus Plan Distribution Options (a) The employer retains the discretion to implement the provisions of this Section 5.6. (b) Right to Receive Stock The right to receive distributions in the form of shares of corporate stock shall be automatically terminated in the event of the sale or other disposition by the trustee of all shares of corporate stock held by the trust. (c) Restricted Stock (1) Notwithstanding anything contained herein to the contrary, if the employer's charter or by-laws restrict ownership of substantially all shares of corporate stock to employees and the trust fund, as described in Code section 409(h)(2), the plan administrator shall distribute a participant's account entirely in cash without granting the participant the right to demand distribution in shares of corporate stock. (2) Except as otherwise provided herein, corporate stock distributed by the trustee may be restricted as to sale or transfer by the by-laws or articles of incorporation of the employer, provided restrictions are applicable to all corporate stock of the same class. If a participant is required to offer the sale of his corporate stock to the employer before offering to sell his corporate stock to a third party, in no event may the employer pay a price less than that offered to the distributee by another potential buyer making a bona fide offer and in no event shall the trustee pay a price less than the fair market value of the corporate stock. (d) Right of First Refusal (1) If any participant, his beneficiary or any other person to whom shares of corporate stock are distributed from the plan (the selling participant) shall, at any time that the stock is not publicly traded, desire to sell some or all of such shares (the offered shares) to a third party; the selling participant shall give written notice of such desire to the employer and the plan administrator. The notice shall contain the number of shares offered for sale, the proposed terms of the sale, and the names and addresses of both the selling participant and third party. Both the trust fund and the employer shall each have the right of first refusal for a period of 14 days from the date the selling participant gives such written notice to the employer and the plan administrator to acquire the offered shares. The fourteen day period shall run concurrently against the trust fund and the employer. As between the trust fund and the employer, the trust fund shall have priority to acquire the shares pursuant to the right of first refusal. The selling price and terms shall not be less than the greater of the value of the stock determined under Section 6.7(b) or the price and terms offered by the third party. (2) If the trust fund and the employer do not exercise their right of first refusal within the required fourteen day period provided above, the selling participant shall have the right, at any time following the expiration of such period, to dispose of the offered shares to the third party; provided, however, that (i) no disposition shall be made to the third party on terms more favorable to the third party than those set forth in the written notice previously given by the selling participant, and (ii) if such disposition shall not be made to a third party on the terms offered to the employer and the trust fund, the offered shares shall again be subject to the right of first refusal set forth above. 33 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (3) The closing pursuant to the exercise of the right of first refusal shall take place at such place agreed upon between the plan administrator and the selling participant, but not later than 10 days after the employer or the trust fund shall have notified the selling participant of the exercise of the right of first refusal. At such closing, the selling participant shall deliver certificates representing the offered shares duly endorsed in blank for transfer, or with stock powers attached duly executed in blank with all required transfer tax stamps attached or provided for, and the employer or the trust fund shall deliver the purchase price, or an appropriate portion thereof, to the selling participant. (e) Put Option (1) If corporate stock is distributed to a participant and such corporate stock is not readily tradable on an established securities market, a participant has a right to require the employer to repurchase the corporate stock distributed to such participant under a fair valuation formula. Such stock shall be subject to the provisions of Section 5.6(c). (2) The put option must be exercisable only by a participant, by the participant's donees, or by a person (including an estate or its distributee) to whom the corporate stock passes by reason of a participant's death. The put option must permit a participant (or beneficiary) to put the corporate stock to the employer. Under no circumstances may the put option bind the plan. However, it shall grant the plan an option to assume the rights and obligations of the employer at the time that the put option is exercised. If it is known at the time a loan is made that federal or state law will be violated by the employer's honoring such put option, the put option must permit the corporate stock to be put, in a manner consistent with such law, to a third party (e.g., an affiliate of the employer or a shareholder other than the plan) that has substantial net worth at the time the loan is made and whose net worth is reasonably expected to remain substantial. The put option shall commence as of the day following the date the corporate stock is distributed to the participant (or beneficiary) and end 60 days thereafter; and, if not exercised within such 60- day period, an additional 60-day option shall commence on the first day of the fifth month of the plan year next following the date the stock was distributed to the participant (or such other 60-day period as provided in regulations issued under the Code). However, in the case of corporate stock that is publicly traded without restrictions when distributed but ceases to be so traded within either of the 60-day periods described herein after distribution, the employer must notify each holder of such corporate stock in writing on or before the tenth day after the date the corporate stock ceases to be so traded that for the remainder of the applicable 60-day period the corporate stock is subject to the put option. The number of days between the tenth day and the date on which notice is actually given, if later than the tenth day, must be added to the duration of the put option. The notice must inform distributees of the term of the put options that they are to hold. The terms must satisfy the requirements of this Section 5.6(e)(2). The put option is exercised by the holder by notifying the employer in writing that the put option is being exercised. The notice shall state the name and address of the holder and the number of shares to be sold. Upon receipt of a written notification from the holder, the employer shall immediately inform the plan administrator of such notice. The plan administrator shall have 10 days to notify the employer if it wishes the trust fund to assume the rights and obligations of the employer with respect to the required purchase of corporate stock. The period during which a put option is exercisable does not include any time when a distributee is unable to exercise it, because the party bound by the put option is prohibited from honoring it by applicable federal or state law. The price at which a put option must be exercisable is the value of the corporate stock determined in accordance with Section 6.7(b) as of the allocation date coincident with or immediately preceding the employer's receipt of the written notification. The total purchase price shall be paid to the holder within 30 days after the notification, provided however, that the employer may defer such payments on a reasonable basis, if it gives written notice to the holder within the 30 day period. Such deferred payments shall be paid in substantially equal monthly, quarterly, semiannual, or annual installments over a period certain beginning not later than 30 days after the exercise of the put option and not extending beyond 5 years. The deferral of payment is reasonable if adequate security and a reasonable interest rate on the unpaid amounts are provided. The amount to be paid under the put option involving installment distributions must be paid not later than 30 days after the exercise of the put option. Payment under a put option must not be restricted by the provisions of a loan or any other arrangement, including the terms of the employer's articles of incorporation, unless so required by applicable state law. For purposes of this Section 5.6(e), total distribution means a distribution to a participant or his beneficiary within one taxable year of the participant's entire vested account. 34 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (3) An arrangement involving the plan that creates a put option must not provide for the issuance of put options other than as provided under this Section 5.6(e). The plan (and the trust fund) must not otherwise obligate itself to acquire corporate stock from a particular holder thereof at an indefinite time determined upon the happening of an event such as the death of the holder. (4) The participant and beneficiary rights and protections created under this Section 5.6(e) as they pertain to plan assets acquired with the proceeds of an exempt loan shall be nonterminable. Therefore, such rights and protections shall continue even after such exempt loan has been repaid although this plan ceased to be an ESOP effective January 1, 1988. ARTICLE VI - ADMINISTRATION OF THE PLAN Section 6.1 - Fiduciary Responsibility (a) Fiduciary Standards - A fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and - * For the exclusive purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the plan; * With the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; * By diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and * In accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of ERISA. (b) Allocation of Fiduciary Responsibility (1) It is intended to allocate to each fiduciary, either named or otherwise, the individual responsibility for the prudent execution of the functions assigned to him. None of the allocated responsibilities or any other responsibilities shall be shared by two or more fiduciaries unless specifically provided for in the plan. (2) When one fiduciary is required to follow the directions of another fiduciary, the two fiduciaries shall not be deemed to share such responsibility. Instead, the responsibility of the fiduciary giving the directions shall be deemed to be his sole responsibility and the responsibility of the fiduciary receiving directions shall be to follow those directions insofar as such instructions on their face are proper under applicable law. (3) Any person or group of persons may serve in more than one fiduciary capacity with respect to this plan. (4) A fiduciary under this plan may employ one or more persons, including independent accountants, attorneys and actuaries to render advice with regard to any responsibility such fiduciary has under the plan. (c) Indemnification by Employer - Unless resulting from the gross negligence, willful misconduct or lack of good faith on the part of a fiduciary who is an officer or employee of the employer, the employer shall indemnify and save harmless such fiduciary from, against, for and in respect of any and all damages, losses, obligations, liabilities, liens, deficiencies, costs and expenses, including without limitation, reasonable attorney's fees and other costs and expenses incident to any suit, action, investigation, claim or proceedings suffered in connection with his acting as a fiduciary under the plan. 35 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (d) Named Fiduciary - The person or persons named by the employer as having fiduciary responsibility for the management and control of plan assets shall be known as the "named fiduciary" hereunder. Such responsibility shall include the appointment of the plan administrator (Section 6.2(a)), the trustee (Section 6.4(a)) and the investment manager (Section 6.4(b)), and the deciding of benefit appeals (Section 6.3). Section 6.2 - Plan Administrator (a) Appointment of Plan Administrator The named fiduciary shall appoint a plan administrator who may be a person or an administrative committee consisting of no more than five members. Vacancies occurring upon resignation or removal of a plan administrator or a committee member shall be filled promptly by the named fiduciary. Any plan administrator may resign at any time by giving notice of his resignation to the named fiduciary, and any plan administrator may be removed at any time by the named fiduciary. The named fiduciary shall review at regular intervals the performance of the plan administrator(s) and shall re-evaluate the appointment of such administrator(s). After the named fiduciary has appointed the plan administrator and has received a written notice of acceptance, the fiduciary responsibility for administration of the plan shall be the responsibility of the plan administrator or plan administrative committee. (b) Duties and Powers of Plan Administrator The plan administrator shall have the following duties and discretionary powers and such other duties and discretionary powers as relate to the administration of the plan: (1) To determine in a non-discriminatory manner all questions relating to the eligibility of employees to become participants. (2) To determine in a non-discriminatory manner eligibility for benefits and to determine and certify the amount and kind of benefits payable to participants. (3) To authorize all disbursements from the fund. (4) To appoint or employ any independent person to perform necessary plan functions and to assist in the fulfillment of administrative responsibilities as he deems advisable, including the retention of a third party administrator, custodian, auditor, accountant, actuary, or attorney. (5) When appropriate, to select an insurance company and annuity contracts which, in his opinion, will best carry out the purposes of the plan. (6) To construe and interpret any ambiguity in the plan and to make, publish, interpret, alter, amend or revoke rules for the regulation of the plan which are consistent with the terms of the plan and with ERISA. (7) To prepare and distribute, in such manner as determined to be appropriate, information explaining the plan. (8) To establish and communicate to participants a procedure and method to insure that each participant will vote corporate stock allocated to such participant's corporate stock account pursuant to Section 6.8. (9) To assist any participant regarding his rights, benefits, or elections available under the plan. (c) Allocation of Fiduciary Responsibility Within Plan Administrative Committee If the plan administrator is a plan administrative committee, the committee shall choose from its members a chairperson and a secretary. The committee may allocate responsibility for those duties and powers listed in Section 6.2(b)(1) and (2) (except determination of qualification for disability retirement) and other purely ministerial duties to one or more members of the committee. The committee shall review at regular intervals the performance of any committee member to whom fiduciary responsibility has been allocated and shall re-evaluate such allocation of responsibility. After the plan administrative committee has made such allocations of responsibilities and has received written notice of acceptance, the fiduciary responsibilities for such administrative duties and powers shall then be considered as the responsibilities of such committee member(s). 36 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (d) Miscellaneous Provisions (1) Plan Administrative Committee Actions - The actions of such committee shall be determined by the vote or other affirmative expression of a majority of its members. Either the chairperson or the secretary may execute any certificate or other written direction on behalf of the committee. A member of the committee who is a participant shall not vote on any question relating specifically to himself. If the remaining members of the committee, by majority vote thereof, are unable to come to a determination of any such question, the named fiduciary shall appoint a substitute member who shall act as a member of the committee for the special vote. (2) Expenses - The plan administrator shall serve without compensation for service as such. All reasonable expenses of the plan administrator shall be paid by the employer or from the fund. (3) Examination of Records - The plan administrator shall make available to any participant for examination during business hours such of the plan records as pertain only to the participant involved. (4) Information to the Plan Administrator - To enable the plan administrator to perform the administrative functions, the employer shall supply full and timely information to the plan administrator on all participants as the plan administrator may require. Section 6.3 - Claims Procedure (a) Notification - The plan administrator shall notify each participant in writing of his determination of benefits. If the plan administrator denies any benefit, such written denial shall include: * The specific reasons for denial; * Reference to provisions on which the denial is based; * A description of and reason for any additional information needed to process the claim; and * An explanation of the claims procedure. (b) Appeal - The participant or his duly authorized representative may: * Request a review of the participant's case in writing to the named fiduciary; * Review pertinent documents; * Submit issues and comments in writing. The written request for review must be submitted no later than 60 days after receiving written notification of denial of benefits. (c) Review - The named fiduciary must render a decision no later than 60 days after receiving the written request for review, unless circumstances make it impossible to do so; but in no event shall the decision be rendered later than 120 days after the request for review is received. (d) Limitation on Time Period for Litigation of a Benefit Claim - Following receipt of the written rendering of the named fiduciary's decision under Section 6.3(c), the participant shall have 365 days in which to file suit in the appropriate court. Thereafter, the right to contest the decision shall be waived. Section 6.4 - Trust Fund (a) Appointment of Trustee The named fiduciary shall appoint a trustee for the proper care and custody of all funds, securities and other properties in the trust, and for investment of plan assets (or for execution of such orders as it receives from an investment manager appointed for investment of plan assets). The duties and powers of the trustee shall be set forth in a trust agreement executed by the employer, which is incorporated herein by reference. The named fiduciary shall review at regular intervals the performance of the trustee and shall re- evaluate the appointment of such trustee. After the named fiduciary has appointed the trustee and has received a written notice of acceptance of its responsibility, the fiduciary responsibility with respect to the proper care and custody of plan assets shall be considered as the responsibility of the trustee. Unless otherwise allocated to an investment manager, the fiduciary responsibility with respect to investment of plan assets shall likewise be considered as the responsibility of the trustee. 37 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (b) Appointment of Investment Manager The named fiduciary may appoint an investment manager who is other than the trustee, which investment manager may be a bank or an investment advisor registered with the Securities and Exchange Commission under the Investment Advisors Act of 1940. Such investment manager, if appointed, shall have sole discretion in the investment of plan assets, subject to the funding policy. The named fiduciary shall review at regular intervals no less frequently than annually, the performance of such investment manager and shall re- evaluate the appointment of such investment manager. After the named fiduciary has appointed an investment manager and has received a written notice of acceptance of its responsibility, the fiduciary responsibility with respect to investment of plan assets shall be considered as the responsibility of the investment manager. (c) Expenses The trust fund shall pay the expenses incurred in the administration of the plan and the investment of the fund, provided the cost is reasonable. Such expenses shall include legal fees incurred by the plan administrator or the trustee, provided such fiduciaries are not proven to have committed a prohibited transaction. Section 6.5 - Investment Policy (a) The plan is designed to invest primarily in corporate stock. It is specifically intended that this stock bonus plan qualify and operate as an eligible individual account plan as defined in ERISA section 407(d)(3). As such, and without limiting the generality of the foregoing, the trustee is hereby specifically authorized to: (1) acquire, hold, sell, and distribute corporate stock that is qualified employer stock. (2) invest in such corporate stock and not limit its holdings of such stock to 10% of trust assets. The trustee may invest up to 100% of plan assets in corporate stock without regard to any plan or trust agreement requirement to diversify investments as permitted under ERISA section 404(a)(2). (3) acquire or sell corporate stock in a transaction with a disqualified person or a party in interest (as those terms are defined in ERISA and the Code) provided that no commission is charged and the transaction is for adequate consideration. (b) With due regard to Section 6.5(a), the plan administrator may also direct the trustee to invest funds under the plan in other property described in the Trust Agreement or in life insurance policies to the extent permitted by Section 6.5(c), or the trustee may hold such funds in cash or cash equivalents. (c) With due regard to Section 6.5(a), the plan administrator may also direct the trustee to invest funds under the plan in insurance policies on the life of any keyman employee. The proceeds of a keyman insurance policy may not be used for the repayment of any indebtedness owed by the plan which is secured by corporate stock but shall be allocated to participants in proportion to their account balances. The amount of employer contribution to be allocated to participants under Section 3.2 shall be reduced by the amount of premiums paid on keyman insurance policies during the plan year. The employer shall contribute an amount each year which is sufficient to pay the required premiums. No insurance company which may issue such policies shall be deemed to be a party to this plan. (d) The plan may not obligate itself to acquire corporate stock from a particular holder thereof at an indefinite time determined upon the happening of an event such as the death of the holder. (e) The plan may not obligate itself to acquire corporate stock under a put option binding upon the plan. However, at the time a put option is exercised, the plan may be given an option to assume the rights and obligations of the employer under a put option binding upon the employer. (f) All purchases of corporate stock shall be made at a price which, in the judgment of the plan administrator, does not exceed the fair market value thereof. All sales of corporate stock shall be made at a price which, in the judgment of the plan administrator, is not less than the fair market value thereof. The valuation rules set forth in Section 6.7 shall be applicable. Section 6.6 - Prohibitions Against Allocations (a) Transactions Involving Corporate Stock - This Section 6.6(a) shall apply to corporate stock acquired by the plan after October 22, 1986 in a sale to which Code section 1042 or, for estates of decedents who died prior to December 20, 1989, Code section 2057 (as in effect December 19, 1989) applies. (1) No portion of the trust fund attributable to (or allocable instead of) such corporate stock may accrue or be allocated directly or indirectly under any qualified plan maintained by the employer during the nonallocation period, for the benefit of: 38 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan (A) Any taxpayer who makes an election under Code section 1042(a) with respect to corporate stock or any decedent if the executor of the estate of the decedent makes a qualified sale to which Code section 2057 applies; (B) Any individual who is related to the taxpayer or the decedent (as defined in Code section 267(b)); or (C) Any other person who owns more than 25% of: (i) any class of outstanding stock of the employer or affiliated employer which issued such corporate stock; or (ii) the total value of any class of outstanding stock of the employer or affiliated employer. For the purpose of determining ownership, the attribution rules of Code section 318(a) shall be applied with the exception of Code section 318(a)(2)(B)(i). (2) An individual who is related to the taxpayer (or the decedent) shall not include lineal descendants of the taxpayer, if the aggregate amount allocated to the benefit of all such lineal descendants during the nonallocation period does not exceed more than 5% of the corporate stock (or amounts allocated in their stead) held by the plan which are attributable to a sale to the plan by any person related to such descendants (within the meaning of Code section 267(c)(4)) in a transaction to which Code section 1042 or Code section 2057 is applied. (3) A person shall be treated as meeting the 25% stock ownership requirement of Section 6.6(a)(1)(C) if such person owns more than 25% of the stock: (A) at any time during the one year period ending on the date of sale of corporate stock to the plan, or (B) on the date as of which corporate stock is allocated to participants in the plan. (4) For purposes of Section 6.6(a)(1), nonallocation period for plan years beginning after December 31, 1986, means the period beginning on the date of the sale of the corporate stock and ending on the later of the date which is ten years after the date of sale or the date of the plan allocation attributable to the final payment of acquisition indebtedness incurred in connection with such sale. (b) Disqualified Persons under Plan Sponsored by S Corporation - Reserved. Section 6.7 - Valuation of the Trust Fund (a) The plan administrator shall direct the trustee, as of each allocation date, and at such other date or dates deemed necessary by the plan administrator, herein called valuation date, to determine the net worth of the assets comprising the trust fund as it exists on the valuation date prior to taking into consideration any contribution to be allocated for that plan year. In determining such net worth, the trustee shall value the assets comprising the trust fund at their fair market value as of the valuation date and shall deduct all expenses for which the trustee has not yet obtained reimbursement from the employer or the trust fund. (b) Valuations must be made in good faith and based on all relevant factors for determining the fair market value of securities. In the case of a transaction between a plan and a disqualified person, value must be determined as of the date of the transaction. For all other plan purposes, value must be determined as of the most recent valuation date under the plan. An independent appraisal will not in itself be a good faith determination of value in the case of a transaction between the plan and a disqualified person. However, in other cases, a determination of fair market value based on at least an annual appraisal independently arrived at by a person who customarily makes such appraisals and who is independent of any party to the transaction will be deemed to be a good faith determination of value. Corporate stock not readily tradable on an established securities market shall be valued by an independent appraiser meeting requirements similar to the requirements of the Regulations prescribed under Code section 170(a)(1). Section 6.8 - Voting Corporate Stock The trustee shall vote all corporate stock held by it as part of the plan assets at such time and in such manner as the plan administrator shall direct, provided, however, that if any agreement entered into by the trust provides for voting of any shares of corporate stock pledged as security for any obligation of the plan, then such shares of corporate stock shall be voted in accordance with such agreement. If the plan administrator shall fail or refuse to give the trustee timely instructions as to how to vote any corporate stock as to which the trustee otherwise has the right to vote, the trustee shall not exercise its power to vote such corporate stock, except as described herein with respect to a tender offer or a corporate matter requiring pass-through voting rights. 39 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan This plan is a stock bonus plan holding a registration-type class of securities; therefore, participants shall not be entitled to direct the trustee as to the manner in which the corporate stock that is entitled to vote and that is allocated to the corporate stock account of such participant is to be voted. ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN Section 7.1 - Right to Discontinue and Amend It is the expectation of the employer that it will continue this plan indefinitely and make the payments of its contributions hereunder, but the continuance of the plan is not assumed as a contractual obligation of the employer and the right is reserved by the employer, at any time, to reduce, suspend or discontinue its contributions hereunder. Section 7.2 - Amendments Except as herein limited, the employer shall have the right to amend this plan at any time to any extent that it may deem advisable. Such amendment shall be stated in writing. It shall be authorized by action of the board of directors under the corporate by-laws and such authorization shall designate the person to execute the amendment. The employer's right to amend the plan shall be limited as follows: (a) No amendment shall increase the duties or liabilities of the plan administrator, the trustee, or other fiduciary without their respective written consent. (b) No amendments shall have the effect of vesting in the employer any interest in or control over any contracts issued pursuant hereto or any other property in the fund. (c) 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 paragraph, a plan amendment which 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. Furthermore, if the vesting schedule of a plan is amended, in the case of an employee who is a participant as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such employee's right to his employer-derived accrued benefit will not be less than his percentage computed under the plan without regard to such amendment. (d) No amendment to the vesting schedule adopted by the employer hereunder shall deprive a participant of his vested portion of his employer contribution accounts to the date of such amendment. If the plan's vesting schedule is amended, or the plan is amended in any way that directly or indirectly affects the computation of the participant's nonforfeitable percentage or if the plan is deemed amended by an automatic change to or from a top-heavy vesting schedule, each participant with at least 3 years of service with the employer may elect, within a reasonable period after the adoption of the amendment or change, to have the nonforfeitable percentage computed under the plan without regard to such amendment or change. For participants who do not have at least one hour of service in any plan year beginning after December 31, 1988, "5 years of service" shall be substituted for "3 years of service" in the preceding sentence. The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of: (1) 60 days after the amendment is adopted; (2) 60 days after the amendment becomes effective; or (3) 60 days after the participant is issued written notice of the 40 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan amendment by the employer or plan administrator. Section 7.3 - Protection of Benefits in Case of Plan Merger In the event of a merger or consolidation with, or transfer of assets to any other plan, each participant will receive a benefit immediately after such merger, consolidation or transfer (if the plan then terminated) which is at least equal to the benefit the participant was entitled to immediately before such merger, consolidation or transfer (if the plan had terminated). Section 7.4 - Termination of Plan (a) When Plan Terminates - This plan shall terminate upon the happening of any of the following events: legal adjudication of the employer as bankrupt; a general assignment by the employer to or for the benefit of its creditors; the legal dissolution of the employer; or termination of the plan by the employer. (b) Allocation of Assets - Upon termination, partial termination, or complete discontinuance of employer contributions, the account balance(s) of each affected participant who is an active participant or who is not an active participant but has neither received a complete distribution of his vested accrued benefit nor incurred five one-year breaks in service shall be 100% vested and nonforfeitable. The amount of the fund assets shall be allocated to each participant, subject to provisions for expenses of administration of the liquidation, in the ratio that such participant's account(s) bears to all accounts. If a participant under this plan has terminated his employment at any time after the first day of the plan year in which the employer made his final contribution to the plan, and if any portion of any account of such terminated participant was forfeited and reallocated to the remaining participants, such forfeiture shall be reversed and the forfeited amount shall be credited to the account of such terminated participant. ARTICLE VIII - MISCELLANEOUS PROVISIONS Section 8.1 - Exclusive Benefit - Non-Reversion The plan is created for the exclusive benefit of the employees of the employer and shall be interpreted in a manner consistent with its being a qualified plan as defined in section 401(a) of the Internal Revenue Code and with ERISA. The corpus or income of the trust may not be diverted to or used for other than the exclusive benefit of the participants or their beneficiaries (except for defraying reasonable expenses of administering the plan). Notwithstanding the above, a contribution paid by the employer to the trust may be repaid to the employer under the following circumstances: (a) Any contribution made by the employer because of a mistake of fact must be returned to the employer within one year of the contribution. (b) In the event the deduction of a contribution made by the employer is disallowed under Code section 404, such contribution (to the extent disallowed) must be returned to the employer within one year of the disallowance of the deduction. (c) If the Commissioner of Internal Revenue determines that the plan is not initially qualified under the Internal Revenue Code, any contribution made incident to that initial qualification by the employer must be returned to the employer within one year after the date the initial qualification is denied, but only if the application for the qualification is made by the time prescribed by law for filing the employer's return for the taxable year in which the plan is adopted, or such later date as the Secretary of the Treasury may prescribe. Section 8.2 - Inalienability of Benefits No benefit or interest available hereunder including any annuity contract distributed herefrom shall be subject to assignment or alienation, either voluntarily or involuntarily. The preceding sentence shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a participant pursuant to a domestic relations order, unless such order is determined to be a qualified domestic relations order as defined in Code section 414(p), or any domestic relations order entered before January 1, 1985. A loan made to a participant and secured by his nonforfeitable account balance(s) under Section 4.4(b) will not be treated as an assignment or alienation and such securing account balance(s) shall be subject to attachment by the plan in the event of default. 41 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan Notwithstanding the preceding paragraph, effective with respect to judgments, orders, and decrees issued, and settlement agreements entered into, on or after August 5, 1997, a participant's benefit (and that of his spouse) shall be reduced to satisfy liabilities of the participant to the plan due to (1) the participant being convicted of committing a crime involving the plan, (2) a civil judgment (or consent order or decree) entered by a court in an action brought in connection with a violation of the fiduciary provisions of part 4 of subtitle B of Title I of ERISA, or (3) a settlement agreement between the Secretary of Labor or the Pension Benefit Guaranty Corporation and the participant in connection with a violation of the fiduciary provisions of ERISA. No reduction shall be made pursuant to this paragraph, unless the judgment, order, decree, or settlement agreement shall expressly provide for the offset of all or part of the amount ordered or required to be paid to the plan against the participant's benefits provided under the plan. Section 8.3 - Employer-Employee Relationship This plan is not to be construed as creating or changing any contract of employment between the employer and its employees, and the employer retains the right to deal with its employees in the same manner as though this plan had not been created. Section 8.4 - Binding Agreement This plan shall be binding on the heirs, executors, administrators, successors and assigns as such terms may be applicable to any or all parties hereto, and on any participants, present or future. Section 8.5 - Separability If any provision of this plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof and this plan shall be construed and enforced as if such provision had not been included. Section 8.6 - Construction The plan shall be construed in accordance with the laws of the state in which the employer was incorporated and with ERISA. Section 8.7 - Copies of Plan This plan may be executed in any number of counterparts, each of which shall be deemed as an original, and said counterparts shall constitute but one and the same instrument which may be sufficiently evidenced by any one counterpart. Section 8.8 - Interpretation Wherever appropriate, words used in this plan in the singular may include the plural or the plural may be read as singular, and the masculine may include the feminine. 42 Copyright @ 2001 by Conrad M. Siegel, Inc. Weis Markets, Inc. Stock Bonus Plan IN WITNESS WHEREOF, the Employer has caused this Plan to be executed this 12 day of November, 2001. WEIS MARKETS, INC. By: /S/Willam R. Mills Title: Vice President Finance EX-10 6 wrmcontract2003.txt EXHIBIT 10-G EXECUTIVE EMPLOYMENT CONTRACT - CFO EMPLOYMENT AGREEMENT THIS AGREEMENT, made effective as of January 1, 2003 by and between WEIS MARKETS, INC., a Pennsylvania corporation (the "Company"), and William R. Mills (the "Executive"), WITNESSETH THAT: WHEREAS, the Executive is currently serving as Chief Financial Officer / Treasurer of the Company, and the Company desires to retain the Executive to continue to serve in such capacity or capacities as the Board of Directors of the Company (the "Board") or the Chairman of the Board (the "Chairman") may from time to time determine, and the Executive is willing to continue to serve in such capacity or capacities, on the terms and conditions herein set forth; NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto, each intending to be legally bound hereby, agree as follows: 1. Employment. The Company agrees to continue to employ the Executive, and the Executive agrees to continue to be employed by the Company, for the Term provided in Paragraph 3(a) below and upon the other terms and conditions hereinafter provided. The Executive hereby represents and warrants that he has the legal capacity to execute and perform this Agreement, that it is a valid and binding agreement, enforceable against him according to its terms, and that its execution and performance by him do not violate the terms of any existing agreement or understanding to which the Executive is a party. 2. Position and Responsibilities. During the Term, the Executive agrees to serve as the Chief Financial Officer/ Treasurer of the Company or in such other executive capacity or capacities for the Company and/or any of its subsidiaries or affiliated companies as the Board or the Chairman may from time to time determine. The Executive also agrees to serve, if elected and without additional compensation, as a member of the Board and/or as an officer and director of any other parent, subsidiary or affiliate of the Company. 3. Term and Duties. (a) Term of Agreement. The term of the Executive's employment under this Agreement shall commence on January 1, 2003 and shall continue thereafter through December 31, 2007 (the "Term"). (b) Duties. During the Term, and except for illness or incapacity and reasonable vacation periods of not less than five weeks in any calendar year (or such greater periods as shall be consistent with the Company's policies for other key the Executives), the Executive shall devote all of his business time, attention, skill and efforts exclusively to the business and affairs of the Company and its subsidiaries and affiliates, shall not be engaged in any other business activity, and shall perform and discharge well and faithfully the duties which may be assigned to him from time to time by the Board or the Chairman; provided, however, that nothing in this Agreement shall preclude the Executive from devoting time during reasonable periods required for: (i) serving, in accordance with the Company's policies and with the prior approval of the Board or the Chairman, which prior approval will not be unreasonably withheld, as a director of any company or organization involving no actual or potential conflict of interest with the Company or any of its subsidiaries or affiliates; (ii) delivering lectures and fulfilling speaking engagements; (iii) engaging in charitable and community activities; and (iv) investing his personal assets in businesses in which his participation is solely that of an investor in such form or manner as will not violate Section 7 below or require any services on the part of the Executive in the operation or the affairs of such business, provided, however, that such activities do not materially affect or interfere with the performance of the Executive's duties and obligations to the Company. 4. Compensation. For all services rendered by the Executive in any capacity required hereunder during the Term, including, without limitation, services as an the Executive, officer, director, or member of any committee of the Company or any subsidiary, affiliate or division thereof, the Executive shall be compensated as set forth below: (a) Base Salary. The Executive shall be paid a fixed salary ("Base Salary") of $285,000 per annum as of the effective date of this Agreement. The Base Salary amount is subject to periodic review and adjustment by the Board or its Executive Compensation Committee but shall not be less than $285,000 per annum during the Term of this Agreement. Base Salary shall be payable in accordance with the customary payroll practices of the Company, but in no event less frequently than monthly. (b) Bonus. The Executive shall be eligible to participate in such annual or long-term bonus or incentive plans as the Company shall from time to time maintain for its senior the Executives. The basis for the Executive's participation shall be the same as for other similarly situated the Executives, and it is understood that awards under any such plan may be discretionary. (c) Equity-Based Compensation. The Executive shall be eligible to participate in, and to be granted stock options, stock appreciation rights or other equity-based awards under, the Company's 1995 Stock Option Plan or such other stock option, stock ownership, stock incentive or other equity-based compensation plans as the Company shall from time to time maintain for its senior the Executives. The basis for the Executive's participation shall be the same as for other similarly situated the Executives, and it is understood that awards under any such plan may be discretionary. (d) SERP Contribution. During the Term, the Company's annual contributions to the Executive's accounts under the Company's Supplemental Executive Retirement Plan (together with any successor plan, the "SERP") shall be determined annually by the Compensation Committee of the Board of Directors (e) Additional Benefits. Except as modified by this Agreement, the Executive shall be entitled to participate in all compensation or employee benefit plans or programs, and to receive all benefits, perquisites and emoluments, for which any member of senior management at the Company is eligible under any plan or program now or hereafter established and maintained by the Company for senior officers, to the extent permissible under the general terms and provisions of such plans or programs and in accordance with the provisions thereof, including group hospitalization, health, dental care, senior executive life or other life insurance, travel or accident insurance, disability plans, tax-qualified or non-qualified pension, savings, thrift and profit- sharing plans, deferred compensation plans, sick-leave plans, auto allowance or auto lease plans, and executive contingent compensation plans, including, without limitation, capital accumulation programs and stock purchase plans. Notwithstanding the foregoing, the Executive acknowledges and agrees that the severance payments provided in certain circumstances under this Agreement are in lieu of any rights which the Executive might otherwise have under any and all other displacement, separation or severance plans or programs of the Company, and the Executive hereby waives all rights to participate in any of such plans or programs in the event of the termination of his employment during the Term. 5. Business Expenses. The Company shall pay or reimburse the Executive for all reasonable travel and other expenses incurred by the Executive (and his spouse where there is a legitimate business reason for his spouse to accompany him) in connection with the performance of his duties and obligations under this Agreement, subject to the Executive's presentation of appropriate vouchers in accordance with such policies and procedures as the Company from time to time establish for senior officers. 6. Effect of Termination of Employment; Effect of Disability. (a) Without Cause Termination or Termination by the Executive for Good Reason. Subject to the provisions of Section 7 below, in the event the Executive's employment hereunder terminates due to either a Without Cause Termination (as defined in Section 6(f)(iii)) or a termination by the Executive for Good Reason (as defined in Section 6(f)(ii)): (i) earned but unpaid Base Salary as of the Date of Termination (as defined in Section 14(b)) and any earned but unpaid bonuses for prior years (collectively, the "Accrued Obligations"), shall be payable in full, and the Company shall, as liquidated damages or severance pay, or both: (A) continue to pay the Executive's Base Salary, as in effect at the Date of Termination, from the Date of Termination until the end of the Term, and (B) pay to the Executive for the year of termination and for each subsequent calendar year or portion thereof during the remainder of the Term, an amount (prorated in the case of any partial year) equal to the highest annual incentive bonus received by the Executive for any year in the three years preceding the Date of Termination, such payments to be made at the normal times for payment of bonuses under the Company's annual bonus plan as in effect at the Date of Termination (the "Bonus Plan"). With respect to the payments provided for in this Section 6(a)(i), the Executive shall be entitled, to the extent permitted by law as determined by the Company in good faith, to participate in any compensation deferral plans or arrangements then provided by the Company to senior the Executives on the same basis as if he had remained an employee through the end of the Term. (ii) Until the end of the Term, the Company shall pay to the Executive, in lieu of Company contributions to the SERP and at the time such contributions would otherwise have been made to the SERP, the amount no less than what was made to the SERP the year prior to Termination. (iii) The Company shall continue to provide the Executive and the Executive's spouse through December 31, 2001 with medical, dental, accident, disability and life insurance benefits upon substantially the same terms and conditions (including contributions required by the Executive for such benefits) as those of the applicable employee benefit plans in effect from time to time as applied to employees; provided, however, that if the Executive or his spouse cannot continue to participate under the terms of the Company plans providing such benefits, the Company shall otherwise provide such benefits on (as nearly as reasonably practicable) the same after-tax basis as if continued participation had been permitted. Notwithstanding the foregoing, in the event the Executive becomes re- employed with another employer and becomes eligible to receive welfare benefits from such employer, the welfare benefits described herein shall be secondary to such benefits during the period of the Executive's eligibility, but only to the extent that the Company reimburses the Executive for any increased cost and provides any additional benefits necessary to give the Executive the benefits provided hereunder. (iv) The Executive shall be entitled to vested benefits under all other compensation or benefit plans in which the Executive participated as of the date of termination, as determined under the terms of the applicable plan or agreement. (b) Disability. In the event of the Executive's Disability, the Company may, by giving a Notice of Disability as provided in Section 14(c), remove the Executive from active employment and in that event shall provide the Executive with the same payments and benefits as those provided in Section 6(a), except that: (i) Base Salary payments under Section 6(a)(i)(A) shall be at the rate 50% of the Executive's Base Salary as in effect at the Date of Disability; (ii) in lieu of the bonus payments provided in Section 6(a)(i)(B), the Executive shall receive, at the same time as bonus payments for the year of Disability would otherwise be made under the Bonus Plan, a prorated bonus for the year of Disability only equal to the amount determined by the Company in good faith (which determination shall be final and conclusive) to be the amount of the bonus award the Executive would have received if he had been employed throughout the bonus year, prorated on a daily basis as of the Date of Disability; and (iii) except for Accrued Obligations, Base Salary payments shall be offset by any amounts otherwise payable to the Executive under the Company's disability program generally available to other employees. (c) Death. In the event the Executive's employment hereunder terminates due to death: (i) Accrued Obligations as of the date of death shall be payable in full; (ii) from the date of the Executive's death until the end of the Term, the Company shall, at the same times Base Salary would otherwise be payable hereunder, make payments at the rate of 50% of the Executive's Base Salary in effect at the date of death to (A) the Executive's spouse at the date of his death, should she survive him and (B) following the death of the Executive's spouse or should she not survive him, to the Executive's estate; (iii) the Company shall pay to the Executive's estate, at the same time as bonus payments for the year of death would otherwise be made under the Bonus Plan, a prorated bonus for the year of death only equal to the amount determined by the Company in good faith (which determination shall be final and conclusive) to be the amount of the bonus award the Executive would have received if he had been employed throughout the bonus year, prorated on a daily basis as of the date of death; and (iv) in the event the Executive is survived by his spouse, the Company shall continue to provide the Executive's spouse through December 31, 2011 with medical and dental insurance benefits in accordance with Section 6(a)(iii) above; (d) Other Termination of Employment. In the event the Executive's employment hereunder terminates due to a Termination for Cause or the Executive terminates employment with the Company other than for Good Reason, Disability, Retirement or death, Accrued Obligations and vested benefits as of the Date of Termination shall be payable in full. No other payments shall be made, or benefits provided, by the Company except for benefits which have already become vested under the terms of employee benefit programs maintained by the Company or its affiliates for its employees generally as provided in Section 10. (e) Definitions. For purposes of this Agreement, the following terms, when capitalized, shall have the following meanings unless the context otherwise requires: (i) "Termination for Cause" means, to the maximum extent permitted by applicable law, a termination of the Executive's employment by the Company by a vote of the majority of the Board members then in office, because the Executive (a) has been convicted of, or has entered a plea of nolo contendere to, a criminal offense involving moral turpitude, or (b) has willfully continued to fail to substantially perform his duties with the Company (other than any such failure resulting from the Executive's incapacity due to physical or mental illness or any such failure subsequent to the Executive being delivered a Notice of Termination without Cause by the Company or delivering a Notice of Termination for Good Reason to the Company) after a written demand for substantial performance is delivered to the Executive by the Board which specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties or (c) has committed an improper action resulting in personal enrichment at the expense of the Company or (d) has engaged in illegal or gross misconduct that is materially and demonstrably injurious to the Company, or (e) has violated the representations made in Section 1 above, or the provisions of Section 7 below; provided, however, that the Board has given the Executive advance notice of such Termination for Cause including the reasons therefor, together with a reasonable opportunity for the Executive to appear with counsel before the Board and to reply to such notice. (ii) a "termination by the Executive for 'Good Reason'" shall mean a termination of his employment by the Executive: (A) by a Notice of Termination given during the period beginning 30 days and ending 180 days following the occurrence of a Change of Control, regardless of the reason or lack of reason for such termination; or (B) by a Notice of Termination given otherwise during the period beginning on the date of a Change of Control and ending on the second anniversary of the date of the Change of Control due to: (1) any change in the duties or responsibilities (including reporting responsibilities) of the Executive that is inconsistent in any material and adverse respect with the Executive's position(s), duties, responsibilities or status with the Company immediately prior to such Change of Control (including any material and adverse diminution of such duties or responsibilities); (2) a material and adverse change in the Executive's titles or offices (including, if applicable, membership on the Board) with the Company as in effect immediately prior to such Change of Control; (3) a material and adverse change in the aggregate value of the Executive's compensation and benefits as in effect during the 12 months immediately prior to such Change of Control; (4) any requirement of the Company that the Executive be based anywhere more than 60 miles from the office where the Executive is located at the time of the Change of Control; or (5) the failure of the Company to obtain the assumption of this Agreement from any Surviving Corporation as contemplated in Section 6(f)(iv)(B)(4). (C) at any time due to: (1) any reduction without the consent of the Executive in the Executive's salary below the amount then provided for under Paragraph 4(a) hereof; or (2) a failure of the Company or its successor to fulfill its obligations under this Agreement in any material respect. An isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company within 10 days after receipt of notice thereof given by the Executive shall not constitute Good Reason. The Executive's right to terminate employment for Good Reason shall not be affected by the Executive's incapacities due to mental or physical illness and the Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason; provided, however, that the Executive must provide notice of termination of employment within 180 days following the Executive's knowledge of an event constituting Good Reason or such event shall not constitute Good Reason under this Agreement. (iii) "Without Cause Termination" means a termination of the Executive's employment by the Company other than due to Disability or expiration of the Term and other than a Termination for Cause. (iv) "Change of Control" means the occurrence of any of the following events: (A) individuals who on the effective date of this Agreement constitute the Board (the "Incumbent Directors") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the effective date, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection by such Incumbent Directors to such nomination) shall be deemed to be an Incumbent Director; provided, however, that no individual elected or nominated as a director of the Company initially as a result of an actual or threatened election contest with respect to directors or any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director; or (B) Any merger, consolidation, division, share exchange, sale or other transfer of assets, liquidation or other transaction or series of related transactions outside the ordinary course of business involving the Company or any of its subsidiaries (a "Business Combination"), unless immediately following such Business Combination there shall be a corporation (the "Surviving Corporation") which meets each of the following requirements: (1) the Surviving Corporation owns, directly or indirectly through subsidiaries, consolidated assets of the Company which immediately prior to the Business Combination had an aggregate book value equal to more than 75% of the book value of the Company's consolidated total assets as of the close of the most recent fiscal quarter ended on or prior to the date of the first public announcement of the Business Combination; (2) at least a majority of the voting power in the election of directors of the Surviving Corporation is held by the shareholders of the Company having such power in the election of the Board immediately prior to the Business Combination and, other than as a result of an election by such shareholders to receive consideration other than in shares of the Surviving Corporation, such voting power is held by such shareholders in substantially the same proportions as immediately prior to the Business Combination; (3) at least a majority of the members of the board of directors of the Surviving Corporation were Incumbent Directors at the time of the Board's approval of the execution of the initial agreement providing for such Business Combination; and (4) the Surviving Corporation, if other than the Company, shall have expressly assumed in writing the obligations of the Company under this Agreement. (v) "Disability" for purposes of this Agreement means the Executive shall be disabled so as to be unable to perform for 180 days in any 365-day period, with or without reasonable accommodation, the essential functions of his positions under this Agreement, as determined by a person or entity experienced in this field selected by the Company and acceptable to the Executive or his representative. (vi) "Retirement" means a voluntary termination of his employment by the Executive (1) on or after attainment of age 65, (2) on not less than 6 months' Notice of Retirement as provided in Section 14 and (4) under circumstances not constituting a Termination for Cause, Without Cause Termination, termination for Good Reason, Disability or death. (vii) The "Date of Termination," "Date of Disability" and "Date of Retirement" shall have the meanings ascribed to them in Section 14. To the fullest extent permitted by applicable law, to the extent this Agreement requires the payment of Base Salary and/or the provision of coverages and benefits subsequent to the Date of Termination or Date of Disability, the Executive's Date of Termination or Date of Disability, as applicable, shall not be treated as a termination of employment (a "Benefit Plan Termination Date") from the Company for purposes of determining the Executive's rights, responsibilities and tax treatment under any and all employee pension, welfare and fringe benefit plans maintained by the Company. Rather, the Benefit Plan Termination Date shall be the day following the last day for which any Base Salary and/or coverages and benefits are required to be provided by this Agreement. 7. Other Duties of the Executive During and After Term. (a) Confidential Information. The Executive recognizes and acknowledges that certain information pertaining to the affairs, business, suppliers, or customers of the Company or any of its subsidiaries or affiliates (any or all of such entities hereinafter referred to as the "Business"), as such information may exist from time to time, is confidential information and is a unique and valuable asset of the Business, access to and knowledge of which are essential to the performance of his duties under this Agreement. The Executive shall not, through the end of the Term or at any time thereafter, except to the extent reasonably necessary in the performance of his duties under this Agreement, divulge to any person, firm, association, corporation or governmental agency, any information concerning the affairs, business, suppliers, or customers of the Business (except such information as is required by law to be divulged to a government agency or pursuant to lawful process or such information which is or shall become part of the public realm through no fault of the Executive), or make use of any such information for his own purposes or for the benefit of any person, firm, association or corporation (except the Business) and shall use his reasonable best efforts to prevent the disclosure of any such information by others. All records and documents relating to the Business, whether made by the Executive or otherwise coming into his possession are, shall be, and shall remain the property of the Business. No copies thereof shall be made which are not retained by the Business, and the Executive agrees, on any termination of his employment, or on demand of the Company, to deliver the same to the Company. (b) Non-Competition. During his employment by the Company, whether during or after the Term, and for a period of four years following the termination of his employment for any reason except for a Without Cause Termination or termination by the Executive for Good Reason, the Executive shall not, without express prior written approval by order of the Board, directly or indirectly, engage in, whether as an officer, director, employee, consultant, agent, partner, joint venturer, proprietor or otherwise, become interested in (other than as a shareholder owning not more than 1% of the outstanding shares of any class of securities registered under Section 12 of the Securities Exchange Act of 1934) or assist any business which (i) is in competition with the Company or any of its affiliates in the retail grocery business or (A) during his employment, in any other business in which the Company or any of its subsidiaries is then engaged or proposes to engage or (B) following the termination of his employment, in any other business which during the 12 months preceding the Executive's Date of Termination accounted for more than 2% of the Company's consolidated revenues and (ii) engages in any such business in any county in which the Company then engages in such business or any county contiguous thereto. (c) Non-Interference. During his employment with the Company and until four years after the termination of the Executive's employment, whether during or after the Term and notwithstanding the cause of termination, the Executive shall not (i) hire or employ, directly or indirectly through any enterprise with which he is associated, any employee of the Company or any of its affiliates or (ii) recruit, solicit or induce (or in any way assist another person or enterprise in recruiting, soliciting or inducing) any such employee or any consultant, vendor or supplier of the Company or any of its affiliates to terminate or reduce such person's employment, consulting or other relationship with the Company or any of its affiliates. (d) Remedies. The Company's obligation to make payments or provide for or increase any benefits under this Agreement (except to the extent previously vested) shall cease upon any violation of the provisions of this Section 7; provided, however, that the Executive shall first have the right to appear before the Board with counsel and that such cessation of payments or benefits shall require a vote of a majority of the Board members then in office. In addition, in the event of a violation by the Executive of the provisions of this Section 7, the Company shall be entitled, if it shall so elect, to institute legal proceedings to obtain damages for any such breach, and/or to enforce the specific performance by the Executive of this Section 7 and to enjoin the Executive from any further violation, and may exercise such remedies cumulatively or in conjunction with such other remedies as may be available to the Company at law or in equity. The Executive acknowledges, however, that the remedies at law for any breach by him of the provisions of this Section 7 would be inadequate and agrees that the Company shall be entitled to injunctive relief against him in the event of any such breach. (d) Survival; Authorization to Modify Restrictions. The covenants of the Executive contained in this Section 7 shall survive any termination of the Executive's employment for the periods stated herein, whether during or after the Term and, except as otherwise provided in this Section 7, regardless of the reason for such termination. The Executive represents that his experience and capabilities are such that the enforcement of the provisions of this Section 7 will not prevent him from earning his livelihood, and acknowledges that it would cause the Company serious and irreparable injury and cost if the Executive were to use his ability and knowledge in competition with the Company or to otherwise breach the obligations contained in this Section 7. Accordingly, it is the intention of the parties that the provisions of this Section 7 shall be enforceable to the fullest extent permissible under applicable law, but that the unenforceability (or modification to conform to such law) of any provision or provisions hereof shall not render unenforceable, or impair, the remainder thereof. If any provision or provisions hereof shall be deemed invalid or unenforceable, either in whole or in part, this Agreement shall be deemed amended to delete or modify, as necessary, the offending provision or provisions and to alter the bounds thereof to the extent required in order to render it valid and enforceable. 8. Certain Additional Payments by the Company. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) or any entity which effectuates a Change of Control (or any of its affiliated entities) to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 8) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to the Executive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in the Executive's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross- Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to the Gross-Up Payment. Notwithstanding the foregoing provisions of this Section 8(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 5% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to the Executive under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to the Executive without giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to the Executive. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 6(a)(ii), unless an alternative method of reduction is elected by the Executive. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. (b) Subject to the provisions of Section 8(a), all determinations required to be made under this Section 8, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change of Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Company or the Executive that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company, and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 8 with respect to any Payments shall be made no later than 30 days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on the Executive's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish the Executive with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Executive thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of the Executive. In the event the amount of the Gross- Up Payment exceeds the amount necessary to reimburse the Executive for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made, and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by the Executive (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. The Executive shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 9. Resolution of Disputes. Except as otherwise provided in Section 7(d) hereof, any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Sunbury, Pennsylvania, by three arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators' award in any court having jurisdiction. In the event of any arbitration, litigation or other proceeding between the Company and the Executive with respect to the subject matter of this Agreement and the enforcement of rights hereunder, the Company shall reimburse the Executive for his reasonable costs and expenses relating to such arbitration, litigation or other proceeding, including attorneys' fees and expenses, to the extent that such arbitration, litigation or other proceeding results in any: (i) settlement requiring the Company to make a payment, continue to make payments or provide any other benefit to the Executive; or (ii) judgment, order or award against the Company in favor of the Executive or his spouse, legal representative or heirs, unless such judgment, order or award is subsequently reversed on appeal or in a collateral proceeding. At the request of the Executive, costs and expenses (including attorneys' fees) incurred in connection with any arbitration, litigation or other proceeding referred to in this Section shall be paid by the Company in advance of the final disposition of the arbitration, litigation or other proceeding upon receipt of an undertaking by or on behalf of the Executive to repay the amounts advanced if it is ultimately determined that he is not entitled to reimbursement of such costs and expenses by the Company as set forth in this Section. 10. Full Settlement; No Mitigation; Non-Exclusivity of Benefits. The Company's obligation to make any payment provided for in this Agreement and otherwise to perform its obligations hereunder shall be in lieu and in full settlement of all other severance payments to the Executive under any other severance plan, arrangement or agreement of the Company and its affiliates, and in full settlement of any and all claims or rights of the Executive for severance, separation and/or salary continuation payments resulting from the termination of his employment. In no event shall the Executive be obligated to seek other employment or to take other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and except as specifically provided herein, such amounts shall not be reduced whether or not the Executive obtains other employment. Except as provided above in this Section 10, nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliates for which the Executive may qualify, nor, except as otherwise specifically provided in this Agreement, shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliates, including without limitation any stock option agreement. Amounts or benefits which are vested benefits or which the Executive is otherwise entitled to receive under any such plan, program, policy, practice, contract or agreement prior to, at or subsequent to any Date of Termination, Date of Disability or Date of Retirement shall be paid or provided in accordance with the terms of such plan, program, policy, practice, contract or agreement except as explicitly modified by this Agreement. 11. Employment and Payments by Affiliates. Except as herein otherwise specifically provided, references in this Agreement to employment by the Company shall include employment by affiliates of the Company, and the obligation of the Company to make any payment or provide any benefit to the Executive hereunder shall be deemed satisfied to the extent that such payment is made or such benefit is provided by any affiliate of the Company. 12. Withholding Taxes. The Company may directly or indirectly withhold from any payments made under this Agreement all Federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling. 13. Consolidation, Merger, or Sale of Assets. Nothing in this Agreement shall preclude the Company from consolidating or merging into or with, or transferring all or substantially all of its assets to, another corporation or entity which assumes this Agreement and all obligations and undertakings of the Company hereunder. Upon such a consolidation, merger or transfer of assets and assumption, the term, "Company" as used herein shall mean such other corporation or entity, and this Agreement shall continue in full force and effect. 14. Notices. (a) General. All notices, requests, demands and other communications required or permitted hereunder shall be given in writing and shall be deemed to have been duly given when delivered or 5 days after being deposited in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows: (i) To the Company: Weis Markets, Inc. 1000 S. Second Street P.O. Box 471 Sunbury, PA 17801 Attention: Norman S. Rich (ii) To the Executive: William R. Mills R.R. 6 Lewisburg, PA 17837 or to such other address as the addressee party shall have previously specified in writing to the other. (b) Notice of Termination. Except in the case of death of the Executive, any termination of the Executive's employment hereunder, whether by the Executive or the Company, shall be effected only by a written notice given to the other party in accordance with this Section 14 (a "Notice of Termination"). Any Notice of Termination shall (i) indicate the specific termination provision in Section 6 relied upon, (ii) in the case of a termination by the Company for Cause or by the Executive for Good Reason, set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination and (iii) specify the effective date of such termination of employment (the "Date of Termination"), which shall not be less than 15 days nor more than 60 days after such notice is given. The failure of the Executive or the Company to set forth in any Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder. (c) Notice of Disability. Any finding of Disability by the Company shall be effected only by a written notice given to the Executive in accordance with this Section 14 (a "Notice of Disability"). Any Notice of Disability shall (i) set forth in reasonable detail the facts and circumstances claimed to provide a basis for such finding of Disability and (ii) specify an effective date (the "Date of Disability"), which shall not be less than 10 days after such notice is given. The failure of the Company to set forth in any Notice of Disability any fact or circumstance which contributes to a showing of Disability shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company's rights hereunder. (d) Notice of Retirement. Retirement shall be effected only by a written notice given by the Executive in accordance with this Section 14 (a "Notice of Retirement"). Any Notice of Retirement shall (i) indicate that it is a Notice of Retirement and (ii) specify an effective date (the "Date of Retirement) which shall not be less than six months after such notice is given. 15. No Attachment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect; provided, however, that nothing in this Section 15 shall preclude the assumption of such rights by executors, administrators, or other legal representatives of the Executive or his estate or their assigning any rights hereunder to the person or persons entitled thereto. 16. Source of Payments. Subject to Section 11 hereof, all payments provided for under this Agreement shall be paid in cash from the general funds of the Company. The Company shall not be required to establish a special or separate fund or other segregation of assets to assure such payments, and, if the Company shall make any investments to aid it in meeting its obligations hereunder, the Executive shall have no right, title or interest whatever in or to any such investments except as may otherwise be expressly provided in a separate written instrument relating to such investments. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and the Executive or any other person. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor. 17. Binding Agreement. This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and the Company and, as permitted by this Agreement, their respective successors, assigns, heirs, beneficiaries and representatives. 18. Governing Law. The validity, interpretation, performance and enforcement of this Agreement shall be governed exclusively by the laws of the Commonwealth of Pennsylvania, without regard to principles of conflicts of laws thereof. 19. Counterparts; Headings. This Agreement may be executed in counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. The underlined Section headings contained in this Agreement are for convenience of reference only and shall not affect the interpretation or construction of any provision hereof. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officer thereunto duly authorized, and the Executive has signed this Agreement, all as of the date first above written. WEIS MARKETS, INC. By: /S/Norman S. Rich --------------------------- Name: Norman S. Rich Title: President/ CEO /S/William R. Mills --------------------------- William R. Mills EX-10 7 creditagreement.htm EXHIBIT 10-H REVOLVING CREDIT AGREEMENT

[Conformed Copy]

REVOLVING CREDIT AGREEMENT

by and among

WEIS MARKETS, INC.,

the LENDERS referred to herein,

the ISSUING BANK referred to herein,

and

MELLON BANK, N.A.,

as Administrative Agent

Dated as of October 15, 2002

TABLE OF CONTENTS

ARTICLE I DEFINITIONS; CONSTRUCTION			1
	1.1	Certain Definitions	1
	1.2	Construction	11
	1.3	Accounting Principles	12
ARTICLE II THE CREDITS			12
	2.1	Revolving Credit Loans	12
	2.2	Revolving Credit Commitment Fee; Reduction of the Revolving Credit Committed Amounts	13
	2.3	Making of Loans	13
	2.4	Interest Rates	14
	2.5	Conversion or Renewal of Interest Rate Options	16
	2.6	Prepayments	17
	2.7	Interest Payment Dates	17
	2.8	Pro Rata Treatment; Payments Generally	18
	2.9	Additional Compensation in Certain Circumstances	18
	2.10	Taxes	20
	2.11	Tax Forms	21
ARTICLE III THE LETTERS OF CREDIT			22
	3.1	The Letters of Credit	23
	3.2	Procedure for Issuance and Amendment of Letters of Credit	23
	3.3	Letter of Credit Participating Interests	24
	3.4	Letter of Credit Drawings and Reimbursements	25
	3.5	Obligations Absolute	26
	3.6	Further Assurances	26
	3.7	Cash Deposit for Letters of Credit	27
	3.8	Certain Provisions Relating to the Issuing Bank	28
	3.9	Existing Letters of Credit	28
ARTICLE IV REPRESENTATIONS AND WARRANTIES			29
	4.1	Corporate Status	29
	4.2	Corporate Power and Authorization	29
	4.3	Execution and Binding Effect	29
	4.4	Governmental Approvals and Filings	29
	4.5	Absence of Conflicts	29
	4.6	Audited Financial Statements	30
	4.7	Interim Financial Statements	30
	4.8	Absence of Material Adverse Changes	31
	4.9	Absence of Material Adverse Changes	31
	4.10	Projections	31
	4.11	Solvency	31
	4.12	Accurate and Complete Disclosure	31
	4.13	Margin Regulations	31
	4.14	Subsidiaries	31
	4.15	Partnerships, etc.	32
	4.16	Litigation	32
	4.17	Absence of Events of Default	32
	4.18	Absence of Other Conflicts	32
	4.19	Insurance	32
	4.20	Title to Property	32
	4.21	Intellectual Property	33
	4.22	Taxes	33
	4.23	Employee Benefit Plans	33
	4.24	Environmental Compliance	33
	4.25	Investment Company	34
ARTICLE V CONDITIONS OF LENDING			34
	5.1	Conditions to Initial Loans	34
	5.2	Conditions to All Loans	35
ARTICLE VI AFFIRMATIVE COVENANTS			35
	6.1	Basic Reporting Requirements	35
	6.2	Insurance	37
	6.3	Payment of Taxes and Other Potential Charges and Priority Claims	38
	6.4	Preservation of Corporate Status	38
	6.5	Governmental Approvals and Filings	38
	6.6	Maintenance of Properties	38
	6.7	Avoidance of Other Conflicts	38
	6.8	Financial Accounting Practices	39
	6.9	Continuation of or Change in Business	39
	6.10	Use of Proceeds	39
	6.11	Environmental Matters	39
ARTICLE VII NEGATIVE COVENANTS			39
	7.1	Financial Covenants	39
	7.2	Liens	40
	7.3	Indebtedness	41
	7.4	Guaranties, Indemnities, etc.	41
	7.5	Loans, Advances and Investments	42
	7.6	Restricted Stock Repurchases	43
	7.7	Disposal of Assets	43
	7.8	Limitation on Mergers, Consolidations and Dissolutions	43
	7.9	Capital Expenditures; Acquisitions	44
	7.10	Sale	44
	7.11	Dealings with Affiliates	44
	7.12	Limitation on Certain Benefit Liabilities	44
	7.13	Consolidated Tax Return	45
	7.14	Fiscal Year	45
	7.15	Limitation on Other Restrictions on Dividends by Subsidiaries, etc.	45
	7.16	Limitation on Other Restrictions on Amendment of the Loan Documents, etc.	45
	7.17	Limitation on Other Restrictions on Liens.	46
ARTICLE VIII DEFAULTS			46
	8.1	Events of Default	46
	8.2	Consequences of an Event of Default	48
ARTICLE IX THE AGENT			48
	9.1	Appointment	48
	9.2	General Nature of Administrative Agent's Duties	49
	9.3	Exercise of Powers	49
	9.4	General Exculpatory Provisions	50
	9.5	Administration by the Administrative Agent	51
	9.6	Lender Parties Not Relying on Administrative Agent or Other Lender Parties	51
	9.7	Indemnification	51
	9.8	Administrative Agent in its Individual Capacity	51
	9.9	Holders of Notes	51
	9.10	Successor Administrative Agent	52
	9.11	Calculations	52
	9.12	Administrative Agent's Fee	52
	9.13	Funding by Administrative Agent	52
ARTICLE X MISCELLANEOUS			53
	10.1	Holidays	53
	10.2	Records	53
	10.3	Amendments and Waivers	53
	10.4	No Implied Waiver; Cumulative Remedies	54
	10.5	Notices	54
	10.6	Expenses; Taxes; Indemnity	55
	10.7	Severability	56
	10.8	Prior Understandings	56
	10.9	Duration; Survival	56
	10.10	Counterparts	56
	10.11	Limitation on Payments	56
	10.12	Set	56
	10.13	Sharing of Collections	57
	10.14	Successors and Assigns; Participations; Assignments	57
	10.15	Confidentiality	59
	10.16	Governing Law; Submission to Jurisdiction: Waiver of Jury Trial; Limitation of Liability	60

Exhibit A Revolving Credit Note

Exhibit B Transfer Supplement

Exhibit C Subsidiary Guaranty

Exhibit D Compliance Certificate

REVOLVING CREDIT AGREEMENT

THIS REVOLVING CREDIT AGREEMENT, dated as of October 15, 2002, by and among WEIS MARKETS, INC., a Pennsylvania corporation (the "Borrower"), the lenders parties hereto from time to time (the "Lenders", as defined further below), the Issuing Bank referred to herein, MELLON BANK, N.A., a national banking association, as Administrative Agent for the Lenders hereunder (in such capacity, together with its successors in such capacity, the "Administrative Agent").

Recitals:

The Borrower has requested the Administrative Agent, the Lenders and the Issuing Bank to enter into this Agreement and to extend credit to the Borrower as provided herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS; CONSTRUCTION

1.1 Certain Definitions. In addition to other words and terms defined elsewhere in this Agreement, as used herein the following words and terms shall have the following meanings, respectively, unless the context hereof otherwise clearly requires:

"Affected Lender" shall have the meaning set forth in Section 2.4(d) hereof.

"Affiliate" of a Person (the "Specified Person") shall mean (a) any Person which directly or indirectly controls, or is controlled by, or is under common control with, the Specified Person, (b) any director or officer (or, in the case of a Person which is not a corporation, any individual having analogous powers) of the Specified Person or of a Person who is an Affiliate of the Specified Person within the meaning of the preceding clause (a), (c) each member of the Weis Family and (d) the lineal descendants and ascendants and spouses of natural Persons included in clauses (a), (b) or (c). For purposes of the preceding sentence, "control" of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

"Applicable Margin" shall have the meaning set forth in Section 2.4(a) hereof.

"Base Rate" shall have the meaning set forth in Section 2.4(a) hereof.

"Base Rate Option" shall have the meaning set forth in Section 2.4(a) hereof.

"Base Rate Portion" of any Loan or Loans shall mean at any time the portion, including the whole, of such Loan or Loans bearing interest at such time (i) under the Base Rate Option or (ii) in accordance with Section 2.8(c)(ii) hereof.

"Business Day" shall mean any day other than a Saturday, Sunday, public holiday under the laws of the Commonwealth of Pennsylvania or other day on which banking institutions are authorized or obligated to close in Pittsburgh, Pennsylvania.

"Capital Lease" shall mean any lease which, in accordance with GAAP, would be treated as a capitalized item.

"Cash Equivalent Investments" shall mean any of the following, to the extent acquired for investment and not with a view to achieving trading profits: (a) obligations fully backed by the full faith and credit of the United States of America maturing not in excess of one year from the date of acquisition, (b) commercial paper maturing not in excess of nine months from the date of acquisition and rated "P1" by Moody's Investors Service or "A1" by Standard & Poor's Corporation on the date of acquisition, (c) certificates of deposit maturing within one year from the date of acquisition thereof (i) issued by any bank or savings and loan association to the extent insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or (ii) issued by commercial banks or trust companies organized under the laws of the United States or America or any state thereof having not less than $100,000,000 of capital, surplus and undivide d profits, (d) repurchase agreements, having terms of less than thirty (30) days, for government obligations of the type specified in clause (a) above with a United States commercial bank or trust company meeting the requirements of subclause (c)(ii) above, provided that, such repurchase agreements are fully collateralized by such government obligations, or (e) tax exempt obligations issued by the United States of America, any state thereof or any other governmental authority maturing within one year from the date of acquisition thereof and having a rating of not less than MIG-1 (Moody's Investment Grade 1) from Moody's Investors Services, Inc.

"Change of Control" shall mean that at any time any Person or group of Persons (as defined in the Securities Exchange Act of 1934, as amended) not a member of the Weis Family shall own more than 20% of the voting capital stock of the Borrower or more than 20% of the equity securities of the Borrower.

"Closing Date" shall mean October 18, 2002 or such later date as shall be acceptable to the Administrative Agent and the Borrower (but in any event not later than October 31, 2002).

"Code" shall mean the Internal Revenue Code of 1986, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed also to refer to any successor sections.

"Commitment Percentage" of a Lender at any time shall mean the percentage that such Lender's Revolving Credit Committed Amount represents of the aggregate Revolving Credit Committed Amounts of all Lenders.

"Confidential Information" shall have the meaning given in Section 10.15 hereof.

"Consolidated Assets" shall mean at any time, assets of the Borrower and its consolidated subsidiaries at such time, determined in accordance with GAAP.

"Consolidated Capital Expenditures" of any Person shall mean, for any period, all expenditures (whether paid in cash or accrued as liabilities during such period) of such Person during such period which would be classified as capital expenditures in accordance with GAAP (including, without limitation, expenditures for maintenance and repairs which are capitalized, and Capital Leases to the extent an asset is recorded in connection therewith in accordance with GAAP).

"Consolidated Cash Interest Expense" shall mean, for any period, the cash payments of interest on the Consolidated Indebtedness of the Borrower and its consolidated Subsidiaries due and payable by the Borrower and its consolidated Subsidiaries during such fiscal period.

"Consolidated Cash Tax Payments" shall mean, for any period, cash payments by the Borrower and its consolidated Subsidiaries for federal, state and local income taxes during such period.

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"Consolidated EBITDA" shall mean, for any period, the sum of (i) Consolidated Net Income for such period (exclusive of extraordinary gains and losses), (ii) Consolidated Interest Expense for such period, (iii) Consolidated Tax Expense for such period and (iv) depreciation and amortization expense of the Borrower and its consolidated Subsidiaries for such period, all determined in accordance with GAAP.

"Consolidated Indebtedness" shall mean at any time, Indebtedness of the Borrower and its consolidated Subsidiaries at such time determined in accordance with GAAP.

"Consolidated Interest Expense" shall mean, for any period, the payments of interest on the Consolidated Indebtedness of the Borrower and its consolidated Subsidiaries due and payable by the Borrower and its consolidated Subsidiaries during such fiscal period.

"Consolidated Net Income" shall mean, for any period, the consolidated net income of the Borrower and its consolidated Subsidiaries for such period, determined in accordance with GAAP.

"Consolidated Net Worth" at any time shall mean the total amount of stockholders' equity of the Borrower and its consolidated Subsidiaries at such time, determined on a consolidated basis in accordance with GAAP; provided that, each item of the following types shall be deducted, to the extent such item is positive and is otherwise included therein: (a) any write-ups or other revaluation after the Closing Date in the book value of any asset owned by the Borrower or any of its consolidated Subsidiaries (other than write-ups resulting from the acquisition of assets of a business made within one year after such acquisition and accounted for by purchase accounting, and write-ups resulting from the valuation in the ordinary course of business of investment securities and inventory at the lower of cost or market), (b) all investments in and loans and Advances to (i) unconsolidated Subsidiaries of the Borrower, and (ii) Persons that are not Subsidiaries of the Bo rrower (other than Cash Equivalent Investments), and (c) treasury stock.

"Consolidated Tax Expense" shall mean, for any period, charges against income of the Borrower and its consolidated Subsidiaries for federal, state and local income taxes, during such period.

"Corresponding Source of Funds" shall mean the proceeds of hypothetical receipts by a Lender of one or more Dollar deposits in the interbank eurodollar market at the beginning of the Funding Period corresponding to such Funding Segment having maturities approximately equal to such Funding Period and in an aggregate amount approximately equal to such Lender's Pro Rata share of such Funding Segment.

"Dollar," "Dollars" and the symbol "$" shall mean lawful money of the United States of America.

"Environmental Laws" means the Clean Water Act, also known as the Federal Water Pollution Control Act, 33 U.S.C. §1251 et seq., as amended by the Water Quality Act of 1987, Pub. L. No. 100-4 (Feb. 4, 1987), the Toxic Substances Control Act, 15 U.S.C. §2601 et seq., the Clean Air Act, 42 U.S.C. §7401, et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §136 et seq., the Safe Drinking Water Act, 42 U.S.C. §300f et seq., the Surface Mining Control and Reclamation Act, 30 U.S.C. §1021 et seq., the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. §9601 et seq., the Superfund Amendment and Reauthorization Act of 1986 ("SARA"), Public Law 99-499, 100 Stat. 1613, the Emergency Planning and Community Right to Know Act, 42 U.S.C. §11001 et seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S. C. §6901 et seq., and the Occupational Safety and Health Act as amended ("OSHA"), 29 U.S.C. §655 and §657 (but only to the extent that it is an Environmental Law under the definition

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set forth below), as any of the same have been amended or may be further amended from time to time, together with all other Laws now or hereafter existing with respect to Hazardous Substances or relating to pollution or protection of the environment, including without limitation all common laws of nuisance, negligence or strict liability relating thereto and all Laws relating to emissions, discharges, spills, disposal, releases or threatened release of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes into the environment (including without limitation ambient air, surface water, groundwater, land surface or subsurface strata or life therein) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections.

"ERISA Affiliate" shall mean, at any time, any member of a controlled group of corporations under Section 414(b) of the Code of which the Borrower or any Subsidiary is a member, and any trade or business (whether or not incorporated) under common control under Section 414(c) of the Code with the Borrower or any Subsidiary, and all other entities which, together with the Borrower and the Subsidiaries, are treated as a single employer under Section 414(m) or (o) of the Code.

"EuroRate" shall have the meaning set forth in Section 2.4(a) hereof.

"EuroRate Option" shall have the meaning set forth in Section 2.4(a) hereof.

"EuroRate Portion" of any Loan or Loans shall mean at any time the portion, including the whole, of such Loan or Loans bearing interest at any time under the EuroRate Option or at a rate calculated by reference to the EuroRate under Section 2.8(c)(i) hereof. If no Loan or Loans is specified, "EuroRate Portion" shall refer to the EuroRate Portion of all Loans outstanding at such time.

"EuroRate Reserve Percentage" shall have the meaning set forth in Section 2.4(a) hereof.

"Event of Default" shall mean any of the Events of Default described in Section 8.1 hereof.

"Existing Letters of Credit" shall have the meaning set forth in Section 3.9.

"Federal Funds Effective Rate" for any day shall mean the rate per annum (rounded upward to the nearest 1/100 of 1%) determined by the Administrative Agent (which determination shall be conclusive) to be the rate per annum announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided that, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

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"Fiscal Quarter" shall mean each thirteen or fourteen-week fiscal period of the Borrower ending in each March, June, September and December, respectively.

"Fiscal Year" shall mean each annual fiscal period of the Borrower ending on the last Saturday in each December.

"Fixed Charge Coverage Ratio" at the end of any Fiscal Quarter, shall mean the ratio of Consolidated EBITDA for the four Fiscal Quarter period then ending to the sum of (i) Consolidated Cash Interest Expense, (ii) Consolidated Cash Tax Payments, (iii) Scheduled Principal Debt Service, and (iv) dividends paid on or with respect to the Borrower's capital stock, in each case (except for clause (iii)) for the four Fiscal Quarter period then ending.

"Funding Periods" shall have the meaning set forth in Section 2.4(b) hereof.

"Funding Segment" of the EuroRate Portion of the Revolving Credit Loans at any time shall mean the entire principal amount of such Portion to which at the time in question there is applicable a particular Funding Period beginning on a particular day and ending on a particular day.

"GAAP" shall have the meaning set forth in Section 1.3 hereof.

"Governmental Action" shall have the meaning set forth in Section 4.4 hereof.

"Governmental Authority" shall mean any government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic.

"Guarantors" shall mean all subsidiaries of the Borrower that are parties to the Subsidiary Guaranty.

"Guaranty Equivalent" shall have the following meaning: a Person (the "Deemed Guarantor") shall be deemed to be subject to a Guaranty Equivalent in respect of any obligation (the "Assured Obligation") of another Person (the "Deemed Obligor") if the Deemed Guarantor directly or indirectly guarantees, becomes surety for, endorses, assumes, agrees to indemnify the Deemed Obligor against, or otherwise agrees, becomes or remains liable (contingently or otherwise) for, such Assured Obligation, in whole or in part. Without limitation, the Guaranty Equivalent shall be deemed to exist if a Deemed Guarantor enters into, agrees, becomes or remains liable (contingently or otherwise), directly or indirectly, to do any of the following: (a) purchase or assume, or to supply funds for the payment, purchase or satisfaction of, an Assured Obligation, (b) make any loan, advance, capital contribution or other investment in, or to purchase or lease any property or services from, a Deemed Obligor (i) to maintain the solvency of the Deemed Obligor, (ii) to enable the Deemed Obligor to meet any other financial condition, (iii) to enable the Deemed Obligor to satisfy any Assured Obligation or any other payment, or (iv) to assure the holder of such Assured Obligation against loss, (c) purchase or lease property or services from the Deemed Obligor regardless of the nondelivery of or failure to furnish of such property or services, (d) a transaction having the characteristics of a takeorpay or throughput contract, or (e) any other transaction the effect of which is to assure the payment or performance (or payment of damages or other remedy in the event of nonpayment or nonperformance) in whole or in part of any Assured Obligation.

"Hazardous Substance" means any substance which (i) constitutes a hazardous waste or substance under any applicable Environmental Laws, (ii) constitutes a "hazardous substance" under CERCLA or the regulations promulgated thereunder, (iii) constitutes a "hazardous waste" under RCRA or the regulations promulgated thereunder, (iv) constitutes a pollutant, contaminant, chemical or industrial, toxic or hazardous substance or

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waste, (v) exhibits any of the hazardous characteristics enumerated in 40 C.F.R. Sections 261.20-261.24, inclusive, (vi) constitutes any of those extremely hazardous substances listed under 302 of SARA which are present in threshold planning or reportable quantities as defined under SARA, (vii) constitutes toxic or hazardous chemical substances which are present in quantities which exceed exposure standards as those terms are defined under 6 and 8 of OSHA and 29 C.F.R. Part 1910, subpart 2, (viii) constitutes or consists of, in whole or in part, asbestos, urea formaldehyde, chlorinated biphenyls (polychlorinated or monochlorinated) or petroleum products or (ix) constitutes a hazardous material which, when transported, is subject to regulation by the United States Department of Transportation at 49 C.F.R. Parts 171-199.

"Indebtedness" of a Person shall mean the following (without duplication): (a) all obligations on account of money borrowed by, or for or on account of, or deposits with or advances to, such Person, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person for the deferred purchase price of property or services (except trade accounts payable arising in the ordinary course of business), (d) all obligations secured by a Lien on property owned by such Person (whether or not assumed, and without regard to any limitation of the rights and remedies of the holder of such Lien to repossession or sale of such property), (e) all obligations of such Person under leases which are, or which should in accordance with GAAP be accounted for as, capitalized leases (without regard to any limitation of the rights and remedies of the lessor under such capitalized lease to repossession or sale of such pro perty), (f) the maximum amount available to be drawn under any letter of credit issued for the account of such Person (irrespective of whether the conditions for any such drawing are met at the time in question) and the unreimbursed amount of all drawings under any such letter of credit, (g) all obligations of such Person in respect of acceptances or similar obligations issued for the account of such Person, and (h) all Indebtedness of others as to which such Person is the Deemed Guarantor under a Guaranty Equivalent.

"Indemnified Parties" shall mean the Administrative Agent, the Lenders, the Issuing Bank, their respective affiliates, and the directors, officers, employees, attorneys and agents of each of the foregoing.

"Initial Revolving Credit Committed Amount" shall have the meaning set forth in Section 2.1(a) hereof.

"Issuing Bank" shall mean Mellon Bank, N.A. and its successors and assigns.

"Law" shall mean any law (including common law), constitution, statute, treaty, convention, regulation, rule, ordinance, order, injunction, writ, decree or award of any Governmental Authority.

"Lender" shall mean any of the Lenders listed on the signature pages hereof, subject to the provisions of Section 10.14 hereof pertaining to Persons becoming or ceasing to be Lenders.

"Lender Parties" shall mean the Administrative Agent, the Lenders and the Issuing Bank.

"Letter of Credit" shall have the meaning given that term in Section 3.1(a).

"Letter of Credit Application" shall have the meaning given that term in Section 3.2(a).

"Letter of Credit Cash Account" shall have the meaning given that term in Section 3.7.

"Letter of Credit Commitment" shall have the meaning given that term in Section 3.1.

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"Letter of Credit Exposure" at any time shall mean the sum of (a) the aggregate Letter of Credit Unreimbursed Draws and (b) the aggregate Letter of Credit Undrawn Availability at such time.

"Letter of Credit Facing Fee" shall have the meaning given that term in Section 3.1(e) hereof.

"Letter of Credit Fee" shall have the meaning given that term in Section 3.1(d) hereof.

"Letter of Credit Participating Interest" shall have the meaning given that term in Section 3.3(a) hereof.

"Letter of Credit Reimbursement Obligation" with respect to a Letter of Credit shall mean the obligation of the Borrower to reimburse the Issuing Bank for Letter of Credit Unreimbursed Draws, together with interest thereon.

"Letter of Credit Undrawn Availability" with respect to a Letter of Credit at any time shall mean the maximum amount available to be drawn under such Letter of Credit at such time or thereafter, regardless of the existence or satisfaction of any conditions or limitations on drawing.

"Letter of Credit Unreimbursed Draws" with respect to a Letter of Credit at any time shall mean the aggregate amount at such time of all payments made by the Issuing Bank under such Letter of Credit, to the extent not repaid by the Borrower.

"Lien" shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, including but not limited to any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security.

"Loan" shall mean any loan by a Lender to the Borrower under this Agreement, and "Loans" shall mean all Loans made by the Lenders under this Agreement.

"Loan Documents" shall mean this Agreement, the Notes, the Subsidiary Guaranty, the Transfer Supplements, the Letters of Credit, the Letter of Credit Applications, and all other agreements and instruments extending or renewing any indebtedness, obligation or liability arising under any of the foregoing, in each case as the same may be amended, modified or supplemented from time to time hereafter.

"Loan Parties" shall mean the Borrower and the Guarantors.

"London Business Day" shall mean a day for dealing in deposits in Dollars by and among banks in the London interbank market and which is a Business Day.

"Material Adverse Effect" shall mean: (a) a material adverse effect on the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) a material adverse effect on the ability of any Loan Party to perform or comply with any of the terms and conditions of any Loan Document, or (c) an adverse effect on the legality, validity, binding effect or enforceability of any Loan Document, or the ability of the Administrative Agent or any Lender to enforce any rights or remedies under or in connection with any Loan Document.

"Multiemployer Plan" shall mean any employee benefit plan which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA.

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"Note" or "Notes" shall mean the Revolving Credit Note(s) of the Borrower executed and delivered under this Agreement, together with all extensions, renewals, refinancings or refundings of any thereof in whole or part.

"Obligations" shall mean all indebtedness, obligations and liabilities of the Borrower to any Lender or the Administrative Agent from time to time arising under or in connection with or related to or evidenced by or secured by or pursuant to this Agreement or any other Loan Document, and all extensions or renewals thereof, whether such indebtedness, obligations or liabilities are direct or indirect, otherwise secured or unsecured, joint or several, absolute or contingent, due or to become due, whether for payment or performance, now existing or hereafter arising. Without limitation of the foregoing, such indebtedness, obligations and liabilities include the principal amount of Loans, interest, fees, indemnities or expenses under or in connection with this Agreement or any other Loan Document, and all extensions and renewals thereof, whether or not such Loans were made in compliance with the terms and conditions of this Agreement or in excess of the obligation of the Lenders to lend . Obligations shall remain Obligations notwithstanding any assignment or transfer or any subsequent assignment or transfer of any of the Obligations or any interest therein.

"Office," when used in connection with the Administrative Agent, shall mean its office located at One Mellon Bank Center, Pittsburgh, Pennsylvania, or at such other office or offices of the Administrative Agent or any branch, subsidiary or affiliate thereof as may be designated in writing from time to time by the Administrative Agent to the Borrower.

"Option" shall mean the Base Rate Option or the EuroRate Option, as the case may be.

"Other Taxes" shall have the meaning set forth in Section 2.10 hereof

"Participants" shall have the meaning set forth in Section 10.14(b) hereof.

"PBGC" shall mean the Pension Benefit Guaranty Corporation established under Title IV of ERISA or any other governmental agency, department or instrumentality succeeding to the functions of said corporation.

"Permitted Liens" shall have the meaning set forth in Section 7.2 hereof.

"Person" shall mean an individual, corporation, partnership, limited liability company, trust, unincorporated association, joint venture, jointstock company, Governmental Authority or any other entity.

"Plan(s)" shall mean (i) any Multiemployer Plan and (ii) any other employee pension benefit plan within the meaning of Section 3(2) of ERISA (other than a Multiemployer Plan) covered by Title IV of ERISA by reason of Section 4021 of ERISA, of which the Borrower, any Subsidiary or any ERISA Affiliate is a "contributing sponsor" within the meaning of Section 4001(a)(13) of ERISA.

"Portion" shall mean the Base Rate Portion or the EuroRate Portion, as the case may be.

"Postretirement Benefits" of a Person shall mean any benefits, other than retirement income, provided by such Person to retired employees, or to their spouses, dependents or beneficiaries, including, without limitation, group medical insurance or benefits, or group life insurance or death benefits.

"Postretirement Benefit Obligation" of a Person shall mean that portion of the actuarial present value of all Postretirement Benefits expected to be provided by such Person which is attributable to employees' service

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rendered to the date of determination (assuming that such liability accrues ratably over an employee's working life to the earlier of his date of retirement or the date on which the employee would first become eligible for full benefits), reduced by the fair market value as of the date of determination of any assets which are segregated from the assets of such Person and which have been restricted so that they cannot be used for any purpose other than to provide Postretirement Benefits or to defray related expenses.

"Potential Default" shall mean any event or condition which with notice, passage of time or a determination by the Required Lenders, or any combination of the foregoing, would constitute an Event of Default.

"Prime Rate" as used herein, shall mean the interest rate per annum announced from time to time by the Administrative Agent as its prime rate. The Prime Rate may be greater or less than other interest rates charged by the Administrative Agent to other borrowers and is not solely based or dependent upon the interest rate which the Administrative Agent may charge any particular borrower or class of borrowers.

"Prohibited Transaction" shall mean any of the transactions described in Section 406 of ERISA or Section 4975 of the Code.

"Pro Rata" shall mean from or to each Lender in proportion to its Commitment Percentage.

"Purchasing Lender" shall have the meaning set forth in Section 10.14(c) hereof.

"Register" shall have the meaning set forth in Section 10.14(d) hereof.

"Regular Payment Date" shall mean the last day of each December, March, June and September after the date hereof.

"Reportable Event" shall mean any of the events set forth in Section 4043(b) of ERISA.

"Required Lenders" shall mean, as of any date, Lenders having Revolving Credit Exposures that constitute, in the aggregate, more than 50% of the Revolving Credit Exposures of all Lenders on such date or, if no Loans, Letters of Credit or Letter of Credit Unreimbursed Draws are outstanding on such date, Lenders which have Revolving Credit Committed Amounts that constitute, in the aggregate, more than 50% of the Revolving Credit Committed Amounts of all the Lenders.

"Responsible Officer" shall mean the President, any Vice President, the Treasurer, the Assistant Treasurer or Chief Financial Officer of the Borrower.

"Restricted Stock Repurchases" shall mean any payment or the incurrence of any liability to make any payment, in cash, property or other assets for the purpose of purchasing, retiring or redeeming any shares of any class of capital stock of the Borrower or any Subsidiary (or any warrants or options evidencing a right to purchase any such shares of stock) or making any other distribution in respect of the purchase, retirement or redemption of any such shares of stock (or any warrants or options evidencing a right to purchase any such shares of stock), including the payment of taxes on behalf of a shareholder in connection with any such purchase, retirement or redemption; provided, that the term "Restricted Stock Repurchases" shall not include payments or liabilities described above which are made or incurred by any Subsidiary to or in favor of the Borrower.

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"Revolving Credit Commitment" shall have the meaning set forth in Section 2.1(a) hereof.

"Revolving Credit Commitment Fee" shall have the meaning set forth in Section 2.2(a) hereof.

"Revolving Credit Committed Amount" shall have the meaning set forth in Section 2.1(a) hereof.

"Revolving Credit Exposure" of any Lender at any time shall mean the sum at such time of the outstanding principal amount of such Lender's Revolving Credit Loans plus such Lender's Pro Rata share of the aggregate Letter of Credit Exposure.

"Revolving Credit Loans" shall have the meaning set forth in Section 2.1(a) hereof.

"Revolving Credit Maturity Date" shall mean October 18, 2005.

"Revolving Credit Notes" shall mean the promissory notes of the Borrower executed and delivered under Section 2.1(c) hereof, any promissory note issued pursuant to Section 10.14(c) hereof, together with all extensions, renewals, refinancings or refundings thereof in whole or part.

"Scheduled Principal Debt Service" shall mean, at any time, the scheduled payments of principal with respect to the Indebtedness of the Borrower and its consolidated Subsidiaries due and payable by the Borrower or its consolidated Subsidiaries during the next four Fiscal Quarters.

"Solvent" shall mean, with respect to any Person at any time, that at such time (a) the sum of the debts and liabilities (including, without limitation, contingent liabilities) of such Person is not greater than all of the assets of such Person at a fair valuation, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person has not incurred, will not incur, does not intend to incur, and does not believe that it will incur, debts or liabilities (including, without limitation, contingent liabilities) beyond such person's ability to pay as such debts and liabilities mature, (d) such Person is not engaged in, and is not about to engage in, a business or a transaction for which such person's property constitutes or would constitute unreasonably small capital, and (e) such Person is not otherwise insolvent as defined in, or o therwise in a condition which could in any circumstances then or subsequently render any transfer, conveyance, obligation or act then made, incurred or performed by it avoidable or fraudulent pursuant to, any Law that may be applicable to such Person pertaining to bankruptcy, insolvency or creditors' rights (including but not limited to the Bankruptcy Code of 1978, as amended, and, to the extent applicable to such Person, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act, or any other applicable Law pertaining to fraudulent conveyances or fraudulent transfers or preferences).

"Standard Notice" shall mean an irrevocable notice provided to the Administrative Agent on a Business Day which is

(a) At least one Business Day in advance in the case of selection of, conversion to or renewal of the Base Rate Option or prepayment of any Base Rate Portion; and

(b) At least three London Business Days in advance in the case of selection of the EuroRate Option or prepayment of any EuroRate Portion.

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Standard Notice must be provided no later than 10:00 a.m., Pittsburgh time, on the last day permitted for such notice.

"Subsidiary" of a Person at any time shall mean any corporation of which a majority (by number of shares or number of votes) of any class of outstanding capital stock normally entitled to vote for the election of one or more directors (regardless of any contingency which does or may suspend or dilute the voting rights of such class) is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person, and any trust of which a majority of the beneficial interest is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person.

"Subsidiary Guaranty" shall have the meaning set forth in Section 5.1(b) hereof.

"Taxes" shall have the meaning set forth in Section 2.10 hereof.

"Transfer Effective Date" shall have the meaning set forth in the applicable Transfer Supplement.

"Transfer Supplement" shall have the meaning set forth in Section 10.14(c) hereof.

"Usage" and "Usage Fee" shall have the meaning set forth in Section 2.4(a).

"Unused Revolving Credit Availability" shall mean, at any time, the difference between (i) the aggregate Revolving Credit Exposure at such time and (ii) the aggregate Revolving Credit Committed Amounts of the Lenders at such time.

"Weis Family" means (i) Robert F. Weis, his spouse and his children, (ii) Ellen W. P. Wasserman and her children, (iii) the Revocable Trust of AGMT of Ellen W. P. Wasserman, (iv) the Girard Trust Bank & Robert Freeman Weis Trust under a Will for Harry Weis, (v) Girard Trust Bank & Morris Goldman Trust UA 12/29/76, (vi) the E. W. P. Wasserman Foundation and (vii) in each case, any Permitted Transferee. "Permitted Transferee" means with respect to any person or entity, (a) such person's spouse, former spouse or children, any trust for such person's benefit or the benefit of such person's spouse or children, (b) any corporation, partnership, limited liability company, trust or other entity controlled by such person or entity or such person's spouse or children and (c) the heirs, executors, administrators, or personal representatives upon death of such person or upon the incompetence or disability of such person for purposes of the protection and management of such person's assets.

"Withdrawal Liability" shall mean "withdrawal liability" as defined by the provisions of Part 1 of Subtitle E to Title IV of ERISA.

1.2 Construction. Unless the context of this Agreement otherwise clearly requires, references to the plural include the singular, the singular the plural and the part the whole; "or" has the inclusive meaning represented by the phrase "and/or" references in this Agreement to "determination" (and similar terms) by the Administrative Agent or by any Lender include good faith estimates by the Administrative Agent or by any Lender (in the case of quantitative determinations) and good faith beliefs by the Administrative Agent or by any Lender (in the case of qualitative determinations). The words "hereof," "herein," "hereunder" and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. References herein to "outofpocket expenses" of a Person (and similar terms) include, but are not limited to, the fees of inhouse counsel and other inhouse professionals of such Person to the extent that such fees are routinely identified and specifically charged under such Person's normal cost accounting system. The section and other headings contained in this Agreement and the Table of Contents preceding this Agreement are for reference purposes only

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and shall not control or affect the construction of this Agreement or the interpretation thereof in any respect. Section, subsection and exhibit references are to this Agreement unless otherwise specified.

1.3 Accounting Principles.

(a) As used herein, "GAAP" shall mean generally accepted accounting principles in the United States, applied on a basis consistent with the principles used in preparing the Borrower's financial statements for the Fiscal Year ended December 29, 2001, as referred to in Section 4.6 hereof.

(b) Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters shall be made, and all financial statements to be delivered pursuant to this Agreement shall be prepared, in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP.

(c) If and to the extent that the financial statements generally prepared by the Borrower apply accounting principles other than GAAP, all financial statements referred to in this Agreement or any other Loan Document shall be delivered in duplicate, one set based on the accounting principles then generally applied by the Borrower and one set based on GAAP. To the extent this Agreement or such other Loan Document requires financial statements to be accompanied by an opinion of independent accountants, each set of financial statements shall be accompanied by such an opinion.

ARTICLE II
THE CREDITS

2.1 Revolving Credit Loans.

(a) Revolving Credit Commitments. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender, severally and not jointly, agrees (such agreement being herein called such Lender's "Revolving Credit Commitment") to make loans (the "Revolving Credit Loans") to the Borrower at any time or from time to time on or after the Closing Date and to but not including the Revolving Credit Maturity Date; provided, notwithstanding the foregoing, no Lender shall have any obligation to make Revolving Credit Loans at any time to the extent that the aggregate principal amount of such Lender's Revolving Credit Exposure at any time outstanding would exceed such Lender's Revolving Committed Amount at such time. Each Lender's "Revolving Credit Committed Amount" at any time shall be equal to the amount set forth as its "Initial Revolving Credit Committed Amount& quot; below its name on the signature pages hereof, as such amount may have been reduced under Section 2.2 hereof at such time, and subject to transfer to another Lender as provided in Section 10.14 hereof.

(b) Nature of Credit. Within the limits of time and amount set forth in this Section 2.1, and subject to the provisions of this Agreement, the Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder.

(c) Revolving Credit Notes. The obligation of the Borrower to repay the unpaid principal amount of the Revolving Credit Loans made to it by each Lender and to pay interest thereon shall be evidenced in part by promissory notes of the Borrower, one to each Lender, dated the Closing Date (the "Revolving Credit Notes") in substantially the form attached hereto as Exhibit A, with the blanks appropriately filled, payable to the order of such Lender in a face amount equal to such Lender's Initial Revolving Credit Committed Amount.

(d) Maturity. To the extent not due and payable earlier, the Revolving Credit Loans shall be due and payable on the Revolving Credit Maturity Date.

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2.2 Revolving Credit Commitment Fee; Reduction of the Revolving Credit Committed Amounts.

(a) Revolving Credit Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of each Lender a commitment fee (the "Revolving Credit Commitment Fee") equal to 0.15% per annum (based on a year of 365 or 366 days, as the case may be, and actual days elapsed) for each day from and including the Closing Date to but not including the Revolving Credit Maturity Date, on the amount (not less than zero) equal to (i) such Lender's Revolving Credit Committed Amount on such day, minus (ii) such Lender's Revolving Credit Exposure on such day. Such Revolving Credit Commitment Fee shall be due and payable for the preceding period for which such fee has not been paid: (x) on each Regular Payment Date, (y) on the date of each reduction of the Revolving Credit Committed Amounts (whether optional or mandatory) on the amount so reduced and (z) on the Revolving Credit Maturity Date.

(b) Reduction of the Revolving Credit Committed Amounts. The Borrower may at any time or from time to time reduce Pro Rata the Revolving Credit Committed Amounts of the Lenders to an aggregate amount (which may be zero) not less than the sum of the Revolving Credit Exposures of the Lenders plus the amount of all Revolving Credit Exposures of the Lenders not yet made as to which notice has been given by the Borrower under Section 2.3 or 3.2 hereof. Any voluntary reduction of the Revolving Credit Committed Amounts shall be in an aggregate amount which is an integral multiple of $5,000,000 or a higher integral multiple of $1,000,000. Voluntary reductions of the Revolving Credit Committed Amounts shall be made by providing not less than three Business Days' notice (which notice shall be irrevocable) to such effect to the Administrative Agent. After the date specified in such notice the Revolving Credit Commitment Fee shall be calculated upon the Revolving Credit Committed Amounts as so reduce d.

2.3 Making of Loans. Whenever the Borrower desires that the Lenders make Revolving Credit Loans, the Borrower shall provide Standard Notice to the Administrative Agent setting forth the following information:

(a) The date, which shall be a Business Day, on which such proposed Loans are to be made;

(b) The aggregate principal amount of such proposed Loans, which shall be the sum of the principal amounts selected pursuant to clause (d) of this Section 2.3, and which shall be an integral multiple of $500,000;

(c) The interest rate Option or Options selected in accordance with Section 2.4(a) hereof and the principal amounts selected in accordance with Section 2.4(c) hereof of the Base Rate Portion and each Funding Segment of the EuroRate Portion of such proposed Loans; and

(d) With respect to each such Funding Segment of such proposed Loans, the Funding Period to apply to such Funding Segment, selected in accordance with Section 2.4(c) hereof.

Standard Notice having been so provided, the Administrative Agent shall promptly notify each Lender of the information contained therein and of the amount of such Lender's Loan. Unless any applicable condition specified in Article V hereof has not been satisfied, on the date specified in such Standard Notice each Lender shall make the proceeds of its Loan available to the Administrative Agent at the Administrative Agent's Office, no later than 12:00 o'clock Noon, Pittsburgh time, in funds immediately available at such Office. The Administrative Agent will make the funds so received available to the Borrower in funds immediately available at the Administrative Agent's Office.

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2.4 Interest Rates.

(a) Optional Bases of Borrowing. The unpaid principal amount of the Loans shall bear interest for each day until due on one or more bases selected by the Borrower from among the interest rate Options set forth below. Subject to the provisions of this Agreement the Borrower may select different Options to apply simultaneously to different Portions of the Loans and may select different Funding Segments to apply simultaneously to different parts of the Euro-Rate Portion of the Loans. The aggregate number of Funding Segments applicable to the Euro-Rate Portion of the Revolving Credit Loans at any time shall not exceed ten.

(i) Base Rate Option: A rate per annum (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) for each day equal to the Base Rate for such day plus the Applicable Margin for such day. The "Base Rate" for any day shall mean the greater of (A) the Prime Rate for such day or (B) 0.50% plus the Federal Funds Effective Rate for such day, such interest rate to change automatically from time to time effective as of the effective date of each change in the Prime Rate or the Federal Funds Effective Rate.

(ii) EuroRate Option: A rate per annum (based on a year of 360 days and actual days elapsed) for each day equal to the EuroRate for such day plus the Applicable Margin for such day. "EuroRate" for any day, as used herein, shall mean for each Funding Segment of the Portion corresponding to a proposed or existing Funding Period the rate per annum determined by the Administrative Agent by dividing (the resulting quotient to be rounded upward to the nearest 1/100 of 1%) (A) the rate of interest (which shall be the same for each day in such Funding Period) determined in good faith by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive) to be the average of the rates per annum for deposits in Dollars offered to major money center banks in the London interbank market at approximately 11:00 a.m., London time, two London Business Days prior to the first day of such Funding Period for delivery on the first day of such Funding Period in amounts comparable to such Funding Segment and having maturities comparable to such Funding Period by (B) a number equal to 1.0 minus the EuroRate Reserve Percentage.

"EuroRate Reserve Percentage" for any day shall mean the percentage (expressed as a decimal, rounded upward to the nearest 1/100 of 1%), as determined in good faith by the Administrative Agent (which determination shall be conclusive), which is in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) representing the maximum reserve requirement (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as "Eurocurrency liabilities") of a member bank in such System. The EuroRate shall be adjusted automatically as of the effective date of each change in the EuroRate Reserve Percentage. The Euro-Rate Option shall be calculated in accordance with the foregoing whether or not any Lender is actually required to hold reserves in connection with its eurocurrency funding or, if required to hold such reserves, is required to hold reserves at the "Euro-Rate Reserve Percentage" as herein defined.

The "Applicable Margin" for EuroRate Loans any day shall equal the Usage Fee on such day plus 0.625%, and the Applicable Margin for Base Rate Loans on any day shall equal zero.

The "Usage Fee" shall be equal to (i) 0.125% for any day when the Revolving Credit Exposures minus the Letter of Credit Undrawn Availability ("Usage") is greater than 33% but less than 67% of the aggregate Revolving Credit Committed Amounts of the Lenders on such day; (ii) 0.250% for any day when Usage is 67% or greater of the aggregate Revolving Credit Committed Amounts on such day, or (iii) 0% in all other cases.

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The Administrative Agent shall give prompt notice to the Borrower and to the Lenders of the EuroRate determined or adjusted in accordance with the definition of the EuroRate, which determination or adjustment shall be conclusive if made in good faith.

(b) Funding Periods. At any time when the Borrower shall select, convert to or renew the Euro-Rate Option to apply to any part of the Loans, the Borrower shall specify one or more periods (the "Funding Periods") during which each such Option shall apply, such Funding Periods being one, two, three or six months; provided that:

(i) Each Funding Period shall begin on a London Business Day, and the term "month", when used in connection with a Funding Period, shall be construed in accordance with prevailing practices in the interbank eurodollar market at the commencement of such Funding Period, as determined in good faith by the Administrative Agent (which determination shall be conclusive); and

(ii) The Borrower may not select a Funding Period that would end after the Revolving Credit Maturity Date.

(c) Transactional Amounts. Every selection of, conversion from, conversion to or renewal of an interest rate Option and every payment or prepayment of any Loans shall be in a principal amount such that after giving effect thereto the aggregate principal amount of the Base Rate Portion of the Revolving Credit Loans or the aggregate principal amount of each Funding Segment of the Euro-Rate Portion of the Revolving Credit Loans, shall be as set forth below:

Portion or Funding Segment	Allowable Aggregate Principal Amounts
Base Rate Portion	Any;
Each Funding Segment of the Euro-Rate Portion	$1,000,000 or a higher integral multiple of $500,000.

(d) EuroRate Unascertainable; Impracticability. If

(i) on any date on which a EuroRate would otherwise be set the Administrative Agent (in the case of clauses (A) or (B) below) or any Lender (in the case of clause (C) below) shall have determined in good faith (which determination shall be conclusive) that:

(A) adequate and reasonable means do not exist for ascertaining such EuroRate,

(B) a contingency has occurred which materially and adversely affects the interbank eurodollar market, or

(C) the effective cost to such Lender of funding a proposed Funding Segment of the EuroRate Portion from a Corresponding Source of Funds shall exceed the EuroRate applicable to such Funding Segment, or

(ii) at any time any Lender shall have determined in good faith (which determination shall be conclusive) that the making, maintenance or funding of any part of the EuroRate Portion has been made impracticable or unlawful by compliance by such Lender or its applicable funding office in good faith with any Law or guideline or interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof or with any request or directive of any such Governmental Authority (whether or not having the force of law);

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then, and in any such event, the Administrative Agent or such Lender, as the case may be, may notify the Borrower of such determination (and any Lender giving such notice shall notify the Administrative Agent). Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of each of the Lenders to allow the Borrower to select, convert to or renew the EuroRate Option shall be suspended until the Administrative Agent or such Lender, as the case may be, shall have later notified the Borrower (and any Lender giving such notice shall notify the Administrative Agent) of the Administrative Agent's or such Lender's determination in good faith (which determination shall be conclusive) that the circumstance giving rise to such previous determination no longer exist.

If any Lender notifies the Borrower of a determination under subsection (ii) of this Section 2.4(d), the EuroRate Portion of the Loans of such Lender (the "Affected Lender") shall automatically be converted to the Base Rate Option as of the date specified in such notice (and accrued interest thereon shall be due and payable on such date).

If at the time the Administrative Agent or a Lender makes a determination under subsection (i) or (ii) of this Section 2.4(d) the Borrower previously has notified the Administrative Agent that it wishes to select, convert to or renew the EuroRate Option, as the case may be, with respect to any proposed Loans but such Loans have not yet been made, such notification shall be deemed to provide for selection of, conversion to or renewal of the Base Rate Option instead of the EuroRate Option with respect to such Loans or, in the case of a determination by a Lender, such Loans of such Lender.

2.5 Conversion or Renewal of Interest Rate Options

(a) Conversion or Renewal. Subject to the provisions of Section 2.9(b) hereof, and if no Event of Default or Potential Default shall have occurred and be continuing or shall exist, the Borrower may convert any part of its Loans from any interest rate Option or Options to one or more different interest rate Options and may renew the Euro-Rate Option as to any Funding Segment of the Euro-Rate Portion:

(i) At any time with respect to conversion from the Base Rate Option; or

(ii) At the expiration of any Funding Period with respect to conversions from or renewals of the Euro-Rate Option as to the Funding Segment corresponding to such expiring Funding Period.

Whenever the Borrower desires to convert or renew any interest rate Option or Options, the Borrower shall provide to the Administrative Agent Standard Notice setting forth the following information:

(w) The date, which shall be a Business Day, on which the proposed conversion or renewal is to be made;

(x) The principal amounts selected in accordance with Section 2.4(c) hereof of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion to be converted from or renewed;

(y) The interest rate Option or Options selected in accordance with Section 2.4(a) hereof and the principal amounts selected in accordance with Section 2.4(c) hereof of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion, as the case may be, to be converted to; and

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(z) With respect to each Funding Segment to be converted to or renewed, the Funding Period selected in accordance with Section 2.4(b) hereof to apply to such Funding Segment.

Standard Notice having been so provided, after the date specified in such Standard Notice, interest shall be calculated upon the principal amount of the Loans as so converted or renewed. Interest on the principal amount of any part of the Loans converted or renewed (automatically or otherwise) shall be due and payable on the conversion or renewal date.

(b) Failure to Convert or Renew. Absent due notice from the Borrower of conversion or renewal in the circumstances described in Section 2.5(a)(ii) hereof, any part of Euro-Rate Portion for which such notice is not received shall be converted automatically to the Base Rate Option on the last day of the expiring Funding Period.

2.6 Prepayments.

(a) Optional Prepayments. The Borrower shall have the right at its option from time to time to prepay its Loans in whole or part without premium or penalty (subject, however, to Section 2.9(b) hereof):

(i) At any time with respect to any part of the Base Rate Portion; or

(ii) At the expiration of any Funding Period with respect to prepayment of the Euro-Rate Portion with respect to any part of the Funding Segment corresponding to such expiring Funding Period.

Any such prepayment shall be made in accordance with Section 2.6 hereof.

(b) Prepayment Procedures. Whenever the Borrower desires or is required to prepay any part of its Loans, it shall provide Standard Notice to the Administrative Agent setting forth the following information:

(i) The date, which shall be a Business Day, on which the proposed prepayment is to be made;

(ii) The total principal amount of such prepayment, which shall be the sum of the principal amounts selected pursuant to clause (b)(iii) of this Section 2.6 and which shall be $1,000,0000 or an integral multiple of $1,000,000 (unless such prepayment repays all of the outstanding Loans); and

(iii) The principal amounts selected in accordance with Section 2.4(c) hereof of the Base Rate Portion and each part of each Funding Segment of the Euro-Rate Portion to be prepaid.

Standard Notice having been so provided, on the date specified in such Standard Notice, the principal amounts of the Base Rate Portion and each part of the Euro-Rate Portion specified in such notice, together with interest on each such principal amount to such date, shall be due and payable.

2.7 Interest Payment Dates. Interest on the Base Rate Portion shall be due and payable on the last day of each calendar month. Interest on each Funding Segment of the EuroRate Portion shall be due and payable on the last day of the corresponding Funding Period and, if such EuroRate Funding Period is longer than three months, also every third month during such Funding Period. After maturity of any part of the Loans (by acceleration or otherwise), interest on such part of the Loans shall be due and payable on demand.

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2.8 Pro Rata Treatment; Payments Generally.

(a) Pro Rata Treatment. Each borrowing and conversion and renewal of interest rate Options hereunder shall be made, and all payments made in respect of principal, interest, Revolving Credit Commitment Fees due from the Borrower hereunder or under the Notes shall be applied, Pro Rata from and to each Lender, except for payments of interest involving an Affected Lender as provided in Section 2.4(d) hereof. The failure of any Lender to make a Loan shall not relieve any other Lender of its obligation to lend hereunder, but neither the Administrative Agent nor any Lender shall be responsible for the failure of any other Lender to make a Loan.

(b) Payments Generally. All payments and prepayments to be made by the Borrower in respect of principal, interest, fees, indemnity, expenses or other amounts due from the Borrower hereunder or under any Loan Document shall be payable in Dollars at 12:00 o'clock Noon, Pittsburgh time, on the day when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, and an action therefor shall immediately accrue, without setoff, counterclaim, withholding or other deduction of any kind or nature. Except for payments under Sections 2.9 and 10.6 hereof, such payments shall be made to the Administrative Agent at its Office in Dollars in funds immediately available at such Office, and payments under Sections 2.9 and 10.6 hereof shall be made to the applicable Lender at such domestic account as it shall specify to the Borrower from time to time in funds immediately available at such account. Any payment or prepayment received by the Administrative Agent or such Lender after 12:00 o'clock Noon, Pittsburgh time, on any day shall be deemed to have been received on the next succeeding Business Day. The Administrative Agent shall distribute to the Lenders all such payments received by it from the Borrower as promptly as practicable after receipt by the Administrative Agent.

(c) Interest on Overdue Amounts. To the extent permitted by Law, after there shall have become due (by acceleration or otherwise) principal, interest, fees, indemnity, expenses or any other amounts due from the Borrower hereunder or under any other Loan Document, such amounts shall bear interest for each day until paid (before and after judgment), payable on demand, at a rate per annum (in each case based on a year of 360 days and actual days elapsed) which for each day shall be equal to the following:

(i) In the case of any part of the Euro-Rate Portion of any Loans, (A) until the end of the applicable then-current Funding Period at a rate per annum 2% above the rate otherwise applicable to such part, and (B) thereafter in accordance with the following clause (ii); and

(ii) In the case of any other amount due from the Borrower hereunder or under any Loan Document, 2% above the then-current Base Rate Option applicable to the Loans.

To the extent permitted by Law, interest accrued on any amount which has become due hereunder or under any Loan Document shall compound on a day-by-day basis, and hence shall be added daily to the overdue amount to which such interest relates.

2.9 Additional Compensation in Certain Circumstances.

(a) Increased Costs or Reduced Return Resulting From Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc. If after the date hereof any change in any Law or guideline or interpretation or application thereof by any Governmental Authority charged with the interpretation or administration thereof or compliance with any request or directive of any Governmental Authority (whether or not having the force of law):

(i) subjects any Lender to any tax or changes the basis of taxation with respect to this Agreement, the Notes, the Loans, the Letters of Credit or the Letter of Credit Participating Interests or payments by the Borrower of principal, interest, commitment fee or other amounts due from the Borrower hereunder or under the Notes (except for Taxes or Other Taxes, as to which Section 2.10 shall govern and except for changes in the rate or basis of taxation of overall net income or overall gross income by the United States or any foreign jurisdiction or any political subdivision of either thereof under the Laws of which such Lender is organized or in which such Lender's applicable lending office is located),

(ii) imposes, modifies or deems applicable any reserve, special deposit or similar requirement against credits or commitments to extend credit extended by, assets (funded or contingent) of, deposits with or for the account of, other acquisitions of funds by, such Lender (other than requirements expressly included herein in the determination of the EuroRate hereunder),

(iii) imposes, modifies or deems applicable any capital adequacy or similar requirement (A) against assets (funded or contingent) of, or credits or commitments to extend credit extended by, any Lender, or (B) otherwise applicable to the obligations of any Lender under this Agreement, or

(iv) imposes upon any Lender any other condition or expense with respect to this Agreement, the Notes, the Letters of Credit or the Letter of Credit Participating Interests or its making, maintenance or funding of any Loan,

and the result of any of the foregoing is to increase the cost to, reduce the income receivable by, or impose any expense (including loss of margin) upon any Lender or, in the case of clause (iii) hereof, any Person controlling a Lender, with respect to this Agreement, the Notes, the Letters of Credit or the Letter of Credit Participating Interests or the making, maintenance or funding of any Loan (or, in the case of any capital adequacy or similar requirement, to have the effect of reducing the rate of return on such Lender's or controlling Person's capital, taking into consideration such Lender's or controlling Person's policies with respect to capital adequacy) by an amount which such Lender deems to be material (such Lender being deemed for this purpose to have made, maintained or funded each Funding Segment of the EuroRate Portion from a Corresponding Source of Funds), such Lender may from time to time notify the Borrower of the amount determined in good faith (using any averaging and attribution method s) by such Lender (which determination shall be conclusive absent manifest error) to be necessary to compensate such Lender for such increase, reduction or imposition. Such amount shall be due and payable by the Borrower to such Lender five Business Days after such notice is given, together with an amount equal to interest on such amount from the date two Business Days after the date demanded until such due date at the Base Rate Option applicable to the Loans. A certificate by such Lender as to the amount due and payable under this Section 2.9(a) (which certificate shall set forth the basis in reasonable detail of the calculation of such amount) from time to time and the method of calculating such amount shall be conclusive absent manifest error.

(b) Funding Breakage. In the event that for any reason (i) the Borrower fails to borrow, convert or renew any Loan hereunder which would, after such borrowing, conversion or renewal, have a Euro-Rate Portion after notice requesting such borrowing, conversion or renewal has been given by the Borrower (whether such failure results from failure to satisfy applicable conditions to such borrowing, conversion, or renewal or otherwise), or (ii) any part of any Funding Segment of any Euro-Rate Portion of the Loans becomes due (by acceleration or otherwise), or is paid, prepaid or converted to another interest rate Option (whether or not such payment, prepayment or conversion is mandatory or automatic and whether or not such payment or prepayment is then due), on a day other than the last day of the corresponding Funding Period, the Borrower shall indemnify each Lender on demand against any loss, liability, cost or expense of any kind or nature which such Lender may sustain or incur in connection wit h or as a result of such event. Such indemnification in any event shall include an amount equal to the excess, if any, of (x) the aggregate amount of interest which would have accrued on the amount of the Euro-Rate Portion not so borrowed, converted or renewed, or which so becomes due, or which is so paid, prepaid

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or converted, from and including the date on which such borrowing, conversion or renewal would have been made pursuant to such notice, or on which such part of such Funding Segment so becomes due, or on which such part of such Funding Segment is paid, prepaid or converted, to the last day of the Funding Period applicable to such amount (or, in the case of a failure to borrow, convert or renew, the Funding Period that would have been applicable to such amount but for such failure), in each case at the applicable rate of interest for such Euro-Rate Portion provided for herein, over (y) the aggregate amount of interest (as determined in good faith by such Lender) which would have accrued to such Lender on such amount for such period by placing such amount on deposit for such period with leading banks in the interbank market. A certificate by a Lender as to any amount that such Lender is entitled to receive pursuant to this Section 2.9(b) shall be conclusive (absent manifest error) if made in good faith.

2.10 Taxes.

(a) Any and all payments by the Borrower to or for the account of the Administrative Agent or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions , assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of the Administrative Agent and each Lender, taxes imposed on or measured by its overall net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case may be, is organized or in which such Lender's applicable lending office is located (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, liabilities being herein referred to as "Taxes"). If the Borrower shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), each of the Administrative Agent and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, provided, however, that the Borrower shall not be required to increase any such amounts payable to any Administrative Agent or any Lender with respect to Taxes that are attributable to such Administrative Agent's, Lender's or Purchasing Lender's failure to comply with the requirements of 2.11 and (iv) within 30 days after the date of such payment, the Borrower shall furnish to the Admini strative Agent (which shall forward the same to such Lender) the original or a certified copy of a receipt evidencing payment thereof.

(b) In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as "Other Taxes").

(c) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, the Borrower shall also pay to the Administrative Agent or to such Lender, as the case may be, at the time interest is paid, such additional amount that the Administrative Agent or such Lender specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) that the Administrative Agent or such Lender would have received if such Taxes or Other Taxes had not been imposed.

(d) The Borrower agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Agent and such Lender, (ii) amounts payable under Section 2.10(c) and (iii) any liability (including additions to tax, penalties, interest and expenses) arising

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therefrom or with respect thereto, in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Payment under this subsection (d) shall be made within 30 days after the date the Lender or the Administrative Agent makes a demand therefor.

(e) If a Lender or the Administrative Agent shall become aware that it is uncontestably entitled to a refund from a Governmental Authority in respect of Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.10, it promptly shall notify the Borrower of the availability of a claim to such refund and shall make a timely claim to such taxation authority for such refund at the Borrower's expense. If a Lender or the Administrative Agent receives a refund (including pursuant to a claim for refund made pursuant to the preceding sentence) in respect of any Taxes or Other Taxes as to which it has received full indemnification payment from the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.10, it shall within 30 days from the date of such receipt pay over the amount of such refund to the Borrower, net of all reasonable out-of-pocket expenses of such Le nder or the Administrative Agent and without interest (other than interest paid by the relevant taxation authority with respect to such refund); provided that the Borrower, upon the request of such Lender or the Administrative Agent, agrees to repay the amount paid over to the Borrower (plus penalties, interest or other reasonable charges) to such Lender or the Administrative Agent in the event such Lender or the Administrative Agent is required to repay such refund to such taxation authority.

2.11 Tax Forms.

(a) Each Lender that is not a "United States person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign Lender") shall deliver to the Administrative Agent, prior to receipt of any payment subject to withholding under the Code (or upon accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Person and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Person by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Person by the Borrower pursuant to this Agreement) or such other evidence satisfactory to the Borrower and the Administrative Agent that such Person is entitled to an exemption from, or reduction of, U.S. withholding tax. Thereafter and from time to time, each such Person shall (i) promptly submit to the Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to the Borrower and the Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Person by the Borrower pursuant to this Agreement, (ii) promptly notify the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (iii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its lending office) to avoid any requirement of applicable Laws that the Borrower make any deduction or withholding for taxes from amounts payable to such Perso n. If such Person fails to deliver the above forms or other documentation, then the Administrative Agent may withhold from any interest payment to such Person an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction.

(b) Upon the request of the Administrative Agent, each Lender that is a "United States person" within the meaning of Section 7701(a)(30) of the Code shall deliver to the Administrative Agent two duly signed completed copies of IRS Form W-9. If such Lender fails to deliver such forms, then the Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable back-up withholding tax imposed by the Code, without reduction.

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(c) If any Governmental Authority asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including reasonable fees and expenses of counsel) of the Administrative Agent. The obligation of the Lenders under this Section shall survive the termination of the Revolving Credit Commitments, repayment of all Obligations and the resignation of the Administrative Agent.

ARTICLE III
THE LETTERS OF CREDIT

3.1 The Letters of Credit.

(a) General. Subject to the terms and conditions of this Agreement, and relying upon the representations and warranties herein set forth and upon the agreements of the Lenders set forth in Sections 3.3 and 3.4 hereof, the Issuing Bank agrees (such agreement being called the Issuing Bank's "Letter of Credit Commitment") to issue for the account of the Borrower or a Subsidiary of the Borrower letters of credit (each, as amended, modified or supplemented from time to time, a "Letter of Credit"), at any time or from time to time on or after the date hereof; provided that, the Issuing Bank shall have no obligation to issue any Letter of Credit if it reasonably believes that any Lender will be unable to satisfy its obligations under Section 3.4(b) hereof. The Borrower shall not request any Letter of Credit to be issued except within the following limitations: (i) no Letter of Credit shall be issued later than 90 days before the R evolving Credit Maturity Date, (ii) no Letter of Credit shall be issued if the Administrative Agent shall have received the notice from the Required Lenders referred to in Section 3.2(c)(ii) hereof, (iii) at the time any Letter of Credit is issued, the aggregate Revolving Credit Exposures of the Lenders (after giving effect to issuance of the requested Letter of Credit) shall not exceed the sum of the Revolving Credit Committed Amounts of the Lenders at such time, (iv) on the date of issuance of any Letter of Credit (and after giving effect to such issuance) the aggregate Letter of Credit Exposures of the Lenders shall not exceed $25,000,000.

(b) Terms of Letters of Credit. The Borrower shall not request any Letter of Credit to be issued, nor shall the Issuing Bank be obligated to issue any Letter of Credit, except within the following limitations: each Letter of Credit (i) shall have an expiration date no later than the earlier of (A) 12 months after the date of issuance thereof (subject to renewals for additional oneyear periods that do not extend past the Revolving Credit Maturity Date), or (B) five Business Days before the Revolving Credit Maturity Date, (ii) shall be denominated in Dollars and (iii) shall be payable only against sight drafts (and not time drafts).

(c) Purposes of Letters of Credit. Each Letter of Credit shall be satisfactory in form, substance and beneficiary to the Issuing Bank in its reasonable discretion. Each Letter of Credit shall be used by the Borrower or a Guarantor as a standby or trade letter of credit used to provide credit support for the Borrower or such Subsidiaries. The provisions of this Section 3.1(c) represent only an obligation of the Borrower to the Issuing Bank and the Lenders; the Issuing Bank shall have no obligation to the Lenders to ascertain the purpose of any Letter of Credit, and the rights and obligations of the Lenders and the Issuing Bank among themselves shall not be impaired or affected by a breach of this Section 3.1(c).

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(d) Letter of Credit Fee. The Borrower shall pay to the Administrative Agent for the Pro Rata account of each Lender a fee (the "Letter of Credit Fee") for each Letter of Credit for each day from and including the date of issuance thereof to and including the date of expiration or termination thereof, equal to (i) $80,000 or the Letter of Credit Undrawn Availability on such day, whichever is greater, times (ii) the Applicable Margin applicable on such day to EuroRate Loans, times (iii) 1/365 (or 1/366, as the case may be). Such Letter of Credit Fee shall be due and payable for the preceding period for which such fee has not been paid on each of the following dates: (A) each Regular Payment Date, and (B) the date of expiration or termination of such Letter of Credit.

(e) Facing Fee; Administration Fees. The Borrower shall pay to the Administrative Agent, for the sole account of the Issuing Bank, a fee (the "Letter of Credit Facing Fee") for each Letter of Credit for each day from and including the date of issuance thereof to and including the date of expiration or termination thereof, equal to (i) $80,000 or the Letter of Credit Undrawn Availability on such day, whichever is greater, times (ii) 0.125% times (iii) 1/365 (or 1/366, as the case may be). Such Letter of Credit Facing Fee shall be due and payable for the preceding period for which such fee has not been paid on the same dates as payments of the Letter of Credit Fee with respect to such Letter of Credit are due. In addition, the Borrower shall pay to the Administrative Agent, for the sole account of the Issuing Bank, such other administration, maintenance, amendment, drawing and negotiation fees as may be customarily charged by the Issuing Bank from time to time in connection with letters of credit.

(f) Suspension of the Commitment to Issue Letters of Credit.

(i) Suspension of Commitment. In the event any restrictions are imposed upon any Lender Party hereto by Law or by any Governmental Authority which would prevent the Issuing Bank from issuing any Letter of Credit in the future or would prevent any Lender from complying with this Article III, the Letter of Credit Commitment shall be immediately suspended. Nothing contained in this Section 3.1(f)(i) shall be deemed a termination of the Revolving Credit Commitment of Mellon Bank, N.A. or any other Lender and, in the event of a suspension of the Letter of Credit Commitment, the Borrower may continue to borrow under the Revolving Credit Commitments, provided the remaining requirements of this Agreement are complied with.

(ii) Action Upon Suspension of Commitment. If the Issuing Bank or any Lender believes any such restriction referred to in the preceding clause (i) exists, it shall immediately notify the Administrative Agent. The Administrative Agent shall forthwith notify the Borrower and the other Lenders of the existence and nature of any restriction which would cause the suspension of either the Letter of Credit Commitment or any other Lender's obligations under this Article III. Such suspension shall continue until either the Administrative Agent notifies the Borrower that the Issuing Bank and/or the affected Lender, as the case may be, no longer believes that such restriction prevents it from issuing Letters of Credit or honoring its obligations under this Article III, as the case may be.

3.2 Procedure for Issuance and Amendment of Letters of Credit.

(a) Request for Issuance. The Borrower may from time to time request, upon at least three Business Days' notice, the Issuing Bank to issue a Letter of Credit by delivering to the Issuing Bank and the Administrative Agent (i) a written request to such effect, specifying the date on which such Letter of Credit is to be issued, the expiration date thereof, and the stated amount thereof, and (ii) at the option of the Issuing Bank, an application, in such form as the Issuing Bank may from time to time require (each, a "Letter of Credit Application"), completed to the satisfaction of the Issuing Bank, together with such other certificates, documents and other papers and information as the Issuing Bank may request. If the Issuing Bank issues a Letter of Credit, it shall deliver the original of such Letter of

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Credit to the beneficiary thereof or as the Borrower shall otherwise direct, and shall promptly notify the Administrative Agent thereof and furnish a copy thereof to the Administrative Agent.

(b) Extension or Increase. The Borrower may from time to time request the Issuing Bank to extend the expiration date of an outstanding Letter of Credit issued by the Issuing Bank or to increase the Letter of Credit Undrawn Availability of such Letter of Credit. Such extension or increase shall for all purposes hereunder (including but not limited to Sections 3.2(a) and 5.2) be treated as though the Borrower had requested issuance of a replacement Letter of Credit; provided that, the Issuing Bank may, if it elects, issue an amendment to the particular Letter of Credit providing for such an extension or increase in lieu of issuing a new Letter of Credit in substitution for the outstanding Letter of Credit.

(c)Limitations on Issuance, Extension and Amendment.

(i) As between the Issuing Bank, on the one hand, and the Administrative Agent and the Lenders, on the other hand, the Issuing Bank shall be justified and fully protected in issuing any Letter of Credit (including any deemed issuance arising from increase or extension of a Letter of Credit as provided in Section 3.2(b) hereof), notwithstanding any subsequent notices to the Issuing Bank, any knowledge of an Event of Default or Potential Default, any knowledge of failure of any condition specified in Section 5.2 hereof to be satisfied, any other knowledge of the Issuing Bank, or any other event, condition or circumstance whatever.

(ii) As between the Issuing Bank, on the one hand, and the Lenders, on the other hand, the Issuing Bank shall not issue any Letter of Credit pursuant to Section 3.2(a) (including any deemed issuance arising from increase or extension of a Letter of Credit as provided in Section 3.2(b)) if the Issuing Bank shall have received, at least two Business Days before authorizing such issuance, from the Required Lenders an unrevoked written notice that any condition precedent set forth in Section 5.2 will not be satisfied and expressly requesting that the Issuing Bank cease issuing Letters of Credit. Unless the Issuing Bank has received such notice or has determined that the applicable limitations set forth in Sections 3.1(a) and 3.1(b) hereof are not satisfied, the Issuing Bank shall be justified and fully protected, as against the Lenders, in issuing such Letter of Credit, notwithstanding any subsequent notices to the Issuing Bank or the Administrative Agent, any knowledge of an Event o f Default or Potential Default, any knowledge of failure of any condition specified in Section 5.2 hereof to be satisfied, any other knowledge of the Issuing Bank or the Administrative Agent, or any other event, condition or circumstance whatever.

(d) Amendments. At the request of the Borrower from time to time, and subject to satisfaction of such conditions as the Issuing Bank may require, the Issuing Bank may amend, modify or supplement Letters of Credit, or waive compliance with any condition of issuance or payment, without the consent of, and without liability to, the Administrative Agent or any Lender, provided that, any such amendment, modification or supplement that extends the expiration date or increases the Letter of Credit Undrawn Availability of an outstanding Letter of Credit shall be subject to Section 3.2(b) hereof.

3.3 Letter of Credit Participating Interests.

(a) Generally. Concurrently with the issuance of each Letter of Credit, the Issuing Bank automatically shall be deemed, irrevocably and unconditionally, to have sold, assigned, transferred and conveyed to each other Lender, and each other Lender automatically shall be deemed, irrevocably and unconditionally, severally to have purchased, acquired, accepted and assumed from the Issuing Bank, without recourse to, or representation or warranty by, the Issuing Bank, an undivided interest, in a proportion equal to such Lender's Pro Rata share, in all of the Issuing Bank's rights and obligations in, to or under such Letter of Credit, the Letter of Credit Reimbursement Obligations, and all collateral, guarantees and other rights from time to time directly or indirectly securing the foregoing (such interest of each Lender being referred to herein as a "Letter of Credit Participating Interest"). Amounts other than Letter of Credit Reimbursement Obligations and Letter of Cr edit Fees payable from time to time under or in connection with a Letter of Credit or a Letter of Credit Application shall be for the sole account of the relevant Issuing Bank. On any date that any Purchasing Lender becomes a party to this Agreement in accordance with Section 10.14 hereof, Letter of Credit Participating Interests in any outstanding Letters of Credit shall be proportionately reallotted among the Lenders in accordance with their Pro Rata shares after such increase or purchase.

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(b) Obligations Absolute. Notwithstanding any other provision hereof, each Lender hereby agrees that its obligation to participate in each Letter of Credit issued in accordance herewith (including in accordance with Section 3.2(c)(ii)), and its obligation to make the payments specified in Section 3.4 hereof, are each absolute, irrevocable and unconditional and shall not be affected by any event, condition or circumstance whatever. The failure of any Lender to make any such payment shall not relieve any other Lender of its funding obligation hereunder on the date due, but no Lender shall be responsible for the failure of any other Lender to meet its funding obligations hereunder.

3.4 Letter of Credit Drawings and Reimbursements.

(a) Borrower's Reimbursement Obligation. The Borrower hereby agrees to reimburse the Issuing Bank, by making payment to the Administrative Agent for the account of such Issuing Bank in accordance with Section 2.8(b) hereof, on the date and in the amount of each payment made by the Issuing Bank under any Letter of Credit, without notice, protest or demand, all of which are hereby waived. To the extent such payment is not timely made, the Borrower hereby agrees to pay to the Administrative Agent, for the account of the Issuing Bank, on demand, interest on any Letter of Credit Unreimbursed Draws for each day from and including the date of such payment by such Issuing Bank until reimbursed in full (before and after judgment), in accordance with Section 2.8(c) hereof, at the rate per annum set forth in Section 2.8(c)(ii) hereof.

(b) Payment by Lenders on Account of Unreimbursed Draws. If the Issuing Bank makes a payment under any Letter of Credit and is not reimbursed in full therefor on such payment date in accordance with Section 3.4(a) hereof, the Issuing Bank will promptly notify the Administrative Agent thereof (which notice may be by telephone), and the Administrative Agent shall forthwith notify each Lender (which notice may be by telephone promptly confirmed in writing) thereof. No later than the Administrative Agent's close of business on the date such notice is given, each such Lender will pay to the Administrative Agent, for the account of the Issuing Bank, in immediately available funds, an amount equal to such Lender's Pro Rata share of the unreimbursed portion of such payment by the Issuing Bank. If and to the extent that any Lender fails to make such payment to the Administrative Agent for the account of the Issuing Bank on such date, such Lender shall pay such amount on demand, together wit h interest, for the Issuing Bank's own account, for each day from and including the date of the Issuing Bank's payment to and including the date of payment to the Issuing Bank (before and after judgment) at the following rates per annum: (i) for each day from and including the date of such payment by the Issuing Bank to and including the second Business Day thereafter, at the Federal Funds Effective Rate for such day, and (ii) for each day thereafter, at the rate applicable to Letter of Credit Unreimbursed Draws under Section 3.4(a) hereof for such day.

(c) Distributions to Participants. If, at any time, after the Issuing Bank has made a Letter of Credit Unreimbursed Draw and has received from any Lender such Lender's share of such Letter of Credit Unreimbursed Draw, the Issuing Bank receives any payment or makes any application of funds on account of the Letter of Credit Reimbursement Obligation arising from such Letter of Credit Unreimbursed Draw, the Issuing Bank will promptly pay to the Administrative Agent, for the account of such Lender, such Lender's Pro Rata share of such payment or application.

(d) Rescission. If any amount received by the Issuing Bank on account of any Letter of Credit Reimbursement Obligation shall be avoided, rescinded or otherwise returned or paid over by the Issuing Bank for any reason at any time, whether before or after the termination of this Agreement (or the Issuing Bank believes in good faith that such avoidance, rescission, return or payment is required, whether or not such matter has been adjudicated), each such Lender will, promptly upon notice from the Administrative Agent or the Issuing Bank, pay over to the Administrative Agent for the account of the Issuing Bank its Pro Rata share of such amount, together with its Pro Rata share of any interest or penalties payable with respect thereto.

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(e) Equalization. If any Lender receives any payment or makes any application on account of its Letter of Credit Participating Interest, such Lender shall forthwith pay over to the Issuing Bank, in Dollars and in like kind of funds received or applied by it the amount in excess of such Lender's ratable share of the amount so received or applied.

3.5 Obligations Absolute. The payment obligations of the Borrower under Section 3.4 hereof shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances (other than wrongful payment by the Issuing Bank under a Letter of Credit which results solely from the gross negligence or willful misconduct of the Issuing Bank), including, without limitation, the following circumstances:

(a) any lack of validity or enforceability of this Agreement, any Letter of Credit, any other Loan Document or any documents, instruments or agreements evidencing or otherwise relating to any obligation of the Borrower or Subsidiary of the Borrower secured or supported by any Letter of Credit;

(b) the existence of any claim, setoff, defense or other right which the Borrower or any other Person may have at any time against any beneficiary or transferee of any Letter of Credit (or any Persons for whom any such beneficiary or transferee may be acting), the Issuing Bank, any Lender, or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or any unrelated transaction;

(c) any draft, certificate, statement or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(d) payment by the Issuing Bank under any Letter of Credit against presentation of a draft or certificate which does not comply with the terms of such Letter of Credit, or payment by the Issuing Bank under the Letter of Credit in any other circumstances in which conditions to payment are not met, except any such payment resulting solely from the gross negligence or willful misconduct of the Issuing Bank; or

(e) any other event, condition or circumstance whatever which does not result solely from the gross negligence or willful misconduct of the Issuing Bank, whether or not similar to any of the foregoing.

The Borrower bears the risk of, and neither the Issuing Bank, any of its directors, officers, employees or agents, nor any Lender, shall be liable or responsible for the use which may be made of any Letter of Credit, or acts or omissions of the beneficiary or any transferee in connection therewith.

3.6 Further Assurances. The Borrower hereby agrees, from time to time, to do and perform any and all acts and to execute any and all further instruments reasonably requested by the Issuing Bank more fully to effect the purposes of this Agreement and the issuance of the Letters of Credit hereunder.

3.7 Cash Deposit for Letters of Credit. (a) Cash Deposit for Letter of Credit Exposure in Certain Circumstances. To the extent that this Agreement or any other Loan Document requires a payment, prepayment or other application of funds to be made with respect to the Revolving Credit Loans, such provision shall be construed as follows: after payment in full of the outstanding Revolving Credit Loans (whether or not such

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payment would require the Borrower to pay any amount under Section 2.9(b) hereof), and the payment in full of all outstanding Letter of Credit Unreimbursed Draws, then, to the extent of the excess, if any, of the aggregate Letter of Credit Exposure at such time over the balance in the Letter of Credit Cash Account, an amount equal to the remainder of the amount so required to be paid by the Borrower shall immediately be paid by the Borrower to the Administrative Agent for deposit in the Letter of Credit Cash Account. In addition, the Borrower agrees that, without limitation of the foregoing or of any other provisions of this Agreement or the Loan Documents requiring collateral for the Letters of Credit or other Obligations in whole or in part, and without limitation of other rights and remedies under this Agreement or the Loan Documents or at law or in equity, if all of the Revolving Credit Loans become due and payable pursuant to Section 8.2 hereof, the Borrower shall immediately pay to th e Administrative Agent, for deposit in the Letter of Credit Cash Account, an amount equal to the excess, if any, of the aggregate Letter of Credit Exposure at such time over the balance in the Letter of Credit Cash Account. The Administrative Agent shall release funds in the Letter of Credit Cash Account to the Issuing Bank for payment of Letter of Credit Reimbursement Obligations constituting Letter of Credit Unreimbursed Draws, as and when the same become due and payable if and to the extent the Borrower fails to pay the same.

(b) Letter of Credit Cash Account. The Administrative Agent shall maintain in its own name at its Office a deposit account (the "Letter of Credit Cash Account"), which shall bear interest (added to the deposit balance) in accordance with the Administrative Agent's ordinary practices for deposit accounts of like size and nature, over which the Administrative Agent shall have sole dominion and control, and the Borrower shall have no right to withdraw any funds deposited therein. The Administrative Agent shall deposit into the Letter of Credit Cash Account such funds as are required to be paid therein by Section 3.7(a). As security for the payment of the Obligations, the Borrower hereby grants, conveys, assigns, pledges, transfers to the Administrative Agent, and creates in the Administrative Agent's favor a continuing Lien on and security interest in, the Letter of Credit Cash Account, all amounts from time to time on deposit therein, all proceeds of the conversion, vol untary or involuntary, thereof into cash, instruments, securities or other property, and all other proceeds thereof. The Borrower hereby represents, warrants, covenants and agrees that such Lien shall at all times be valid and perfected, prior to all other Liens, and the Borrower shall take or cause to be taken such actions and execute and deliver such instruments and documents as may be necessary or, in the Administrative Agent's judgment, desirable to perfect or protect such Lien. The Borrower shall not create or suffer to exist any Lien on any amounts or investment held in the Letter of Credit Collateral Account other than the Lien in favor of the Administrative Agent granted under this Section.

(c) Application of Funds. The Administrative Agent shall apply funds in the Letter of Credit Cash Account: (i) on account of Letter of Credit Reimbursement Obligations as and when the same become due and payable if and to the extent that the Borrower fails directly to pay the same, and (ii) if no Letter of Credit Reimbursement Obligations are due and payable, no Letters of Credit are outstanding and the balance of the Letter of Credit Cash Account exceeds the aggregate Letter of Credit Exposure, the excess shall be applied on account of the other Obligations secured hereby. If all Obligations (other than Obligations constituting contingent obligations under indemnification provisions which survive indefinitely, so long as no unsatisfied claim has been made under any such indemnification provision) have been paid in full in cash, all Commitments have terminated and all Letters of Credit have expired, promptly following demand by the Borrower the Administrative Agent shall release to the Borro wer all remaining funds in the Letter of Credit Cash Account.

3.8 Certain Provisions Relating to the Issuing Bank.

(a) General. The Issuing Bank shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents, and no implied duties or responsibilities on the part of the

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Issuing Bank shall be read into this Agreement or any Loan Document or shall otherwise exist. The duties and responsibilities of the Issuing Bank to the other Lender Parties under this Agreement and the other Loan Documents shall be mechanical and administrative in nature, and the Issuing Bank shall not have a fiduciary relationship in respect of any Lender Party or any other Person. The Issuing Bank shall not be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any other Loan Document, unless caused by its own gross negligence or willful misconduct. The Issuing Bank shall be under no obligation to ascertain, inquire or give any notice relating to (i) the performance or observance of any of the terms or conditions of this Agreement or any other Loan Document on the part of the Borrower, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower or any other Person, or (iii) the existence of any Event of Default or Potential Default. The Issuing Bank shall not be under any obligation, either initially or on a continuing basis, to provide the Administrative Agent or any Lender with any notices, reports or information of any nature, whether in its possession presently or hereafter, except for such notices, reports and other information expressly required by this Agreement to be so furnished.

(b) Administration. The Issuing Bank may rely upon any notice or other communication of any nature (written or oral, including but not limited to telephone conversations, whether or not such notice or other communication is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the proper party or parties, and the Issuing Bank shall not have any duty to verify the identity or authority of any Person giving such notice or other communication. The Issuing Bank may consult with legal counsel (including, without limitation, in-house counsel for the Issuing Bank or in-house or other counsel for the Borrower), independent public accountants and any other experts selected by it from time to time, and the Issuing Bank shall not be liable for any action taken or omitted to be taken in good faith in accordance with the advice of such counsel, accountants or experts. Whenever the Issuing Bank shall deem it necessary or desirable that a ma tter be proved or established with respect to the Borrower or any Lender Party, such matter may be established by a certificate of the Borrower or such Lender Party, as the case may be, and the Issuing Bank may conclusively rely upon such certificate.

(c) Indemnification of Issuing Bank by Lenders. Each Lender hereby agrees to reimburse and indemnify the Issuing Bank and its directors, officers, employees and agents (to the extent not reimbursed by the Borrower and without limitation of the obligations of the Borrower to do so), Pro Rata, from and against any and all amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature (including, without limitation, the fees and disbursements of counsel (other than in-house counsel) for the Issuing Bank or such other Person in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not the Issuing Bank or the other Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against such Issuing Bank, in its capacity as such, or such other Person, as a result of, or arising out of, or in any way related to or by reason of, this Agreement, any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction secured or financed in whole or in part, directly or indirectly, with any Letter of Credit or the proceeds thereof, provided that, no Lender shall be liable for any portion of such amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting from the gross negligence or willful misconduct of the Issuing Bank or such other Person, as finally determined by a court of competent jurisdiction.

3.9 Existing Letters of Credit. The Issuing Bank has previously issued the letters of credit identified on Schedule 3.9 (the "Existing Letters of Credit"). Effective on the Closing Date (i) the Existing Letters of Credit shall be deemed to be Letters of Credit issued under this Agreement and (ii) the Issuing Bank shall be deemed to have sold, and each other Lender shall be deemed to have purchased its Letter of Credit Participating Interest in each such Letter of Credit in accordance with Section 3.3(a) hereof.

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES

The Borrower hereby represents and warrants to each Lender Party as follows:

4.1 Corporate Status. The Borrower and each Subsidiary of the Borrower is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation. The Borrower and each Subsidiary of the Borrower has corporate power and authority to own its property and to transact the business in which it is engaged or presently proposes to engage. The Borrower and each Subsidiary of the Borrower is duly qualified to do business as a foreign corporation and is in good standing in all jurisdictions in which the ownership of its properties or the nature of its activities or both makes such qualification necessary or advisable, except for matters that, individually or in the aggregate, are not likely to have a Material Adverse Effect.

4.2 Corporate Power and Authorization. Each Loan Party has corporate power and authority to execute, deliver, perform, and take all actions contemplated by, each Loan Document to which it is a party, and all such action has been duly and validly authorized by all necessary corporate proceedings on its part. Without limitation of the foregoing, the Borrower has the corporate power and authority to borrow and to cause Letters of Credit to be issued pursuant to the Loan Documents to the fullest extent permitted hereby and thereby from time to time, and has taken all necessary corporate action to authorize such borrowings and such issuances of Letters of Credit.

4.3 Execution and Binding Effect. This Agreement and each other Loan Document to which any Loan Party is a party has been duly and validly executed and delivered by each Loan Party which is a party hereto or thereto, as the case may be. This Agreement and each such other Loan Document constitutes, and each other Loan Document when executed and delivered by the applicable Loan Party will constitute, the legal, valid and binding obligation of each Loan Party which is a party hereto or thereto, as the case may be, enforceable against such Loan Party in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors' rights or by general principles of equity limiting the availability of equitable remedies.

4.4 Governmental Approvals and Filings. No approval, order, consent, authorization, certificate, license, permit or validation of, or exemption or other action by, or filing, recording or registration with, or notice to, any Governmental Authority (collectively, "Governmental Action") is or will be necessary or advisable in connection with execution and delivery of any Loan Document by any Loan Party, consummation by any Loan Party of the transactions herein or therein contemplated, performance of or compliance with the terms and conditions hereof or thereof by any Loan Party or to ensure the legality, validity, binding effect or enforceability hereof or thereof.

4.5 Absence of Conflicts. Neither the execution and delivery of any Loan Document by any Loan Party, nor consummation by any Loan Party of the transactions herein or therein contemplated, nor performance of or compliance with the terms and conditions hereof or thereof by any Loan Party does or will

(a) violate or conflict with any Law, or

(b) violate, conflict with or result in a breach of any term or condition of, or constitute a default under, or result in (or give rise to any right, contingent or otherwise, of any Person to cause) any termination, cancellation, prepayment or acceleration of performance of, or result in the creation or imposition of (or give rise to any obligation, contingent or otherwise, to create or impose) any Lien upon any of property of the Borrower or any Subsidiary of the Borrower pursuant to, or otherwise result in (or give rise to any right, contingent or otherwise, of any Person to cause) any change in any right, power, privilege, duty or obligation of the Borrower or any Subsidiary of the Borrower under or in connection with,

(i) the articles of incorporation or bylaws (or other constituent documents) of the Borrower or any Subsidiary of the Borrower,

(ii) any agreement or instrument creating, evidencing or securing any other Indebtedness or Guaranty Equivalents to which the Borrower or any Subsidiary of the Borrower is a party or by which any of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound, or

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(iii) any other agreement or instrument or arrangement to which the Borrower or any Subsidiary of the Borrower is a party or by which any of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound,

except, in the case of clauses (ii) and (iii), for matters that, individually or in the aggregate, are not likely to have a Material Adverse Effect.

4.6 Audited Financial Statements. The Borrower has heretofore furnished to the Administrative Agent and each Lender consolidated and consolidating balance sheets of the Borrower and its consolidated Subsidiaries as of December 30, 2000, and December 29, 2001, and the related consolidated and consolidating statements of income, cash flows and changes in stockholders' equity for the fiscal years then ended, as examined and reported on by Ernst & Young LLP, independent certified public accountants for the Borrower, who delivered an unqualified opinion in respect thereof. Such financial statements (including the notes thereto) present fairly in all material respects the financial condition of the Borrower and its consolidated Subsidiaries as of the end of each such fiscal year and the results of their operations and their cash flows for the fiscal years then ended, all in conformity with GAAP.

4.7 Interim Financial Statements. The Borrower has heretofore furnished to the Administrative Agent and each Lender interim consolidated balance sheets of the Borrower and its consolidated Subsidiaries as of the end of each of the first two fiscal quarters of the fiscal year ending in December, 2002, together with the related consolidated statements of income, cash flows and changes in stockholders' equity for the applicable fiscal periods ending on each such date. Such financial statements (including the notes thereto) present fairly in all material respects the financial condition of the Borrower and its consolidated Subsidiaries as of the end of each such fiscal quarter and the results of their operations and their cash flows for the fiscal periods then ended, all in conformity with GAAP (except to the extent set forth in the notes to said financial statements), subject to normal and recurring yearend audit adjustments, and except that such financial statements do not contain all of the foot note disclosures required by GAAP.

4.8 Absence of Undisclosed Liabilities. As of the date of this Agreement, neither the Borrower nor any Subsidiary of the Borrower has any liability or obligation of any nature whatever (whether absolute, accrued, contingent or otherwise, whether or not due), except (a) as disclosed in the financial statements referred to in Sections 4.6 and 4.7 hereof or on Schedule 4.22 hereto, (b) matters that, individually or in the aggregate, are not likely to have a Material Adverse Effect, and (c) liabilities, obligations, commitments and losses incurred after December 29, 2001, in the ordinary course of business and consistent with past practices.

4.9 Absence of Material Adverse Changes. Since December 29, 2001, there has been no material adverse change in the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole.

4.10 Projections. The Borrower has furnished to the Administrative Agent and each Lender projections prepared by the Borrower demonstrating the projected consolidated operating cash flows and sources and uses of funds of the Borrower and its consolidated Subsidiaries, for Fiscal Year ending in December 2002. Such projections were prepared on the basis of assumptions and estimates which, as of the date of preparation thereof and as of the date hereof, are believed by the Borrower to be reasonable, are made in good faith, and represent the Borrower's best judgment as to such matters. Nothing has come to the attention to the Borrower which would lead the Borrower to believe that such projections are not reasonable. Nothing contained in this Section shall constitute a representation or warranty that such future financial performance or results of operations will in fact be achieved.

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4.11 Solvency. On and as of the Closing Date and after giving effect to all Loans and other obligations and liabilities being incurred on such date in connection therewith, and on the date of each subsequent Loan or other extension of credit hereunder and after giving effect to application of the proceeds thereof in accordance with the terms of the Loan Documents, each Loan Party is and will be Solvent.

4.12 Accurate and Complete Disclosure. All factual information (taken as a whole) heretofore, contemporaneously or hereafter provided (orally or in writing) by or on behalf of any Loan Party to the Administrative Agent or any Lender pursuant to or in connection with any Loan Document or any transaction contemplated hereby or thereby (other than the projections referred to in Section 4.10, as to which no representation is made in this Section 4.12) is or will be (as the case may be) true and accurate in all material respects on the date as of which such information is dated (or, if not dated, when received by the Administrative Agent or such Lender, as the case may be) and does not or will not (as the case may be) omit to state any material fact necessary to make such information (taken as a whole) not misleading at such time in light of the circumstances in which it was provided. Each Loan Party has disclosed to the Administrative Agent and each Lender in writing every fact or circumstance know n to such Loan Party which has, or which cannot reasonably be expected not to have, a Material Adverse Effect.

4.13 Margin Regulations. No part of the proceeds of any Loan hereunder will be used for the purpose of buying or carrying any "margin stock," as such term is used in Regulation U of the Board of Governors of the Federal Reserve System, as amended from time to time, or to extend credit to others for the purpose of buying or carrying any "margin stock". Neither any Loan Party nor any Subsidiary of any Loan Party is engaged in the business of extending credit to others for the purpose of buying or carrying "margin stock". Neither the making of any Loan nor any use of proceeds of any such Loan will violate or conflict with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System, as amended from time to time.

4.14 Subsidiaries. Schedule 4.14 hereof states as of the date hereof the authorized capitalization of each Subsidiary of the Borrower, the number of shares of each class of capital stock issued and outstanding of each such Subsidiary, and the number and percentage of outstanding shares of each such class of capital stock owned by the Borrower and by each Subsidiary. The outstanding shares of each Subsidiary of the Borrower have been duly authorized and validly issued and are fully paid and nonassessable. As of the date of this Agreement, each Loan Party owns beneficially and of record and has good title to all of the shares it is listed as owning in such Schedule 4.14, free and clear of any Lien. There are no options, warrants, calls, subscriptions, conversion rights, exchange rights, preemptive rights or other rights, agreements or arrangements (contingent or otherwise) which may in any circumstances now or hereafter obligate any Subsidiary to issue any shares of its capital stock or any other securities.

4.15 Partnerships, etc. As of the date of this Agreement, neither the Borrower nor any Subsidiary of the Borrower is a partner (general or limited) of any partnership, is a party to any joint venture or owns (beneficially or of record) any equity or similar interest in any Person (including but not limited to any interest pursuant to which the Borrower or such Subsidiary has or may in any circumstance have an obligation to make capital contributions to, or be generally liable for or on account of the liabilities, acts or omissions of such other Person), except for (a) capital stock of Subsidiaries referred to in Section 4.14 hereof, and (b) equity investments now existing or hereafter acquired as permitted under Section 7.5.

4.16 Litigation. There is no pending or (to the Borrower's knowledge after due inquiry) threatened action, suit, proceeding or investigation by or before any Governmental Authority against or affecting the Borrower or any Subsidiary of the Borrower, except for (a) matters set forth in Schedule 4.16 hereof, (b) matters described in the financial statements referred to in Section 4.6 hereof, and (c) matters that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

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4.17 Absence of Events of Default. No event has occurred and is continuing and no condition exists which constitutes an Event of Default or Potential Default.

4.18Absence of Other Conflicts. Neither the Borrower nor any Subsidiary of the Borrower is in violation of or conflict with, or is subject to any contingent liability on account of any violation of or conflict with:

(a) any Law,

(b) its articles of incorporation or by-laws (or other constituent documents), or

(c) any agreement or instrument or arrangement to which it is party or by which it or any of its properties (now owned or hereafter acquired) may be subject or bound

except in the case of clauses (a) and (c) for matters that, individually or in the aggregate, are not likely to have a Material Adverse Effect.

4.19 Insurance. The Borrower and each Subsidiary of the Borrower maintains, with insurers it reasonably believes to be financially sound and reputable, insurance with respect to its properties and business and against at least such liabilities, casualties and contingencies and in at least such types and amounts as is customary in the case of corporations engaged in the same or a similar business or having similar properties similarly situated.

4.20 Title to Property. The Borrower and each Subsidiary of the Borrower has good and marketable title to all real property owned or purported to be owned by it and good title to all other property of whatever nature owned or purported to be owned by it, including but not limited to all property reflected in the most recent audited balance sheet referred to in Section 4.6 hereof or submitted pursuant to Section 6.1(a) hereof, as the case may be, except as sold or otherwise disposed of in the ordinary course of business after the date of such balance sheet or, after the Closing Date, as otherwise permitted by the Loan Documents, in each case free and clear of all Liens, other than Permitted Liens.

4.21 Intellectual Property. The Borrower and each Subsidiary of the Borrower owns, or is licensed or otherwise has the right to use, all the patents, trademarks, service marks, names (trade, service, fictitious or otherwise), copyrights, technology (including but not limited to computer programs and software), processes, data bases and other rights, necessary to own and operate its properties and to carry on its business as presently conducted and presently planned to be conducted without conflict with the rights of others.

4.22 Taxes. All tax and information returns required to be filed by or on behalf of the Borrower or any Subsidiary of the Borrower have been properly prepared, executed and filed. All taxes, assessments, fees and other governmental charges upon the Borrower or any Subsidiary of the Borrower or upon any of their respective properties, incomes, sales or franchises which are due and payable have been paid other than those not yet delinquent and payable without premium or penalty, and except for those being diligently contested in good faith by appropriate proceedings, and in each case adequate reserves and provisions for taxes have been made on the books of the Borrower and each Subsidiary of the Borrower. The reserves and provisions for taxes on the books of the Borrower and each Subsidiary of the Borrower are adequate for all open years and for its current fiscal period. Except as set forth on Schedule 4.22 hereto, neither the Borrower nor any Subsidiary of the Borrower knows of any proposed add itional assessment or basis for any material assessment for additional taxes (whether or not reserved against). The federal, state and local corporate income and franchise tax liabilities of the Borrower and each of its Subsidiaries have been finally determined by the Internal Revenue Service and other relevant taxing authorities, or the time for audit has expired, for all fiscal periods ending on or prior to December 28, 1996, and all such liabilities (including all deficiencies assessed following audit) have been satisfied. Neither the Borrower nor any Subsidiary of the Borrower has at any time filed a consolidated tax return with any Person other than the Borrower and its Subsidiaries.

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4.23 Employee Benefit Plans. Schedule 4.23 hereto sets forth a true, complete and correct list of all Plans. Except as set forth on Schedule 4.23 hereto, (a) none of the Borrower, any Subsidiary or any ERISA Affiliate currently contributes to, or is currently obligated to contribute to, any Multiemployer Plan or has incurred, or is reasonably expected to incur, any Withdrawal Liability to any Multiemployer Plan and (b) no fact, including but not limited to any Reportable Event, exists, to the Borrower's knowledge, in connection with any Plan which fact may constitute grounds for termination of any such Plan by the PBGC pursuant to Sections 4042(a) (1), (2) or (3) of ERISA or for the appointment by the appropriate United Stated District Court of a trustee to administer any Plan. To the best of the Borrower's knowledge, each Plan has been maintained and administered in all material respects in compliance with ERISA and the Code, and the Borrower, each Subsidiary and each ERISA Affiliate is in com pliance with the provisions of ERISA and the Code relating to minimum funding requirements for all Plans. To the best of the Borrower's knowledge, none of the Borrower, any Subsidiary or any ERISA Affiliate has incurred any material liability to the PBGC with respect to any Plan. No Prohibited Transaction exists or will exist with respect to any Plan upon the execution, delivery and performance of the Loan Documents by the Loan Parties for which a statutory or administrative exemption is not available under Section 408 of ERISA or Section 4975 of the Code, which Prohibited Transaction is likely to have a Material Adverse Effect.

4.24 Environmental Compliance. Except as otherwise specifically disclosed in Schedule 4.24, and except to the extent that any deviation from any representation set forth in this Section 4.24 would not be likely to result in a Material Adverse Effect:

(a) The Borrower and each of its Subsidiaries are, and all real property owned or leased by any of them is, in compliance with applicable Environmental Laws;

(b) To the knowledge of any Responsible Officer, there have not been any releases of any Hazardous Substances from or to any real property owned or leased by the Borrower or any Subsidiary, nor have any Hazardous Substances been used, generated, treated, stored or disposed of on such real property, except in compliance with applicable Environmental Laws; and

(c) To the knowledge of any Responsible Officer, no Hazardous Substances have been or are being used, generated, treated, stored, transported or disposed of by the Borrower or any Subsidiary except in compliance with applicable Environmental Laws.

4.25 Investment Company. Neither the Borrower nor any of its Subsidiaries is an "investment company" or a company controlled by an investment company within the meaning of the Investment Company Act of 1940, as amended.

ARTICLE V
CONDITIONS OF LENDING

5.1 Conditions to Initial Loans. The obligation of each Lender to make Loans on the Closing Date and of the Issuing Bank to issue any Letter of Credit on the Closing Date is subject to the satisfaction, immediately prior to or concurrently with the making of such Loan or the issuance of such Letter of Credit, of the following conditions precedent, in addition to the conditions precedent set forth in Section 5.2 hereof:

(a) Agreement; Notes. The Administrative Agent shall have received an executed counterpart of this Agreement for each Lender, duly executed by the Borrower, and executed Revolving Credit Notes, conforming to the requirements hereof, duly executed on behalf of the Borrower.

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(b) Subsidiary Guaranty. The Administrative Agent shall have received, with a copy for each Lender, a Guaranty and Suretyship Agreement substantially in the form of Exhibit C hereto (as amended, modified or supplemented from time to time, the "Subsidiary Guaranty"), duly executed on behalf of each Subsidiary of the Borrower named on the signature pages thereto.

(c) Corporate Proceedings. The Administrative Agent shall have received, with a counterpart for each Lender, certificates by the Secretary or Assistant Secretary of each Loan Party dated as of the Closing Date as to (i) true copies of the articles of incorporation and by-laws (or other constituent documents) of each Loan Party in effect on such date (which, in the case of articles of incorporation or other constituent documents filed or required to be filed with the Secretary of State or other Governmental Authority in its jurisdiction of incorporation, shall be certified to be true, correct and complete by such Secretary of State or other Governmental Authority not more than 30 days before the Closing Date), (ii) true copies of all corporate action taken by each Loan Party relative to this Agreement and the other Loan Documents and (iii) the incumbency and signature of the respective officers of each Loan Party executing this Agreement and the other Loan Documents to which such Loan Pa rty is a party, together with satisfactory evidence of the incumbency of such Secretary or Assistant Secretary.

(d) Legal Opinion of Counsel to the Loan Parties. The Administrative Agent shall have received, with an executed counterpart for each Lender, opinions addressed to the Administrative Agent and each Lender, dated the Closing Date, of Paul, Weiss, Rifkind, Wharton & Garrison and Pepper Hamilton LLP, counsel to the Loan Parties.

(e) Certificates of Insurance. The Administrative Agent shall have received insurance certificates evidencing the Borrower's insurance coverage.

(f) Fees, Expenses, etc. All fees and other compensation required to be paid to the Administrative Agent or the Lenders pursuant hereto or pursuant to any other written agreement on or prior to the Closing Date shall have been paid or received.

(g) Additional Matters. The Administrative Agent shall have received such other certificates, opinions, documents and instruments as may be reasonably requested by any Lender. All corporate and other proceedings, and all documents, instruments and other matters in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be reasonably satisfactory in form and substance to the Administrative Agent.

5.2 Conditions to All Loans. The obligation of each Lender to make any Loan and of the Issuing Bank to issue Letters of Credit after the Closing Date is subject to performance by each of the Loan Parties of their respective obligations to be performed hereunder or under the other Loan Documents on or before the date of such Loan and to satisfaction of the following further conditions precedent:

(a) Notice. Notice with respect to such Loan or Letter of Credit shall have been given by the Borrower as provided in Article II or Article III hereof.

(b) Representations and Warranties. Each of the representations and warranties made by the Borrower and each Loan Party herein and in each other Loan Document shall be true and correct in all material respects on and as of such date as if made on and as of such date (except to the extent such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct as of such earlier date), both before and after giving effect to the Loans requested to be made on such date and Letters of Credit requested to be issued on such date; provided, the representations and warranties in Sections 4.10 need be true and correct only as of the Closing Date.

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(c) No Defaults. No Event of Default or Potential Default shall have occurred and be continuing on such date or after giving effect to the Loans requested to be made or Letters of Credit requested to be issued on such date.

(d) No Violations of Law, etc. Neither the making nor use of the Loans or Letter of Credit, as the case may be, shall cause any Lender or the Issuing Bank to violate or conflict with any Law.

Each request by the Borrower for any Loan or Letter of Credit shall constitute a representation and warranty by the Borrower that the conditions set forth in this Section 5.2 have been satisfied as of the date of such request. Failure of the Administrative Agent to receive notice from the Borrower to the contrary before such Loan is made or such Letter of Credit is issued shall constitute a further representation and warranty by the Borrower that the conditions referred to in this Section 5.2 have been satisfied as of the date such Loan is made or such Letter of Credit is issued.

ARTICLE VI
AFFIRMATIVE COVENANTS

The Borrower hereby covenants to the Administrative Agent and each Lender as follows:

6.1 Basic Reporting Requirements.

(a) Annual Audit Reports. As soon as practicable, and in any event within 90 days after the close of each fiscal year of the Borrower, the Borrower shall furnish to the Administrative Agent, with a copy for each Lender, consolidated and consolidating statements of income, cash flows and changes in stockholders' equity of the Borrower and its consolidated Subsidiaries for such fiscal year and a consolidated and consolidating balance sheet of the Borrower and its consolidated Subsidiaries as of the close of such fiscal year, and notes to each, all in reasonable detail, setting forth in comparative form the corresponding figures for the preceding fiscal year. Such financial statements shall be accompanied by a report of Ernst & Young LLP or other independent certified public accountants of recognized national standing selected by the Borrower and reasonably satisfactory to the Required Lenders. Such report shall be free of exceptions or qualifications not acceptable to th e Required Lenders and in any event shall be free of any exception or qualification which is of "going concern" or like nature or which relates to a limited scope of examination. Such report in any event shall contain a written statement of such accountants substantially to the effect that (i) such accountants examined such financial statements in accordance with generally accepted auditing standards and accordingly made such tests of accounting records and such other auditing procedures as such accountants considered necessary in the circumstances and (ii) in the opinion of such accountants such financial statements present fairly in all material respects the financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal year and the results of their operations and their cash flows and changes in stockholders' equity for such fiscal year, in conformity with GAAP.

(b) Quarterly Reports. As soon as practicable, and in any event within 45 days after the close of each of the first three fiscal quarters of each fiscal year of the Borrower, the Borrower shall furnish to the Administrative Agent, with a copy for each Lender, unaudited consolidated statements of income, cash flows and changes in stockholders' equity of the Borrower and its consolidated Subsidiaries for such fiscal quarter and for the period from the beginning of such fiscal year to the end of such fiscal quarter and an unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as of the close of such fiscal quarter, all in reasonable detail, setting forth in comparative form the corresponding figures for the same periods or as of the same date during the preceding fiscal year (except for the consolidated and consolidating balance sheets, which shall set forth in comparative form the corresponding balance sheet as of the prior fiscal year end). Such financial statements shall be certified by a Responsible Officer of the Borrower as presenting fairly in all material respects the financial position of the Borrower and its consolidated Subsidiaries as of the end of such fiscal quarter and the results of their operations and their cash flows and changes in stockholders' equity for such fiscal year, in conformity with GAAP, subject to normal and recurring yearend audit adjustments.

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(c) Additional Quarterly Reporting. The Borrower shall deliver to the Administrative Agent, with a copy for each Lender, concurrently with the delivery of the financial statements referred to in subsections (a) and (b) of this Section 5.1:

(a) a compliance certificate in substantially the form attached hereto as Exhibit D, duly completed and signed by a Responsible Officer of the Borrower, and

(b) the Borrower's "sales per square foot" reports, in form reasonably satisfactory to the Administrative Agent and "same store sales" reports, in substantially the form currently included in the Borrower's SEC filings.

(d) Certain Other Reports and Information. Promptly upon their becoming available to the Borrower, the Borrower shall deliver to the Administrative Agent, with a copy for each Lender, a copy of (i) all regular or special reports, registration statements and amendments to the foregoing which the Borrower or any Subsidiary shall file with the Securities and Exchange Commission (or any successor thereto) or any securities exchange and (ii) all reports, proxy statements, financial statements and other information distributed by the Borrower to its bondholders or the financial community generally.

(e) Further Information. The Borrower will promptly furnish to the Administrative Agent, with a copy for each Lender, a copy of the executive summary (and related financial projections) of Borrower's operating budget for each Fiscal Year (which shall in any event be furnished not later than the last day of the immediately prior Fiscal Year) and such other information and in such form as the Administrative Agent or any Lender may reasonably request from time to time.

(f) Notice of Certain Events. Promptly upon becoming aware of any of the following, the Borrower shall give the Administrative Agent notice thereof, together with a written statement of a Responsible Officer of the Borrower setting forth the details thereof and any action with respect thereto taken or proposed to be taken by the Borrower:

(i) Any Event of Default or Potential Default.

(ii) Any material adverse change in the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole.

(iii) Any pending or threatened action, suit, proceeding or investigation by or before any Governmental Authority against or affecting the Borrower or any Subsidiary of the Borrower, except for matters that if adversely decided, individually or in the aggregate, would not have a Material Adverse Effect.

(iv) Any material violation, breach or default by the Borrower or any Subsidiary of the Borrower or by any other party of or under any agreement or instrument material to the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole.

(v) Any Reportable Event (other than Reportable Events for which the thirty (30) day advance notice requirement to the PBGC has been waived pursuant to PBGC Regulation 29 C.F.R. 2615.1 et seq.) regarding any of the Plans and any action which is proposed to be taken with respect thereto. In addition, the Borrower shall send to the Administrative Agent, (A) if so requested by any Lender, copies of each annual and other report with respect to each Plan filed with the United States Secretary of Labor or the PBGC and (B) promptly after receipt thereof, a copy of any notice the Borrower, any Subsidiary or any ERISA Affiliate may receive relating to any Prohibited Transaction or the intention of the PBGC to terminate any Plan or to appoint a trustee to administer any Plan or assessing any Withdrawal Liability with respect to any Multiemployer Plan or any liability under Section 412 of the Internal Revenue Code or under Sections 302, 4062, 4063 or 4064 of ERISA.

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(g) Visitation; Verification. The Borrower shall permit such Persons as the Administrative Agent or any Lender may designate from time to time to visit and inspect any of the properties of the Borrower and of any Subsidiary, to examine their respective books and records and take copies and extracts therefrom and to discuss their respective affairs with their respective Responsible Officers and directors, at such times, upon reasonable advance notice, and as often as the Administrative Agent or any Lender may reasonably request. The Borrower hereby authorizes such Responsible Officers and directors to discuss with the Administrative Agent or any Lender the affairs of the Borrower and its Subsidiaries.

6.2 Insurance. The Borrower shall, and shall cause each Subsidiary to, (a) maintain with financially sound and reputable insurers insurance with respect to its properties and business and against such liabilities, casualties and contingencies and of such types and in such amounts as is customary in the case of corporations engaged in the same or similar businesses or having similar properties similarly situated, and (b) furnish to each Lender from time to time upon request copies of the policies under which such insurance is issued, certificates of insurance and such other information relating to such insurance as such Lender may request.

6.3 Payment of Taxes and Other Potential Charges and Priority Claims. The Borrower shall, and shall cause each Subsidiary to, pay or discharge

(a) on or prior to the date on which penalties attach thereto, all taxes, assessments and other governmental charges imposed upon it or any of its properties;

(b) on or prior to the date when due, all lawful claims of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons which, if unpaid, might result in the creation of a Lien upon any such property; and

(c) on or prior to the date when due, all other lawful claims which, if unpaid, would result in the creation of a Lien upon any such property or which, if unpaid, would give rise to a claim entitled to priority over general creditors of the Borrower or such Subsidiary in a case under Title 11 (Bankruptcy) of the United States Code, as amended;

provided that, unless and until foreclosure, distraint, levy, sale or similar proceedings shall have been commenced the Borrower or such Subsidiary need not pay or discharge any such tax, assessment, charge or claim so long as (x) the validity thereof is contested in good faith and by appropriate proceedings diligently conducted, and (y) such reserves or other appropriate provisions as may be required by GAAP shall have been made therefor.

6.4 Preservation of Corporate Status. The Borrower shall, and shall cause each of its Subsidiaries to, maintain its status as a corporation or other entity duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, as applicable, and to be duly qualified to do business as a foreign corporation or other entity and in good standing in all jurisdictions in which the ownership of its properties or the nature of its business or both make such qualification necessary or advisable, except for matters that, individually or in the aggregate, are not likely to have a Material Adverse Effect.

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6.5 Governmental Approvals and Filings. The Borrower shall, and shall cause each Subsidiary to, keep and maintain in full force and effect all Governmental Actions necessary or advisable in connection with execution and delivery of any Loan Document by any Loan Party, consummation by any Loan Party of the transactions herein or therein contemplated, performance of or compliance with the terms and conditions hereof or thereof by any Loan Party or to ensure the legality, validity, binding effect, enforceability or admissibility in evidence hereof or thereof.

6.6 Maintenance of Properties. The Borrower shall, and shall cause each Subsidiary to, maintain or cause to be maintained in good repair, working order and condition (ordinary wear and tear excepted) the properties now or hereafter owned, leased or otherwise possessed by it and shall make or cause to be made all needful and proper repairs, renewals, replacements and improvements thereto so that the business carried on in connection therewith may be properly and advantageously conducted at all times.

6.7 Avoidance of Other Conflicts. The Borrower shall not, and shall not permit any of its Subsidiaries to, violate or conflict with, be in violation of or conflict with, or be or remain subject to any liability (contingent or otherwise) on account of any violation or conflict with

                      (a) any Law, or

                      (b) its articles of incorporation of by-laws (or other constituent documents), or

                 (c) any agreement or instrument to which it is a party or by which it or any of its property is bound,

except, in the case of clauses (a) and (c), for matters that are not likely, individually or in the aggregate, to have a Material Adverse Effect.

6.8. Financial Accounting Practices. The Borrower shall, and shall cause each Subsidiary of the Borrower to, make and keep books, records and accounts which, in reasonable detail, accurately and fairly reflect its transactions and dispositions of its assets and maintain a system of internal accounting controls sufficient to provide reasonable assurances that (a) transactions are executed in accordance with management's general or specific authorization, (b) transactions are recorded as necessary (i) to permit preparation of financial statements in conformity with GAAP and (ii) to maintain accountability for assets, (c) access to assets is permitted only in accordance with management's general or specific authorization and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

6.9. Continuation of or Change in Business. The Borrower and each of its Subsidiaries shall continue to engage in the primary businesses they engage in during the present and preceding fiscal year, and the Borrower shall not, and shall not permit any Subsidiary of the Borrower to, engage in any unrelated business.

6.10 Use of Proceeds. The Borrower shall apply the proceeds of all Loans hereunder only for working capital, capital expenditures and general corporate purposes. The Borrower shall not use the proceeds of any Loans hereunder directly or indirectly for any unlawful purpose, in any manner inconsistent with Section 4.13 hereof, or inconsistent with any other provision of any Loan Document.

6.11 Environmental Matters. The Borrower shall, and shall cause its Subsidiaries to:

(a) comply with all Environmental Laws, the noncompliance with which would be likely to result in a Material Adverse Effect;

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(b) inspect real property that is owned or leased by them at a frequency appropriate to maintain compliance with item (a) above;

(c) employ appropriate technology, where necessary, to maintain compliance with applicable Environmental Laws; and

(d) remediate or cause to be remediated any unlawful release of, unlawful contamination by or other unlawful presence of Hazardous Substances found on real property owned or leased by any of them, in a timely manner and in accordance with (and at the least to the extent required by) applicable Environmental Laws and directives of any Governmental Authority having authority over such remediation.

ARTICLE VII
NEGATIVE COVENANTS

The Borrower hereby covenants to the Administrative Agent and each Lender as follows:

7.1 Financial Covenants.

(a) Minimum Consolidated Net Worth. The Borrower shall not permit Consolidated Net Worth at any time to be less than $488,000,000.00 plus 50% of cumulative Consolidated Net Income for all fiscal quarters ending after June 29, 2002 and prior to the date of determination; provided that, if Consolidated Net Income for any such fiscal quarter is negative, cumulative Consolidated Net Income shall not be reduced.

(b) Fixed Charge Coverage Ratio. The Borrower shall not permit its Fixed Charge Coverage Ratio to be less than 1.75 to 1 at the end of any Fiscal Quarter.

7.2 Liens. The Borrower shall not, and shall not permit any Subsidiary to, at any time create, incur, assume or suffer to exist any Lien on any of its property (now owned or hereafter acquired), or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except for the following ("Permitted Liens"):

(a) Liens existing on the date hereof securing obligations existing on the date hereof, as such Liens and obligations are listed in Schedule 7.2 hereto; and Liens securing successor Indebtedness incurred to refinance predecessor Indebtedness secured by Liens allowed under this subsection (a); provided that, in each case, the successor Indebtedness is an obligation of the same Person subject to the predecessor Indebtedness and is not greater than (and is not otherwise on terms materially less advantageous to the Borrower (in the Borrower's reasonable judgment exercised in good faith) than) the predecessor Indebtedness immediately before such refinancing, and the Lien securing the successor Indebtedness does not extend to any property other than that subject to the Lien securing the predecessor Indebtedness immediately before such refinancing;

(b) Liens arising from taxes, assessments, charges or claims described in Section 6.3 hereof that are not yet due or that remain payable without penalty or to the extent permitted to remain unpaid under the proviso to such Section 6.3;

(c) The Lien in favor of the Administrative Agent contemplated by Section 3.7 hereof and deposits or pledges of cash or securities in the ordinary course of business to secure (i) workmen's compensation, unemployment insurance or other social security obligations, (ii) performance of bids, tenders, trade contracts (other than for payment of money) or leases, (iii) stay, surety or appeal bonds, or (iv) other obligations of a like nature incurred in the ordinary course of business;

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(d) (i) Liens by a Borrower or Subsidiary on property securing all or part of the purchase price thereof and Liens (whether or not assumed) existing in property at the time of purchase thereof by the Borrower or a Subsidiary, provided, that: (A) such Lien is created before or substantially simultaneously with the purchase of such property by the Borrower or such Subsidiary, (B) such Lien is confined solely to the property so purchased, improvements thereto and proceeds thereof, and (C) the aggregate amount secured by all such Liens on any particular property at the time purchased by the Borrower or such Subsidiary, as the case may be, shall not exceed 100% of the purchase price of such property ("purchase price" for this purpose including the amount secured by each such Lien thereon whether or not assumed), and (ii) Liens arising under Capital Leases; provided that, the aggregate outstanding principal amount of all Indebtedness secured by Liens described in this Section 7.2(d) shall not exceed $20,000,000 at any time;

(e) Zoning restrictions, easements, minor restrictions (including reservations, covenants and rights of way) on the use of real property, minor irregularities in title thereto and other minor Liens that do not secure the payment of money or the performance of an obligation and that do not in the aggregate materially detract from the value of a property or asset to, or materially impair its use in the business of, the Borrower or such Subsidiary;

(f) Liens arising out of attachments, judgments or awards against the Borrower or any of its Subsidiaries with respect to which the Borrower or Subsidiary is engaged in proceedings for review or appeal and with respect to which the Borrower or such Subsidiary shall have secured within thirty days of the attachment of such claims a stay of execution pending such proceedings for review or appeal;

(g) Landlords', mechanics', carriers', workmen's, warehousemen's, materialmen's, repairmen's liens, statutory liens of banks and rights of set off, or other like Liens incurred in the ordinary course of business in respect of obligations which are not overdue or are being contested in good faith and by appropriate proceedings promptly initiated and diligently conducted, if a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor or making deposits to obtain the release of such Liens; and

(h) Liens on the property of a Person at the time such Person became a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary, but only for a period of not more than thirty days after consummation of such acquisition, merger of consolidation, and only if such Liens were in existence prior to the consummation of, and were not entered into in contemplation of, such acquisition, merger or consolidation, do not extend to any assets other than those of the Person acquired by, merged into or consolidated with the Borrower or such Subsidiary, and do not, for all Liens otherwise permitted by this clause (h) secure obligations in excess of $20,000,000 in the aggregate.

"Permitted Lien" shall in no event include any Lien imposed by, or required to be granted pursuant to, ERISA or any Environmental Law.

7.3 Indebtedness. The Borrower shall not, and shall not permit any Subsidiary to, at any time create, incur, assume or suffer to exist any Indebtedness, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except

(a) Indebtedness to the Lender Parties pursuant to this Agreement and the other Loan Documents;

(b) Indebtedness existing on the date hereof and listed on Schedule 7.3(b) attached hereto and refinancings and renewals thereof; provided, that the successor Indebtedness is not greater than (and is not otherwise on terms materially less advantageous to the Borrower (in the Borrower's reasonable judgment exercised in good faith) than) the Indebtedness being refinanced or renewed;

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(c) Indebtedness consisting of trade payables incurred in the ordinary course of business;

(d) Indebtedness consisting of Guaranty Equivalents permitted by Section 7.4;

(e) Indebtedness due the Borrower or any Subsidiary incurred in the ordinary course of business;

(f) Additional Indebtedness in respect of, or incurred to finance, the purchase price of property and under Capital Leases in an aggregate principal amount not in excess of $20,000,000 at any one time outstanding; and

(g) Additional Indebtedness in an aggregate principal amount not in excess of $20,000,000 at any one time outstanding.

7.4 Guaranties, Indemnities, etc. The Borrower shall not, and shall not permit any Subsidiary to, be or become subject to or bound by any Guaranty Equivalent, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except:

(a) The Subsidiary Guaranty;

(b) Guaranties existing on the date hereof and listed in Schedule 7.4 hereto and refinancings and renewals thereof that do not increase the amount covered thereby;

(c)Contingent liabilities arising from the endorsement of negotiable or other instruments for deposit or collection or similar transactions in the ordinary course of business;

(d) Indemnities by the Borrower or any Subsidiary of the liabilities of its directors or officers in their capacities as such as permitted by Law;

(e) Indemnification provisions (other than with respect to Indebtedness) contained in contracts for transactions not otherwise prohibited hereby which are customarily included in contracts for similar transactions; and

(f) Guaranties by Subsidiaries of the Borrower of Indebtedness described in Section 7.3(g) hereof.

7.5Loans, Advances and Investments. The Borrower shall not, and shall not permit any Subsidiary to, at any time make or suffer to exist or remain outstanding any loan or advance to, or purchase, acquire or own (beneficially or of record) any stock, bonds, notes or securities of, or any partnership interest (whether general or limited) in, or any other interest in, or make any capital contribution to or other investment in, any other Person, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except:

(a) Loans and investments existing on the date hereof and listed in Schedule 7.5 hereof;

(b) Receivables owing to the Borrower or any Subsidiary arising from sales of inventory or services in the ordinary course of business and loans and advances extended by the Borrower or any Subsidiary to subcontractors or suppliers under usual and customary terms in the ordinary course of business;

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(c) The capital stock of a Subsidiary owned on the date hereof and listed on Schedule 4.14 hereto; loans, advances and capital contributions from the Borrower to its Subsidiaries; and loans and advances from a Subsidiary of the Borrower to the Borrower or another Subsidiary of the Borrower;

(d) Acquisitions of Subsidiaries permitted by Section 7.9; provided, that on the date of acquisition the Subsidiary becomes a party to the Subsidiary Guaranty in accordance with Section 5.12 of the Subsidiary Guaranty;

(e) Cash Equivalent Investments;

(f) Investments in marketable securities such as stocks, bonds, note or other securities, provided that the aggregate cost of such investments at any time outstanding (including for this purpose the cost of any investment written off) does not exceed $50,000,000;

(g) advances to employees in connection with relocation expenses in the ordinary course of business;

(h) advances to employees in an aggregate principal amount not exceeding $500,000 at any time outstanding; and

(i) securities issued on account of claims against a supplier or customer in the bankruptcy of such supplier or customer.

7.6 Restricted Stock Repurchases. From and after the Closing Date the Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly through a Subsidiary or otherwise, declare, order, pay, make or set aside any sum or property for any Restricted Stock Repurchases, except that, if no Event of Default or Potential Default shall have occurred and be continuing, and if no such Event of Default or Potential Default would exist after giving effect to the following, then the Borrower may make Restricted Stock Repurchases so long as the aggregate amount of all such repurchases after June 29, 2002, does not exceed $40,000,000.

7.7 Disposal of Assets. The Borrower shall not and shall not permit any Subsidiary to, abandon, sell, lease or otherwise dispose of any part of its assets (including shares of stock of the Subsidiaries held by the Borrower) except:

(a) The Borrower or its Subsidiaries may sell or otherwise dispose of inventory, equipment, other tangible assets and intellectual property in the ordinary course of business;

(b) The Borrower and its Subsidiaries may dispose of equipment which is obsolete or no longer useful in the business of the Borrower and its Subsidiaries (as determined by the Borrower in good faith);

(c) Subsidiaries of the Borrower may sell, transfer or lease their assets to the Borrower or to another Subsidiary; and

(d) The Borrower and its Subsidiaries may sell or otherwise dispose of assets, including shares of stock of a Subsidiary constituting all or less than a majority of the shares of a Subsidiary, for cash if the aggregate cash proceeds received for all such sales during the term of this Agreement do not exceed 10% of the book value of the Consolidated Assets of the Borrower and its Subsidiaries as of June 29, 2002.

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7.8 Limitation on Mergers, Consolidations and Dissolutions. The Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, (x) merge with or into or consolidate with any other Person, (y) liquidate, wind-up, dissolve or divide, or (z) agree, become or remain liable (contingently or otherwise) to do any of the foregoing; provided, that:

(a) any Subsidiary may merge into or consolidate with or liquidate into the Borrower so long as the Borrower is the surviving entity;

(b) any wholly-owned Subsidiary may merge into or consolidate with or liquidate into any other wholly-owned Subsidiary;

(c) the Borrower or a Subsidiary may effect any acquisition permitted by Section 7.9 by means of a merger or consolidation, provided, that if the resulting entity is not an existing Subsidiary, such entity shall become a Subsidiary Guarantor in accordance with Section 5.12 of the Subsidiary Guaranty; and

(d) any Subsidiary may merge into or consolidate with a third party in connection with a sale permitted by Section 7.7(d).

7.9 Capital Expenditures; Acquisitions. The Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, (a) acquire all or any substantial portion of the stock or assets of any going concern or line of business, or (b) make Consolidated Capital Expenditures; except the Borrower or a Subsidiary may make such acquisitions for cash and may make Consolidated Capital Expenditures, so long as the sum of the aggregate cash purchase price paid for all such acquisitions during any Fiscal Year and all Consolidated Capital Expenditures made during such Fiscal Year does not exceed $100,000,000.

7.10 SaleLeasebacks. The Borrower shall not, and shall not permit any Subsidiary of the Borrower to, at any time enter into or permit to remain in effect any transaction to which the Borrower or any Subsidiary of the Borrower is a party involving the sale, transfer or other disposition by the Borrower or any Subsidiary of the Borrower of any property (now owned or hereafter acquired), with a view directly or indirectly to the leasing back of any part of the same property or any other property used for the same or a similar purpose or purposes, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, except sale-leaseback transactions that would have been permitted by Sections 7.2 and 7.3, if structured as secured loans or as Capitalized Leases.

7.11 Dealings with Affiliates. Except for agreements, arrangements and contracts existing on the Closing Date and described on Schedule 7.11 hereto, the Borrower shall not, and shall not permit any Subsidiary of the Borrower to, enter into or carry out any transaction with (including, without limitation, purchase or lease property or services from, sell or lease property or services to, loan or Advance to, or enter into, permit to remain in existence or amend any contract, agreement or arrangement with) any Affiliate of the Borrower (other than a wholly-owned Subsidiary of the Borrower), directly or indirectly, or agree, become or remain liable (contingently or otherwise) to do any of the foregoing, (it being understood that dividends paid on capital stock shall be deemed not to be "transactions" for purposes of this Section 7.11), except:

(a) Directors, officers, employees and consultants of the Borrower or any Subsidiary of the Borrower may be compensated for services rendered in such capacity to the Borrower or such Subsidiary of the Borrower; provided that, (i) such compensation is in good faith and on terms no less favorable to the Borrower or such Subsidiary of the Borrower than those that could have been obtained in a comparable transaction with an unrelated third party, and (ii) in the case of compensation in excess of $100,000 per annum for any individual, the board of directors of the Borrower (including a majority of the directors having no direct or indirect interest in such transaction) approve any such transaction occurring after the Closing Date;

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(b) Restricted Stock Purchases permitted by Section 7.6 hereof;

(c) Stock option plans, restricted stock plans and other officer, director and employee benefit plans and arrangements approved by the board of directors of the Borrower (including a majority of the directors having no direct or indirect interest in such transaction); and

(d) Transactions between the Borrower and its Subsidiaries, on the one hand and Affiliates of the Borrower, on the other hand; provided that, (i) such transactions are entered into in good faith and on terms no less favorable to the Borrower or such Subsidiary of the Borrower than those that could have been obtained in a comparable transaction with an unrelated third party, and (ii) the board of directors of the Borrower (including a majority of the directors having no direct or indirect interest in such transaction) approve any such transaction occurring after the Closing Date.

7.12 Limitation on Certain Benefit Liabilities. The Borrower shall not, and shall not permit any Subsidiary of the Borrower, or any ERISA Affiliate to, become subject to Benefit Exposures in an amount that in the aggregate for all such Persons could reasonably be expected to have a Material Adverse Effect. As used herein, the term "Benefit Exposures" shall mean the sum of the maximum potential liabilities (direct, contingent or other) of the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate in connection with the following: (a) withdrawal liability (within the meaning of Section 4201 of ERISA) from any Multiemployer Plan, whether or not such liability has yet been triggered as a result of a withdrawal; (b) the "amount of unfunded benefit liabilities" (within the meaning of Section 4001(a)(18) of ERISA) under any Plan subject to Title IV of ERISA and maintained by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate, whether or not such liability has yet been triggered as a result of a termination of such Plan; (c) excise taxes assessed in connection with all of the above or otherwise in connection with any Plan maintained by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate; (d) Postretirement Benefit Obligations; (e) any other liability (contingent or other) in connection with a Plan maintained by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate or Multiemployer Plan which gives rise to a material risk of a Lien attaching to assets of the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate without regard to any minimum amount required by Law to cause such Lien to attach, which has not been previously vacated, fully discharged or satisfied; and (f) any liability (contingent or other) in connection with a Plan not maintained by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate of which the Borrower has knowledge and which gives rise to a material risk of a Lien attaching to the assets of the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate without regard to any minimum amount required by Law to cause such Lien to attach, which has not been previously vacated, fully discharged or satisfied.

7.13 Consolidated Tax Return. The Borrower shall not, and shall not permit any of its Subsidiaries to, file or consent to the filing of any consolidated income tax return with any Person other than the Borrower and its Subsidiaries.

7.14 Fiscal Year. The Borrower shall not, and shall not permit any of its Subsidiaries to, change its Fiscal Year or Fiscal Quarters.

7.15 Limitation on Other Restrictions on Dividends by Subsidiaries, etc. The Borrower shall not permit any Subsidiary to be or become subject to any restriction of any nature (whether arising by operation of Law, by agreement, by its articles of incorporation, by-laws or other constituent documents of such Subsidiary, or otherwise) on the right of such Subsidiary from time to time to (a) declare and pay dividends with respect to capital stock owned by the Borrower or any Subsidiary, (b) pay any indebtedness, obligations or liabilities from time to time owed to the Borrower or any Subsidiary, (c) make loans or advances to the Borrower or any Subsidiary, or (d) transfer any of its properties or assets to the Borrower or any Subsidiary, except:

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(i) Legal restrictions of general applicability under the corporation law under which such Subsidiary is incorporated, and fraudulent conveyance or similar laws or general applicability for the benefit of creditors of such Subsidiary generally; and

(ii) With respect to clause (d) above: (A) non-assignment provisions of any executory contract or of any lease by the Borrower or such Subsidiary as lessee, and (B) restrictions on transfer of property subject to a Permitted Lien for the benefit of the holder of such Permitted Lien.

7.16 Limitation on Other Restrictions on Amendment of the Loan Documents, etc. The Borrower shall not, and shall not permit any Subsidiary to, enter into, become or remain subject to any agreement or instrument to which the Borrower or such Subsidiary is a party or by which either of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound (other than the Loan Documents) that would prohibit or require the consent of any Person to any amendment, modification or supplement to any of the Loan Documents.

7.17 Limitation on Other Restrictions on Liens. The Borrower shall not, and shall not permit any Subsidiary to, enter into, become or remain subject to any agreement or instrument to which the Borrower or such subsidiary is a party or by which either of them or any of their respective properties (now owned or hereafter acquired) may be subject or bound that would prohibit the grant of any Lien upon any of its properties (now owned or hereafter required); except:

(a) The Loan Documents;

(b) Restrictions in documents evidencing the Indebtedness permitted by Sections 7.3(f) and (g) or the Guaranty Equivalents permitted by Section 7.4(f); and

(c) Restrictions pursuant to non-assignment provisions of any executory contract or of any lease by the Borrower or such Subsidiary as lessees, and restrictions on granting Liens on property subject to a Permitted Lien for the benefit of the holder of such Permitted Lien.

ARTICLE VIII
DEFAULTS

8.1 Events of Default. An Event of Default shall mean the occurrence or existence of one or more of the following events or conditions (for any reason, whether voluntary, involuntary or effected or required by Law):

(a) The Borrower shall fail to pay when due principal of any Loan, any Letter of Credit Reimbursement Obligation or any required cash deposit pursuant to Section 3.7.

(b) Any Loan Party shall fail to pay when due interest on any Loan, any fees, indemnity or expenses, or any other amount due hereunder or under any other Loan Document and such failure shall have continued for a period of five Business Days.

(c) Any representation or warranty made or deemed made by any Loan Party in or pursuant to or in connection with any Loan Document, or any statement made by any Loan Party in any financial statement, certificate, report, exhibit or document furnished by any Loan Party to the Administrative Agent or any Lender pursuant to or in connection with any Loan Document, shall prove to have been false or misleading in any material respect as of the time when made or deemed made (including by omission of material information necessary to make such representation, warranty or statement not misleading).

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(d) The Borrower shall default in the performance or observance of any covenant contained in Article VII hereof or any of the covenants contained in Section 3.7 or 6.1(f)(i) hereof.

(e) Any Loan Party shall default in the performance or observance of any other covenant, agreement or duty under this Agreement or any other Loan Document and (i) in the case of a default under Section 6.1 hereof (other than as referred to in subsection (f)(i) thereof) such default shall have continued for a period of ten days and (ii) in the case of any other default such default shall have continued for a period of 30 days after notice thereof from the Administrative Agent to the Borrower.

(f) Any Cross-Default Event shall occur with respect to any Cross-Default Obligation. As used herein, "Cross-Default Obligation" shall mean any Indebtedness or set of related Indebtedness of the Borrower or any Subsidiary in excess of $10,000,000 in aggregate principal amount. As used herein, "Cross-Default Event" with respect to a Cross-Default Obligation shall mean the occurrence of any default, event or condition which causes or which would permit any Person or Persons to cause all or any part of such Cross-Default Obligation to become due (by acceleration, mandatory prepayment or repurchase, or otherwise) before its otherwise stated maturity, or failure to pay all or any part of such Cross-Default Obligation at its stated maturity.

(g) One or more judgments for the payment of money shall have been entered against the Borrower or any Subsidiary, which judgment or judgments in the aggregate exceed by at least $10,000,000 in the aggregate and such judgment or judgments shall have remained undischarged and unstayed for a period of 60 consecutive days.

(h) One or more writs or warrants of attachment, garnishment, execution, distraint or similar process which exceed $10,000,000 in the aggregate shall have been issued against the Borrower or any Subsidiary or any of their respective properties and shall have remained undischarged and unstayed for a period of 60 consecutive days.

(i) Any Loan Document or term or provision thereof shall cease to be in full force and effect (except in accordance with the terms thereof), or any Loan Party shall, or shall purport to, terminate, revoke, repudiate, declare voidable or void or otherwise contest, any Loan Document or term or provision thereof or any obligation or liability of any Loan Party thereunder.

(k) Any Plan shall be terminated by the PBGC where the assets of such Plan are insufficient to cover benefits guaranteed by the PBGC; a trustee shall be appointed by an appropriate Governmental Authority to administer any Plan or the PBGC shall institute proceedings to terminate any Plan or to appoint a trustee to administer any Plan; a notice assessing Withdrawal Liability with respect to any Multiemployer Plan or any liabilities under Section 412 of the Code or under Sections 302, 4062, 4063 or 4064 of ERISA shall have been received by the Borrower, any Subsidiary or any ERISA Affiliate; and the aggregate liabilities of the Borrower, any of its Subsidiaries and/or any ERISA Affiliate which would result from any of the foregoing are in excess of $10,000,000.

(k) A Change of Control shall have occurred.

(l) A proceeding shall have been instituted in respect of the Borrower or any Subsidiary of the Borrower

(i) seeking to have an order for relief entered in respect of such Person, or seeking a declaration or entailing a finding that such Person is insolvent or a similar declaration or finding, or seeking dissolution, windingup, charter revocation or forfeiture, liquidation, reorganization, arrangement, adjustment, composition or other similar relief with respect to such Person, its assets or its debts under any Law relating to bankruptcy, insolvency, relief of debtors or protection of creditors, termination of legal entities or any other similar Law now or hereafter in effect, or

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(ii) seeking appointment of a receiver, trustee, liquidator, assignee, sequestrator or other custodian for such Person or for all or any substantial part of its property and such proceeding shall result in the entry, making or grant of any such order for relief, declaration, finding, relief or appointment, or such proceeding shall remain undismissed and unstayed for a period of sixty consecutive days.

(m) The Borrower or any Subsidiary of the Borrower shall become insolvent; shall fail to pay, become unable to pay, or state that it is or will be unable to pay, its debts as they become due; shall voluntarily suspend transaction of its or his business; shall make a general assignment for the benefit of creditors; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in Section 8.1(l)(i) hereof, or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such order for relief, declaration, finding or relief described therein; shall institute (or fail to controvert in a timely and appropriate manner) a proceeding described in Section 8.1(l)(ii) hereof, or (whether or not any such proceeding has been instituted) shall consent to or acquiesce in any such appointment or to the taking of possession by any such custodian of all or any substantial part of its or his property; shall dissolve, windup, revoke or forfeit its charter (or other constituent documents) or liquidate itself or any substantial part of its property; or shall take any action in furtherance of any of the foregoing.

8.2 Consequences of an Event of Default.

(a) If an Event of Default specified in subsections (a) through (k) of Section 8.1 hereof shall occur and be continuing or shall exist, then, in addition to all other rights and remedies which the Administrative Agent or any Lender may have hereunder or under any other Loan Document, at law, in equity or otherwise, the Lenders shall be under no further obligation to make Loans hereunder and the Issuing Bank shall be under no further obligation to issue Letters of Credit hereunder, and the Administrative Agent, upon the written request of the Required Lenders shall, by notice to the Borrower, from time to time do any or all of the following:

(i) Declare the Commitments terminated, whereupon the Commitments will terminate and any fees hereunder shall be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue.

(ii) Declare the unpaid principal amount of the Loans, interest accrued thereon and all other Obligations (including the obligation to deposit cash under Section 3.7) to be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue.

(b) If an Event of Default specified in subsection (l) or (m) of Section 8.1 hereof shall occur or exist, then, in addition to all other rights and remedies which the Administrative Agent or any Lender may have hereunder or under any other Loan Document, at law, in equity or otherwise, the Commitments shall automatically terminate and the Lenders shall be under no further obligation to make Loans and the Issuing Bank shall be under no further obligation to issue Letters of Credit, and the unpaid principal amount of the Loans, interest accrued thereon and all other Obligations (including the obligation to deposit cash under Section 3.7) shall become immediately due and payable without presentment, demand, protest or notice of any kind, all of which are hereby waived, and an action therefor shall immediately accrue.

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ARTICLE IX
THE AGENT

9.1 Appointment. Subject to Section 9.10, each Lender Party hereby irrevocably appoints Mellon Bank, N.A. to act as Administrative Agent for such Lender Party under this Agreement and the other Loan Documents. Each Lender hereby irrevocably authorizes the Administrative Agent to take such action on behalf of such Lender Party under the provisions of this Agreement and the other Loan Documents, and to exercise such powers and to perform such duties, as are expressly delegated to or required of the Administrative Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto. Mellon Bank, N.A. hereby agrees to act as Administrative Agent on behalf of the Lender Parties on the terms and conditions set forth in this Agreement and the other Loan Documents, subject to its right to resign as provided in Section 9.10 hereof. Each Lender Party hereby irrevocably authorizes the Administrative Agent to execute and deliver each of the Loan Documents and to accept delive ry of such of the other Loan Documents as may not require execution by the Administrative Agent. Each Lender Party agrees that the rights and remedies granted to the Administrative Agent under the Loan Documents shall be exercised exclusively by the Administrative Agent, and that no Lender Party shall have any right individually to exercise any such right or remedy, except to the extent expressly provided herein or therein.

9.2 General Nature of Administrative Agent's Duties. Notwithstanding anything to the contrary elsewhere in this Agreement or in any other Loan Document:

(a) The Administrative Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Loan Documents, and no implied duties or responsibilities on the part of the Administrative Agent shall be read into this Agreement or any Loan Document or shall otherwise exist.

(b) The duties and responsibilities of the Administrative Agent under this Agreement and the other Loan Documents shall be mechanical and administrative in nature, and the Administrative Agent shall not have a fiduciary relationship in respect of any Lender Party.

(c) The Administrative Agent is and shall be solely the Administrative Agent of the Lender Parties. The Administrative Agent does not assume, and shall not at any time be deemed to have, any relationship of agency or trust with or for, or any other duty or responsibility to, any Loan Party or any other Person (except only for its relationship as Administrative Agent for, and its express duties and responsibilities to, the Lender Parties as provided in this Agreement and the other Loan Documents).

(d) The Administrative Agent shall be under no obligation to take any action hereunder or under any other Loan Document if the Administrative Agent believes in good faith that taking such action may conflict with any Law or any provision of this Agreement or any other Loan Document, or may require the Administrative Agent to qualify to do business in any jurisdiction where it is not then so qualified.

9.3 Exercise of Powers. The Administrative Agent shall take any action of the type specified in this Agreement or any other Loan Document as being within the Administrative Agent's rights, powers or discretion in accordance with directions from the Required Lenders (or, to the extent this Agreement or such Loan Document expressly requires the direction or consent of some other Person or set of Persons, then instead in accordance with the directions of such other Person or set of Persons). In the absence of such directions, the Administrative Agent shall have the authority (but under no circumstances shall be obligated), in its sole discretion, to take any

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such action, except to the extent this Agreement or such Loan Document expressly requires the direction or consent of the Required Lenders (or some other Person or set of Persons), in which case the Administrative Agent shall not take such action absent such direction or consent. Any action or inaction pursuant to such direction, discretion or consent shall be binding on all the Lender Parties. The Administrative Agent shall not have any liability to any Person as a result of (a) the Administrative Agent acting or refraining from acting in accordance with the directions of the Required Lenders (or other applicable Person or set of Persons), (b) the Administrative Agent refraining from acting in the absence of instructions to act from the Required Lenders (or other applicable Person or set of Persons), whether or not the Administrative Agent has discretionary power to take such action, or (c) the Administrative Agent taking discretionary action it is authorized to take under this Section (subject, in t he case of this clause (c), to the provisions of Section 9.4(a) hereof).

9.5 General Exculpatory Provisions. Notwithstanding anything to the contrary elsewhere in this Agreement or any other Loan Document:

(a) The Administrative Agent shall not be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any other Loan Document, unless caused by its own gross negligence or willful misconduct.

(b) The Administrative Agent shall not be responsible for (i) the execution, delivery, effectiveness, enforceability, genuineness, validity or adequacy of this Agreement or any other Loan Document, (ii) any recital, representation, warranty, document, certificate, report or statement in, provided for in, or received under or in connection with, this Agreement or any other Loan Document, (iii) any failure of any Loan Party or Lender Party to perform any of their respective obligations under this Agreement or any other Loan Document, (iv) the existence, validity, enforceability, perfection, recordation, priority, adequacy or value, now or hereafter, of any Lien or other direct or indirect security afforded or purported to be afforded by any of the Loan Documents or otherwise from time to time, or (v) caring for, protecting, insuring, or paying any taxes, charges or assessments with respect to any collateral.

(c) The Administrative Agent shall not be under any obligation to ascertain, inquire or give any notice relating to (i) the performance or observance of any of the terms or conditions of this Agreement or any other Loan Document on the part of any Loan Party, (ii) the business, operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries, or (iii) except to the extent set forth in Section 9.5(f) hereof, the existence of any Event of Default or Potential Default.

(d) The Administrative Agent shall not be under any obligation, either initially or on a continuing basis, to provide any Lender Party with any notices, reports or information of any nature, whether in its possession presently or hereafter, except for such notices, reports and other information expressly required by this Agreement or any other Loan Document to be furnished by the Administrative Agent to such Lender Party.

9.5 Administration by the Administrative Agent.

(a) The Administrative Agent may rely upon any notice or other communication of any nature (written or oral, including but not limited to telephone conversations, whether or not such notice or other communication is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the proper party or parties, and the Administrative Agent shall not have any duty to verify the identity or authority of any Person giving such notice or other communication.

(b) The Administrative Agent may consult with legal counsel, independent public accountants and any other experts selected by it from time to time, and the Administrative Agent shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts.

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(c) The Administrative Agent may conclusively rely upon the truth of the statements and the correctness of the opinions expressed in any certificates or opinions furnished to the Administrative Agent in accordance with the requirements of this Agreement or any other Loan Document. Whenever the Administrative Agent shall deem it necessary or desirable that a matter be proved or established with respect to any Loan Party or Lender Party, such matter may be established by a certificate of such Loan Party or Lender Party, as the case may be, and the Administrative Agent may conclusively rely upon such certificate (unless other evidence with respect to such matter is specifically prescribed in this Agreement or another Loan Document).

(d) The Administrative Agent may fail or refuse to take any action unless it shall be indemnified to its satisfaction from time to time against any and all amounts, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature which may be imposed on, incurred by or asserted against the Administrative Agent by reason of taking or continuing to take any such action.

(e) The Agent may perform any of its duties under this Agreement or any other Loan Document by or through agents or attorneys-in-fact. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in fact selected by it with reasonable care.

(f) The Administrative Agent shall not be deemed to have any knowledge or notice of the occurrence of any Event of Default or Potential Default unless the Administrative Agent has received notice from a Lender Party or any Loan Party referring to this Agreement, describing such Event of Default or Potential Default, and stating that such notice is a "notice of default". If the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to each Lender Party.

9.6 Lender Parties Not Relying on Administrative Agent or Other Lender Parties. Each Lender Party acknowledges as follows: (a) Neither the Administrative Agent nor any other Lender Party has made any representations or warranties to it, and no act taken hereafter by the Administrative Agent or any other Lender Party shall be deemed to constitute any representation or warranty by the Administrative Agent or such other Lender Party to it. (b) It has, independently and without reliance upon the Administrative Agent or any other Lender Party, and based upon such documents and information as it has deemed appropriate, made its own credit and legal analysis and decision to enter into this Agreement and the other Loan Documents. (c) It will, independently and without reliance upon the Administrative Agent or any other Lender Party, and based upon such documents and information as it shall deem appropriate at the time, make its own decisions to take or not take action under or in connection with this Ag reement and the other Loan Documents.

9.7 Indemnification. Each Lender agrees to reimburse and indemnify the Administrative Agent and its directors, officers, employees and agents (to the extent not reimbursed by a Loan Party and without limitation of the obligations of the Loan Parties to do so), Pro Rata, from and against any and all amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature (including, without limitation, the fees and disbursements of counsel for the Administrative Agent or such other Person in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not the Administrative Agent or such other Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Administrative Agent or such other Person as a result of, or arising out of, or in any way related to or by reason of, this Agreement, any other Loan Document, any tr ansaction from time to time contemplated hereby or thereby, or any transaction financed in whole or in part or directly or indirectly with the proceeds of any Loan or Letter of Credit, provided that, no Lender shall be liable for any portion of such amounts, losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting solely from the gross negligence or willful misconduct of the Administrative Agent or such other Person.

9.8 Administrative Agent in its Individual Capacity. With respect to its Revolving Credit Commitment, Letter of Credit Commitment and the Obligations owing to it, the Administrative Agent shall have the same rights and powers under this Agreement and each other Loan Document as any other Lender and may exercise the same as though it were not the Administrative Agent, and the terms "Lenders," "holders of Notes", "Issuing Bank" and like terms shall include the Administrative Agent in its individual capacity as such. The Administrative Agent and its affiliates may, without liability to account, make loans to, accept deposits from, acquire debt or equity interests in, act as trustee under indentures of, and engage in any other business with, any Loan Party and any stockholder, subsidiary or affiliate of any Loan Party, as though the Administrative Agent were not the Administrative Agent hereunder.

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9.9 Holders of Notes. The Administrative Agent may deem and treat the Lender which is payee of a Note as the owner and holder of such Note for all purposes hereof unless and until a Transfer Supplement with respect to the assignment or transfer thereof shall have been filed with the Administrative Agent in accordance with Section 10.14 hereof. Any authority, direction or consent of any Person who at the time of giving such authority, direction or consent is shown in the Register as being a Lender shall be conclusive and binding on each present and subsequent holder, transferee or assignee of any Note or Notes payable to such Lender or of any Note or Notes issued in exchange therefor.

9.10 Successor Administrative Agent. The Administrative Agent may resign at any time by giving 30 days' prior written notice thereof to the Lenders and the Borrower. The Administrative Agent may be removed by the Required Lenders at any time by giving 10 days' prior written notice thereof to the Administrative Agent, the other Lenders and the Borrower. Upon any such resignation or removal, the Required Lenders shall have the right (with the consent of the Borrower so long as no Potential Default or Event of Default shall be continuing, which consent shall not be unreasonably withheld or delayed) to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed and consented to, and shall have accepted such appointment, within 30 days after such notice of resignation or removal, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent. Each successor Administrative Agent shall be a commercial bank o r trust company organized under the laws of the United States of America or any State thereof and having a combined capital and surplus of at least $1,000,000,000. Upon the acceptance by a successor Administrative Agent of its appointment as Administrative Agent hereunder, such successor Administrative Agent shall thereupon succeed to and become vested with all the properties, rights, powers, privileges and duties of the former Administrative Agent, without further act, deed or conveyance. Upon the effective date of resignation or removal of a retiring Administrative Agent, such Administrative Agent shall be discharged from its duties under this Agreement and the other Loan Documents, but the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted by it while it was Administrative Agent under this Agreement. If and so long as no successor Administrative Agent shall have been appointed, then any notice or other communication required or permitted to be given by the Administr ative Agent shall be sufficiently given if given by the Required Lenders, all notices or other communications required or permitted to be given to the Administrative Agent shall be given to each Lender, and all payments to be made to the Administrative Agent shall be made directly to the Borrower or Lender for whose account such payment is made.

9.11 Calculations. The Administrative Agent shall not be liable for any calculation, apportionment or distribution of payments made by it in good faith. If such calculation, apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Lender Party to whom payment was due but not made shall be to recover from the other Lender Parties any payment in excess of the amount to which they are determined to be entitled or, if the amount due was not paid by the appropriate Loan Party, to recover such amount from the appropriate Loan Party.

9.12 Administrative Agent's Fee. The Borrower agrees to pay to the Administrative Agent, for its individual account, a nonrefundable annual Administrative Agent's fee in an amount agreed to by the Administrative Agent and the Borrower.

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9.13 Funding by Administrative Agent. Unless the Administrative Agent shall have been notified in writing by any Lender not later than the close of business on the day before the day on which Loans are requested by the Borrower to be made that such Lender will not make its Pro Rata share of such Loans, the Administrative Agent may assume that such Lender will make its Pro Rata share of the Loans, and in reliance upon such assumption the Administrative Agent may (but in no circumstances shall be required to) make available to the Borrower a corresponding amount. If and to the extent that any Lender fails to make such payment to the Administrative Agent on such date, such Lender shall pay such amount on demand (or, if such Lender fails to pay such amount on demand, the Borrower shall pay such amount on demand), together with interest, for the Administrative Agent's own account, for each day from and including the date of the Administrative Agent's payment to and including the date of repayment to the Administrative Agent (before and after judgment) at the rate or rates per annum applicable to such Loans. All payments to the Administrative Agent under this Section shall be made to the Administrative Agent at its Office in Dollars in funds immediately available at such Office, without setoff, withholding, counterclaim or other deduction of any nature.

ARTICLE X
MISCELLANEOUS

10.1 Holidays. Whenever any payment or action to be made or taken hereunder or under any other Loan Document shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action.

10.2 Records. The unpaid principal amount of the Loans owing to each Lender, the unpaid interest accrued thereon, the interest rate or rates applicable to such unpaid principal amount, the duration of such applicability, each Lender's Revolving Credit Committed Amount, and the fees owing to each Lender shall at all times be ascertained from the records of the Administrative Agent, which shall be conclusive absent manifest error. The unpaid Letter of Credit Reimbursement Obligations, the unpaid interest accrued thereon, and the interest rate or rates applicable thereto shall at all times be ascertained from the records of the Issuing Bank, which shall be conclusive absent manifest error.

10.3 Amendments and Waivers. Neither this Agreement nor any Loan Document may be amended, modified or supplemented except in accordance with the provisions of this Section. The Administrative Agent and the Borrower may from time to time amend, modify or supplement the provisions of this Agreement or any other Loan Document for the purpose of amending, adding to, or waiving any provisions, or changing in any manner the rights and duties of any Loan Party, the Administrative Agent or any Lender Party. Any such amendment, modification, supplement or waiver made by Borrower and the Administrative Agent in accordance with the provisions of this Section shall be binding upon the Borrower, each Lender Party and the Administrative Agent. The Administrative Agent shall not enter into any such amendments, modifications, supplements or waivers without the consent of the Required Lenders, and, in the case of any such amendment, modification, supplement or waiver described in the next sentence, without the c onsent of the additional Persons described in the next sentence. No such amendment, modification, supplement or waiver may be made which will:

(a) Increase the aggregate Revolving Credit Committed Amounts over the amount thereof then in effect without the consent of all Lenders, or increase the Revolving Credit Committed Amount of any Lender over the amount then in effect without the consent of such Lender, or extend the Revolving Credit Maturity Date, without the written consent of each Lender affected thereby;

(b) Reduce the principal amount of or extend the time for any scheduled payment of principal of any Loan, or reduce the rate of interest or extend the time for payment of interest borne by any Loan or Letter of Credit Reimbursement Obligation, or extend the time for payment of or reduce the amount of any Revolving Credit Commitment Fee or Letter of Credit Fee or reduce or postpone the date for payment of any other fees, expenses, indemnities or amounts payable under any Loan Document, without the written consent of each Lender affected thereby;

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(c) Change the definition of "Required Lenders" or amend this Section 10.3, without the written consent of all the Lenders;

(d) Amend or waive any of the provisions of Article IX hereof, or impose additional duties upon the Administrative Agent or otherwise adversely affect the rights, interests or obligations of the Administrative Agent, without the written consent of the Administrative Agent;

(e) Amend or waive any of the provisions of Article III, or impose additional duties upon the Issuing Bank or otherwise affect the rights, interests or obligations of the Issuing Bank, without the written consent of the Issuing Bank;

(f) Reduce any Letter of Credit Unreimbursed Draw, or extend the time for repayment by the Borrower of any Letter of Credit Unreimbursed Draw, without the written consent of each Lender; or

(g) Except as otherwise permitted by any Loan Document, release any Guarantor without the written consent of each Lender (it being understood that a Guarantor may be released upon the disposition permitted hereby by the Borrower of all of its interest in such Guarantor);

and, provided further, that Transfer Supplements may be entered into in the manner provided in Section 10.14 hereof. Any such amendment, modification or supplement must be in writing and shall be effective only to the extent set forth in such writing. Any Event of Default or Potential Default waived or consented to in any such amendment, modification or supplement shall be deemed to be cured and not continuing to the extent and for the period set forth in such waiver or consent, but no such waiver or consent shall extend to any other or subsequent Event of Default or Potential Default or impair any right consequent thereto.

10.4 No Implied Waiver; Cumulative Remedies. No course of dealing and no delay or failure of the Administrative Agent or any Lender Party in exercising any right, power or privilege under this Agreement or any other Loan Document shall affect any other or future exercise thereof or exercise of any other right, power or privilege; nor shall any single or partial exercise of any such right, power or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies of the Administrative Agent and the Lender Parties under this Agreement and any other Loan Document are cumulative and not exclusive of any rights or remedies which the Administrative Agent or any Lender Party would otherwise have hereunder or thereunder, at law, in equity or otherwise.

10.5 Notices.

(a) Except to the extent otherwise expressly permitted hereunder or thereunder, all notices, requests, demands, directions and other communications (collectively "notices") under this Agreement or any Loan Document shall be in writing (including telexed and telecopied communication) and shall be sent by firstclass mail, or by nationally-recognized overnight courier, or by telex or telecopier (with confirmation in writing mailed firstclass or sent by such an overnight courier), or by personal delivery. All notices shall be sent to the applicable party at the address stated on the signature pages hereof or in accordance with the last unrevoked written direction from such party to the other parties hereto, in all cases with postage or other charges prepaid. Any such properly given notice to the Administrative Agent or any Lender Party shall be effective when received. Any such properly given notice to the Borrower shall be effective on the earliest to occur of receipt, telephone confirmation of receipt of telex or telecopy communication, one Business Day after delivery to a nationally-recognized overnight courier, or three Business Days after deposit in the mail.

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(b) Any Lender Party giving any notice to the Borrower or any other party to a Loan Document shall simultaneously send a copy thereof to the Administrative Agent, and the Administrative Agent shall promptly notify the other Lender Parties of the receipt by it of any such notice.

(c) The Administrative Agent and each Lender Party may rely on any notice (whether or not such notice is made in a manner permitted or required by this Agreement or any Loan Document) purportedly made by or on behalf of the Borrower or any other Loan Party, and neither the Administrative Agent nor any Lender Party shall have any duty to verify the identity or authority of any Person giving such notice.

10.6 Expenses; Taxes; Indemnity.

(a) The Borrower agrees to pay or cause to be paid and to save the Lender Parties harmless against liability for the payment of all reasonable outofpocket costs and expenses (including but not limited to reasonable fees and expenses of counsel, including local counsel, auditors, consulting engineers, appraisers, and all other professional, accounting, evaluation and consulting costs) incurred by

(i) the Administrative Agent from time to time arising from or relating to (A) the negotiation, preparation, execution, delivery, administration and performance of this Agreement and the other Loan Documents, or (B) any requested amendments, modifications, supplements, waivers or consents (whether or not ultimately entered into or granted) to this Agreement or any Loan Document;

(ii) any Lender Party from time to time arising from or relating to the enforcement or preservation of rights under this Agreement or any Loan Document (including but not limited to any such costs or expenses arising from or relating to collection or enforcement of an outstanding Loan or any other amount owing hereunder or thereunder by the Administrative Agent or any Lender Party, and any litigation, proceeding, dispute, work-out, restructuring or rescheduling related in any way to this Agreement or the Loan Documents); and

(iii) the Administrative Agent, in connection with the syndication of the credit facilities under this Agreement, whether incurred before or after the Closing Date.

(b) The Borrower hereby agrees to pay all recording, filing, registration and search fees and taxes and all similar impositions now or hereafter determined by the Administrative Agent or any Lender Parties to be payable in connection with this Agreement or any other Loan Documents or any other documents, instruments or transactions pursuant to or in connection herewith or therewith, and the Borrower agrees to save the Administrative Agent and each Lender Party harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission to pay or delay in paying any such fees, taxes or impositions.

(c) The Borrower hereby agrees to reimburse and indemnify each of the Indemnified Parties from and against any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for such Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Indemnified Party shall be designated a party thereto) that may at any time be imposed on, asserted against or incurred by such Indemnified Party as a result of, or arising out of, or in any way related to or by reason of, this Agreement or any other Loan Document, any transaction from time to time contemplated hereby or thereby, or any transaction financed in whole or in part or directly or indirectly with the proceeds of any Loan or Letter of Credit; but excluding any such losses, liabilities, claims, dama ges, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements resulting solely from the gross negligence or willful misconduct of such Indemnified Party, as finally determined by a court of competent jurisdiction. If and to the extent that the foregoing obligations of the Borrower under this subsection (c), or any other indemnification obligation of the Borrower hereunder or under any other Loan Document, are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable Law.

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10.7 Severability. The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.

10.8 Prior Understandings. This Agreement and the other Loan Documents supersede all prior and contemporaneous understandings and agreements, whether written or oral, among the parties hereto relating to the transactions provided for herein and therein.

10.9 Duration; Survival. All representations and warranties of the each Loan Party contained herein or in any other in the Loan Document or made in connection herewith or therewith shall survive the making of, and shall not be waived by the execution and delivery, of this Agreement or any other Loan Document, any investigation by or knowledge of the Administrative Agent or any Lender Party, the making of any Loan, the issuance of any Letter of Credit, or any other event or condition whatever. Except as provided in the last sentence of this Section, all covenants and agreements of each Loan Party contained herein or in any other Loan Document shall continue in full force and effect from and after the date hereof until all Revolving Credit Commitments and the Letter of Credit Commitment have terminated, all Letters of Credit have terminated or expired (or cash collateralized to the satisfaction of the Issuing Bank pursuant to documentation satisfactory to the Issuing Bank) and all Obligations (oth er than Obligations constituting contingent obligations under indemnification provisions so long as no unsatisfied claim has been made under any indemnification provision) have been paid in full. Without limitation, all obligations of the Borrower hereunder or under any other Loan Document to make payments to or indemnify the Administrative Agent or any Lender Party shall survive the payment in full of all other Obligations, termination of the Borrower's right to borrow hereunder, and all other events and conditions whatever. In addition, all obligations of each Lender Party to make payments to or indemnify the Administrative Agent shall survive the payment in full by the Borrower of all Obligations, termination of the Borrower's right to borrow hereunder, the termination or expiration of all Letters of Credit and all other events or conditions whatever.

10.10 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.

10.11 Limitation on Payments. The parties hereto intend to conform to all applicable Laws in effect from time to time limiting the maximum rate of interest that may be charged or collected. Accordingly, notwithstanding any other provision hereof or of any other Loan Document, the Borrower shall not be required to make any payment to or for the account of any Lender Party, and each Lender Party shall refund any payment made by the Borrower, to the extent that such requirement or such failure to refund would violate or conflict with nonwaivable provisions of applicable Laws limiting the maximum amount of interest which may be charged or collected by such Lender Party.

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10.12 SetOff. The Borrower hereby agrees that, if an Event of Default shall have occurred and be continuing or shall exist, to the fullest extent permitted by law, if any Obligation of the Borrower shall be due and payable (by acceleration or otherwise), each Lender Party shall have the right, without notice to the Borrower, to setoff against and to appropriate and apply to such Obligation any indebtedness, liability or obligation of any nature owing to the Borrower by such Lender Party, including but not limited to all deposits (whether time or demand, general or special, provisionally credited or finally credited, whether or not evidenced by a certificate of deposit) now or hereafter maintained by the Borrower with such Lender Party. Such right shall be absolute and unconditional in all circumstances and, without limitation, shall exist whether or not such Lender Party or any other Person shall have given notice or made any demand to the Borrower or any other Person, whether such indebtedness, obligation or liability owed to the Borrower is contingent, absolute, matured or unmatured (it being agreed that such Lender may deem such indebtedness, obligation or liability to be then due and payable at the time of such setoff), and regardless of the existence or adequacy of any collateral, guaranty or any other security, right or remedy available to any Lender or any other Person. The Borrower hereby agrees that, to the fullest extent permitted by law, any Participant and any branch, subsidiary or affiliate of any Lender Party or any Participant shall have the same rights of set-off as a Lender Party as provided in this Section (regardless of whether such Participant, branch, subsidiary or affiliate would otherwise be deemed in privity with or a direct creditor of the Borrower). The rights provided by this Section are in addition to all other rights of set-off and banker's lien and all other rights and remedies which any Lender (or any such Participant, branch, subsidiary or affiliate) may otherwise ha ve under this Agreement, any other Loan Document, at law or in equity, or otherwise, and nothing in this Agreement or any Loan Document shall be deemed a waiver or prohibition of or restriction on the rights of set-off or bankers' lien of any such Person.

10.13 Sharing of Collections. The Lenders hereby agree among themselves that if any Lender shall receive (by voluntary payment, realization upon security, setoff or from any other source) any amount on account of the Loans, interest thereon, or any other Obligation contemplated by this Agreement or the other Loan Documents to be made by the Borrower Pro Rata to all Lenders in greater proportion than any such amount received by any other Lender, then the Lender receiving such proportionately greater payment shall notify each other Lender and the Administrative Agent of such receipt, and equitable adjustment will be made in the manner stated in this Section so that, in effect, all such excess amounts will be shared ratably among all of the Lenders. The Lender receiving such excess amount shall purchase (which it shall be deemed to have done simultaneously upon the receipt of such excess amount) for cash from the other Lenders a participation in the applicable Obligations owed to such other Lenders in such amount as shall result in a ratable sharing by all Lenders of such excess amount (and to such extent the receiving Lender shall be a Participant). If all or any portion of such excess amount is thereafter recovered from the Lender making such purchase, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, together with interest or other amounts, if any, required by Law to be paid by the Lender making such purchase. The Borrower hereby consents to and confirms the foregoing arrangements. Each Participant shall be bound by this Section as fully as if it were a Lender hereunder.

10.14 Successors and Assigns; Participations; Assignments.

(a) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender Parties, all future holders of the Notes and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights hereunder or interests herein without the prior written consent of all the Lenders and the Administrative Agent, and any purported assignment without such consent shall be void.

(b) Participations. Any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable Law, at any time sell participations to one or more commercial banks or other Persons (each a "Participant") in all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of its Commitments and the Loans owing to it and any Note held by it); provided that

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(i) any such Lender's obligations under this Agreement and the other Loan Documents shall remain unchanged,

(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations,

(iii) the parties hereto shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and each of the other Loan Documents,

(iv) such Participant shall be bound by the provisions of Section 10.13 hereof, and

(v) no Participant (unless such Participant is an affiliate of such Lender, or is itself a Lender) shall be entitled to require such Lender to take or refrain from taking action under this Agreement or under any other Loan Document, except that such Lender may agree with such Participant that such Lender will not, without such Participant's consent, take action of the type described in subsections (a), (b), (c) or (f) of Section 10.3 hereof.

The Borrower agrees that any such Participant shall be entitled to the benefits of Sections 2.9 and 10.6 with respect to its participation in the Commitments and the Loans outstanding from time to time as if such Participant were a Lender; provided, that no such Participant shall be entitled to receive any greater amount pursuant to such Sections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such Lender to such Participant had no such transfer occurred.

(c) Assignments. Any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable Law, at any time assign all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or any portion of its Commitments and Loans owing to it and any Note held by it and to the extent such Lender is also the Issuing Bank, all or any portion of its Letter of Credit Commitment) to any Lender, any affiliate of a Lender or to one or more additional commercial banks or other Persons (each a "Purchasing Lender"); provided, that

(i) such assignment to a Purchasing Lender which is not a Lender or an affiliate of a Lender shall be consented to by the Borrower, the Administrative Agent and the Issuing Bank (such consents not to be unreasonably withheld); provided, that the consent of the Borrower shall not be required for any assignment made during any period when an Event of Default has occurred and is continuing;

(ii) if a Lender makes such an assignment of less than all of its then remaining rights and obligations under this Agreement and the other Loan Documents, such transferor Lender shall retain, after such assignment, a minimum aggregate principal amount of $5,000,000 of its Revolving Credit Commitment and such assignment shall be in a minimum aggregate principal amount of $5,000,000 of the Revolving Credit Commitments;

(iii) each such assignment shall be of a constant, and not a varying, percentage of each Revolving Credit Commitment and the Revolving Credit Loans of the transferor Lender and of all of the transferor Lender's rights and obligations under this Agreement and the other Loan Documents; and

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(iv) each such assignment shall be made pursuant to a Transfer Supplement in substantially the form of Exhibit B to this Agreement, duly completed (a "Transfer Supplement").

In order to effect any such assignment, the transferor Lender and the Purchasing Lender shall execute and deliver to the Administrative Agent a duly completed Transfer Supplement (including the consents required by clause (i) of the preceding sentence) with respect to such assignment, together with any Note or Notes subject to such assignment (the "Transferor Lender Notes") and a processing and recording fee of $3,500; and, upon receipt thereof, the Administrative Agent shall accept such Transfer Supplement. Upon receipt of the Purchase Price Receipt Notice pursuant to such Transfer Supplement, the Administrative Agent shall record such acceptance in the Register. Upon such execution, delivery, acceptance and recording, from and after the Transfer Effective Date specified in such Transfer Supplement

(x) the Purchasing Lender shall be a party hereto and, to the extent provided in such Transfer Supplement, shall have the rights and obligations of a Lender hereunder, and

(y) the transferor Lender thereunder shall be released from its obligations under this Agreement to the extent so transferred (and, in the case of an Transfer Supplement covering all or the remaining portion of a transferor Lender's rights and obligations under this Agreement, such transferor Lender shall cease to be a party to this Agreement) from and after the Transfer Effective Date.

On or prior to the Transfer Effective Date specified in an Transfer Supplement, the Borrower, at its expense, shall execute and deliver to the Administrative Agent (for delivery to the Purchasing Lender) new Notes evidencing such Purchasing Lender's assigned Commitments or Loans and (for delivery to the transferor Lender) replacement Notes in the principal amount of the Loans or Commitments retained by the transferor Lender (such Notes to be in exchange for, but not in payment of, those Notes then held by such transferor Lender). Each such Note shall be dated the date and be substantially in the form of the predecessor Note. The Administrative Agent shall mark the predecessor Notes "exchanged" and deliver them to the Borrower. Accrued interest and accrued fees shall be paid to the Purchasing Lender at the same time or times provided in the predecessor Notes and this Agreement.

(d) Register. The Administrative Agent shall maintain at its office a copy of each Transfer Supplement delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time. The entries in the Register shall be conclusive absent manifest error and the Borrower, the Administrative Agent and the Lenders may treat each person whose name is recorded in the Register as a Lender hereunder for all purposes of the Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

(e) Assignments to Federal Reserve Bank. Any Lender may at any time assign all or any portion of its rights under this Agreement, including without limitation any Loans owing to it, and any Note held by it to a Federal Reserve Bank. No such assignment shall relieve the transferor Lender from its obligations hereunder.

10.15 Confidentiality. The Administrative Agent and each Lender acknowledge that, in the course of their dealings with the Borrower and its Subsidiaries hereunder and under the other Loan Documents, they may from time to time become parties to certain Confidential Information (as hereinafter defined). The Administrative Agent and each Lender agree that they will not disclose, except as required by Law or as requested by any Governmental Authority, any Confidential Information to any Person which is not the Administrative Agent, a Lender or a prospective Purchasing Lender to which the Borrower has not after notice objected in good faith and which has agreed or is deemed to have agreed to be bound by the terms of this provision, or a director, officer, employee, attorney, accountant or authorized agent of the Administrative Agent or a Lender, nor shall the Administrative Agent, any Lender or any such other Person use any Confidential Information for any purpose other than in connection with the Lo an Documents. As used herein, the term "Confidential Information" shall mean all information furnished by or on behalf of the Borrower or any Subsidiary under any Loan Document other than information which is generally available to the public other than by reason of a disclosure by the Administrative Agent, any Lender or any such other Person. The obligations of the Administrative Agent and the Lenders under this Section 10.15 shall survive any termination of the Loan Documents.

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10.16 Governing Law; Submission to Jurisdiction: Waiver of Jury Trial; Limitation of Liability.

(a) GOVERNING LAW. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS (EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES.

(b) CERTAIN WAIVERS. THE BORROWER (AND IN THE CASE OF CLAUSE (iv) BELOW EACH OF THE LENDERS) HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER PARTY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM);

(ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER THE BORROWER;

(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 10.5 HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND

(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.

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(v) LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE BY THE BORROWER AGAINST ANY LENDER PARTY OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY). THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed and delivered this Agreement as of the date first above written.

WEIS MARKETS, INC.

By /s/ William R. Mills

Title: Senior Vice President and Treasurer/CFO

Address for Notices:

1000 South Second Street
Sunbury PA 17801-0471

Attn: Chief Financial Officer


Telephone: 570-286-4571

Telecopier: 570-286-3286

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Initial Revolving Credit MELLON BANK, N.A.,

Committed Amount: individually and as Administrative Agent

$20,000,000

By /s/ John R. Cooper

Title: Vice President

Address for Notices:

Mellon Bank, N.A.

One Mellon Center

Pittsburgh, PA 15258-0001

Attn: Loan Products Department

Telephone: 412-234-3187

Telecopier: 412-236-6112

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Initial Revolving Credit CITIZENS BANK OF PENNSYLVANIA

Committed Amount:

$20,000,000

By /s/ Joseph N. Butto

Title: Vice President

Address for Notices:

Citizens Bank of Pennsylvania

2 n. 2^nd Street, 12^th Floor

Harrisburg, PA 17101

Attn: Joseph N. Butto

Telephone: 717-777-3357

Telecopier: 717-777-3363

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Initial Revolving Credit Committed Amount: $20,000,000	JPMORGAN CHASE BANK By /s/ Lee P. Brennan                               Title: Vice President Address for Notices: JPMorgan Chase Bank One Riverfront Plaza Newark, NJ 07102 Attn: Lee P. Brennan Telephone: 973-353-6162 Telecopier: 973-353-6158
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Initial Revolving Credit Committed Amount: $20,000,000	M&T BANK By /s/ Edward T. Sigl                                 Title: Vice President Address for Notices: M&T Bank 10 Reitz Blvd. Lewisburg, PA 17837 Attn: Edward T. Sigl Telephone: 570-522-5113 Telecopier: 570-524-9525
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Initial Revolving Credit Committed Amount: $20,000,000	WACHOVIA BANK, NATIONAL ASSOCIATION By /s/ Sharon Mueller                               Title: Vice President Address for Notices: Wachovia Bank – PA6490 600 Penn Street – 2nd Floor P.O. Box 1102 Reading, PA 19601–1102 Attn: Sharon Mueller, VP Telephone: 610-655-1400 Telecopier: 610-655-3300
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EXHIBIT A

WEIS MARKETS, INC.

Revolving Credit Note

$           Pittsburgh, Pennsylvania

                  , 2002

FOR VALUE RECEIVED, the undersigned, WEIS MARKETS, INC., a Pennsylvania corporation (the "Borrower"), promises to pay to the order of [NAME OF LENDER] (the "Lender") on or before the Revolving Credit Maturity Date, and at such earlier dates as may be required by the Agreement (as defined below), the lesser of (i) the principal sum of            ($        ) or (ii) the aggregate unpaid principal amount of all Revolving Credit Loans made by the Lender to the Borrower from time to time pursuant to the Agreement. The Borrower further promises to pay to the order of the Lender interest on the unpaid principal amount hereof from time to time outstanding at the rate or rates per annum determined pursuant to the Agreement, payable on the dates set forth in the Agreement.

This Note is one of the "Revolving Credit Notes" as referred to in, and is entitled to the benefits of, the Revolving Credit Agreement, dated as of October 15, 2002, by and among the Borrower, the Lenders parties thereto from time to time, the Issuing Bank referred to therein, and Mellon Bank, N.A., a national banking association, as Administrative Agent, for the Lenders (as the same may be amended, modified or supplemented from time to time, the "Agreement"), which among other things provides for the acceleration of the maturity hereof upon the occurrence of certain events and for prepayments in certain circumstances and upon certain terms and conditions. Terms defined in the Agreement have the same meanings herein.

This Note is secured by and is entitled to the benefits of the Subsidiary Guaranty referred to in the Agreement.

The Borrower hereby expressly waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Agreement, and an action for amounts due hereunder or thereunder shall immediately accrue.

This Note shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania, without regard to principles of choice of law.

WEIS MARKETS, INC.

By

Title:

A-1

Exhibit B

TRANSFER SUPPLEMENT

THIS TRANSFER SUPPLEMENT, dated as of the date specified in Item 1 of Schedule I hereto, among the Transferor Lender specified in Item 2 of Schedule I hereto (the "Transferor Lender"), each Purchasing Lender specified in Item 3 of Schedule I hereto (each a "Purchasing Lender") and Mellon Bank, N.A., as Administrative Agent for the Lenders under the Credit Agreement described below.

Recitals:

A. This Transfer Supplement is being executed and delivered in accordance with Section 10.14(c) of the Revolving Credit Agreement, dated as of October 15, 2002, by and among Weis Markets, Inc., a Pennsylvania corporation (the "Borrower"), the Lenders parties thereto from time to time, the Issuing Bank referred to therein and Mellon Bank, N.A., a national banking association, as Administrative Agent for the Lenders (as the same may be amended, modified or supplemented from time to time, the "Credit Agreement"). Capitalized terms used herein without definition have the meaning specified in the Credit Agreement.

B. Each Purchasing Lender (if it is not already a Lender) wishes to become a Lender party to the Credit Agreement.

C. The Transferor Lender is selling and assigning to each Purchasing Lender, and each Purchasing Lender is purchasing and assuming, a certain portion of the Transferor Lender's rights and obligations under the Credit Agreement, including, without limitation, the Transferor Lender's Revolving Credit Commitment and Loans owing to it and any Notes held by it (the "Transferor Lender's Interests").

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Transfer Effective Notice. Upon receipt by the Administrative Agent of five counterparts of this Transfer Supplement (to each of which is attached a fully completed Schedule I and Schedule II), and each of which has been executed by the Transferor Lender, by each Purchasing Lender and by any other Person required by Section 10.14(c) of the Credit Agreement to execute this Transfer Supplement, the Administrative Agent will transmit to the Borrower, the Transferor Lender and each Purchasing Lender a transfer effective notice, substantially in the form of Schedule III to this Transfer Supplement (a "Transfer Effective Notice"). The date specified in such Transfer Effective Notice as the date on which the transfer effected by this Transfer Supplement shall become effective (the "Transfer Effective Date") shall be the fifth Business Day following the date of such Transfer Effective Notice or such other date as shall be agreed upon among the Tr ansfer Lender, the Purchasing Lender, the Administrative Agent and the Borrower. From and after the close of business at the Administrative Agent's Office on the Transfer Effective Date each Purchasing Lender (if not already a Lender party to the Credit Agreement) shall be a Lender party to the Credit Agreement for all purposes thereof having the respective interests in the Transferor Lender's Interests reflected in this Transfer Supplement.

2. Purchase Price; Sale. At or before 12:00 Noon, local time at the Transferor Lender's office specified in Schedule III, on the Transfer Effective Date, each Purchasing Lender shall pay to the Transferor Lender, in immediately available funds, an amount equal to the purchase price, as agreed between the Transferor Lender and such Purchasing Lender (the "Purchase Price"), of the portion being purchased by such Purchasing Lender (such Purchasing Lender's "Purchased Percentage") of the Transferor Lender's Interests. Effective upon receipt by the Transferor Lender of the Purchase Price from a Purchasing Lender, the Transferor Lender hereby irrevocably sells, assigns and transfers to such Purchasing Lender, without recourse, representation or warranty (express or implied) except as set forth in Section 6 hereof, and each Purchasing Lender hereby irrevocably purchases, takes and assumes from the Transferor Lender such Purchasing Lender's Purchased Per centage of the Transferor Lender's Interests. The Transferor Lender shall promptly notify the Administrative Agent of the receipt of the Purchase Price from a Purchasing Lender ("Purchase Price Receipt Notice"). Upon receipt by the Administrative Agent of such Purchase Price Receipt Notice, the Administrative Agent shall record in the Register the information with respect to such sale and purchase as contemplated by Section 10.14(d) of the Credit Agreement.

B-1

3. Principal, Interest and Fees. All principal payments, interest, fees and other amounts that would otherwise be payable from and after the Transfer Effective Date to or for the account of the Transferor Lender in respect of the Transferor Lender's Interests shall, instead, be payable to or for the account of the Transferor Lender and the Purchasing Lenders, as the case may be, in accordance with their respective interests as reflected in this Transfer Supplement.

4. Closing Documents. Concurrently with the execution and delivery hereof, the Transferor Lender will provide, or will request that the Borrower provide, to each Purchasing Lender (if it is not already a Lender party to the Credit Agreement) conformed copies of all documents delivered to such Transferor Lender on the Closing Date in satisfaction of conditions precedent set forth in the Credit Agreement.

5. Further Assurances. Each of the parties to this Transfer Supplement agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Transfer Supplement.

6. Certain Representations and Agreements. By executing and delivering this Transfer Supplement, the Transferor Lender and each Purchasing Lender confirm to and agree with each other and the Administrative Agent and the Lenders as follows:

(a) Other than the representation and warranty that it is the legal and beneficial owner of the interest being assigned hereby free and clear of any adverse claim, the Transferor Lender makes no representation or warranty and assumes no responsibility with respect to (i) the execution, delivery, effectiveness, enforceability, genuineness, validity or adequacy of the Credit Agreement or any other Loan Document, (ii) any recital, representation, warranty, document, certificate, report or statement in, provided for in, received under or in connection with, the Credit Agreement or any other Loan Document, or (iv) the existence, validity, enforceability, perfection, recordation, priority, adequacy or value, now or hereafter, of any Lien or other direct or indirect security afforded or purported to be afforded by any of the Loan Documents or otherwise from time to time.

(b) The Transferor Lender makes no representation or warranty and assumes no responsibility with respect to (i) the performance or observance of any of the terms or conditions of the Credit Agreement or any other Loan Document on the part of any Loan Party, (ii) the business, operations, condition (financial or otherwise) or prospects of any Loan Party or any other Person, or (iii) the existence of any Event of Default or Potential Default.

(c) Each Purchasing Lender confirms that it has received a copy of the Credit Agreement and each of the other Loan Documents, together with copies of the financial statements referred to in Sections 4.6 and 4.7 thereof, the most recent financial statements delivered pursuant to Section 6.1 thereof, if any, and such other documents and information as it has deemed appropriate to make its own credit and legal analysis and decision to enter into this Transfer Supplement. Each Purchasing Lender confirms that it has made such analysis and decision independently and without reliance upon the Administrative Agent, the Transferor Lender or any other Lender.

(d) Each Purchasing Lender, independently and without reliance upon the Administrative Agent, the Transferor Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, will make its own decisions to take or not take action under or in connection with the Credit Agreement or any other Loan Document.

B-2

(e) Each Purchasing Lender irrevocably appoints the Administrative Agent to act as Administrative Agent for such Purchasing Lender under the Agreement and the other Loan Documents, all in accordance with Article IX of the Credit Agreement and the other provisions of the Credit Agreement and the other Loan Documents.

(f) Each Purchasing Lender agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement and the other Loan Documents are required to be performed by it as a Lender.

7. Schedule II. Schedule II hereto sets forth the revised Revolving Credit Commitments of the Transferor Lender and each Purchasing Lender as well as administrative information with respect to each Purchasing Lender.

8. Governing Law. This Transfer Supplement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania, without regard to principles of choice of law.

9. Counterparts. This Transfer Supplement may be executed on any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Transfer Supplement to be executed by their respective duly authorized officers on Schedule I hereto as of the date set forth in Item 1 of Schedule I hereto.

B-3

Schedule I
to
Transfer Supplement

COMPLETION OF INFORMATION AND

SIGNATURES FOR TRANSFER SUPPLEMENT

Re: Revolving Credit Agreement, dated as of October 15, 2002, by and Weis Markets, Inc., a Pennsylvania corporation (the "Borrower"), the Lenders parties thereto from time to time, the Issuing Bank referred to therein and Mellon Bank, N.A., a national banking association, as Administrative Agent (as amended, modified or supplemented from time to time, the "Credit Agreement").

Item 1	(Date of Assignment Supplement):	[Insert date of Assignment Supplement]
Item 2	(Transferor Lender):	[Insert name of Transferor Lender]
Item 3	(Purchasing Lender[s]):	[Insert name[s] of Purchasing Lender[s]]
Item 4	(Signatures of Parties to Transfer Supplement):

  [Name of Transferor Lender]  ,

as Transferor Lender

By:

Title:

  [Name of Purchasing Lender]  ,

as Purchasing Lender

By:

Title:

  [Name of Purchasing Lender]  ,

as Purchasing Lender

By:

Title:

B-4

[Following two consents required only when Purchasing Lender is not already a Lender or an affiliate of a Lender]

CONSENTED TO AND ACKNOWLEDGED:

WEIS MARKETS, INC.

By:

Title:

MELLON BANK, N.A., as Administrative Agent and Issuing Bank

By:

Title:

ACCEPTED FOR RECORDATION IN PURCHASING LENDER REGISTER:

MELLON BANK, N.A., as Administrative Agent

By:

Title:

B-5

Schedule II
to
Transfer Supplement

LIST OF LENDING OFFICES, ADDRESSES

FOR NOTICES AND COMMITTED AMOUNTS

[Name of Transferor Lender] Revised Commitment:

Revolving Credit
Committed Amount $          

Revised Commitment
Percentage:           

[Name of Purchasing Lender] New Commitment:

Revolving Credit
Committed Amount $          

Revised Commitment
Percentage:           

Administrative Information

for Purchasing Lender:

Address:

Attention:

Telephone:

Telex:

(Answerback: )

Telecopier:

B-6

Schedule III
to
Transfer Supplement

Transfer Effective Notice

To: [Insert Name of Borrower, Transferor

Lender and each Purchasing Lender]

The undersigned, as Administrative Agent under the Revolving Credit Agreement, dated as of October 15, 2002, by and among Weis Markets, Inc., a Pennsylvania corporation, the Lenders parties thereto from time to time, the Issuing Bank referred to therein and Mellon Bank, N.A., a national banking association, as Administrative Agent for the Lenders (as the same may be amended, modified or supplemented from time to time, the "Credit Agreement"), acknowledges receipt of five executed counterparts of a completed Transfer Supplement, dated           , 199 , from [name of Transferor Lender] to [name of each Purchasing Lender] (the "Transfer Supplement"). Terms defined in the Transfer Supplement are used herein as therein defined.

1. Pursuant to the Transfer Supplement, you are advised that the Transfer Effective Date will be           , 20   . [Insert fifth Business Day following date of Transfer Effective Notice or other date agreed to among the Transferor Lender, the Purchasing Lender, the Administrative Agent and the Borrower.]

2. Pursuant to Section 10.14(c) of the Credit Agreement, the Transferor Lender has delivered to the Administrative Agent the Transferor Lender Notes.

3. Section 10.14(c) of the Credit Agreement provides that the Borrower is to deliver to the Administrative Agent on or before the Assignment Effective Date the following Notes, each dated the date of the Note it replaces.

[Describe each new Revolving Credit Note for Transferor Lender and Purchasing Lender as to date, principal amount and payee.]

4. The Transfer Supplement provides that each Purchasing Lender is to pay its Purchase Price to the Transferor Lender at or before 12:00 o'clock Noon, local time at the Transferor Lender's lending office specified in Schedule II to the Transfer Supplement, on the Transfer Effective Date in immediately available funds.

Very truly yours,

MELLON BANK, N.A., as Administrative Agent

By:

Title:

B-7

Exhibit C

________________________________________________________________________________________________________________________________________________________________________

GUARANTY AND SURETYSHIP AGREEMENT

dated as of October 15, 2002

made by

THE SUBSIDIARY GUARANTORS REFERRED TO HEREIN

in favor of

MELLON BANK, N.A.,
as Administrative Agent

________________________________________________________________________________________________________________________________________________________________________

C-

GUARANTY AND SURETYSHIP AGREEMENT

THIS AGREEMENT, dated as of October 15, 2002, made by each of the Persons executing this Agreement as a Subsidiary Guarantor and each other Person which from time to time becomes a Subsidiary Guarantor party hereto (each, a "Subsidiary Guarantor"), in favor of Mellon Bank, N.A., as Administrative Agent under the Revolving Credit Agreement referred to below (in such capacity, together with its successors, the "Administrative Agent") and the Lenders party thereto from time to time.

Recitals:

A. Weis Markets, Inc., a Pennsylvania corporation (the "Borrower") has entered into a Revolving Credit Agreement dated as of October 15, 2002, with the Lenders parties thereto from time to time, the Issuing Bank referred to therein, and Mellon Bank, N.A., as Administrative Agent (as amended, modified or supplemented from time to time, the "Credit Agreement"). Each Subsidiary Guarantor will derive substantial direct and indirect benefit from the transactions contemplated by the Credit Agreement, and each Subsidiary Guarantor may receive a portion of the proceeds of extensions of credit under the Credit Agreement from time to time.

B. It is a condition precedent to the extension of credit under the Credit Agreement that the Subsidiary Guarantors execute and deliver this Agreement. This Agreement, among other things, is made by the Subsidiary Guarantors to induce the Lenders, the Issuing Bank and the Administrative Agent (collectively, the "Lender Parties") to enter into the Loan Documents (as defined in the Credit Agreement) and to induce the Lenders to extend credit under the Credit Agreement.

C. Each Subsidiary Guarantor acknowledges that the Lender Parties have relied and will rely on this Agreement in entering into the Loan Documents and extending credit under the Credit Agreement. Each Subsidiary Guarantor further acknowledges that it has, independently and without reliance upon the Lender Parties or any representation by or other information from the Lender Parties, made its own credit analysis and decision to enter into this Agreement.

NOW, THEREFORE, in consideration of the premises, and intending to be legally bound, each Subsidiary Guarantor hereby agrees as follows:

Article I
Definitions

1.1. Definitions. Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Credit Agreement.

Article II
Guaranty and Suretyship

2.1. Guaranty and Suretyship. Each Subsidiary Guarantor hereby absolutely, unconditionally and irrevocably guarantees and becomes surety for the full and punctual payment and performance of the Obligations as and when such payment or performance shall become due (at scheduled maturity, by acceleration or otherwise) in accordance with the terms of the Loan Documents. This Agreement is an agreement of suretyship as well as of guaranty, is a guarantee of payment and performance and not merely of collectibility, and is in no way conditioned upon any attempt to collect from or proceed against the Borrower, any other Subsidiary Guarantor or any other Person or any other event or circumstance. The obligations of each Subsidiary Guarantor under this Agreement are direct and primary obligations of such Subsidiary Guarantor and are independent of the Obligations, and a separate action or actions may be brought against such Subsidiary Guarantor regardless of whether action is brought against the Borrower, any other Subsidiary Guarantor or any other Person or whether the Borrower, any other Subsidiary Guarantor or any other Person is joined in any such action or actions.

2.2. Obligations Absolute. To the extent permitted by Law, each Subsidiary Guarantor agrees that the Obligations will be paid and performed strictly in accordance with the terms of the Loan Documents, regardless of any Law, regulation or order now or hereafter in effect in any jurisdiction affecting the Obligations, any of the terms of the Loan Documents or the rights of any Lender Party or any other Person with respect thereto. To the extent permitted by Law, the obligations of each Subsidiary Guarantor under this Agreement shall be absolute, unconditional and irrevocable, irrespective of any of the following:

(a) any lack of legality, validity, enforceability, allowability (in a bankruptcy, insolvency, reorganization, dissolution or similar proceeding, or otherwise), or any avoidance or subordination, in whole or in part, of any Loan Document or any of the Obligations;

(b) any change in the amount, nature, time, place or manner of payment or performance of, or in any other term of, any of the Obligations (whether or not such change is contemplated by the Loan Documents as presently constituted, and specifically including any increase in the Obligations, whether resulting from the extension of additional credit to the Borrower or otherwise), any execution of any additional Loan Documents, or any amendment or waiver of or any consent to departure from any Loan Document;

(c) any taking, exchange, release, impairment or nonperfection of any collateral, or any taking, release, impairment or amendment or waiver of or consent to departure from any other guaranty or other direct or indirect security for any of the Obligations;

C-1

(d) any manner of application of collateral or other direct or indirect security for any of the Obligations, or proceeds thereof, to any of the Obligations or to other obligations secured thereby, or any manner of sale or other disposition of any collateral for any of the Obligations or any other assets of any Loan Party;

(e) any impairment by any Lender Party or any other Person of any recourse of such Subsidiary Guarantor against any Loan Party or any other Person, or any other impairment by any Lender Party or any other Person of the suretyship status of such Subsidiary Guarantor;

(f) any bankruptcy, insolvency, reorganization, dissolution or similar proceedings with respect to, or any change, restructuring or termination of the corporate structure or existence of, any Loan Party, such Subsidiary Guarantor or any other Person;

(g) any failure of any Lender Party or any other Person to disclose to such Subsidiary Guarantor any information pertaining to the business, operations, condition (financial or other) or prospects of any Loan Party or any other Person, or to give any other notice, disclosure or demand; or

(h) any other event or circumstance (excluding only the defense of full, strict and indefeasible payment and performance) that might otherwise constitute a defense available to, a discharge of, or a limitation on the obligations of, any Loan Party, such Subsidiary Guarantor or a guarantor or surety.

2.3. Waivers, etc. Each Subsidiary Guarantor hereby irrevocably waives, to the fullest extent permitted by Law, any defense to or limitation on its obligations under this Agreement arising out of or based upon any matter referred to in Section 2.2. Without limiting the generality of the foregoing, each Subsidiary Guarantor hereby irrevocably waives, to the fullest extent permitted by Law, each of the following:

(a) all notices, disclosures and demands of any nature which otherwise might be required from time to time to preserve intact any rights against such Subsidiary Guarantor, including (i) any notice of any event or circumstance described in Section 2.2, (ii) any notice required by any law, regulation or order now or hereafter in effect in any jurisdiction, (iii) any notice of nonpayment, nonperformance, dishonor, or protest under any Loan Document or any of the Obligations, (iv) any notice of the incurrence of any Obligation, (v) any notice of any default or any failure on the part of any Loan Party or any other Person to comply with any Loan Document or any of the Obligations or any direct or indirect security for any of the Obligations, and (vi) any notice of any information pertaining to the business, operations, condition (financial or other) or prospects of any Loan Party or any other Person;

C-2

(b) any right to any marshalling of assets, to the filing of any claim against any Loan Party or any other Person in the event of any bankruptcy, insolvency, reorganization, dissolution or similar proceeding, or to the exercise against any Loan Party or any other Person of any other right or remedy under or in connection with any Loan Document or any of the Obligations or any direct or indirect security for any of the Obligations; any requirement of promptness or diligence on the part of the Lender Parties or any other Person; any requirement to exhaust any remedies under or in connection with, or to mitigate the damages resulting from default under, any Loan Document or any of the Obligations or any direct or indirect security for any of the Obligations; and any requirement of acceptance of this Agreement, and any requirement that such Subsidiary Guarantor receive notice of such acceptance; and

(c) any defense or other right arising by reason of any Law now or hereafter in effect in any jurisdiction pertaining to election of remedies (including anti-deficiency laws, "one action" laws or similar laws), or by reason of any election of remedies or other action or inaction by the Lender Parties (including commencement or completion of any judicial proceeding or nonjudicial sale or other action in respect of collateral security for any of the Obligations), which results in denial or impairment of the right of the Lender Parties to seek a deficiency against any Loan Party any other Person, or which otherwise discharges or impairs any of the Obligations or any recourse of such Subsidiary Guarantor against any Loan Party or any other Person.

2.4. Reinstatement. This Agreement shall continue to be effective, or be automatically reinstated, as the case may be, if at any time payment of any of the Obligations is avoided, rescinded or must otherwise be returned by any Lender Party for any reason, all as though such payment had not been made.

2.5. No Stay. Without limiting the generality of any other provision of this Agreement, if any acceleration of the time for payment or performance of any Obligation, or any condition to any such acceleration, shall at any time be stayed, enjoined or prevented for any reason (including stay or injunction resulting from the pendency against any Loan Party or any other Person of a bankruptcy, insolvency, reorganization, dissolution or similar proceeding), each Subsidiary Guarantor agrees that, for purposes of this Agreement and its obligations hereunder, at the option of the Administrative Agent, such Obligation shall be deemed to have been accelerated and such condition to acceleration shall be deemed to have been met.

2.6. Payments. All payments to be made by each Subsidiary Guarantor pursuant to this Agreement (other than payments to a Lender Party under Section 2.11) shall be made to the Administrative Agent at the time prescribed for payments of the underlying Obligation in the Credit Agreement, without setoff, counterclaim, withholding or other deduction of any nature. The Administrative Agent shall apply such payments received by it in accordance with the Credit Agreement.

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2.7. Subrogation, etc. Any rights which any Subsidiary Guarantor may have or acquire by way of subrogation, reimbursement, restitution, exoneration, contribution or indemnity, and any similar rights (whether arising by operation of law, by agreement or otherwise), against the Borrower, any other Subsidiary Guarantor or any other Person arising from the existence, payment, performance or enforcement of any of the obligations of such Subsidiary Guarantor under or in connection with this Agreement, shall be subordinate in right of payment to the Obligations, and such Subsidiary Guarantor shall not exercise any such rights until all Obligations (other than Obligations constituting contingent obligations under indemnification provisions so long as no claim has been made under any indemnification provision) and all other obligations under this Agreement have been paid in cash and performed in full and all commitments to extend credit under, and all Letters of Credit issued under, the Loan Documents sh all have terminated. If, notwithstanding the foregoing, any amount shall be received by a Subsidiary Guarantor on account of any such rights at any time prior to the time at which all Obligations and all other obligations under this Agreement shall have been paid in cash and performed in full and all commitments to extend credit under, and all Letters of Credit issued under, the Loan Documents shall have terminated, such amount shall be held by such Subsidiary Guarantor in trust for the benefit of the Lender Parties, segregated from other funds held by such Subsidiary Guarantor, and shall be forthwith delivered to the Administrative Agent in the exact form received by such Subsidiary Guarantor (with any necessary endorsement), to be applied to the Obligations, whether matured or unmatured, in such order as the Lender Party may elect, or to be held by the Administrative Agent on behalf of the Lender Parties as security for the Obligations and disposed of by the Administrative Agent in accordance with the Cred it Agreement.

2.8. Continuing Agreement. This Agreement is a continuing guaranty and shall continue in full force and effect until all Obligations (and if the only Obligations remaining are those referred to in the second to last sentence of Section 10.9 of the Credit Agreement, this Agreement shall continue to be effective only with respect to such Obligations) and all other amounts payable under this Agreement have been paid in cash and performed in full, and all commitments to extend credit under, and all Letters of Credit issued under, the Loan Documents have terminated (or, in the case of Letters of Credit, have been cash collateralized to the satisfaction of the Issuing Bank pursuant to documentation satisfactory to the Issuing Bank), subject in any event to reinstatement in accordance with Section 2.4. Without limiting the generality of the foregoing, each Subsidiary Guarantor hereby irrevocably waives any right to terminate or revoke this Agreement.

2.9. Limitation on Payments. The parties hereto intend to conform to all applicable Laws limiting the maximum rate of interest that may be charged or collected by the Lender Parties from any Subsidiary Guarantor. Accordingly, notwithstanding any other provision hereof, a Subsidiary Guarantor shall not be required to make any payment to or for the account of a Lender Party, and such Lender Party shall refund any payment made by such Subsidiary Guarantor, to the extent that such requirement or such failure to refund would violate or conflict with mandatory and nonwaivable provisions of applicable Law limiting the maximum amount of interest which may be charged or collected by such Lender Party from such Subsidiary Guarantor.

2.10. Limitation on Obligations. Notwithstanding any other provision hereof, to the extent that mandatory and nonwaivable provisions of applicable Law pertaining to fraudulent transfer or fraudulent conveyance otherwise would render the full amount of the obligations of a Subsidiary Guarantor under this Agreement avoidable, invalid or unenforceable, the obligations of such Subsidiary Guarantor under this Agreement shall be limited to the maximum amount which does not result in such avoidability, invalidity or unenforceability. In any action, suit or proceeding pertaining to this Agreement, the burden of proof, by clear and convincing evidence, shall be on the Person claiming that this Section 2.10 applies to limit any obligation of such Subsidiary Guarantor under this Agreement, or claiming that any obligation of such Subsidiary Guarantor under this Agreement is avoidable, invalid or unenforceable, as to each element of such claim.

C-4

2.11. Release of Subsidiary Guarantor. Upon the sale or other disposition of all of the capital stock of and other equity interests in a Subsidiary Guarantor to a Person or Persons other than the Borrower or a Subsidiary of the Borrower, which sale or other disposition is in compliance with the Loan Documents, the Administrative Agent will, at such Subsidiary Guarantor's expense, release such Subsidiary Guarantor from its obligations under this Agreement; provided, however, that (a) at the time of such request and such release no Event of Default or Potential Default shall have occurred and be continuing, and (b) such Subsidiary Guarantor shall have delivered to the Administrative Agent, at least five Business Days prior to the date of the proposed release, a written request for release describing the terms of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a form for release for execution by the Administrative Agent and a certification by a Responsible Officer of the Borrower to the effect that the transaction is in compliance with the Loan Documents and as to such other matters as the Administrative Agent may in good faith request.

Article III
Representations and Warranties

3.1. Credit Agreement. The provisions of Article IV of the Credit Agreement are hereby incorporated by reference (together with all related definitions and cross references), insofar as such provisions relate to a Subsidiary Guarantor or any Subsidiary of a Subsidiary Guarantor. Each Subsidiary Guarantor hereby represents and warrants to the Lender Parties as provided therein.

3.2. Representations and Warranties Remade at Each Extension of Credit. Each request (including any deemed request) by the Borrower for any extension of credit under any Loan Document shall be deemed to constitute a representation and warranty by each Subsidiary Guarantor to the Lender Parties that the representations and warranties made by such Subsidiary Guarantor in this Article III are true and correct on and as of the date of such request with the same effect as though made on and as of such date. Failure by the Administrative Agent to receive notice from a Subsidiary Guarantor to the contrary before any extension of credit under any Loan Document shall constitute a further representation and warranty by such Subsidiary Guarantor to the Lender Parties that the representations and warranties made by such Subsidiary Guarantor in this Article III are true and correct on and as of the date of such extension of credit with the same effect as though made on and as of such date.

Article IV
Covenants

4.1. Covenants Generally. Reference is hereby made to the provisions of Articles VI and VII of the Credit Agreement (together with all related definitions and crossreferences). Each Subsidiary Guarantor hereby agrees that, to the extent such provisions impose upon the Borrower a duty to cause any Subsidiary Guarantor to do or refrain from doing certain acts or things or to meet or refrain from meeting certain conditions, such Subsidiary Guarantor shall do or refrain from doing such acts or things, or meet or refrain from meeting such conditions, as the case may be.

C-5

Article V
Miscellaneous

5.1. Amendments, etc. No amendment to or waiver of any provision of this Agreement, and no consent to any departure by any Subsidiary Guarantor herefrom, shall in any event be effective unless in a writing manually signed by or on behalf of such Subsidiary Guarantor and the Administrative Agent. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Such amendments, waivers and consents shall be made in accordance with, and shall be subject to, Section 10.3 of the Credit Agreement.

5.2. No Implied Waiver; Remedies Cumulative. No delay or failure of the Administrative Agent or any other Lender Party in exercising any right or remedy under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of the Administrative Agent or any other Lender Party under this Agreement are cumulative and not exclusive of any other rights or remedies available hereunder, under any other agreement, at law, or otherwise.

5.3. Notices. Except to the extent, if any, otherwise expressly provided herein, all notices and other communications (collectively, "notices") under this Agreement shall be given, shall be effective, and may be relied upon, in the same way as notices under the Credit Agreement. In the case of a Subsidiary Guarantor notices shall be sent to it at the address set forth on the signature page hereto or the signature page of its Additional Subsidiary Guarantor Supplement, or in accordance with the last unrevoked written direction from such Subsidiary Guarantor to the Administrative Agent.

5.4. Expenses. Each Subsidiary Guarantor agrees to pay upon demand all reasonable expenses (including reasonable fees and expenses of counsel) which the Administrative Agent or any other Lender Party may incur from time to time arising from or relating to the administration of, or exercise, enforcement or preservation of rights or remedies under, this Agreement.

5.5. Entire Agreement. This Agreement and the other Loan Documents constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous understandings and agreements.

5.6. Survival. All representations and warranties of each Subsidiary Guarantor contained in or made in connection with this Agreement shall survive, and shall not be waived by, the execution and delivery of this Agreement, any investigation by or knowledge of any Lender Party, any extension of credit, termination of this Agreement, or any other event or circumstance whatsoever.

5.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all such counterparts shall constitute but one and the same agreement.

5.8. Setoff. In the event that any obligation of a Subsidiary Guarantor now or hereafter existing under this Agreement or any other Loan Document shall have become due and payable, each Lender Party shall have the right from time to time, without notice to such Subsidiary Guarantor, to set off against and apply to such due and payable amount any obligation of any nature of such Lender Party to such Subsidiary Guarantor, including all deposits (whether time or demand, general or special, provisionally or finally credited, however evidenced) now or hereafter maintained by such Subsidiary Guarantor with such Lender Party. Such right shall be absolute and unconditional in all circumstances and, without limitation, shall exist whether such obligation to such Subsidiary Guarantor is absolute or contingent, matured or unmatured (it being agreed that such Lender Party may deem such obligation to be then due and payable at the time of such setoff), regardless of the offices or branches through which the parties are acting with respect to the offset obligations, and regardless of the existence or adequacy of any other direct or indirect security or any other right or remedy available to such Lender Party. Nothing in this Agreement or any other Loan Document shall be deemed a waiver of or restriction on any right of setoff or banker's lien available to a Lender Party under this Section 5.8, at law or otherwise. Each Subsidiary Guarantor hereby agrees that any affiliate of a Lender Party, and any holder of a participation in any obligation of such Subsidiary Guarantor under this Agreement, shall have the same rights of setoff as the Lender Parties as provided in this Section 5.8 (regardless of whether such affiliate or participant otherwise would be deemed a creditor of such Subsidiary Guarantor).

C-6

5.9. Construction. In this Agreement, unless the context otherwise clearly requires, references to the plural include the singular, the singular the plural, and the part the whole; the neuter case includes the masculine and feminine cases; and "or" is not exclusive. In this Agreement, any references to property (or similar terms) include any interest in such property (or other item referred to); "include," "includes," "including" and similar terms are not limiting; and "hereof," "herein," "hereunder" and similar terms refer to this Agreement as a whole and not to any particular provision. Section and other headings in this Agreement, and any table of contents herein, are for reference purposes only and shall not affect the interpretation of this Agreement in any respect. Section and other references in this Agreement are to this Agreement unless otherwise specified. This Agreement has been fully negotiated between the applicab le parties, each party having the benefit of legal counsel, and accordingly neither any doctrine of construction of guaranties in favor of the secured party, nor any doctrine of construction of ambiguities against the party controlling the drafting, shall apply to this Agreement.

5.10. Successors and Assigns. This Agreement shall be binding upon each Subsidiary Guarantor and its successors and assigns, and shall inure to the benefit of and be enforceable by the Administrative Agent and the other Lender Parties and their respective successors and assigns. Without limitation of the foregoing, each Lender Party (and any successive assignee or transferee) from time to time may assign or otherwise transfer all or any portion of its rights or obligations under the Loan Documents (including all or any portion of any commitment to extend credit), or any Obligations, to any other Person, and such Obligations (including any Obligations resulting from extension of credit by such other Person under or in connection with the Loan Documents) shall be and remain Obligations entitled to the benefit of this Agreement, and to the extent of its interest in such Obligations such other Person shall be vested with all the benefits in respect thereof granted to the Lender Party in this Agreeme nt or otherwise.

5.11. Joint and Several Obligations. The obligations of the Subsidiary Guarantors hereunder are joint and several obligations of each of them.

5.12. Additional Subsidiary Guarantors. Upon execution by a Person of a supplement in the form of Annex A (as "Additional Subsidiary Guarantor Supplement"), such Person shall become party hereto as an additional Subsidiary Guarantor and shall be subject to and bound by all of the provisions hereof. The addition of any additional Subsidiary Guarantor as a party to this Agreement shall not require the consent of any other Subsidiary Guarantor. The rights and obligations of each Subsidiary Guarantor shall remain in full force and effect following the addition of any additional Subsidiary Guarantor as a party to this Agreement. At the time an Additional Subsidiary Guarantor Supplement is executed by a new Subsidiary Guarantor, such Subsidiary Guarantor shall deliver to the Administrative Agent an opinion of counsel in substantially the form of Annex B, and covering such other matters as the Administrative Agent may reasonably request.

C-7

5.13. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Limitation of Liability. Without limiting the generality of Section 10.16 of the Credit Agreement:

(a) Governing Law. This Agreement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania, without regard to conflict of law principles.

(b) Certain Waivers. Each Subsidiary Guarantor hereby irrevocably and unconditionally:

(i) agrees that any action, suit or proceeding by any Person arising from or relating to this Agreement or any other Loan Document or any statement, course of conduct, act, omission or event occurring in connection herewith or therewith (collectively, "Related Litigation") may be brought in any state or federal court of competent jurisdiction sitting in Allegheny County, Pennsylvania, submits to the jurisdiction of such courts, and to the fullest extent permitted by Law agrees that will not bring any Related Litigation in any other forum (but nothing herein shall affect the right of any Lender Party to bring any action, suit or proceeding in any other forum);

(ii) waives any objection which it may have at any time to the laying of venue of any Related Litigation brought in any such court, waives any claim that any such Related Litigation has been brought in an inconvenient forum, and waives any right to object, with respect to any Related Litigation brought in any such court, that such court does not have jurisdiction over such Subsidiary Guarantor;

(iii) consents and agrees to service of any summons, complaint or other legal process in any Related Litigation by registered or certified U.S. mail, postage prepaid, to such Subsidiary Guarantor at the address for notices described in Section 5.3 hereof, and consents and agrees that such service shall constitute in every respect valid and effective service (but nothing herein shall affect the validity or effectiveness of process served in any other manner permitted by Law); and

(iv) waives the right to trial by jury in any Related Litigation.

(c) Limitation of Liability. To the fullest extent permitted by Law, no claim may be made by any Subsidiary Guarantor against any Lender Party or any affiliate, director, officer, employee, attorney or agent of any of them for any special, incidental, indirect, consequential or punitive damages in respect of any claim arising from or relating to this Agreement or any other Loan Document or any statement, course of conduct, act, omission, or event occurring in connection herewith or therewith (whether for breach of contract, tort or any other theory of liability). Each Subsidiary Guarantor hereby waives, releases and agrees not to sue upon any claim for any such damages, whether such claim presently exists or arises hereafter and whether or not such claim is known or suspected to exist in its favor.

C-8

IN WITNESS WHEREOF, the Subsidiary Guarantor(s) have executed and delivered this Agreement as of the date first above written.

ALBANY PUBLIC MARKETS, INC.

By_______________________________

Name:

Title:

Address

Attn:

Telephone:

Facsimile:

DUTCH VALLEY FOOD COMPANY, INC.

By_______________________________

Name:

Title:

Address

Attn:

Telephone:

Facsimile:

KING'S SUPERMARKETS, INC.

By_______________________________

Name:

Title:

Address

Attn:

Telephone:

Facsimile:

C-9

MARTIN'S FARM MARKET, INC.

By_______________________________

Name:

Title:

Address

Attn:

Telephone:

Facsimile:

SHAMROCK WHOLESALE DISTRIBUTORS, INC.

By_______________________________

Name:

Title:

Address

Attn:

Telephone:

Facsimile:

SUPERPETZ, LLC.

By_______________________________

Name:

Title:

Address

Attn:

Telephone:

Facsimile:

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WEIS TRANSPORTATION, INC.

By_______________________________

Name:

Title:

Address

Attn:

Telephone:

Facsimile:

WMK FINANCING, INC.

By_______________________________

Name:

Title:

Address

Attn:

Telephone:

Facsimile:

WMK HOLDINGS, INC.

By_______________________________

Name:

Title:

Address

Attn:

Telephone:

Facsimile:

C-1

Annex A
to
Guaranty and Suretyship Agreement

ADDITIONAL SUBSIDIARY GUARANTOR SUPPLEMENT

THIS SUPPLEMENT to the Guaranty and Suretyship Agreement dated as of [ ], made by the Subsidiary Guarantors referred to therein in favor of Mellon Bank, N.A., as Administrative Agent (such Guaranty and Suretyship Agreement, as amended, modified or supplemented, being referred to as the "Subsidiary Guaranty").

Recitals:

A. Capitalized terms used herein and not otherwise defined shall have the meanings given them in, or by reference in, the Subsidiary Guaranty.

B. The Subsidiary Guaranty contemplates that a Person may become party to the Subsidiary Guaranty as an additional Subsidiary Guarantor. The Person executing this Supplement as Subsidiary Guarantor below (the "Additional Subsidiary Guarantor") desires to become party to the Subsidiary Guaranty as a Subsidiary Guarantor.

NOW, THEREFORE, the Additional Subsidiary Guarantor , intending to be legally bound hereby, represents, warrants and covenants to the Lender Parties and the Loan Parties as follows:

Section 1. Joinder. The Additional Subsidiary Guarantor hereby becomes party to the Subsidiary Guaranty as a Subsidiary Guarantor thereunder, and agrees that it shall be subject to and bound by all of the provisions thereof.

Section 2. Warranties, etc. The Additional Subsidiary Guarantor hereby represents and warrants to each Lender Party that each of the representations and warranties set forth in Article III of the Subsidiary Guaranty is true and correct, insofar as such provisions relate to the Additional Subsidiary Guarantor or any Subsidiary of the Additional Subsidiary Guarantor, after giving effect to this Supplement.

Section 3. Governing Law. This Supplement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania, without regard to principles of conflicts of law.

Section 4. Execution in Counterparts. This Supplement may be executed by the Additional Subsidiary Guarantor in any number of counterparts, each of which shall be deemed to be an original, and all such counterparts shall constitute but one and the same agreement.

IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has duly executed this Supplement.

as Subsidiary Guarantor

By_______________________________

Name:

Title:

Address:

Attn:

Telephone:

Facsimile:

Date:                                      

2

Annex B to Guaranty and Suretyship Agreement

Form of Opinion of Counsel to Additional Subsidiary Guarantor

[Date]

To Mellon Bank, N.A., as Administrative

Agent under the Credit Agreement referred

to below and to each of the Lender Parties

referred to in such Credit Agreement

Ladies and Gentlemen:

We have acted as counsel for [name of Additional Subsidiary Guarantor] (the "Additional Subsidiary Guarantor") and are rendering this opinion in connection with (a) the Guaranty and Suretyship Agreement (the "Subsidiary Guaranty," as further defined below), dated as of [ ], made by the Subsidiary Guarantors referred to therein in favor of Mellon Bank, N.A., as Administrative Agent under the Credit Agreement referred to below, and (b) the Additional Subsidiary Guarantor Supplement (the "Supplement") executed by the Additional Subsidiary Guarantor, whereby the Additional Subsidiary Guarantor has joined the Subsidiary Guaranty as a Subsidiary Guarantor. Terms used herein, but not otherwise defined herein, have the meaning ascribed thereto in the Subsidiary Guaranty.

In connection with opinion set forth herein, we have reviewed originals or copies, identified to my satisfaction, of the following:

(i) the Subsidiary Guaranty, as initially executed and as amended, modified and supplemented to date (the "Subsidiary Guaranty"),

(ii) the Supplement,

(iii) the Revolving Credit Agreement dated as of October 15, 2002, by and among Weis Markets, Inc., as Borrower, the Lenders parties thereto from time to time, and Mellon Bank, N.A., as Administrative Agent, as initially executed and as amended, modified and supplemented to date (the "Credit Agreement")

(iv) the other Loan Documents (as defined in the Credit Agreement),

(v) the articles of incorporation and bylaws of the Additional Subsidiary Guarantor, each as in effect on the date hereof, and

(vi) such other documents, records, certificates and instruments as we have deemed relevant and necessary as a basis for the opinions hereinafter expressed.

In our examination, we have assumed the genuineness of all signatures on original documents, the authenticity of all documents submitted to us as originals, the conformity to the originals of all copies submitted to us as certified, conformed or photostatic copies, and the authenticity of the originals of such copies. As to various questions of fact material to this opinion, we have relied, without independent investigation or verification, upon statements, representations and certificates of officers and other representatives of the Additional Subsidiary Guarantor and certificates of public officials.

Based upon the foregoing, and subject to the qualifications and assumptions set forth herein, it is our opinion that:

D-1

1. The Additional Subsidiary Guarantor is a corporation duly incorporated, validly existing and in good standing under the laws of [state].

2. The execution and delivery by the Additional Subsidiary Guarantor of the Supplement and the performance by the Additional Subsidiary Guarantor of the Supplement and the Subsidiary Guaranty (a) are within the Additional Subsidiary Guarantor's corporate powers; (b) have been duly authorized by all necessary corporate action on the part of the Additional Subsidiary Guarantor; (c) require no action by or in respect of, or filing on the part of the Additional Subsidiary Guarantor with, any governmental body, agency or official, in each case, on the part of the Additional Subsidiary Guarantor; and (d) do not violate or conflict with, or constitute a default by the Additional Subsidiary Guarantor under, any provision of (i) any applicable law, regulation, judgment, injunction, order, decree, (ii) the articles of incorporation or bylaws of the Additional Subsidiary Guarantor, or (iii) any material agreement or instrument to which the Additional Subsidiary Guarantor or any of its Subsidiaries is a party or b y which any of them or any of their respective properties may be subject or bound.

3. The Supplement has been duly executed and delivered by the Additional Subsidiary Guarantor. The Supplement and the Subsidiary Guaranty constitute the legal, valid and binding obligation of the Additional Subsidiary Guarantor, enforceable in accordance with their respective terms.

4. The Additional Subsidiary Guarantor is not required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

The opinions set forth herein are subject to the following qualifications and limitations:

(a) The enforceability of the Supplement and the Subsidiary Guaranty may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating to or affecting the rights of creditors generally.

(b) The enforceability of the Supplement and the Subsidiary Guaranty may be limited by general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in a proceeding in equity or at law). In applying such principles a court, among other things, might not allow a creditor to accelerate maturity of a debt under certain circumstances including, without limitations, upon the occurrence of a default deemed immaterial. Such principles as applied by a court might include a requirement that a creditor act with reasonableness and in good faith.

(c) The remedy of specific performance and injunctive and other forms of equitable relief are subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

In rendering the foregoing opinion, we do not express any opinion as to any laws other than [general corporate laws of the jurisdiction of incorporation of the Additional Subsidiary Guarantor], the laws of [ ], and the federal laws of the United States of America. To the extent that the Subsidiary Guaranty and the Supplement are stated to be governed by the laws of the Commonwealth of Pennsylvania, we have assumed, with your permission, that the laws of [ ] are identical in all relevant respects to the laws of the Commonwealth of Pennsylvania.

The opinion expressed herein is based upon the laws in effect on the date hereof, and we assume no obligation to revise or supplement this opinion should any such law be changed by legislative action, judicial decision, or otherwise.

The opinion is being delivered to you solely for your benefit, and neither this opinion nor any part hereof may be delivered to, or used, referred to or relied upon, by any other person without our express prior written consent.

Very truly yours,

D-2

Exhibit D COMPLIANCE CERTIFICATE

Reference is made to the Revolving Credit Agreement (the "Credit Agreement") dated as of October 15, 2002, among Weis Markets, Inc., a Pennsylvania corporation (the "Borrower"), the Lenders parties thereto from time to time, the Issuing Bank referred to therein and Mellon Bank, N.A., as Administrative Agent. Capitalized terms defined in the Credit Agreement shall have the same meanings herein.

This is the Certificate required by Section 6.1(c)(i) of the Credit Agreement. The following calculations demonstrate as at the end of                  , compliance with the restrictions contained in Sections 7.1(a) and 7.1(b) of the Credit Agreement:

I. Section 7.1(a) – Minimum Stockholders' Equity

A. Stockholders' equity at                 $            

B. Less:

(1) Writeups and revaluations since Closing Date ($            )

(2) Investments and loans to, unconsolidated subsidiaries and non-subsidiaries ($            )

(3) Treasury stock ($            )

C. Consolidated Net Worth at                
(A minus B) $            

D. Cumulative Net Income for Fiscal Quarters after June 29, 2002 $            

E. Minimum Required Consolidated Net Worth at                 [$488,000,000 plus 50% of D] $            

II. Section 7.1(b) -- Fixed Charge Coverage Ratio

Calculation of EBITDA

A. Consolidated Net Income for the four Fiscal Quarters beginning                 and ending                 (excluding extraordinary gains and losses) $            

B. Consolidated Interest Expense for the four Fiscal Quarters beginning                 and ending                 $            

C. Consolidated Tax Expense for the four Fiscal Quarters beginning                 and ending                 $            

D. Depreciation and amortization for the four Fiscal Quarters beginning                 and ending                 $            

E. Sum of A through D $            

Calculation of Fixed Charges

F. Consolidated Cash Interest Expense for the four Fiscal Quarters beginning         and ending        $            

G. Consolidated Cash Tax Payments paid by the Borrower or any Subsidiary during the four Fiscal Quarters beginning                 and ending                 $            

H. Scheduled Principal Debt Service for the four Fiscal Quarters beginning ________ and ending _________

I. Dividends paid on Borrower's stock for the four Fiscal Quarters beginning           and ending        $            

J. Sum of G, H, I and J $            

Fixed Charge Coverage Ratio

K. Ratio of F to J       to      

L. Required Fixed Charge Coverage Ratio 1.75 to 1

III. Section 7.7 -- Dispositions

A. Dispositions during Fiscal Quarter ended                 $            

B. Dispositions after Closing Date and prior to                 $            

C. Total Dispositions [sum of A and B] $            

D. 10% of book value of Consolidated Assets on June 29, 2002 $            

IV. Section 7.9 -- Capital Expenditures and Acquisitions

A. Purchase price for acquisitions during Fiscal Quarter ended                 $            

B. Purchase price for acquisitions made since beginning of Fiscal Year Date and prior to                 $            

C. Consolidated Capital Expenditures made during the Fiscal Quarter ended                 $            

D. Consolidated Capital Expenditures made since beginning of Fiscal Year and prior to                 $            

E. Sum of A, B, C and D $            

F. Maximum Permitted Amount per Fiscal Year $100,000,000

The undersigned has reviewed the financial statements referred to in Subsection [6.1(a)/6.1(b)] of the Credit Agreement and such financial statements fairly present the financial condition and operations of the Borrower and its consolidated Subsidiaries as of the date thereof and for the period covered thereby.

As of this date, no Event of Default or Potential Default has occurred and is continuing [or, if an Event of Default or Potential Default has occurred and is continuing, the nature of such Event of Default or Potential Default, the status thereof and the action the Borrower is taking or intends to take to remedy or correct the Event of Default or Potential Default].

WEIS MARKETS, INC.

By

Title

Date

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10

                                  Weis Markets, Inc.
                                 Profit Sharing Plan


                                 Originally Effective
                                  December 31, 1952


                          As Amended And Restated Effective
                                   January 1, 1997


                       Weis Markets, Inc. Profit Sharing Plan
- -------------------------------------------------------------------------------

                                  TABLE OF CONTENTS


PREAMBLE                                                             1

ARTICLE I - DEFINITIONS                                              2
Section 1.1 - References
Section 1.2 - Compensation
Section 1.3 - Dates
Section 1.4 - Employee
Section 1.5 - Employer
Section 1.6 - Fiduciaries
Section 1.7 - Participant/Beneficiary
Section 1.8 - Participant Accounts
Section 1.9 - Plan
Section 1.10 - Service
Section 1.11 - Trust

ARTICLE II - PARTICIPATION                                           8
Section 2.1 - Eligibility Service
Section 2.2 - Plan Participation
Section 2.3 - Termination of Participation
Section 2.4 - Re-Participation (Break in Service Rules)

ARTICLE III - ALLOCATIONS TO PARTICIPANT ACCOUNTS                   10
Section 3.1 - General Provisions
Section 3.2 - Profit Sharing Contributions
Section 3.3 - Qualified Nonelective Contributions
Section 3.4 - Employee 401(k) Elective Deferral Contributions
Section 3.5 - Employee Nondeductible Contributions
Section 3.6 - Employer Matching Contributions
Section 3.7 - Rollover/Transfer Account
Section 3.8 - Allocation of Investment Results

ARTICLE IV - PAYMENT OF PARTICIPANT ACCOUNTS                        14
Section 4.1 - Vesting Service Rules
Section 4.2 - Vesting of Participant Accounts
Section 4.3 - Payment of Participant Accounts
Section 4.4 - In-Service Payments
Section 4.5 - Distributions Under Domestic Relations Orders

ARTICLE V - ADDITIONAL QUALIFICATION RULES                          20
Section 5.1 - Limitations on Allocations Under Code Section 415
Section 5.2 - Joint and Survivor Annuity Requirements
Section 5.3 - Distribution Requirements
Section 5.4 - Top-Heavy Provisions
Section 5.5 - Reserved

ARTICLE VI - ADMINISTRATION OF THE PLAN                             35
Section 6.1 - Fiduciary Responsibility
Section 6.2 - Plan Administrator
Section 6.3 - Claims Procedure
Section 6.4 - Trust Fund

ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN                     38
Section 7.1 - Right to Discontinue and Amend


Section 7.2 - Amendments
Section 7.3 - Protection of Benefits in Case of Plan Merger
Section 7.4 - Termination of Plan

ARTICLE VIII - MISCELLANEOUS PROVISIONS                             40
Section 8.1 - Exclusive Benefit - Non-Reversion
Section 8.2 - Inalienability of Benefits
Section 8.3 - Employer-Employee Relationship
Section 8.4 - Binding Agreement
Section 8.5 - Separability
Section 8.6 - Construction
Section 8.7 - Copies of Plan
Section 8.8 - Interpretation

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                                  PREAMBLE

This amended and restated plan, executed on the date indicated at the end
hereof, is made effective as of January 1, 1997, except as provided
otherwise in Section 1.3(c), by Weis Markets, Inc., a corporation, with its
principal office located in Sunbury, Pennsylvania.

                            W I T N E S S E T H :

WHEREAS, effective December 31, 1952, the employer established the plan for
its employees and desires to continue to maintain a permanent qualified
plan in order to provide its employees and their beneficiaries with
financial security in the event of retirement, disability, or death; and

WHEREAS, it is desired to amend said plan;

NOW THEREFORE, the premises considered, the original plan is hereby
replaced by this amended and restated plan, and the following are the
provisions of the qualified plan of the employer as restated herein;
provided, however, that each employee who was previously a participant
shall remain a participant, and no employee who was a participant in the
plan before the date of amendment shall receive a benefit under this
amended plan which is less than the benefit he was then entitled to receive
under the plan as of the day prior to the amendment.

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ARTICLE I - DEFINITIONS

Section 1.1 - References

   (a) Code means the Internal Revenue Code of 1986, as it may be amended
       from time to time.
   (b) ERISA means the Employee Retirement Income Security Act of 1974,
       as amended.

Section 1.2 - Compensation
   (a) Compensation means, except as provided in Section 1.2(b) hereof,
       any earnings reportable as W-2 wages for federal income tax
       withholding purposes and earned income, plus elective contributions,
       for the plan year.

       However, compensation shall not include any earnings reportable as
       W-2 wages that are payable following the termination of employment
       pursuant to a severance agreement.

       Elective contributions are amounts excludable from the employee's
       gross income and contributed by the employer, at the employee's
       election to:

           A cafeteria plan (excludable under Code section 125);

           A Code section 401(k) arrangement (excludable under Code
           section 402(e)(3));

           A simplified employee pension (excludable under Code
           section 402(h));

           A tax sheltered annuity (excludable under Code
           section 403(b)); or

           Effective for plan years beginning on or after
           January 1, 1998, a Code section 132(f)(4) qualified
           transportation fringe benefit plan.

       "Earned Income" means net earnings from self-employment in the trade
       or business with respect to which the employer has established the
       plan, provided that personal services of the individual are a
       material income producing factor.  Net earnings shall be determined
       without regard to items excluded from gross income and the deductions
       allocable to those items.  Net earnings shall be determined after the
       deduction allowed to the self-employed individual for all
       contributions made by the employer to a qualified plan and, for plan
       years beginning after December 31, 1989, the deduction allowed to the
       self-employed under Code section 164(f) for self-employment taxes.

       Any reference in this plan to compensation shall be a reference to
       the definition in this Section 1.2, unless the plan reference
       specifies a modification to this definition.  The plan administrator
       shall take into account only compensation actually paid by the
       employer for the relevant period.  A compensation payment includes
       compensation by the employer through another person under the common
       paymaster provisions in Code sections 3121 and 3306.  Compensation
       from an employer that is not a participating employer under this plan
       shall be excluded.

   (b) Exclusions From Compensation - Notwithstanding the provisions of
       Section 1.2(a), the following types of remuneration shall be excluded
       from the participant's compensation:

           Compensation in excess of $22,000 for Pharmacists with less
           than 10 years of service.

           Compensation in excess of $24,000 for Pharmacists with 10 or
           more years of service.

   (c) Limitations on Compensation
       (1) Compensation Dollar Limitation - For any plan year beginning
           after December 31, 1993, the plan administrator shall take into
           account only the first $150,000 (or beginning January 1, 1995,
           such larger amount as the Commissioner of Internal Revenue may
           prescribe) of any participant's compensation for determining all
           benefits provided under the plan.  For any plan year beginning
           after December 31, 1988 but before January 1, 1994, the plan
           administrator shall take into account only the first $200,000 (or,
           for plan years beginning after December 31, 1989 but before
           January 1, 1994, such larger amount as the Commissioner of
           Internal Revenue may prescribe) of any participant's compensation
           for determining all benefits provided under the plan.  The
           compensation dollar limitation for a plan year shall be the
           limitation amount in effect on January 1 of the calendar year in
           which the plan year begins.  For any plan year beginning before
           January 1, 1989, the $200,000 limitation (but not the family
           aggregation requirement described in Section 1.2(c)(2)) applies
           only if the plan is top-heavy for such plan year or operates as a
           deemed top-heavy plan for such plan year.  If the plan should
           determine compensation on a period of time that contains less than
           12 calendar months (such as for a short plan year), the annual
           compensation dollar limitation shall be an amount equal to the

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           compensation dollar limitation for the plan year multiplied by the
           ratio obtained by dividing the number of full months in the period
           by 12.

       (2) Application of Compensation Limitation to Certain Family
           Members - For any plan year beginning after December 31, 1988 but
           before January 1, 1997, the compensation dollar limitation shall
           apply to the combined compensation of the employee and of any
           family member who is either (A) the employee's spouse, or (B) the
           employee's lineal descendant under the age of 19 as described in
           this Section 1.2(c)(2).  If, for such a plan year, the combined
           compensation of the employee and such family members who are
           participants entitled to an allocation for that plan year shall
           exceed the compensation dollar limitation, compensation for each
           such participant, for purposes of the contribution and allocation
           provisions of Article III, shall mean his adjusted compensation.

           Adjusted compensation shall mean the amount that bears the same
           ratio to the compensation dollar limitation as the affected
           participant's compensation (without regard to the compensation
           dollar limitation) bears to the combined compensation of all the
           affected participants in the family unit.  If the plan uses
           permitted disparity, the plan administrator shall determine the
           integration level of each affected family member participant using
           actual compensation.  The total of the affected participants'
           compensations equal to or less than the applicable integration
           levels may not exceed the compensation dollar limitation.  The
           combined excess compensation of the affected participants in the
           family unit may not exceed the compensation dollar limitation
           minus the amount determined under the preceding sentence.  If the
           combined excess compensation exceeds this limitation, the plan
           administrator shall prorate the limitation on the excess
           compensation among the affected participants in the family unit in
           proportion to each such individual's actual compensation minus his
           integration level.

   (d) Compensation for Nondiscrimination Testing - For purposes of
       determining whether the plan discriminates in favor of highly
       compensated employees, compensation means compensation as defined in
       this Section 1.2, except that the employer will not give effect to
       any exclusion from compensation specified in Section 1.2(b).
       Notwithstanding the above, the employer may amend this plan to
       exclude from this nondiscrimination definition of compensation any
       items of compensation excludable under Code section 414(s) and the
       applicable Treasury regulations, provided such adjusted definition
       conforms to the nondiscrimination requirements of those regulations.

Section 1.3 - Dates

   (a) Accounting Date means the date(s) on which investment results are
       allocated to participants' accounts as set forth below:

           December 31

   (b) Allocation Date means the date(s) as of which any contribution is
       allocated to participants' accounts.
       The profit sharing contribution and forfeitures shall be allocated as
       of December 31.

   (c) The Effective Date of the plan is December 31, 1952.

       The effective date of this amendment and restatement is
       January 1, 1997; provided, however, that the plan provision required
       to comply with the Family and Medical Leave Act shall be effective
       August 5, 1993, the plan provisions required to comply with the
       Uniformed Services Employment and Re-Employment Rights Act of 1994
       shall be effective December 12, 1994, the plan provisions required to
       comply with the Retirement Protection Act of 1994 shall generally be
       effective on the first day of the first limitation year beginning
       after December 31, 1994, the plan provisions required to comply with
       the Small Business Job Protection Act of 1996 shall generally be
       effective on the first day of the plan year beginning after
       December 31, 1996, and the plan provisions required to comply with
       the Taxpayer Relief Act of 1997 shall generally be effective on the
       first day of the plan year beginning after August 5, 1997, except as
       specified otherwise in this plan or in said Acts.

       Notwithstanding anything herein to the contrary, the provisions noted
       below shall become effective on the date indicated.  If such
       effective date is subsequent to the effective date of this
       restatement, the prior provisions of the plan shall continue in
       effect until such indicated effective date.

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Provision                                                      Effective Date

Section 2.2(a)(2) Eligible Class of Employees                  January 1, 2002

Section 4.3(a)(3) Payment Upon Other Termination of Employment December 15, 2000

Section 4.5 Distributions under Domestic Relations Orders      December 15, 2000

       Effective for plan years beginning before January 1, 1998, the dollar
       amount appearing in Sections 4.2(b), 4.2(c), 4.3(d), 4.4(b), and 4.5
       shall be $3,500 as provided under the prior provisions of the plan
       before this restatement.  The $5,000 dollar amount in such Sections
       shall be effective for plan years beginning after December 31, 1997.

   (d) Plan Entry Date means the participation date(s) specified in
       Article II.

   (e) Plan Year means the 12-consecutive-month period beginning on
       January 1 and ending on December 31.

   (f) Limitation Year means the plan year.

Section 1.4 - Employee
   (a) (1) Employee means any person employed by the employer,
           including an owner-employee or other self-employed individual (as
           defined in Section 1.4(a)(3)).  The term employee shall include
           any employee of the employer maintaining the plan or of any other
           employer required to be aggregated with such employer under Code
           section 414(b), (c), (m), or (o).  The term employee shall also
           include any leased employee deemed to be an employee of any such
           employer as provided in Code section 414(n) or (o) and as defined
           in Section 1.4(a)(2).

       (2) Leased Employee means an individual (who otherwise is not an
           employee of the employer) who, pursuant to a leasing agreement
           between the employer and any other person, has performed services
           for the employer (or for the employer and any persons related to
           the employer within the meaning of Code section 414(n)(6)) on a
           substantially full time basis for at least one year and such
           services are performed under the primary direction or control of
           the employer.  If a leased employee is treated as an employee by
           reason of this Section 1.4(a)(2), compensation from the leasing
           organization that is attributable to services performed for the
           employer shall be considered as compensation under the plan.
           Contributions or benefits provided a leased employee by the
           leasing organization that are attributable to services performed
           for the employer shall be treated as provided by the employer.

           Safe harbor plan exception - The plan shall not treat a leased
           employee as an employee if the leasing organization covers the
           employee in a safe harbor plan and, prior to application of this
           safe harbor plan exception, 20% or less of the employer's
           nonhighly compensated employees are leased employees.  A safe
           harbor plan is a money purchase pension plan providing immediate
           participation, full and immediate vesting, and a nonintegrated
           contribution formula equal to at least 10% of the employee's
           compensation without regard to employment by the leasing
           organization on a specified date.  The safe harbor plan must
           determine the 10% contribution on the basis of compensation as
           defined in Section 1.2(a) without regard to Section 1.2(b).

       (3) Owner-Employee/Self-Employed Individual - Owner-employee means
           a self-employed individual who is a sole proprietor (if the
           employer is a sole proprietorship) or who is a partner (if the
           employer is a partnership) owning more than 10% of either the
           capital or profits interest of the partnership.  Self-employed
           individual means an individual who has earned income for the
           taxable year from the trade or business for which the plan is
           established, or who would have had earned income but for the fact
           that the trade or business had no net profits for the taxable
           year.

   (b) Highly Compensated Employee means any employee who:

       (1) was a more than 5% owner of the employer (applying the
           constructive ownership rules of Code section 318, and applying the
           principles of Code section 318, for an unincorporated entity) at
           any time during the current or the preceding plan year; or

       (2) for the preceding plan year -

          (A) had compensation from the employer in excess of $80,000 (as
              adjusted by the Commissioner of Internal Revenue pursuant to
              Code section 415(d), except that the base period shall be the
              calendar quarter ending September 30, 1996), and

          (B) if the employer elects the application of this Subparagraph
              for such preceding plan year, was in the top-paid group of
              employees for such preceding plan year.  For this purpose, an
              employee is in the top-paid group of employees for any plan
              year if such employee is in the group consisting of the top 20%
              of the employees when ranked on the basis of compensation paid
              during such plan year.


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       The term highly compensated employee also includes any former
       employee who separated from service (or has a deemed separation from
       service, as determined under Treasury regulations) prior to the plan
       year, performs no service for the employer during the plan year, and
       was a highly compensated employee either for the separation plan year
       or any plan year ending on or after his 55th birthday, based on the
       applicable rules in effect for such plan year.

       For purposes of determining who is a highly compensated employee
       under this Section 1.4(b), compensation means compensation as defined
       in Section 1.2(a) without regard to Section 1.2(b).

       The plan administrator shall make the determination of who is a
       highly compensated employee, and, if the employer so amends this
       plan, this determination shall include the determination of the
       number and identity of the top-paid 20% group, consistent with Code
       section 414(q) and regulations issued thereunder.  The employer may
       amend this plan to make a calendar year data election with regard to
       the plan year preceding the current plan year to determine the
       employees with compensation in excess of $80,000 and the top-paid 20%
       group, as prescribed by Treasury regulations.  A top-paid 20% group
       election or a calendar year data election must apply to all plans and
       arrangements of the employer.

       This Section 1.4(b) is effective for plan years beginning after
       December 31, 1996, except that, in determining whether an employee is
       a highly compensated employee in 1997, this provision shall be
       treated as having been in effect for the last plan year beginning
       before January 1, 1997.

   (c) Nonhighly Compensated Employee means any employee who is not a
       highly compensated employee.

Section 1.5 - Employer

   (a) Employer means Weis Markets, Inc. or any successor entity by
       merger, purchase, consolidation, or otherwise; or an organization
       affiliated with the employer that may assume the obligations of this
       plan with respect to its employees by becoming a party to this plan.
       Another employer, whether or not it is affiliated with the sponsor
       employer, may adopt this plan to cover its employees by filing with
       the sponsor employer a written resolution adopting the plan, upon
       which the sponsor employer shall indicate its acceptance of such
       employer as an employer under the plan.  Each such employer shall be
       deemed to be the employer only as to persons who are on its payroll.

       The following employers have adopted this plan and have been accepted
       by the sponsor employer on or before the date this document is
       executed:

                           Albany Public Markets,  Inc.

   (b) Employer for Compliance Testing - For purposes of determining
       whether the plan satisfies the participation coverage requirements of
       Code section 410(b) and the limitations on benefits and allocations
       under Code section 415, employer shall mean the employer that adopts
       this plan, and all members of a controlled group of corporations (as
       defined in Code section 414(b)), all commonly controlled trades or
       businesses (as defined in Code section 414(c)) or affiliated service
       groups (as defined in Code section 414(m)) of which the adopting
       employer is a part, and any other entity required to be aggregated
       with the employer pursuant to regulations under Code section 414(o).

Section 1.6 - Fiduciaries

   (a) Named Fiduciary means the person or persons having fiduciary
       responsibility for the management and control of plan assets.

   (b) Plan Administrator means the person or persons appointed by the
       named fiduciary to administer the plan.

   (c) Trustee means the trustee named in the trust agreement executed
       pursuant to this plan, or any duly appointed successor trustee.

   (d) Investment Manager means a person or corporation other than the
       trustee appointed for the investment of plan assets.

Section 1.7 - Participant/Beneficiary

   (a) Participant means an eligible employee of the employer who becomes
       a member of the plan pursuant to the provisions of Article II, or a
       former employee who has an accrued benefit under the plan.

   (b) Beneficiary means a person designated by a participant who is or
       may become entitled to a benefit under the plan.  A beneficiary who
       becomes entitled to a benefit under the plan remains a beneficiary
       under the plan until the trustee has fully distributed his benefit to
       him.  A beneficiary's right to (and the plan administrator's, or a
       trustee's duty to provide to the beneficiary) information or data
       concerning the plan shall not arise until he first becomes entitled
       to receive a benefit under the plan.

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Section 1.8 - Participant Accounts

   (a) Profit Sharing Account means the balance of the separate account
       derived from employer's profit sharing contributions, including
       forfeitures (if any).

   (b) Employee Nondeductible Contribution Account means the balance of
       the separate account derived from the participant's non-deductible
       employee contributions (if so provided under Section 3.5).

   (c) Rollover/Transfer Account means the balance of the separate
       account derived from rollover contributions and/or transfer
       contributions (if so provided under Section 3.7).

   (d) Accrued Benefit means the total of the participant's account
       balances as of the accounting date falling on or before the day on
      which the accrued benefit is being determined.

Section 1.9 - Plan

    Plan means Weis Markets, Inc. Profit Sharing Plan as set forth herein
    and as it may be amended from time to time.

Section 1.10 - Service

   (a) Service means any period of time the employee is in the employ of
       the employer, including any period the employee is on an unpaid leave
       of absence authorized by the employer under a uniform,
       nondiscriminatory policy applicable to all employees.  Separation
       from service means that the employee no longer has an employment
       relationship with the employer.

   (b) (1) Hour of Service means:

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

           (B) Each hour for which an employee is paid, or entitled to
               payment, by the employer on account of a period of time during
               which no duties are performed (irrespective of whether the
               employment relationship has terminated) due to vacation,
               holiday, illness, incapacity (including disability), layoff,
               jury duty, military duty, or leave of absence.  No more than
               501 hours of service shall be credited under this
               Subparagraph (B) for any single continuous period (whether or
               not such period occurs in a single computation period).  An
               hour of service shall not be credited to an employee under this
               Subparagraph (B) if the employee is paid, or entitled to
               payment, under a plan maintained solely for the purpose of
               complying with applicable worker's compensation or unemployment
               compensation or disability insurance laws.  Hours under this
               Subparagraph (B) shall be calculated and credited pursuant to
               section 2530.200b-2 of the Department of Labor Regulations that
               are incorporated herein by this reference; and

           (C) Each hour for which back pay, irrespective of mitigation of
               damages, is either awarded or agreed to by the employer.  The
               same hours of service shall not be credited both under
               Subparagraph (A) or Subparagraph (B), as the case may be, and
               under this Subparagraph (C).  These hours shall be credited to
               the employee for the computation period or periods to which the
               award or agreement pertains rather than the computation period
               in which the award, agreement, or payment is made.

           Hours of service shall be determined on the basis of actual hours
           for which an employee is paid or entitled to payment.  The above
           provisions shall be construed so as to resolve any ambiguities in
           favor of crediting employees with hours of service.

           If, for the purposes of the plan, an employee's records are
           maintained on other than an hourly basis, the plan administrator,
           according to uniform rules applicable to a class of employees, may
           apply the following equivalencies for the purpose of crediting
           hours of service:

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                                          Credit Granted to Individual if
         Basis Upon Which Records              Individual Earns One or
             Are Maintained             More Hours of Service During Period
         ------------------------       -----------------------------------
                   Shift                        Actual hours of full shift
                   Day                           10 hours of service
                   Week                          45 hours of service
          Semi-Monthly Payroll Period            95 hours of service
            Months of Employment                 190 hours of service

       (2) Solely for purposes of determining whether a break in service
           for participation and vesting purposes has occurred in a
           computation period, an individual who is absent from work for
           maternity or paternity reasons shall receive credit for the hours
           of service that would otherwise have been credited to such
           individual but for such absence, or in any case in which such
           hours cannot be determined, 8 hours of service per day of such
           absence.  For purposes of this paragraph, an absence from work for
           maternity or paternity reasons means an absence (A) by reason of
           the pregnancy of the individual, (B) by reason of a birth of a
           child of the individual, (C) by reason of the placement of a child
           with the individual in connection with the adoption of such child
           by such individual, or (D) for purposes of caring for such child
           for a period beginning immediately following such birth or
           placement.  The hours of service credited under this paragraph
           shall be credited:  (A) in the computation period in which the
           absence begins if the crediting is necessary to prevent a break in
           service in that period, or (B) in all other cases, in the
           following computation period.  No more than 501 hours of service
           shall be credited under this paragraph for any single continuous
           period (whether or not such period occurs in a single computation
           period).

       (3) Solely for purposes of determining whether a break in service
           for participation and vesting purposes has occurred in a
           computation period, an individual who is absent from work on
           unpaid leave under the Family and Medical Leave Act shall receive
           credit for the hours of service that would otherwise have been
           credited to such individual but for such absence, or in any case
           in which such hours cannot be determined, 8 hours of service per
           day of such absence.  Such an individual shall be treated as
           actively employed for the purposes of participation and
           eligibility for an allocation of any employer contribution that
           may be provided under this plan.  Notwithstanding the preceding,
           this paragraph shall not apply if the employer or the particular
           employee is not subject to the requirements of the Family and
           Medical Leave Act at the time of the absence.

       (4) Hours of service shall be credited for employment with other
           members of an affiliated service group (under Code
           section 414(m)), a controlled group of corporations (under Code
           section 414(b)), or a group of trades or businesses under common
           control (under Code section 414(c)), of which the adopting
           employer is a member.  Hours of service shall also be credited for
           any leased employee who is considered an employee for purposes of
           this plan under Code section 414(n) or Code section 414(o).

   (c) (1) Year of Service means a 12-consecutive-month computation
           period during which the employee completes the required number of
           hours of service with the employer as specified in Sections 2.1
           or 4.1.  No more than one year of service will be credited for any
           12-consecutive-month period unless otherwise required by Code
           section 410 or 411.

       (2) Service With Related Employers - For purposes of crediting
           years of service, hours of service credited in accordance with
           Section 1.10(b)(4) shall be taken into account.

       (3) Predecessor Service - If the employer maintains the plan of a
           predecessor employer, service with such predecessor employer shall
           be treated as service for the employer.  If the employer does not
           maintain the plan of a predecessor employer, then service as an
           employee of a predecessor employer shall not be considered as
           service under the plan, except as noted below:

               No credit for predecessor service.

           The years of service to be taken into account shall be determined
           as of the effective date of this provision with respect to the
           particular predecessor employer.  If the predecessor employer is
           not considered to be the sponsoring employer under the provisions
           of Section 1.5(b), the period taken into account for determining
           the years of service to be credited under this Section 1.10(c)(3)
           shall be the five year period ending as of the last day of the
           plan year immediately preceding the plan year containing the
           effective date of this provision and any years of service
           performed by the employee for the predecessor employer during any
           prior period shall not be taken into account.

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   (d) Break in Service (or One Year Break in Service) means a 12-
       consecutive-month computation period during which a participant or
       former participant does not complete the specified number of hours of
       service with the employer as set forth in Sections 2.1(b) and 4.1(b).

   (e) Qualified Military Service - Notwithstanding any provision of this
       plan to the contrary, effective December 12, 1994, contributions,
       benefits, and service credit with respect to qualified military
       service will be provided in accordance with Code section 414(u).

Section 1.11 - Trust

   (a) Trust means the qualified trust created under the employer's plan.

   (b) Trust Fund means all property held or acquired by the plan.


                        ARTICLE II - PARTICIPATION

Section 2.1 - Eligibility Service

   (a) Eligibility Year of Service means an eligibility computation
       period during which the employee completes at least 1,000 hours of
       service with the employer.

   (b) One Year Break in Service means for the purposes of this Article
       II an eligibility computation period during which the participant or
       former participant does not complete more than 500 hours of service
       with the employer.

   (c) Eligibility Computation Period - The initial eligibility
       computation period shall be the 12-consecutive-month period beginning
       with the day on which the employee first performs an hour of service
       with the employer (employment commencement date).
       Succeeding eligibility computation periods shall coincide with the
       plan year, beginning with the first plan year that commences prior to
       the first anniversary of the employee's employment commencement date
       regardless of whether the employee is credited with the required
       number of hours of service during the initial eligibility computation
       period.  An employee who is credited with the required number of
       hours of service in both the initial eligibility computation period
       and the first plan year that commences prior to the first anniversary
       of the employee's employment commencement date shall be credited with
       two years of service for purposes of eligibility to participate.

Section 2.2 - Plan Participation

   (a) Eligibility

       (1) Age/Service Requirements - An employee who is a member of the
           eligible class of employees shall be eligible for plan
           participation after he has satisfied the following participation
           requirement(s):

           (A) Completion of 1 year of service.

           (B) No age requirement.

       (2) Eligible Class of Employees - All employees of the employer except
           those described in (i), (ii), (iii), (iv), (v), (vi), (vii), and
           (viii) below shall be eligible to be covered under the plan if
           employed in the following categories:

                  Salaried Employee     Assistant Head Pharmacist
                  Foreman               Store Manager
                  Accounting Clerk      Grocery Manager
                  Department Assistant  Level I Department Managers
                  Head Pharmacist


           (i) Employees who benefit under other profit sharing arrangements
               and pay arrangements in the Mr. Z's Divisions shall not be
               eligible to participate in the plan prior to January 1, 2000.
               Head Pharmacists of Mr. Z's Divisions shall be eligible to be
               covered under the plan effective January 1, 2000.  Assistant
               Head Pharmacists of Mr. Z's Divisions shall be eligible to be
               covered under the plan effective January 1, 2001.  Supervisors,
               Store Managers, Non-Perishable Managers, and Front-End Managers
               of Mr. Z's Divisions shall be eligible to be covered under the
               plan effective January 1, 2002.  Level I Department Managers of
               Mr. Z's Divisions shall be eligible to be covered under the
               plan effective January 1, 2003.

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          (ii) Employees, except for executive management, of the Weis Food
               Service Division shall not be eligible to participate in the
               plan.

         (iii) Employees of King's Markets shall  not be eligible to
               participate in the plan prior to January 1, 1998.  Salaried
               employees who are superintendents of King's Markets shall be
               eligible to be covered under the plan effective January 1,
               1998.  Store Managers of King's Markets shall be eligible to be
               covered under the plan effective January 1, 1999.  Head
               Pharmacists, Assistant Head Pharmacists, Grocery Managers, and
               Assistant Managers of King's Markets shall be eligible to be
               covered under the plan effective January 1, 2000.  Level I
               Department Managers of King's Markets shall be eligible to be
               covered under the plan effective January 1, 2001.

          (iv) Individuals not directly employed by the employer as defined in
               Section 1.5(a) shall not be eligible to participate in the
               plan.  An employee of the employer as that term is defined in
               Section 1.5(b) with respect to the sponsoring employer shall
               not participate in this plan unless such employee's direct
               employer affirmatively elects to become a participating
               employer hereunder.

           (v) Employees included in a unit of employees covered by a
               collective bargaining agreement between the employer and
               employee representatives shall not be eligible to participate
               in the plan if retirement benefits were the subject of good
               faith bargaining and if less than 2% of the employees of the
               employer who are covered pursuant to that agreement are
               professionals as defined in Regulation section 1.410(b)-9(g).
               For this purpose, the term "employee representatives" does not
               include any organization more than half of whose members are
               employees who are owners, officers, or executives of the
               employer.

          (vi) Leased employees who are considered employees under the plan
               shall not be eligible to participate in the plan.

         (vii) Employees who are non-resident aliens (as defined in Code
               section 7701(b)(1)(B)) and who receive no earned income (as
               defined in Code section 911(d)(2)) from the employer that
               constitutes income from sources within the United States (as
               defined in Code section 861(a)(3)) shall not be eligible to
               participate in the plan.

        (viii) Highly compensated employees as defined in Section 1.4(b)
               shall not be eligible to participate in the plan.

       Notwithstanding the above eligible class of employees, the
       eligible class provisions of the plan before January 1, 1998 shall
       continue to apply to participants who participated in the Plan
       before January 1, 1998, and to employees who otherwise would have
       become participants in the Plan by December 31, 1998.

   (b) Entry Date - An eligible employee shall participate in the plan on
       the earlier of the June 30 or December 31 entry date coinciding with
       or immediately following the date on which he has met the age and
       service requirements.  If an employee who is not a member of the
       eligible class of employees becomes a member of the eligible class,
       such employee shall participate immediately, if he has satisfied the
       age and service requirements and would have otherwise previously
       become a participant.

Section 2.3 - Termination of Participation

   A participant shall continue to be an active participant of the plan so
   long as he is a member of the eligible class of employees and he does
   not incur a one-year break in service due to termination of employment.
   He shall become an inactive participant when he incurs a one-year break
   in service due to termination of employment, or at the end of the plan
   year during which he ceases to be a member of the eligible class of
   employees.  He shall cease participation completely upon the later of
   his receipt of a total distribution of his nonforfeitable account
   balance(s) under the plan or the forfeiture of the nonvested portion of
   the account balance(s).

Section 2.4 - Re-Participation (Break in Service Rules)

   (a) Vested Participant - A former participant who had a nonforfeitable
       right to all or a portion of his account balance derived from
       employer contributions at the time of his termination from service
       shall become a participant immediately upon returning to the employ
       of the employer, if he is a member of the eligible class of
       employees.

   (b) Nonvested Participant - In the case of a former participant who
       did not have any nonforfeitable right to his account balance derived
       from employer contributions at the time of his termination from
       service, years of service before a period of consecutive one-year
       breaks in service shall not be taken into account in computing
       service if the number of consecutive one-year breaks in service in
       such period equals or exceeds the greater of 5 or the aggregate
       number of years of service before such breaks in service.  Such
       aggregate number of years of service shall not include any years of
       service disregarded under the preceding sentence by reason of prior
       breaks in service.

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       If such former participant's years of service before termination from
       service are disregarded pursuant to the preceding paragraph, he shall
       be considered a new employee for eligibility purposes.  If such
       former participant's years of service before termination from service
       may not be disregarded pursuant to the preceding paragraph, he shall
       participate immediately upon returning to the employ of the employer,
       if he is a member of the eligible class of employees.

   (c) Return to Eligible Class - If a participant becomes an inactive
       participant, because he is no longer a member of the eligible class
       of employees, but does not incur a break in service, such inactive
       participant shall become an active participant immediately upon
       returning to the eligible class of employees.  If such participant
       incurs a break in service, eligibility shall be determined under the
       re-participation rules in Section 2.4(a) and (b) above.

              ARTICLE III - ALLOCATIONS TO PARTICIPANT ACCOUNTS

Section 3.1 - General Provisions

   (a) Maintenance of Participant Accounts - The plan administrator shall
       maintain separate accounts covering each participant under the plan
       as herein described.  Such accounts shall be increased by
       contributions, reallocation of forfeitures (if any), investment
       income, and market value appreciation of the fund.  They shall be
       decreased by market value depreciation of the fund, forfeiture of
       nonvested amounts, benefit payments, withdrawals, and expenses.

   (b) Amount and Payment of Employer Contribution

      (1) Amount of Contribution - For each plan year, the employer
          contribution to the plan shall be the amount that is determined
          under the provisions of this Article; provided, however, that the
          employer may not make a contribution to the plan for any plan year
          to the extent the contribution would exceed the participants'
          maximum permissible amounts under Code section 415.  Further, the
          employer contribution shall not exceed the maximum amount
          deductible under Code section 404.

          The employer contributes to this plan on the conditions that its
          contribution is not due to a mistake of fact and that the Internal
          Revenue Service will not disallow the deduction for its
          contribution.  The trustee, upon written request from the
          employer, shall return to the employer the amount of the
          employer's contribution made due to a mistake of fact or the
          amount of the employer's contribution disallowed as a deduction
          under Code section 404. The trustee shall not return any portion
          of the employer's contribution under the provisions of this
          paragraph more than one year after the earlier of:  (A) The date
          on which the employer made the contribution due to a mistake of
          fact; or (B) The time of disallowance of the contribution as a
          deduction, and then, only to the extent of the disallowance.  The
          trustee will not increase the amount of the employer contribution
          returnable under this Section for any earnings attributable to the
          contribution, but the trustee will decrease the employer
          contribution returnable for any losses attributable to it. The
          trustee may require the employer to furnish whatever evidence it
          deems necessary to confirm that the amount the employer has
          requested be returned is properly returnable under ERISA.

      (2) Payment of Contribution - The employer shall make its
          contribution to the plan within the time prescribed by the Code or
          applicable Treasury regulations.  Subject to the consent of the
          trustee, the employer may make its contribution in property rather
          than in cash, provided the contribution of property is not a
          prohibite d transaction under the Code or ERISA.

      (3) Omission of Eligible Employee - If, in any plan year, any
          employee who should be included as a participant in the plan is
          erroneously omitted and discovery of such omission is not made
          until after a contribution by the employer for the year has been
          made and allocated, the employer shall make a subsequent
          contribution with respect to (or credit an unallocated forfeiture
          to) the omitted employee in the amount that the employer would
          have contributed with respect to him had he not been omitted (plus
          any applicable interest).  Such contribution shall be made
          regardless of whether or not it is deductible in whole or in part
          in any taxable year under applicable provisions of the Code.

      (4) Inclusion of Ineligible Employee - If, in any plan year, any
          person who should not have been included as a participant in the
          plan is erroneously included and discovery of such incorrect
          inclusion is not made until after a contribution for the year has
          been made, the employer shall not be entitled to recover the
          contribution made with respect to the ineligible person regardless
          of whether or not a deduction is allowable with respect to such
          contribution.  In such event, the amount contributed with respect
          to the ineligible person shall constitute a forfeiture (except for
          deferred compensation that shall be distributed to the ineligible
          person) for the plan year in which the discovery is made.

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      (5) Allocation if More Than One Employer - If the employer consists
          of more than one entity, the contribution made by each such entity
          shall be allocated among the applicable accounts of the
          participants employed by the contributing employer.  If a
          participant is employed by more than one entity during the
          applicable period, each such entity shall contribute with respect
          to the compensation earned by the participant while employed by
          that entity.

   (c) Limitations and Conditions - Notwithstanding the allocation
       procedures set forth in this Article, the allocations to
       participants' accounts shall be limited or modified to the extent
       required to comply with the provisions of Article V (limitations on
       allocations under Code section 415, top-heavy provisions under Code
       section 416, and related employer provisions under Code section 414).

       In any limitation year in which the allocation to one or more
       participants' accounts would be in excess of the limitations on
       allocations under Code section 415, the annual additions under the
       Weis Markets, Inc. Stock Bonus Plan that the employer also sponsors
       will be reduced to the extent necessary to comply with such
       limitations first.  If any further reduction is required, the annual
       additions under the Weis Markets, Inc. Retirement Savings Plan will
       be reduced second with respect to such participants.  If any further
       reduction is required, the annual additions under this plan will be
       reduced third with respect to such participants.

Section 3.2 - Profit Sharing Contributions

   (a) Amount of Contribution - The employer shall determine, in its sole
       discretion, the amount of employer profit sharing contribution to be
       made to the plan each year; provided, however, that the employer
       shall contribute such amount as may be required for restoration of a
       forfeited amount under Section 4.2.

   (b) Conditions for Allocations - An active participant shall be
       eligible for an allocation of the employer profit sharing
       contribution and forfeitures as of an allocation date, provided that
       he satisfies the following conditions:

       (1) He completed at least 1,000 hours of service during the current
           plan year, except that the hours of service requirement shall not
           apply with respect to any minimum top-heavy allocation as provided
           in Section 5.4.

                                     AND

       (2) He is employed by the employer on the last day of the plan year.

                                     AND

       (3) He is not a Highly Compensated Employee as defined in Section
           1.4(b).

   (c) (1) Allocation Formula

           The employer profit sharing contribution and forfeitures for the
           plan year shall be allocated to the profit sharing account of each
           eligible participant in the ratio that each participant's number
           of allocation units bears to the allocation units of all
           participants.  A participant shall be credited with one allocation
           unit for each full $100.00 of compensation for the plan year, plus
           1.5 units for each year of service.

       (2) Top-Heavy Plan Years

           In any plan year in which this plan is top-heavy (as defined in
           Section 5.4(e)(2)) when aggregated with the Weis Markets, Inc.
           Retirement Savings Plan and Weis Markets, Inc. Stock Bonus Plan
           that the employer also sponsors, the top-heavy minimum benefit
           requirement shall be met under the Weis Markets, Inc. Retirement
           Savings Plan.  For such a plan year, the contribution on behalf of
           each participant who is a non-key employee and who participates in
           the aggregated plans shall be increased as necessary under such
           other sponsored defined contribution plan to equal 3% of such
           participant's compensation or the largest percentage of employee
           401(k) elective deferral contribution, employer contribution, and
           forfeitures allocated under the aggregated plans on behalf of any
           key employee for that year, whichever is less.

           If a participant only participates in this plan, the contributions
           and forfeitures allocable to the profit sharing account shall be
           increased as necessary for compliance with the top-heavy minimum
           benefit requirement.  The total of the contributions and
           forfeitures allocated to such account(s) for such a participant
           shall not be less than an amount equal to 3% of his compensation
           or the largest percentage of employee 401(k) elective deferral
           contribution, employer contribution, and forfeiture allocated
           under the aggregated plans on behalf of any key employee for that
           year, whichever is less.

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       (3) Compensation - For purposes of the allocation of the employer
           profit sharing contribution, compensation means compensation as
           defined in Section 1.2(a) and (b) for the entire plan year.
           However, for purposes of the top-heavy contribution, compensation
           means compensation as defined in Section 5.1(d)(2), subject to the
           limitations of Section 1.2(c).

Section 3.3 - Qualified Nonelective Contributions

   Qualified nonelective contributions shall not be made under this plan
   and no amount shall be credited to the qualified nonelective
   contribution account.  Any employer contributions shall be made as
   profit sharing contributions.  In any plan year in which the plan is
   top-heavy (as defined in Section 5.4(e)(2)), the top-heavy minimum
   benefit requirement shall be met as provided in Section 3.2.

Section 3.4 - Employee 401(k) Elective Deferral Contributions

   No contribution shall be made under this plan pursuant to either a
   salary reduction arrangement or a cash or deferred arrangement and no
   amount shall be credited to the employee 401(k) elective deferral
   account.

Section 3.5 - Employee Nondeductible Contributions

   Employee nondeductible contributions are not permitted under this plan
   and no amount shall be credited to the employee nondeductible
   contribution account.  A participant may not treat his excess
   contributions as an amount distributed to him and then contributed by
   him to the plan as an employee nondeductible contribution as described
   in Section 5.5(b)(3).

Section 3.6 - Employer Matching Contributions

   Employer matching contributions shall not be made under this plan and no
   amount shall be credited to the employer matching contribution account.

Section 3.7 - Rollover/Transfer Account

   (a) Rollover Contributions - A participant may contribute to his
       rollover/transfer account any amounts that he previously received
       either as a lump sum distribution (as defined in Code
       section 402(e)(4)(D)) or within one taxable year as a distribution
       from another qualified plan on account of termination of that plan
       provided that:

       (1) He transferred such distribution to an individual retirement
           account or annuity within sixty (60) days after receipt, or

       (2) He transferred such distribution to this plan within sixty
          (60) days after receipt.

       Before accepting a rollover contribution, the trustee may require an
       employee to furnish satisfactory evidence that the proposed transfer
       is in fact a "rollover contribution" which the Code permits an
       employee to make to a qualified plan.

   (b) Transfer Contributions - With the consent of the plan
       administrator, the participant may have funds transferred directly to
       this plan from another qualified plan.  Consent shall not be given if
       the optional forms of payment to which the funds are subject under
       the prior plan are not properly disclosed by the prior plan or cannot
       be accommodated by this plan and trust.

       Further, this plan shall not accept any direct or indirect transfers
       (in a transfer after December 31, 1984) from a defined benefit plan,
       money purchase plan (including a target benefit plan), stock bonus or
       profit sharing plan that would otherwise have provided for a life
       annuity form of payment to the participant.

   (c) Contributions Before Plan Entry Date - An employee, (who is in the
       eligible class of employees) prior to satisfying the plan's
       eligibility conditions, may make a rollover or transfer contribution
       to the plan to the same extent and in the same manner as a
       participant.  If an employee makes a rollover or transfer
       contribution to the plan before satisfying the plan's eligibility
       conditions, the plan administrator and trustee will treat the
       employee as a participant for all purposes of the plan, except the
       employee is not a participant for purposes of sharing in
       contributions or forfeitures under the plan until he actually becomes
       a participant in the plan.  If the employee has a separation from
       service prior to becoming a participant, the trustee will distribute
       his rollover/transfer account to him.

   (d) Distribution - Withdrawals may be made from a rollover/transfer
       account under the terms and conditions set forth in Section 4.4.

Section 3.8 - Allocation of Investment Results

   (a) General Allocation Procedures

       Investment income and market value appreciation or depreciation shall
       be allocated to each account of each participant who has accrued
       benefits in proportion to the respective account balances on each
       accounting date.  For this purpose, each account balance shall be
       equal to the average balance for the period commencing on the day
       following the prior accounting date and ending on the current
       accounting date.

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   (b) Participant Investment Election
       A participant who has reached age 55 and is 100% vested may elect to
       have 50% or 100% of his account transferred to a separate interest
       bearing fund which is not subject to market value fluctuation (money
       market fund or similar investment) and to have the investment results
       allocated to his account based upon earnings and losses on such
       separate interest bearing fund.  The participant may make such
       investment election at any time after he reaches age 55 and is 100%
       vested in his account by filing a written election with the plan
       administrator within 30 days after the first day of the plan year as
       of which such election is to be effective.  The participant may
       change this election annually and such election is irrevocable until
       the first day of the plan year following the plan year as of which
       such election is to be effective.

       Participants who terminate employment with account balances in excess
       of $5,000 may make the same investment election as above at the time
       of termination.  However, this one-time election is irrevocable until
       age 55.  At that time, the participant may change this election
       annually as above.

                  ARTICLE IV - PAYMENT OF PARTICIPANT ACCOUNTS

Section 4.1 - Vesting Service Rules

   (a) Vesting Year of Service means a vesting computation period during
       which the employee completes at least 1,000 hours of service with the
       employer.  All of an employee's years of service with the employer
       shall be counted to determine the nonforfeitable percentage in the
       employee's account balance(s) derived from employer contributions,
       except:

       (1) Years of service disregarded under the break in service rules
           in Section 4.1(d) below.  (Post-ERISA break in service rules)

       (2) Years of service before the effective date of ERISA if such
           service would have been disregarded under the break in service
           rules of the prior plan in effect from time to time before such
           date.  For this purpose, break in service rules are rules which
           result in the loss of prior vesting or benefit accruals, or which
           deny an employee eligibility to participate, by reason of
           separation or failure to complete a required period of service
           within a specified period of time.  (Pre-ERISA break in service
           rules)

   (b) One Year Break in Service means for the purposes of this
       Article IV a vesting computation period during which the participant
       or former participant does not complete more than 500 hours of
       service with the employer.

   (c) Vesting Computation Period means the 12-consecutive-month period
       coinciding with the plan year.

   (d) Break in Service Rules

       (1) Vested Participant - A former participant who had a
           nonforfeitable right to all or a portion of his account balance(s)
           derived from employer contributions at the time of his termination
           from service shall retain credit for all vesting years of service
           prior to a break in service.

       (2) Nonvested Participant - In the case of a former participant who
           did not have any nonforfeitable right to his account balance(s)
           derived from employer contributions at the time of his termination
           from service, years of service before a period of consecutive one-
           year breaks in service shall not be taken into account in
           computing service if the number of consecutive one-year breaks in
           service in such period equals or exceeds the greater of 5 or the
           aggregate number of years of service before such breaks in
           service.  Such aggregate number of years of service shall not
           include any years of service disregarded under the preceding
           sentence by reason of prior breaks in service.

       (3) Vesting for Pre-Break and Post-Break Accounts - In the case of
           a participant who has five or more consecutive one-year breaks in
           service, all years of service after such breaks in service shall
           be disregarded for the purpose of vesting the employer-derived
           account balance(s) that accrued before such breaks in service.
           Whether or not such participant's pre-break service counts in
           vesting the post-break employer-derived account balance(s) shall
           be determined according to the rules set forth in
           Section 4.1(d)(1) and (2) above.  Separate accounts shall be
           maintained for each of the participant's pre-break and post-break
           employer-derived account balance(s).  All accounts shall share in
           the investment earnings and losses of the fund.

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Section 4.2 - Vesting of Participant Accounts

   (a) Determination of Vesting

       (1) Normal Retirement - A participant's right to his account
           balance(s) shall be 100% vested and nonforfeitable upon the
           attainment of age 65, the normal retirement age.  If the employer
           enforces a mandatory retirement age, the normal retirement age
           shall be the lesser of the mandatory age or the age specified
           herein.

       (2) Late Retirement - If a participant remains employed after his
           normal retirement age, his account balance(s) shall remain 100%
           vested and nonforfeitable.  Such participant shall continue to
           receive allocations to his account as he did before his normal
           retirement age.

       (3) Early Retirement - In the case of a participant who has
           attained age 60 and completed 5 years of service before his normal
           retirement age, the participant's right to his account balance(s)
           shall be 100% vested and nonforfeitable.  Such participant may
           retire before his normal retirement age without the consent of the
           employer and receive payment of benefits from the plan.  If a
           participant separates from service before satisfying the age
           requirement for early retirement, but has satisfied the service
           requirement, the participant shall be entitled to elect an early
           retirement benefit upon satisfaction of such age requirement.

       (4) Disability - If a participant separates from service due to
           disability, such participant's right to his account balance(s) as
           of his date of disability shall be 100% vested and nonforfeitable.
           Disability means inability to engage in any substantial gainful
           activity by reason of any medically determinable physical or
           mental impairment which 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.  The permanence and degree of
           such impairment shall be supported by medical evidence.
           Notwithstanding such definition, a participant who is eligible for
           Social Security disability benefits shall automatically satisfy
           the definition of disability.  Disability shall be determined by
           the plan administrator after consultation with a physician chosen
           by the plan administrator.  In the administration of this section,
           all employees shall be treated in a uniform manner in similar
           circumstances.

       (5) (A) Death - In the event of the death of a participant who
               has an accrued benefit under the plan, (whether or not he is an
               active participant), 100% of the participant's account
               balance(s) as of the date of death shall be paid to his
               surviving spouse; except that, if there is no surviving spouse,
               or if the surviving spouse has already consented in a manner
               which is (or conforms to) a qualified election under the joint
               and survivor annuity provisions of Code section 417(a) and
               regulations issued pursuant thereto and as set forth in
               Section 5.2, then such balance(s) shall be paid to the
               participant's designated beneficiary.

           (B) Beneficiary Designation - Subject to the spousal consent
               requirements of Section 5.2, the participant shall have the
               right to designate his beneficiaries, including a contingent
               death beneficiary, and shall have the right at any time prior
               to his death to change such beneficiaries. The designation
               shall be effective only if made in writing on a form signed by
               the participant and supplied by and filed with the plan
               administrator prior to his death. If the participant fails to
               designate a beneficiary, or if the designated person or persons
               predecease the participant, "beneficiary" shall mean: (a) the
               spouse, (b) if no surviving spouse, then to the surviving
               children in equal shares, (c) if no surviving children, then to
               the surviving parents in equal shares, (d) if no surviving
               parents, then to the surviving brothers and sisters in equal
               shares, (e) if no surviving brothers and sisters, then (f) to
               the participant's estate if an estate is opened within 2 years
               of the participant's death; and otherwise to a charity selected
               in the sole discretion of the plan administrator.

               If a designated beneficiary dies after the participant has died
               but before the plan has commenced or made distribution to the
               designated beneficiary, the plan shall be administered as set
               forth in this paragraph. The death benefit will be paid to the
               beneficiary's designated beneficiary, if any designated prior
               to such beneficiary's death in connection with the
               beneficiary's election of a form of payment of the
               participant's death benefit to which he is entitled; and if no
               such designation is on file with the plan administrator, then
               to the beneficiary's estate in a single lump sum payment if an
               estate is opened within 2 years of the participant's death; and
               otherwise to a charity selected in the sole discretion of the
               plan administrator.  If the deceased designated beneficiary was
               not the participant's surviving spouse, distribution under this
               paragraph will be completed by December 31 of the fifth year
               following the participant's date of death.  If the deceased
               designated beneficiary was the participant's surviving spouse,
               distribution under this paragraph will be completed by December
               31 of the fifth year following the beneficiary's date of death.

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               For purposes of this Section, if a spouse or beneficiary of the
               participant dies simultaneously with the participant, for
               purposes of the plan, the participant shall be deemed to be the
               survivor and to have died subsequent to such spouse or
               beneficiary.  Likewise, if a beneficiary designated by a
               designated beneficiary dies simultaneously with a designated
               beneficiary, the designated beneficiary shall be deemed to be
               the survivor and to have died subsequent to the beneficiary
               designated by the designated beneficiary.

       (6) Termination From Service - If a participant separates from the
           service of the employer other than by retirement, disability, or
           death, his vested interest in his accounts shall be equal to the
           account balance multiplied by the vesting percentage determined
           below:
           (A) Profit Sharing Account - The vesting percentage applicable
               to the participant's profit sharing account shall be determined
               based on his vesting years of service as follows:


            Years of Service           Vesting Percentage
            ----------------           ------------------
               0-2 Years                        0%
                 3                             20%
                 4                             40%
                 5                             60%
                 6                             80%
             7 or More Years                  100%


               Transition Rule - Notwithstanding the above vesting schedule,
               the vesting provisions of the plan before July 31, 1993, the
               effective date of the amendment, shall continue to apply to
               participants who participated in the plan before the amendment
               date, if such prior vesting provisions are more favorable to
               particular participants than the vesting provisions set forth
               herein.

           (B) Employer Matching Contribution Account - No employer
               matching contribution account is provided under this plan.

           (C) Other Accounts - The participant shall always be 100% vested
               in his following accounts:  employee nondeductible contribution
               account and rollover/transfer account.  The accrued benefit in
               such accounts shall be nonforfeitable.

   (b) Forfeitures

       (1) Time of Forfeiture - If a participant terminates employment
           before his account balances derived from employer contributions
           are fully vested, the nonvested portion of his accounts shall be
           forfeited on the earlier of:

           (A) The last day of the vesting computation period in which the
               participant first incurs five consecutive one-year breaks in
               service, or

           (B) The date the participant receives his entire vested accrued
               benefit.

       (2) Cashout Distributions and Restoration

           (A) Cashout Distribution - If an employee terminates service and
               the value of his vested account balances derived from employer
               and employee contributions are not greater than $5,000, the
               employee shall receive a distribution of the value of the
               entire vested portion of such account balances and the
               nonvested portion will be treated as a forfeiture.  For
               purposes of this section, if the value of an employee's vested
               account balances is zero, he shall be deemed to have received a
               distribution of such vested account balances.  (Effective for
               distributions made on or after March 22, 1999, for the purpose
               of determining the value of a participant's vested account
               balance, prior distributions shall be disregarded if
               distributions have not commenced under an optional form of
               payment described in Section 4.3.)

               If an employee terminates service and the value of his vested
               account balances exceeds $5,000, he may elect to receive the
               value of his vested account balances after such termination as
               provided in Section 4.3.  The nonvested portion shall be
               treated as a forfeiture as of the date of distribution.  If the
               employee elects to have distributed less than the entire vested
               portion of the account balances derived from employer
               contributions, the part of the nonvested portion that will be
               treated as a forfeiture is the total nonvested portion
               multiplied by a fraction, the numerator of which is the amount
               of the distribution attributable to employer contributions and
               the denominator of which is the total value of the vested
               employer derived account balances.

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           (B) Restoration of Accounts - If an employee receives a cashout
               distribution pursuant to this section and resumes employment
               covered under this plan before he incurs five consecutive one-
               year breaks in service, his employer-derived account balances
               shall each be restored to the amount on the date of
               distribution, if he repays to the plan the full amount of the
               distribution attributable to employer contributions before the
               earlier of five years after the first date on which he is
               subsequently re-employed by the employer, or the date he incurs
               five consecutive one-year breaks in service following the date
               of the distribution.  If an employee is deemed to receive a
               distribution pursuant to this Section 4.2(b)(2), and he resumes
               employment covered under this plan before he incurs five
               consecutive one-year breaks in service, upon the re-employment
               of such employee his employer-derived account balances will be
               restored to the amount on the date of such deemed distribution.

               Any amount required to restore such forfeitures shall be
               deducted from forfeitures (including forfeitures of excess
               aggregate contributions) occurring in the plan year of
               restoration.  If forfeitures are insufficient for the
               restoration, the employer may make a contribution to the plan
               for such plan year to satisfy the restoration.  However, by the
               end of the plan year following the plan year of restoration,
               sufficient forfeitures or employer contributions shall be
               credited to the account to satisfy the restoration.

   (c) Disposition of Forfeitures

       (1) Profit Sharing Account - Forfeitures of profit sharing accounts
           shall be reallocated among the eligible active participants at the
           end of the plan year in which such forfeitures occur in accordance
           with the allocation procedures set forth in Section 3.2.

       (2) Employer Matching Contribution Account - No employer matching
           contribution account is provided under this plan.

   (d) Withdrawal of Employee Nondeductible Contributions - No
       forfeitures shall occur solely as a result of an employee's
       withdrawal of employee nondeductible contributions.

   (e) Unclaimed Benefits

      (1) Forfeiture - The plan does not require the trustee or the plan
          administrator to search for, or to ascertain the whereabouts of,
          any participant or beneficiary.  At the time the participant's or
          beneficiary's benefit becomes distributable under the plan, the
          plan administrator, by certified or registered mail addressed to
          his last known address of record, shall notify any participant or
          beneficiary that he is entitled to a distribution under this plan.
          If the participant or beneficiary fails to claim his distributive
          share or make his whereabouts known in writing to the plan
          administrator within twelve months from the date of mailing of the
          notice, the plan administrator shall treat the participant's or
          beneficiary's unclaimed payable accrued benefit as forfeited and
          shall reallocate such forfeiture in accordance with
          Section 4.2(c).  A forfeiture under this paragraph shall occur at
          the end of the notice period or, if later, the earliest date
          applicable Treasury regulations would permit the forfeiture.
          These forfeiture provisions apply solely to the participant's or
          beneficiary's accrued benefit derived from employer contributions.

      (2) Restoration - If a participant or beneficiary who has incurred
          a forfeiture of his accrued benefit under the provisions of this
          Subsection makes a claim, at any time, for his forfeited accrued
          benefit, the plan administrator shall restore the participant's or
          beneficiary's forfeited accrued benefit to the same dollar amount
          as the dollar amount of the accrued benefit forfeited, unadjusted
          for any gains or losses occurring after the date of the
          forfeiture.  The plan administrator shall make the restoration
          during the plan year in which the participant or beneficiary makes
          the claim from forfeitures occurring in that plan year.  If
          forfeitures are insufficient for the restoration, the employer
          shall make a contribution to the plan to satisfy the restoration.
          The plan administrator shall direct the trustee to distribute the
          participant's or beneficiary's restored accrued benefit to him not
          later than 60 days after the close of the plan year in which the
          plan administrator restores the forfeited accrued benefit.

Section 4.3 - Payment of Participant Accounts

  (a) Time of Payment

      (1) Commencement of Benefits - Unless the participant elects
          otherwise, distribution of benefits shall begin no later than the
          60th day after the latest of the close of the plan year in which:

          (A) The participant attains age 65 (or the plan's normal
              retirement age, if earlier);

          (B) Occurs the 10th anniversary of the year in which the
              participant commenced participation in the plan; or

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          (C) The participant terminates service with the employer (i.e.
              late retirement).

      (2) Payment Upon Retirement, Disability, or Death - Subject to the
          provisions set forth in Section 4.3(a)(1), in the Joint and
          Survivor Requirements of Section 5.2, and in the Distribution
          Requirements of Section 5.3, if the participant terminates
          employment due to retirement, disability, or death, his account(s)
          shall be paid as soon as administratively possible after the
          occurrence of the event creating the right to a distribution.

      (3) Payment Upon Other Termination of Employment - Subject to the
          provisions set forth in Section 4.3(a)(1), and in the Distribution
          Requirements of Section 5.3, if the participant terminates
          employment other than by retirement, disability, or death, his
          account(s) shall be paid as soon as administratively possible
          after the end of the plan year in which severance of employment
          occurs.

          However, if the vested profit sharing, employer matching and
          qualified nonelective contribution accounts exceed $25,000, no
          distribution shall be made until the participant attains age 65 or
          until the participant meets the early retirement requirements, if
          earlier.

      (4) Notwithstanding the foregoing, the failure of a participant
          (and spouse where the spouse's consent is required) to consent to
          a distribution while a benefit is immediately distributable,
          within the meaning of Section 5.2(c), shall be deemed to be an
          election to defer commencement of payment of any benefit
          sufficient to satisfy this section.

  (b) Optional Form(s) of Payment - A participant or beneficiary may
      elect to receive distribution of his account(s) in one of the
      optional forms of payment outlined below, provided that such
      distribution complies with the Distribution Requirements of
      Section 5.3.

      The participant or beneficiary shall file a written request for
      benefits with the plan administrator before payments will commence.
      If a distribution is required under Section 5.3, the vested balance
      of the account(s) exceeds $5,000, and the participant fails to elect
      a form of payment, the trustee shall pay the benefit in installment
      payments that meet the requirements of Section 5.3 over the joint
      life and last survivor expectancy of the participant and his
      designated beneficiary.

      Optional forms of payment include:

      (1) Lump Sum Payment - A lump sum benefit payment may be made in
          cash from the fund or by distribution of assets in kind, provided
          that the participant or beneficiary agrees to such distribution in
          kind and the trustee determines a current fair market value of the
          assets to be distributed.  However, if the vested accrued benefit
          is no more than $5,000, benefits shall automatically be paid in a
          lump sum.

      (2) Installment Payments over a period of years that meets the
          Distribution Requirements of Section 5.3.  Installment payments
          may be made in cash from the fund or by distribution of an annuity
          term certain contract.

          If installment payments are made from the fund, the plan
          administrator shall direct the trustee to segregate the
          participant's accrued benefit in a separate account.  The trustee
          will invest such participant's segregated account in federally
          insured interest bearing savings accounts or time deposits (or a
          combination of both), or in other fixed income investments.  A
          segregated account remains a part of the trust, but it alone
          shares in any income it earns, and it alone bears any expense or
          loss it incurs.

  (c) General Payment Provisions

      (1) All distributions due to be made under this plan shall be made
          on the basis of the amount to the credit of the participant as of
          the accounting date coincident with or immediately preceding the
          occurrence of the event calling for a distribution.

          For a lump sum distribution made to a participant in the same year
          as the participant's date of termination, such amount shall be
          increased with respect to investment results attributable thereto
          which accrue during the period following such accounting date
          until the participant's date of termination.  If a distributable
          event occurs after an allocation date and before allocations have
          been made to the account of the participant, the distribution
          shall also include the amounts allocable to the account as of such
          allocation date.

      (2) If any person entitled to receive benefits hereunder is
          physically or mentally incapable of receiving or acknowledging
          receipt thereof, and if a legal representative has been appointed
          for him, the plan administrator may direct the benefit payment to
          be made to such legal representative.

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      (3) Each optional form of benefit provided under the plan shall be
          made available to all participants on a nondiscriminatory basis.
          The plan may not retroactively reduce or eliminate optional forms
          of benefits and any other Code section 411(d)(6) protected
          benefits, except as provided in Regulation section 1.411(d)-4,
          Q&A-2(b) and in other relief granted statutorily or by the
          Commissioner of Internal Revenue.  Any reduction or elimination of
          optional forms of benefits shall apply only to benefits accrued
          after the later of the effective date or adoption date of such
          change.

      (4) The participant's election of a form of benefit payment shall
          be irrevocable as of the annuity starting date, subject to the
          notice requirements contained in Section 4.3(e).

      (5) Any annuity contract distributed herefrom shall be
          nontransferable.  The terms of any such annuity contract purchased
          and distributed by the plan shall comply with the requirements of
          this plan.  The ownership of the annuity contract shall reside
          with the participant.  Any dividend, refund or recovery on an
          annuity contract shall be credited to the participant or
          beneficiary for whom the annuity contract was purchased.

  (d) Eligible Rollover Distributions

      Effective for distributions made on or after January 1, 1993,
      notwithstanding the optional forms of payment listed in
      Section 4.3(b), a distributee may elect, at the time and in the
      manner prescribed by the plan administrator, to have any portion of
      an eligible rollover distribution paid directly to an eligible
      retirement plan specified by the distributee in a direct rollover.

      (1) Eligible Rollover Distribution - An eligible rollover
          distribution is any distribution of all or any portion of the
          balance to the credit of the distributee, except that an eligible
          rollover distribution does not include:  any distribution that is
          one of a series of substantially equal periodic payments (not less
          frequently than annually) made for the life (or life expectancy)
          of the distributee or the joint lives (or joint life expectancies)
          of the distributee and the distributee's designated beneficiary,
          or for a specified period of ten years or more; any distribution
          to the extent such distribution is required under Code
          section 401(a)(9), the portion of any distribution that is not
          includable in gross income (determined without regard to the
          exclusion for net unrealized appreciation with respect to employer
          securities), and a hardship withdrawal made on or after
          January 1, 1999 from a participant's employee 401(k) elective
          deferral account before he has attained age 591/2.

      (2) Eligible Retirement Plan - An eligible retirement plan is an
          individual retirement account described in Code section 408(a), an
          individual retirement annuity described in Code section 408(b), an
          annuity plan described in Code section 403(a), or a qualified
          trust described in Code section 401(a), that accepts the
          distributee's eligible rollover distribution.  However, in the
          case of an eligible rollover distribution to the surviving spouse,
          an eligible retirement plan is an individual retirement account or
          individual retirement annuity.

      (3) Distributee - A distributee includes an employee or former
          employee.  In addition, the employee's or former employee's
          surviving spouse and the employee's or former employee's spouse or
          former spouse who is the alternate payee under a qualified
          domestic relations order, as defined in Code section 414(p), are
          distributees with regard to the interest of the spouse or former
          spouse.

      (4) Direct Rollover - A direct rollover is a payment by the plan to
          the eligible retirement plan specified by the distributee.

  (e) Payment Election Procedures
      As described in Section 5.2(c), an account balance in excess of
      $5,000 shall not be immediately distributed without the consent of
      the participant.  The participant shall receive the notice required
      under Regulation section 1.411(a)-11(c) no less than 30 days and no
      more than 90 days before the annuity starting date with respect to
      the distribution.  Effective for distributions made on or after
      January 1, 1993, for any distribution in excess of $200, the plan
      administrator shall give the participant notice of his eligible
      rollover distribution rights.  The participant shall receive such
      notice in the same time period as the 411 notice is required to be
      provided.  Effective for distributions made on or after
      January 1, 1994, if a distribution is one to which Code
      sections 401(a)(11) and 417 do not apply, such distribution may
      commence less than 30 days after the 411 notice is given, provided
      that:

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

      (2) The participant, after receiving the notice, affirmatively
          elects a distribution.

Section 4.4 - In-Service Payments

  (a) Withdrawals - A participant may withdraw amounts from his
      account(s) before his separation from service only under the
      circumstances and only to the extent provided below.
      No payments shall be made before separation from service.

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  (b) Participant Loans
      No participant loans shall be permitted under this plan.

Section 4.5 - Distributions Under Domestic Relations Orders

  Nothing contained in this plan prevents the trustee, in accordance with
  the direction of the plan administrator, from complying with the
  provisions of a qualified domestic relations order (as defined in Code
  section 414(p)).

  A distribution will not be made to an alternate payee until the
  participant attains (or would have attained) his earliest retirement
  age.  For this purpose, earliest retirement age means the earlier of:
  (1) the date on which the participant is entitled to a distribution
  under this plan; or (2) the date the participant attains age 50.  Any
  restriction on the account balance payable before the participant
  satisfies the early retirement requirements shall not apply to an
  alternate payee.

  Nothing in this Section gives a participant a right to receive
  distribution at a time otherwise not permitted under the plan nor does
  it permit the alternate payee to receive a form of payment not otherwise
  permitted under the plan.
  The plan administrator shall establish reasonable procedures to
  determine the qualified status of a domestic relations order.  Upon
  receiving a domestic relations order, the plan administrator promptly
  will notify the participant and any alternate payee named in the order,
  in writing, of the receipt of the order and the plan's procedures for
  determining the qualified status of the order.  Within a reasonable
  period of time after receiving the domestic relations order, the plan
  administrator shall determine the qualified status of the order and
  shall notify the participant and each alternate payee, in writing, of
  its determination.  The plan administrator shall provide notice under
  this paragraph by mailing to the individual's address specified in the
  domestic relations order, or in a manner consistent with Department of
  Labor regulations.

  If any portion of the participant's nonforfeitable accrued benefit is
  payable during the period the plan administrator is making its
  determination of the qualified status of the domestic relations order,
  the plan administrator shall make a separate accounting of the amounts
  payable.  If the plan administrator determines the order is a qualified
  domestic relations order within 18 months of the date amounts first are
  payable following receipt of the order, it shall direct the trustee to
  distribute the payable amounts in accordance with the order.  If the
  plan administrator does not make its determination of the qualified
  status of the order within the 18-month determination period, it shall
  direct the trustee to distribute the payable amounts in the manner the
  plan would distribute if the order did not exist and shall apply the
  order prospectively if it later determines the order is a qualified
  domestic relations order.

                  ARTICLE V - ADDITIONAL QUALIFICATION RULES

Section 5.1 - Limitations on Allocations Under Code Section 415

  (a) Single Plan Limitations

      (1) If the participant does not participate in, and has never
          participated in another qualified plan maintained by the employer,
          a welfare benefit fund (as defined in Code section 419(e))
          maintained by the employer, or an individual medical account (as
          defined in Code section 415(l)(2)) maintained by the employer,
          that provides an annual addition as defined in Section 5.1(d)(1),
          the amount of annual additions that may be credited to the
          participant's account for any limitation year will not exceed the
          lesser of the maximum permissible amount or any other limitation
          contained in this plan.  If the employer contribution that would
          otherwise be contributed or allocated to the participant's account
          would cause the annual additions for the limitation year to exceed
          the maximum permissible amount, the amount contributed or
          allocated will be reduced so that the annual additions for the
          limitation year will equal the maximum permissible amount.

      (2) Prior to determining the participant's actual compensation for
          the limitation year, the employer may determine the maximum
          permissible amount for a participant on the basis of a reasonable
          estimation of the participant's compensation for the limitation
          year, uniformly determined for all participants similarly
          situated.

      (3) As soon as is administratively feasible after the end of the
          limitation year, the maximum permissible amount for the limitation
          year will be determined on the basis of the participant's actual
          compensation for the limitation year.

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      (4) If pursuant to Section 5.1(a)(3) or as a result of either the
          allocation of forfeitures or a reasonable error in determining the
          amount of elective deferrals that may be made with respect to a
          participant, there is an excess amount, the excess will be
          disposed of as follows:

          (A) Any employee nondeductible contributions (and any gain
              attributable thereto), to the extent they would reduce the
              excess amount, will be returned to the participant.

          (B) If after the application of Subparagraph (A) an excess
              amount still exists, any elective deferrals (and any gain
              attributable thereto), to the extent they would reduce the
              excess amount, will be distributed to the participant.

          (C) If after the application of Subparagraph (B) an excess
              amount still exists, the excess amount shall be allocated and
              reallocated to the profit sharing account or qualified
              nonelective contribution account of the other participants in
              the plan to the extent permissible under the limitations of
              this Section 5.1.

          (D) If after the application of Subparagraph (C) an excess
              amount still exists, the excess amount will be held unallocated
              in a suspense account.  The suspense account will be applied to
              reduce future employer contributions for all active
              participants in the next limitation year, and each succeeding
              limitation year if necessary.

          (E) If a suspense account is in existence at any time during a
              limitation year pursuant to this Section 5.1(a)(4), it will not
              participate in the allocation of the trust's investment gains
              and losses.  If a suspense account is in existence at any time
              during a particular limitation year, all amounts in the
              suspense account must be allocated and reallocated to
              participants' accounts before any employer, elective deferral,
              or employee nondeductible contributions may be made to the plan
              for that limitation year.  Excess amounts may not be
              distributed to participants or former participants.
  (b) Combined Limitations - Other Defined Contribution Plan

      (1) This Section 5.1(b) applies if, in addition to this plan, the
          participant is covered under another qualified defined
          contribution plan maintained by the employer, a welfare benefit
          fund (as defined in Code section 419(e)) maintained by the
          employer, or an individual medical account (as defined in Code
          section 415(l)(2)), maintained by the employer, that provides an
          annual addition as defined in Section 5.1(d)(1), during any
          limitation year.  The annual additions that may be credited to a
          participant's account under this plan for any such limitation year
          will not exceed the maximum permissible amount reduced by the
          annual additions credited to a participant's account under the
          other plans and welfare benefit funds for the same limitation
          year.  If the annual additions with respect to the participant
          under other defined contribution plans and welfare benefit funds
          maintained by the employer are less than the maximum permissible
          amount and the employer contribution that would otherwise be
          contributed or allocated to the participant's account under this
          plan would cause the annual additions for the limitation year to
          exceed this limitation, the amount contributed or allocated will
          be reduced so that the annual additions under all such plans and
          funds for the limitation year will equal the maximum permissible
          amount.  If the annual additions with respect to the participant
          under such other defined contribution plans and welfare benefit
          funds in the aggregate are equal to or greater than the maximum
          permissible amount, no amount will be contributed or allocated to
          the participant's account under this plan for the limitation year.

      (2) Prior to determining the participant's actual compensation for
          the limitation year, the employer may determine the maximum
          permissible amount for a participant in the manner described in
          Section 5.1(a)(2).

      (3) As soon as is administratively feasible after the end of the
          limitation year, the maximum permissible amount for the limitation
          year will be determined on the basis of the participant's actual
          compensation for the limitation year.

      (4) If, pursuant to Section 5.1(b)(3) or as a result of the
          allocation of forfeitures, a participant's annual additions under
          this plan and such other plans would result in an excess amount
          for a limitation year, the excess amount will be deemed to consist
          of the annual additions last allocated, except that annual
          additions attributable to a welfare benefit fund or individual
          medical account will be deemed to have been allocated first
          regardless of the actual allocation date.

      (5) If an excess amount was allocated to a participant on an
          allocation date of this plan that coincides with an allocation
          date of another plan, the excess amount will be disposed of in the
          manner provided in Section 3.1(c).

      (6) Any excess amount attributed to this plan will be disposed of
          in the manner described in Section 5.1(a)(4).

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  (c) Combined Limitations - Other Defined Benefit Plan
      If the employer maintains, or at any time maintained, a qualified
      defined benefit plan covering any participant in this plan, the sum
      of the participant's defined benefit plan fraction and defined
      contribution plan fraction will not exceed 1.0 in any limitation
      year.  Any excess amounts shall be disposed of in the manner provided
      in Section 3.1(c).  Any excess amount attributed to this plan will be
      disposed of in the manner described in Section 5.1(a)(4).
      Effective with respect to limitation years beginning after
      December 31, 1999, this Section 5.1(c) shall no longer be in effect.
      The following definitions in Section 5.1(d) shall no longer apply:
      defined benefit plan fraction, defined contribution plan fraction,
      highest average compensation, projected annual benefit.

  (d) Definitions (Code Section 415 Limitations)

      (1) Annual Additions - The sum of the following amounts credited to
          a participant's account for the limitation year:  (A) employer
          contributions, (B) employee contributions, (C) forfeitures, and
          (D) amounts allocated, after March 31, 1984, to an individual
          medical account, as defined in Code section 415(l)(2), that is
          part of a pension or annuity plan maintained by the employer are
          treated as annual additions to a defined contribution plan.  Also,
          amounts derived from contributions paid or accrued after
          December 31, 1985 (in taxable years ending after such date), that
          are attributable to postretirement medical benefits, allocated to
          the separate account of a key employee (as defined in Code
          section 419A(d)(3)) under a welfare benefit fund (as defined in
          Code section 419(e)) maintained by the employer are treated as
          annual additions to a defined contribution plan.

          For this purpose, any excess amount applied under
          Section 5.1(a)(4) or (b)(6) in the limitation year to increase the
          accounts of participants who did not have an excess amount or to
          reduce employer contributions will be considered annual additions
          for such limitation year.

      (2) Compensation - A participant's earned income and any earnings
          reportable as W-2 wages for federal income tax withholding
          purposes.  W-2 wages means wages as defined in Code
          section 3401(a) but determined without regard to any rules that
          limit the remuneration included in wages based on the nature or
          location of the employment or the services performed (such as the
          exception for agricultural labor in Code section 3401(a)(2)).

          For limitation years beginning after December 31, 1991, for
          purposes of applying the limitations of this Section 5.1,
          compensation for a limitation year is the compensation actually
          paid or includable in gross income during such limitation year.

          For limitation years beginning after December 31, 1997,
          compensation shall include elective contributions as defined in
          Section 1.2(a) and elective contributions under a Code section 457
          plan or a Code section 501(c)(18) plan.

          Notwithstanding the preceding, compensation for a participant in a
          defined contribution plan who is permanently and totally disabled
          (as defined in Code section 22(e)(3)) is the compensation such
          participant would have received for the limitation year if the
          participant had been paid at the rate of compensation paid
          immediately before becoming permanently and totally disabled; such
          imputed compensation for the disabled participant may be taken
          into account only if contributions made on behalf of such
          participant are nonforfeitable when made.

      (3) Defined Benefit Fraction - A fraction, the numerator of which
          is the sum of the participant's projected annual benefits under
          all the defined benefit plans (whether or not terminated)
          maintained by the employer, and the denominator of which is the
          lesser of 125% of the dollar limitation determined for the
          limitation year under Code sections 415(b) and (d) or 140% of the
          highest average compensation, including any adjustments under Code
          section 415(b).

          Notwithstanding the above, if the participant was a participant as
          of the first day of the first limitation year beginning after
          December 31, 1986, in one or more defined benefit plans maintained
          by the employer which were in existence on May 6, 1986, the
          denominator of this fraction will not be less than 125% of the sum
          of the annual benefits under such plans that the participant had
          accrued as of the close of the last limitation year beginning
          before January 1, 1987, disregarding any changes in the terms and
          conditions of the plan after May 5, 1986. The preceding sentence
          applies only if the defined benefit plans individually and in the
          aggregate satisfied the requirements of Code section 415 for all
          limitation years beginning before January 1, 1987.

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      (4) Defined Contribution Dollar Limitation - $30,000, as adjusted
          under Code section 415(d) for limitation years beginning after
          December 31, 1994.

      (5) Defined Contribution Fraction - A fraction, the numerator of
          which is the sum of the annual additions to the participant's
          account under all the defined contribution plans (whether or not
          terminated) maintained by the employer for the current and all
          prior limitation years (including the annual additions
          attributable to the participant's nondeductible employee
          contributions to all defined benefit plans, whether or not
          terminated, maintained by the employer, and the annual additions
          attributable to all welfare benefit funds, as defined in Code
          section 419(e), and individual medical accounts, as defined in
          Code section 415(l)(2), maintained by the employer), and the
          denominator of which is the sum of the maximum aggregate amounts
          for the current and all prior limitation years of service with the
          employer (regardless of whether a defined contribution plan was
          maintained by the employer).  The maximum aggregate amount in any
          limitation year is the lesser of 125% of the dollar limitation
          determined under Code sections 415(b) and (d) in effect under Code
          section 415(c)(1)(A) or 35% of the participant's compensation for
          such year.

          If the employee was a participant as of the end of the first day
          of the first limitation year beginning after December 31, 1986, in
          one or more defined contribution plans maintained by the employer
          that were in existence on May 6, 1986, the numerator of this
          fraction will be adjusted if the sum of this fraction and the
          defined benefit fraction would otherwise exceed 1.0 under the
          terms of this plan.  Under the adjustment, an amount equal to the
          product of (1) the excess of the sum of the fractions over 1.0
          times (2) the denominator of this fraction, will be permanently
          subtracted from the numerator of this fraction.  The adjustment is
          calculated using the fractions as they would be computed as of the
          end of the last limitation year beginning before January 1, 1987,
          and disregarding any changes in the terms and conditions of the
          plan made after May 5, 1986, but using the Code section 415
          limitation applicable to the first limitation year beginning on or
          after January 1, 1987.

          The annual addition for any limitation year beginning before
          January 1, 1987, shall not be recomputed to treat all employee
          contributions as annual additions.

      (6) Employer - For purposes of this Section 5.1, employer shall
          mean the employer as defined in Section 1.5(b) but including all
          members of a controlled group of corporations as defined in Code
          section 414(b) as modified by Code section 415(h) and all commonly
          controlled trades or businesses as defined in Code section 414(c)
          as modified by Code section 415(h).

      (7) Excess Amount - The excess of the participant's annual
          additions for the limitation year over the maximum permissible
          amount.

      (8) Highest Average Compensation - The average compensation for the
          three consecutive years of service with the employer that produces
          the highest average.  A year of service with the employer is the
          12-consecutive-month period coinciding with the plan year.

      (9) Limitation Year - The 12-consecutive-month period defined in
          Section 1.3(f).  All qualified plans maintained by the employer
          must use the same limitation year.  If the limitation year is
          amended to a different 12-consecutive-month period, the new
          limitation year must begin on a date within the limitation year in
          which the amendment is made.

     (10) Maximum Permissible Amount - The maximum annual addition that
          may be contributed or allocated to a participant's account under
          the plan for any limitation year shall not exceed the lesser of:

          (A) the defined contribution dollar limitation as defined in
             Section 5.1(d)(4); or

          (B) 25% of the participant's compensation for the limitation
              year.

          The compensation limitation referred to in (B) shall not apply to
          any contribution for medical benefits (within the meaning of Code
          section 401(h) or Code section 419A(f)(2)) that is otherwise
          treated as an annual addition under Code section 415(l)(1)
          or 419A(d)(2).

          If a short limitation year is created because of an amendment
          changing the limitation year to a different 12-consecutive-month
          period, the maximum permissible amount will not exceed the defined
          contribution dollar limitation multiplied by the following
          fraction:

               Number of months in the short limitation year
               ---------------------------------------------
                                    12

      (11) Projected Annual Benefit - The annual retirement benefit
          (adjusted to an actuarially equivalent straight life annuity if
          such benefit is expressed in a form other than a straight life
          annuity or qualified joint and survivor annuity) to which the
          participant would be entitled under the terms of the plan
          assuming:

          (A) the participant will continue employment until normal
              retirement age under the plan (or current age, if later); and

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          (B) the participant's compensation for the current limitation
              year and all other relevant factors used to determine benefits
              under the plan will remain constant for all future limitation
              years.

Section 5.2 - Joint and Survivor Annuity Requirements

  No annuity form of payment is provided under Section 4.3(b) and no
  direct or indirect transfer is accepted under Section 3.7 from a defined
  benefit plan, money purchase pension plan (including a target benefit
  plan), stock bonus or profit sharing plan that would otherwise have
  provided for a life annuity form of payment to any participant;
  therefore, this Section 5.2 shall not apply to this plan, except for the
  provisions of Section 5.2(c) and (f).

  (a) Qualified Joint and Survivor Annuity - Unless an optional form of
      benefit is selected pursuant to a qualified election within the 90-
      day period ending on the annuity starting date, a married
      participant's vested account balance will be paid in the form of a
      qualified joint and survivor annuity and an unmarried participant's
      vested account balance will be paid in the form of a life annuity
      with a ten-year guaranteed period.  The participant may elect to have
      such annuity distributed upon attainment of the earliest retirement
      age under the plan.

  (b) Qualified Preretirement Survivor Annuity - Unless an optional form
      of benefit or another beneficiary has been selected within the
      election period pursuant to a qualified election, if a participant
      dies before the annuity starting date, 100% of the participant's
      vested account balance shall be applied toward the purchase of an
      annuity for the life of the surviving spouse.  The surviving spouse
      may elect to have such annuity distributed within a reasonable period
      after the participant's death.

  (c) Restrictions on Immediate Distributions - If the value of a
      participant's vested account balance derived from employer and
      employee contributions exceeds (or at the time of any prior
      distribution (1) in plan years beginning before January 1, 1998,
      exceeded $3,500 or (2) in plan years beginning after
      December 31, 1997, exceeded) $5,000, and the account balance is
      immediately distributable, the participant and the participant's
      spouse (or where either the participant or the spouse has died, the
      survivor) must consent to any distribution of such account balance.
      Effective for distributions made on or after March 22, 1999, for the
      purpose of determining the value of a participant's vested account
      balance, prior distributions shall be disregarded if distributions
      have not commenced under an optional form of payment described in
      Section 4.3.  The consent of the participant and the participant's
      spouse shall be obtained in writing within the 90-day period ending
      on the annuity starting date.  The annuity starting date is the first
      day of the first period for which an amount is paid as an annuity or
      in any other form.  The plan administrator shall notify the
      participant and the participant's spouse of the right to defer any
      distribution until the participant's account balance is no longer
      immediately distributable.  Such notification shall include a general
      description of the material features, and an explanation of the
      relative values of, the optional forms of benefit available under the
      plan in a manner that would satisfy the notice requirements of Code
      section 417(a)(3), and shall be provided no less than 30 days and no
      more than 90 days prior to the annuity starting date.

      Notwithstanding the foregoing, only the participant need consent to
      the commencement of a distribution in the form of a qualified joint
      and survivor annuity while the account balance is immediately
      distributable.  Furthermore, if payment in the form of a qualified
      joint and survivor annuity is not required with respect to the
      participant pursuant to Section 5.2(f), only the participant need
      consent to the distribution of an account balance that is immediately
      distributable.  Neither the consent of the participant nor the
      participant's spouse shall be required to the extent that a
      distribution is required to satisfy Code section 401(a)(9) or
      section 415.  In addition, upon termination of this plan if the plan
      does not offer an annuity option (purchased from a commercial
      provider) and if the employer or any entity within the same
      controlled group as the employer does not maintain another defined
      contribution plan (other than an employee stock ownership plan as
      defined in Code section 4975(e)(7)), the participant's account
      balance may, without the participant's consent, be distributed to the
      participant.  However, if any entity within the same controlled group
      as the employer maintains another defined contribution plan (other
      than an employee stock ownership plan), the participant's account
      balance will be transferred, without the participant's consent, to
      the other plan if the participant does not consent to an immediate
      distribution.

      An account balance is immediately distributable if any part of the
      account balance could be distributed to the participant (or surviving
      spouse) before the participant attains (or would have attained if not
      deceased) the later of normal retirement age or age 62.

  (d) Definitions (Code Section 417 Requirements)

      (1) Election Period - The period that begins on the first day of
          the plan year in which the participant attains age 35 and ends on
          the date of the participant's death.  If a participant separates
          from service prior to the first day of the plan year in which
          age 35 is attained, with respect to the account balance as of the
          date of separation, the election period shall begin on the date of
          separation.

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      (2) Pre-Age 35 Waiver - A participant who will not yet attain
          age 35 as of the end of any current plan year may make a special
          qualified election to waive the qualified preretirement survivor
          annuity for the period beginning on the date of such election and
          ending on the first day of the plan year in which the participant
          will attain age 35.  Such election shall not be valid unless the
          participant receives a written explanation of the qualified
          preretirement survivor annuity in such terms as are comparable to
          the explanation required under Section 5.2(e)(1).  Qualified
          preretirement survivor annuity coverage will be automatically
          reinstated as of the first day of the plan year in which the
          participant attains age 35.  Any new waiver on or after such date
          shall be subject to the full requirements of this Section 5.2.

      (3) Earliest Retirement Age - The earliest date on which, under the
          plan, the participant could elect to receive retirement benefits.

      (4) Qualified Election - A waiver of a qualified joint and survivor
          annuity or a qualified preretirement survivor annuity.  Any waiver
          of a qualified joint and survivor annuity or a qualified
          preretirement survivor annuity shall not be effective unless:
          (a) the participant's spouse consents in writing to the
          election; (b) the election designates a specific beneficiary,
          including any class of beneficiaries or any contingent
          beneficiaries, that may not be changed without spousal consent (or
          the spouse expressly permits designations by the participant
          without any further spousal consent); (c) the spouse's consent
          acknowledges the effect of the election; and (d) the spouse's
          consent is witnessed by a plan representative or notary public.
          Additionally, a participant's waiver of the qualified joint and
          survivor annuity shall not be effective unless the election
          designates a form of benefit payment that may not be changed
          without spousal consent (or the spouse expressly permits
          designations by the participant without any further spousal
          consent).  If it is established to the satisfaction of a plan
          representative that there is no spouse or that the spouse cannot
          be located, a waiver will be deemed a qualified election.

          Any consent by a spouse obtained under this provision (or
          establishment that the consent of a spouse may not be obtained)
          shall be effective only with respect to such spouse.  A consent
          that permits designations by the participant without any
          requirement of further consent by such spouse must acknowledge
          that the spouse has the right to limit consent to a specific
          beneficiary, and a specific form of benefit where applicable, and
          that the spouse voluntarily elects to relinquish either or both of
          such rights.  A revocation of a prior waiver may be made by a
          participant without the consent of the spouse at any time before
          the commencement of benefits.  The number of revocations shall not
          be limited.  No consent obtained under this provision shall be
          valid unless the participant has received notice as provided in
          Section 5.2(e).

      (5) Qualified Joint and Survivor Annuity - An immediate annuity for
          the life of the participant with a survivor annuity for the life
          of the spouse that is not less than 50% and not more than 100% of
          the amount of the annuity which is payable during the joint lives
          of the participant and the spouse and which is the amount of
          benefit that can be purchased with the participant's vested
          account balance.  The percentage of the survivor annuity under the
          plan shall be 50% (unless a different percentage is elected by the
          participant).

      (6) Spouse (Surviving Spouse) - The spouse or surviving spouse of
          the participant, provided that a former spouse will be treated as
          the spouse or surviving spouse and a current spouse will not be
          treated as the spouse or surviving spouse to the extent provided
          under a qualified domestic relations order as described in Code
          section 414(p).

      (7) Annuity Starting Date - The first day of the first period for
          which an amount is paid as an annuity or any other form.

      (8) Vested Account Balance - The aggregate value of the
          participant's vested account balances derived from employer and
          employee contributions (including rollovers), whether vested
          before or upon death, including the proceeds of insurance
          contracts, if any, on the participant's life.  The provisions of
          this Section 5.2 shall apply to a participant who is vested in
          amounts attributable to employer contributions, employee
          contributions, or both at the time of death or distribution.

  (e) Notice Requirements

      (1) In the case of a qualified joint and survivor annuity, the plan
          administrator shall no less than 30 days and no more than 90 days
          prior to the annuity starting date provide each participant a
          written explanation of:  (i) the terms and conditions of a
          qualified joint and survivor annuity; (ii) the participant's right
          to make and the effect of an election to waive the qualified joint
          and survivor annuity form of benefit; (iii) the rights of a
          participant's spouse; and (iv) the right to make, and the effect
          of, a revocation of a previous election to waive the qualified
          joint and survivor annuity.

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      (2) In the case of a qualified preretirement survivor annuity as
          described in Section 5.2(b), the plan administrator shall provide
          each participant within the applicable period for such participant
          a written explanation of the qualified preretirement survivor
          annuity in such terms and in such manner as would be comparable to
          the explanation provided for meeting the requirements of
          Section 5.2(e)(1) applicable to a qualified joint and survivor
          annuity.

          The applicable period for a participant is whichever of the
          following periods ends last: (i) the period beginning with the
          first day of the plan year in which the participant attains age 32
          and ending with the close of the plan year preceding the plan year
          in which the participant attains age 35; (ii) a reasonable period
          ending after the individual becomes a participant; (iii) a
          reasonable period ending after Section 5.2(e)(3) ceases to apply
          to the participant; (iv) a reasonable period ending after this
          Section 5.2 first applies to the participant.  Notwithstanding the
          foregoing, notice must be provided within a reasonable period
          ending after separation from service in the case of a participant
          who separates from service before attaining age 35.

          For purposes of applying the preceding paragraph, a reasonable
          period ending after the enumerated events described in (ii),
          (iii), and (iv) is the end of the two-year period beginning one
          year prior to the date the applicable event occurs, and ending one
          year after that date.  In the case of a participant who separates
          from service before the plan year in which he attains age 35,
          notice shall be provided within the two-year period beginning one
          year prior to separation and ending one year after separation.  If
          such a participant thereafter returns to employment with the
          employer, the applicable period for such participant shall be
          redetermined.

      (3) Notwithstanding the other requirements of this Section 5.2(e),
          the respective notices prescribed by this Subsection need not be
          given to a participant if (1) the plan "fully subsidizes" the
          costs of a qualified joint and survivor annuity or qualified
          preretirement survivor annuity, and (2) the plan does not allow
          the participant to waive the qualified joint and survivor annuity
          or qualified preretirement survivor annuity and does not allow a
          married participant to designate a nonspouse beneficiary.  For
          purposes of this Section 5.2(e)(3), a plan fully subsidizes the
          costs of a benefit if no increase in cost, or decrease in benefits
          to the participant may result from the participant's failure to
          elect another benefit.

  (f) Safe Harbor Rules

      This Section 5.2(f) shall apply to a participant in a profit-sharing
      plan, and to any distribution, made on or after the first day of the
      first plan year beginning after December 31, 1988, from or under a
      separate account attributable solely to accumulated deductible
      employee contributions, as defined in Code section 72(o)(5)(B), and
      maintained on behalf of a participant in a money purchase pension
      plan, (including a target benefit plan) if the following conditions
      are satisfied:  (1) the participant does not or cannot elect payments
      in the form of a life annuity; and (2) on the death of a participant,
      the participant's vested account balance will be paid to the
      participant's surviving spouse, but if there is no surviving spouse,
      or if the surviving spouse has consented in a manner conforming to a
      qualified election, then to the participant's designated beneficiary.
      The surviving spouse may elect to have distribution of the vested
      account balance commence within the 90-day period following the date
      of the participant's death.  The account balance shall be adjusted
      for gains or losses occurring after the participant's death in
      accordance with the provisions of the plan governing the adjustment
      of account balances for other types of distributions.  This
      Subsection (f) shall not be operative with respect to a participant
      in a profit-sharing plan if the plan is a direct or indirect
      transferee of a defined benefit plan, money purchase plan, a target
      benefit plan, stock bonus, or profit-sharing plan that is subject to
      the survivor annuity requirements of Code section 401(a)(11) and
      section 417.  If this Subsection (f) is operative, then the
      provisions of this Section 5.2, other than Subsections (c) and (f)
      shall be inoperative.

      (1) The participant may waive the spousal death benefit described
          in this Subsection (f) at any time provided that no such waiver
          shall be effective unless it satisfies the conditions of
          Section 5.2(d)(4) (other than the notification requirement
          referred to therein) that would apply to the participant's waiver
          of the qualified preretirement survivor annuity.

      (2) For purposes of this Subsection (f), vested account balance
          shall mean, in the case of a money purchase pension plan or a
          target benefit plan, the participant's separate account balance
          attributable solely to accumulated deductible employee
          contributions within the meaning of Code section 72(o)(5)(B).  In
          the case of a profit-sharing plan, vested account balance shall
          have the same meaning as provided in Section 5.2(d)(8).

  (g) Transitional Rules

      (1) Any living participant not receiving benefits on
          August 23, 1984, who would otherwise not receive the benefits
          prescribed by the previous paragraphs of this Section 5.2 must be
          given the opportunity to elect to have the prior paragraphs of
          this Section apply if such participant is credited with at least
          one hour of service under this plan or a predecessor plan in a
          plan year beginning on or after January 1, 1976, and such
          participant had at least 10 years of vesting service when he or
          she separated from service.

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      (2) Any living participant not receiving benefits on
          August 23, 1984, who was credited with at least one hour of
          service under this plan or a predecessor plan on or after
          September 2, 1974, and who is not otherwise credited with any
          service in a plan year beginning on or after January 1, 1976, must
          be given the opportunity to have his or her benefits paid in
          accordance with Section 5.2(f)(4).

      (3) The respective opportunities to elect (as described in
          Section 5.2(f)(1) and (2)) must be afforded to the appropriate
          participants during the period commencing on August 23, 1984, and
          ending on the date benefits would otherwise commence to said
          participants.

      (4) Any participant who has elected pursuant to Section 5.2(f)(2)
          and any participant who does not elect under Section 5.2(f)(1) or
          who meets the requirements of Section 5.2(f)(1) except that such
          participant does not have at least ten years of vesting service
          when he or she separates from service, shall have his or her
          benefits distributed in accordance with all of the following
          requirements if benefits would have been payable in the form of a
          life annuity:

          (A) Automatic Joint and Survivor Annuity - If benefits in the
              form of a life annuity become payable to a married participant
              who:

              (i) begins to receive payments under the plan on or after
                  normal retirement age; or

             (ii) dies on or after normal retirement age while still
                  working for the employer; or

            (iii) begins to receive payments on or after the qualified
                  early retirement age; or

             (iv) separates from service on or after attaining normal
                  retirement age (or the qualified early retirement age) and
                  after satisfying the eligibility requirements for the
                  payment of benefits under the plan and thereafter dies
                  before beginning to receive such benefits;

              then such benefits will be received under this plan in the form
              of a qualified joint and survivor annuity, unless the
              participant has elected otherwise during the election period.
              The election period must begin at least 6 months before the
              participant attains qualified early retirement age and end not
              more than 90 days before the commencement of benefits.  Any
              election hereunder will be in writing and may be changed by the
              participant at any time.

          (B) Election of Early Survivor Annuity - A participant who is
              employed after attaining the qualified early retirement age
              will be given the opportunity to elect, during the election
              period, to have a survivor annuity payable on death.  If the
              participant elects the survivor annuity, payments under such
              annuity must not be less than the payments that would have been
              made to the spouse under the qualified joint and survivor
              annuity if the participant had retired on the day before his or
              her death.  Any election under this provision will be in
              writing and may be changed by the participant at any time.  The
              election period begins on the later of (1) the 90th day before
              the participant attains the qualified early retirement age, or
              (2) the date on which participation begins, and ends on the
              date the participant terminates employment.

          (C) For purposes of this Section 5.2(f)(4), qualified early
              retirement age is the latest of:

              (i) the earliest date, under the plan, on which the
                  participant may elect to receive retirement benefits;

             (ii) the first day of the 120th month beginning before the
                  participant reaches normal retirement age; or

            (iii) the date the participant begins participation.
                  Further, for purposes of this Section 5.2(f)(4), a qualified
                  joint and survivor annuity is an annuity for the life of the
                  participant with a survivor annuity for the life of the
                  spouse as described in Section 5.2(d)(5).
  (h) Loans
      If required under Section 4.4(b) of the plan, a participant must
      obtain the consent of his spouse, if any, to use his account balances
      as security for a loan.  Spousal consent shall be obtained no earlier
      than the beginning of the 90-day period that ends on the date on
      which the loan is to be so secured.  The consent must be in writing,
      must acknowledge the effect of the loan, and must be witnessed by a
      plan representative or notary public.  Such consent shall thereafter
      be binding with respect to the consenting spouse or any subsequent
      spouse with respect to that loan.  A new consent shall be required if
      the account balances are used for renegotiation, extension, renewal,
      or other revision of the loan.

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      Once a valid spousal consent has been obtained in compliance with
      this provision; then, notwithstanding any other provision of this
      plan, the portion of the participant's vested account balances used
      as a security interest held by the plan by reason of a loan
      outstanding to the participant shall be taken into account for
      purposes of determining the amount of the account balances payable at
      the time of death or distribution, but only if the reduction is used
      as repayment of the loan.  If less than 100% of the participant's
      vested account balances (determined without regard to the preceding
      sentence) is payable to the surviving spouse, then the account
      balances shall be adjusted by first reducing the vested account
      balances by the amount of the security used as repayment of the loan,
      and then determining the benefit payable to the surviving spouse.

Section 5.3 - Distribution Requirements

  Subject to Section 5.2 Joint and Survivor Annuity Requirements, the
  requirements of this Section 5.3 shall apply to any distribution of a
  participant's interest and will take precedence over any inconsistent
  provisions of this plan.

  The provisions of this Section shall apply to calendar years beginning
  after December 31, 1984.  All distributions required under this Section
  shall be determined and made in accordance with the proposed regulations
  under Code section 401(a)(9), including the minimum distribution
  incidental benefit requirement of Proposed Regulation
  section 1.401(a)(9)-2.

  With respect to distributions under the plan made for calendar years
  beginning on or after January 1, 2002, the plan will apply the minimum
  distribution requirements of Code section 401(a)(9) in accordance with
  the regulations under section 401(a)(9) that were proposed in
  January 2001, notwithstanding any provision of the plan to the contrary.
  This preceding sentence shall continue in effect until the end of the
  last calendar year beginning before the effective date of final
  regulations under Code section 401(a)(9) or such other date specified in
  guidance published by the Internal Revenue Service.

  (a) Required Beginning Date - The entire interest of a participant
      must be distributed or begin to be distributed no later than the
      participant's required beginning date.

  (b) Limits on Distribution Periods - As of the first distribution
      calendar year, distributions, if not made in a single sum, may only
      be made over one of the following periods (or a combination thereof):

      (1) the life of the participant;

      (2) the life of the participant and a designated beneficiary;

      (3) a period certain not extending beyond the life expectancy of
          the participant; or

      (4) a period certain not extending beyond the joint life and last
          survivor expectancy of the participant and a designated
          beneficiary.

  (c) Determination of Amount to Be Distributed Each Year - If the
      participant's interest is to be distributed in other than a single
      sum, the following minimum distribution rules shall apply on or after
      the required beginning date.

      (1) Individual Account

          (A) If a participant's benefit is to be distributed over (1) a
              period not extending beyond the life expectancy of the
              participant or the joint life and last survivor expectancy of
              the participant and the participant's designated beneficiary
              (2) a period not extending beyond the life expectancy of the
              designated beneficiary, the amount required to be distributed
              for each calendar year, beginning with distributions for the
              first distribution calendar year, must at least equal the
              quotient obtained by dividing the participant's benefit by the
              applicable life expectancy.

          (B) For calendar years beginning before January 1, 1989, if the
              participant's spouse is not the designated beneficiary, the
              method of distribution selected must assure that at least 50%
              of the present value of the amount available for distribution
              is paid within the life expectancy of the participant.

          (C) For calendar years beginning after December 31, 1988, the
              amount to be distributed each year, beginning with
              distributions for the first distribution calendar year shall
              not be less than the quotient obtained by dividing the
              participant's benefit by the lesser of (1) the applicable life
              expectancy or (2) if the participant's spouse is not the
              designated beneficiary, the applicable divisor determined from
              the table set forth in Q&A-4 of Proposed Regulation
              section 1.401(a)(9)-2.  Distributions after the death of the
              participant shall be distributed using the applicable life
              expectancy in Section 5.3(c)(1)(A) above as the relevant
              divisor without regard to Proposed Regulation
              section 1.401(a)(9)-2.

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          (D) The minimum distribution required for the participant's
              first distribution calendar year must be made on or before the
              participant's required beginning date.  The minimum
              distribution for other calendar years, including the minimum
              distribution for the distribution calendar year in which the
              employee's required beginning date occurs, must be made on or
              before December 31 of that distribution calendar year.

      (2) Other Forms - If the participant's benefit is distributed in
          the form of an annuity purchased from an insurance company,
          distributions thereunder shall be made in accordance with the
          requirements of Code section 401(a)(9) and the proposed
          regulations thereunder.

  (d) Death Distribution Provisions

      (1) Distribution Beginning Before Death - If the participant dies
          after distribution of his interest has begun, the remaining
          portion of such interest will continue to be distributed at least
          as rapidly as under the method of distribution being used prior to
          the participant's death.

      (2) Distribution Beginning After Death - If the participant dies
          before distribution of his interest begins, distribution of the
          participant's entire interest shall be completed by December 31 of
          the calendar year containing the fifth anniversary of the
          participant's death except to the extent that an election is made
          to receive distributions in accordance with (A) or (B) below:

          (A) If any portion of the participant's interest is payable to a
              designated beneficiary, distributions may be made over the life
              or over a period certain not greater than the life expectancy
              of the designated beneficiary commencing on or before
              December 31 of the calendar year immediately following the
              calendar year in which the participant died;

          (B) If the designated beneficiary is the participant's surviving
              spouse, the date distributions are required to begin in
              accordance with (A) above shall not be earlier than the later
              of (i) December 31 of the calendar year immediately following
              the calendar year in which the participant died and
              (ii) December 31 of the calendar year in which the participant
              would have attained age 701/2.

          If the participant has not made an election pursuant to this
          Section 5.3 by the time of his death, the participant's designated
          beneficiary must elect the method of distribution no later than
          the earlier of (1) December 31 of the calendar year in which
          distributions would be required to begin under this
          Section 5.3(d)(2), or (2) December 31 of the calendar year that
          contains the fifth anniversary of the date of death of the
          participant.  If the participant has no designated beneficiary, or
          if the designated beneficiary does not elect a method of
          distribution, distribution of the participant's entire interest
          must be completed by December 31 of the calendar year containing
          the fifth anniversary of the participant's death.

      (3) For purposes of Section 5.3(d)(2) above, if the surviving
          spouse dies after the participant, but before payments to such
          spouse begin, the provisions of Section 5.3(d)(2) with the
          exception of Section 5.3(d)(2)(B) therein, shall be applied as if
          the surviving spouse were the participant.

      (4) For purposes of this Section 5.3(d), any amount paid to a child
          of the participant will be treated as if it had been paid to the
          surviving spouse if the amount becomes payable to the surviving
          spouse when the child reaches the age of majority.

      (5) For the purposes of this Section 5.3(d), distribution of a
          participant's interest is considered to begin on the participant's
          required beginning date (or, if Section 5.3(d)(3) above is
          applicable, the date distribution is required to begin to the
          surviving spouse pursuant to Section 5.3(d)(2)(B) above).  If
          distribution in the form of an annuity irrevocably commences to
          the participant before the required beginning date, the date
          distribution is considered to begin is the date distribution
          actually commences.

  (e) Definitions (Code Section 401(a)(9) Requirements)
      (1) Applicable Life Expectancy - The life expectancy (or joint life
          and last survivor expectancy) calculated using the attained age of
          the participant (or designated beneficiary) as of the
          participant's (or designated beneficiary's) birthday in the
          applicable calendar year reduced by one for each calendar year
          that has elapsed since the date life expectancy was first
          calculated.  If life expectancy is being recalculated, the
          applicable life expectancy shall be the life expectancy as so
          recalculated.  The applicable calendar year shall be the first
          distribution calendar year, and if life expectancy is being
          recalculated such succeeding calendar year.

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      (2) Designated Beneficiary - The individual who is designated as
          the beneficiary under the plan in accordance with Code
          section 401(a)(9) and the proposed regulations thereunder.

      (3) Distribution Calendar Year - A calendar year for which a
          minimum distribution is required.  For distributions beginning
          before the participant's death, the first distribution calendar
          year is the calendar year immediately preceding the calendar year
          that contains the participant's required beginning date.  For
          distributions beginning after the participant's death, the first
          distribution calendar year is the calendar year in which
          distributions are required to begin pursuant to Section 5.3(d)
          above.

      (4) Life Expectancy - Life expectancy and joint life and last
          survivor expectancy are computed by use of the expected return
          multiples in Tables V and VI of section 1.72-9 of the Income Tax
          Regulations.
          Unless otherwise elected by the participant (or spouse, in the
          case of distributions described in Section 5.3(d)(2)(B) above) by
          the time distributions are required to begin, life expectancies
          shall be recalculated annually.  Such election shall be
          irrevocable as to the participant (or spouse) and shall apply to
          all subsequent years.  The life expectancy of a nonspouse
          beneficiary may not be recalculated.

      (5) Participant's Benefit

          (A) The account balance as of the last valuation date in the
              calendar year immediately preceding the distribution calendar
              year (valuation calendar year) increased by the amount of any
              contributions or forfeitures allocated to the account balance
              as of dates in the valuation calendar year after the valuation
              date and decreased by distributions made in the valuation
              calendar year after the valuation date.

          (B) Exception for Second Distribution Calendar Year - If any
              portion of the minimum distribution for the first distribution
              calendar year is made in the second distribution calendar year
              on or before the required beginning date, the amount of the
              minimum distribution made in the second distribution calendar
              year shall be treated as if it had been made in the immediately
              preceding distribution calendar year.

      (6) Required Beginning Date

          (A) Non-5% Owner - The required beginning date is April 1 of the
              calendar year following the later of:  (i) the calendar year in
              which the participant attains age 701/2, or (ii) the calendar
              year in which the participant retires.  If a participant who is
              not a 5% owner attains age 701/2 after December 31, 1995 and
              before January 1, 2003, the participant shall be permitted to
              elect to commence the distribution of his benefits as if his
              required beginning date were April 1 of the calendar year
              following the calendar year in which he attains age 701/2.  If an
              annuity form of payment is elected, the date as of which such
              distributions commence shall be his annuity starting date for
              all purposes.  If an installment form of payment is elected,
              the participant shall have a new annuity starting date as of
              the date payments are elected to commence following his
              termination of employment.

          (B) 5% Owner - The required beginning date for a participant who
              is a 5% owner is April 1 of the calendar year following the
              calendar year in which the participant attains age 701/2.  A
              participant is treated as a 5% owner for purposes of this
              Section 5.3(e)(6) if such participant is a 5% owner as defined
              in Code section 416(i) (determined in accordance with
              section 416 but without regard to whether the plan is top-
              heavy) at any time during the plan year ending with or within
              the calendar year in which such participant attains age 701/2.

          (C) Once distributions have begun to a 5% owner under this
              Section 5.3(e)(6), they must continue to be distributed, even
              if the participant ceases to be a 5% owner in a subsequent
              year.

  (f) Transitional Rule

      (1) Notwithstanding the other requirements of this Section 5.3 and
          subject to the requirements of Section 5.2, Joint and Survivor
          Annuity Requirements, distribution on behalf of any employee,
          including a 5% owner, may be made in accordance with all of the
          following requirements (regardless of when such distribution
          commences).

          (A) The distribution by the trust is one that would not have
              disqualified such trust under Code section 401(a)(9) as in
              effect prior to amendment by the Deficit Reduction Act of 1984.

          (B) The distribution is in accordance with a method of
              distribution designated by the employee whose interest in the
              trust is being distributed or, if the employee is deceased, by
              a beneficiary of such employee.

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          (C) Such designation was in writing, was signed by the employee
              or the beneficiary, and was made before January 1, 1984.

          (D) The employee had accrued a benefit under the plan as of
              December 31, 1983.

          (E) The method of distribution designated by the employee or the
              beneficiary specifies the time at which distribution will
              commence, the period over which distributions will be made, and
              in the case of any distribution upon the employee's death, the
              beneficiaries of the employee listed in order of priority.

              A distribution upon death will not be covered by this
              transitional rule unless the information in the designation
              contains the required information described above with respect
              to the distributions to be made upon the death of the employee.

      (2) For any distribution that commences before January 1, 1984, but
          continues after December 31, 1983, the employee, or the
          beneficiary, to whom such distribution is being made, will be
          presumed to have designated the method of distribution under which
          the distribution is being made if the method of distribution was
          specified in writing and the distribution satisfies the
          requirements in this Section 5.3(f).

      (3) If a designation is revoked any subsequent distribution must
          satisfy the requirements of Code section 401(a)(9) and the
          proposed regulations thereunder.  If a designation is revoked
          subsequent to the date distributions are required to begin, the
          trust must distribute by the end of the calendar year following
          the calendar year in which the revocation occurs the total amount
          not yet distributed that would have been required to have been
          distributed to satisfy Code section 401(a)(9) and the proposed
          regulations thereunder, but for the election made under Tax Equity
          and Fiscal Responsibility Act of 1982 section 242(b)(2).  For
          calendar years beginning after December 31, 1988, such
          distributions must meet the minimum distribution incidental
          benefit requirements in Proposed Regulation section 1.401(a)(9)-2.
          Any changes in the designation will be considered to be a
          revocation of the designation.  However, the mere substitution or
          addition of another beneficiary (one not named in the designation)
          under the designation will not be considered to be a revocation of
          the designation, so long as such substitution or addition does not
          alter the period over which distributions are to be made under the
          designation, directly or indirectly (for example, by altering the
          relevant measuring life).  In the case in which an amount is
          transferred or rolled over from one plan to another plan, the
          rules in Proposed Regulation section 1.401(a)(9)-1 Q&A J-2 and Q&A
          J-3 shall apply.

Section 5.4 - Top-Heavy Provisions

  (a) Application of Provisions - If the plan is or becomes top-heavy in
      any plan year beginning after December 31, 1983, the provisions of
      Section 5.4 will supersede any conflicting provisions in the plan.

  (b) Minimum Allocation

      (1) Except as otherwise provided in Section 5.4(b)(3) and (4)
          below, the employer contributions and forfeitures allocated on
          behalf of any participant who is not a key employee shall not be
          less than the lesser of 3% of such participant's compensation or
          in the case where the employer has no defined benefit plan which
          designates this plan to satisfy Code section 401, the largest
          percentage of employer contributions and forfeitures, as a
          percentage of the key employee's compensation that may be taken
          into account under Section 1.2(c), allocated on behalf of any key
          employee for that year.  For this purpose, amounts contributed to
          the key employee's employee 401(k) elective deferral account shall
          be included as allocations on his behalf for that year.  However,
          amounts contributed to a non-key employee's employee 401(k)
          elective deferral account shall not be taken into account in
          determining whether he has received his minimum allocation.  The
          minimum allocation is determined without regard to any Social
          Security contribution.  This minimum allocation shall be made even
          though, under other plan provisions, the participant would not
          otherwise be entitled to receive an allocation, or would have
          received a lesser allocation for the year because of (i) the
          participant's failure to complete 1,000 hours of service (or any
          equivalent provided in the plan), or (ii) the participant's
          failure to make mandatory employee contributions to the plan, or
          (iii) compensation less than a stated amount.

      (2) For purposes of computing the minimum allocation, compensation
          shall mean compensation as defined in Section 5.1(d)(2), subject
          to the limitations of Section 1.2(c).

      (3) The provision in Section 5.4(b)(1) above shall not apply to any
          participant who was not employed by the employer on the last day
          of the plan year.

      (4) The provision in Section 5.4(b)(1) above shall not apply to any
          participant to the extent the participant is covered under any
          other plan or plans of the employer and the employer has provided
          in Section 3.2 or 3.3 that the minimum allocation or benefit
          requirement applicable to top-heavy plans will be met in the other
          plan or plans.  If this plan is intended to meet the minimum
          allocation or benefit requirement applicable to another plan or
          plans, the employer shall so provide in Section 3.2 or 3.3, as
          appropriate.

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      (5) The minimum allocation required (to the extent required to be
          nonforfeitable under Code section 416(b)) may not be forfeited
          under Code section 411(a)(3)(B) or 411(a)(3)(D).

  (c) Adjustments in Code Section 415 Limits - If the plan is top-heavy,
      the defined benefit fraction and the defined contribution fraction
      shall be computed by applying a factor of 1.0 (instead of 1.25) to
      the applicable dollar limits under Code section 415(b)(1)(A)
      and 415(c)(1)(A) for such year, unless the plan meets the following
      conditions:

      (1) Such plan would not be a top-heavy plan if "90%" were
          substituted for "60%" in the top-heavy tests; and

      (2) The minimum employer contribution percentage under
          Section 5.4(b) is 4% instead of 3%.

      (3) A non-key employee who participates in this plan and in a
          defined benefit plan aggregated herewith will receive in
          accordance with Section 3.2(c)(2) or Section 3.3(b) either (i) a
          minimum employer contribution of 7.5% under this plan or another
          defined contribution plan aggregated herewith or (ii) a minimum
          nonintegrated accrued benefit of 3% of average annual
          compensation, not to exceed a cumulative accrued benefit of 30%
          under the defined benefit plan.

          However, the reduced Code section 415 factor of 1.0 shall not apply
          under a top-heavy plan with respect to any individual so long as
          there are no employer contributions, forfeitures, or voluntary
          employee nondeductible contributions allocated to such individual.

          Effective with respect to limitation years beginning after
          December 31, 1999, this Section 5.4(c) shall no longer be in effect.

  (d) Minimum Vesting Schedule - For any plan year in which this plan is
      top-heavy, the following minimum vesting schedule shall automatically
      apply to the plan, if this schedule is more liberal than the schedule
      provided in Section 4.2(a)(6)(A) and (B):

                Years of Service          Vesting Percentage
                ----------------          -------------------
                    0-1 Year                       0%
                      2                           20%
                      3                           40%
                      4                           60%
                      5                           80%
                 6 or More Years                 100%


      The minimum vesting schedule shall apply to all benefits within the
      meaning of Code section 411(a)(7) except those attributable to
      employee contributions, including benefits accrued before the
      effective date of Code section 416 and benefits accrued before the
      plan became top-heavy.  Further, no decrease in a participant's
      nonforfeitable percentage may occur in the event the plan's status as
      top-heavy changes for any plan year, and the provisions of
      Section 7.2(d) shall apply.  However, this Section does not apply to
      the account balances of any employee who does not have an hour of
      service after the plan has initially become top-heavy and such
      employee's account balance attributable to employer contributions and
      forfeitures will be determined without regard to this Section.

  (e) Definitions (Code Section 416 Requirements)

      (1) Key Employee - Any employee or former employee (and the
          beneficiaries of such employee) who at any time during the
          determination period was an officer of the employer if such
          individual's annual compensation exceeds 50% of the dollar
          limitation under Code section 415(b)(1)(A), an owner (or
          considered an owner under Code section 318) of one of the ten
          largest interests in the employer if such individual's
          compensation exceeds 100% of the dollar limitation under Code
          section 415(c)(1)(A), a 5% owner of the employer, or a 1% owner of
          the employer who has an annual compensation of more than $150,000.
          Annual compensation means compensation as defined in
          Section 5.1(d)(2), but including elective contributions as defined
          in Section 1.2(a) and elective contributions under a Code
          section 457 plan or a Code section 501(c)(18) plan for any plan
          year and subject to the limitations of Section 1.2(c).  The
          determination period is the plan year containing the determination
          date and the four preceding plan years.  The determination of who
          is a key employee will be made in accordance with Code
          section 416(i)(1) and the regulations thereunder.

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      (2) Top-Heavy Plan - For any plan year beginning after
          December 31, 1983, this plan is top-heavy if any of the following
          conditions exists:

          (A) If the top-heavy ratio for this plan exceeds 60% and this
              plan is not part of any required aggregation group or
              permissive aggregation group of plans.

          (B) If this plan is a part of a required aggregation group of
              plans but not part of a permissive aggregation group and the
              top-heavy ratio for the group of plans exceeds 60%.

          (C) If this plan is a part of a required aggregation group and
              part of a permissive aggregation group of plans and the top-
              heavy ratio for the permissive aggregation group exceeds 60%.

      (3) Top-Heavy Ratio

          (A) If the employer maintains one or more defined contribution
              plans (including any Simplified Employee Pension Plan) and the
              employer has not maintained any defined benefit plan that
              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 aggregation 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
              determination 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 Code
              section 416 and the regulations thereunder.  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 and the regulations thereunder.

          (B) If the employer maintains one or more defined contribution
              plans (including any Simplified Employee Pension Plan) and the
              employer maintains or has maintained one or more defined
              benefit plans that during the five-year period ending on the
              determination date(s) has or has had any accrued 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 account balances under the aggregated defined
              contribution plan or plans for all key employees, determined in
              accordance with (A) 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 (A) 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 and
              the regulations thereunder.  The accrued benefits under a
              defined benefit plan in both the numerator and denominator of
              the top-heavy ratio are increased for any distribution of an
              accrued benefit made in the five-year period ending on the
              determination date.

          (C) For purposes of Section 5.4(e)(3)(A) and (B) above the value
              of account balances and the present value of accrued benefits
              will be determined as of the most recent valuation date that
              falls within or ends with the 12-month period ending on the
              determination date, except as provided in Code section 416 and
              the regulations thereunder for the first and second plan years
              of a defined benefit plan.  The account balances and accrued
              benefits of a participant (1) who is not a key employee but who
              was a key employee in a prior year, or (2) who has not been
              credited with at least one hour of service with any employer
              maintaining the plan at any time during the five-year period
              ending on the determination date will be disregarded.  The
              calculation of the top-heavy ratio, and the extent to which
              distributions, rollovers, and transfers are taken into account
              will be made in accordance with Code section 416 and the
              regulations thereunder.  Deductible employee contributions 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 (1) the method, if any, that
              uniformly applies for accrual purposes under all defined
              benefit plans maintained by the employer, or (2) 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).

      (4) Permissive Aggregation Group - The required aggregation group
          of plans plus any other plan or plans of the employer that, when
          considered as a group with the required aggregation group, would
          continue to satisfy the requirements of Code sections 401(a)(4)
          and 410.

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      (5) Required Aggregation Group - (1) Each qualified plan of the
          employer in which at least one key employee participates or
          participated at any time during the determination period
          (regardless of whether the plan has terminated), and (2) any other
          qualified plan of the employer that enables a plan described in
          (1) to meet the requirements of Code sections 401(a)(4) or 410.

      (6) Determination Date - For any plan year subsequent to the first
          plan year, the last day of the preceding plan year.  For the first
          plan year of the plan, the last day of that year.

      (7) Valuation Date - The last day of the plan year shall be the
          date as of which account balances or accrued benefits are valued
          for purposes of calculating the top-heavy ratio.

      (8) Present Value - Present value shall be based only on the
          interest and mortality rates specified in the employer's defined
          benefit plan.

      (9) Non-Key Employee - Any employee who is not a key employee.
          Non-key employees include employees who are former key employees.

Section 5.5 - Reserved

                     ARTICLE VI - ADMINISTRATION OF THE PLAN

Section 6.1 - Fiduciary Responsibility

  (a) Fiduciary Standards - A fiduciary shall discharge his duties with
      respect to a plan solely in the interest of the participants and
      beneficiaries and -

      For the exclusive purpose of providing benefits to participants and
      their beneficiaries and defraying reasonable expenses of
      administering the plan;

      With the care, skill, prudence, and diligence under the circumstances
      then prevailing that a prudent man acting in a like capacity and
      familiar with such matters would use in the conduct of an enterprise
      of a like character and with like aims;

      By diversifying the investments of the plan so as to minimize the
      risk of large losses, unless under the circumstances it is clearly
      prudent not to do so; and

      In accordance with the documents and instruments governing the plan
      insofar as such documents and instruments are consistent with the
      provisions of ERISA.

  (b) Allocation of Fiduciary Responsibility

      (1) It is intended to allocate to each fiduciary, either named or
          otherwise, the individual responsibility for the prudent execution
          of the functions assigned to him.  None of the allocated
          responsibilities or any other responsibilities shall be shared by
          two or more fiduciaries unless specifically provided for in the
          plan.

      (2) When one fiduciary is required to follow the directions of
          another fiduciary, the two fiduciaries shall not be deemed to
          share such responsibility.  Instead, the responsibility of the
          fiduciary giving the directions shall be deemed to be his sole
          responsibility and the responsibility of the fiduciary receiving
          directions shall be to follow those directions insofar as such
          instructions on their face are proper under applicable law.

      (3) Any person or group of persons may serve in more than one
          fiduciary capacity with respect to this plan.

      (4) A fiduciary under this plan may employ one or more persons,
          including independent accountants, attorneys and actuaries to
          render advice with regard to any responsibility such fiduciary has
          under the plan.

  (c) Indemnification by Employer - Unless resulting from the gross
      negligence, willful misconduct or lack of good faith on the part of a
      fiduciary who is an officer or employee of the employer, the employer
      shall indemnify and save harmless such fiduciary from, against, for
      and in respect of any and all damages, losses, obligations,
      liabilities, liens, deficiencies, costs and expenses, including
      without limitation, reasonable attorney's fees and other costs and
      expenses incident to any suit, action, investigation, claim or
      proceedings suffered in connection with his acting as a fiduciary
      under the plan.

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  (d) Named Fiduciary - The person or persons named by the employer as
      having fiduciary responsibility for the management and control of
      plan assets shall be known as the "named fiduciary" hereunder.  Such
      responsibility shall include the appointment of the plan
      administrator (Section 6.2(a)), the trustee (Section 6.4(a)) and the
      investment manager (Section 6.4(b)), and the deciding of benefit
      appeals (Section 6.3).

Section 6.2 - Plan Administrator

  (a) Appointment of Plan Administrator
      The named fiduciary shall appoint a plan administrator who may be a
      person or an administrative committee consisting of no more than five
      members.  Vacancies occurring upon resignation or removal of a plan
      administrator or a committee member shall be filled promptly by the
      named fiduciary.  Any plan administrator may resign at any time by
      giving notice of his resignation to the named fiduciary, and any plan
      administrator may be removed at any time by the named fiduciary.  The
      named fiduciary shall review at regular intervals the performance of
      the plan administrator(s) and shall re-evaluate the appointment of
      such administrator(s).  After the named fiduciary has appointed the
      plan administrator and has received a written notice of acceptance,
      the fiduciary responsibility for administration of the plan shall be
      the responsibility of the plan administrator or plan administrative
      committee.

  (b) Duties and Powers of Plan Administrator
      The plan administrator shall have the following duties and
      discretionary powers and such other duties and discretionary powers
      as relate to the administration of the plan:

      (1) To determine in a nondiscriminatory manner all questions
          relating to the eligibility of employees to become participants.

      (2) To determine in a nondiscriminatory manner eligibility for
          benefits and to determine and certify the amount and kind of
          benefits payable to participants.

      (3) To authorize all disbursements from the fund.

      (4) To appoint or employ any independent person to perform
          necessary plan functions and to assist in the fulfillment of
          administrative responsibilities as he deems advisable, including
          the retention of a third party administrator, custodian, auditor,
          accountant, actuary, or attorney.

      (5) When appropriate, to select an insurance company and annuity
          contracts that, in his opinion, will best carry out the purposes
          of the plan.

      (6) To construe and interpret any ambiguities in the plan and to
          make, publish, interpret, alter, amend or revoke rules for the
          regulation of the plan that are consistent with the terms of the
          plan and with ERISA.

      (7) To prepare and distribute, in such manner as determined to be
          appropriate, information explaining the plan.

  (c) Allocation of Fiduciary Responsibility Within Plan Administrative
      Committee

      If the plan administrator is a plan administrative committee, the
      committee shall choose from its members a chairperson and a
      secretary.  The committee may allocate responsibility for those
      duties and powers listed in Section 6.2(b)(1) and (2) (except
      determination of qualification for disability retirement) and other
      purely ministerial duties to one or more members of the committee.
      The committee shall review at regular intervals the performance of
      any committee member to whom fiduciary responsibility has been
      allocated and shall re-evaluate such allocation of responsibility.
      After the plan administrative committee has made such allocations of
      responsibilities and has received written notice of acceptance, the
      fiduciary responsibilities for such administrative duties and powers
      shall then be considered as the responsibilities of such committee
      member(s).

  (d) Miscellaneous Provisions

      (1) Plan Administrative Committee Actions - The actions of such
          committee shall be determined by the vote or other affirmative
          expression of a majority of its members.  Either the chairperson
          or the secretary may execute any certificate or other written
          direction on behalf of the committee.  A member of the committee
          who is a participant shall not vote on any question relating
          specifically to himself.  If the remaining members of the
          committee, by majority vote thereof, are unable to come to a
          determination of any such question, the named fiduciary shall
          appoint a substitute member who shall act as a member of the
          committee for the special vote.

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      (2) Expenses - The plan administrator shall serve without
          compensation for service as such.  All reasonable expenses of the
          plan administrator shall be paid by the employer or from the fund.

      (3) Examination of Records - The plan administrator shall make
          available to any participant for examination during business hours
          such of the plan records as pertain only to the participant
          involved.

      (4) Information to the Plan Administrator - To enable the plan
          administrator to perform the administrative functions, the
          employer shall supply full and timely information to the plan
          administrator on all participants as the plan administrator may
          require.

Section 6.3 - Claims Procedure

  (a) Notification - The plan administrator shall notify each
      participant in writing of his determination of benefits.  If the plan
      administrator denies any benefit, such written denial shall include:

           The specific reasons for denial;

           Reference to provisions on which the denial is based;

           A description of and reason for any additional information
           needed to process the claim; and

           An explanation of the claims procedure.

  (b) Appeal - The participant or his duly authorized representative
      may:

           Request a review of the participant's case in writing to the
           named fiduciary;

           Review pertinent documents;

           Submit issues and comments in writing.

      The written request for review must be submitted no later than
      60 days after receiving written notification of denial of benefits.

  (c) Review - The named fiduciary must render a decision no later than
      60 days after receiving the written request for review, unless
      circumstances make it impossible to do so; but in no event shall the
      decision be rendered later than 120 days after the request for review
      is received.

  (d) Limitation on Time Period for Litigation of a Benefit Claim -
      Following receipt of the written rendering of the named fiduciary's
      decision under Section 6.3(c), the participant shall have 365 days in
      which to file suit in the appropriate court.  Thereafter, the right
      to contest the decision shall be waived.

Section 6.4 - Trust Fund

  (a) Appointment of Trustee
      The named fiduciary shall appoint a trustee for the proper care and
      custody of all funds, securities and other properties in the trust,
      and for investment of plan assets (or for execution of such orders as
      it receives from an investment manager appointed for investment of
      plan assets).  The duties and powers of the trustee shall be set
      forth in a trust agreement executed by the employer, which is
      incorporated herein by reference.  The named fiduciary shall review
      at regular intervals the performance of the trustee and shall re-
      evaluate the appointment of such trustee.  After the named fiduciary
      has appointed the trustee and has received a written notice of
      acceptance of its responsibility, the fiduciary responsibility with
      respect to the proper care and custody of plan assets shall be
      considered as the responsibility of the trustee.  Unless otherwise
      allocated to an investment manager, the fiduciary responsibility with
      respect to investment of plan assets shall likewise be considered as
      the responsibility of the trustee.

  (b) Appointment of Investment Manager
      The named fiduciary may appoint an investment manager who is other
      than the trustee, which investment manager may be a bank or an
      investment advisor registered with the Securities and Exchange
      Commission under the Investment Advisors Act of 1940.  Such
      investment manager, if appointed, shall have sole discretion in the
      investment of plan assets, subject to the funding policy.  The named
      fiduciary shall review at regular intervals no less frequently than
      annually, the performance of such investment manager and shall re-
      evaluate the appointment of such investment manager.  After the named
      fiduciary has appointed an investment manager and has received a
      written notice of acceptance of its responsibility, the fiduciary
      responsibility with respect to investment of plan assets shall be
      considered as the responsibility of the investment manager.

  (c) Funding Policy
      The named fiduciary shall determine and communicate in writing to the
      fiduciary responsible for investment of plan assets the funding
      policy for the plan.  The funding policy shall set forth the plan's
      short-range and long-range financial needs, so that said fiduciary
      may coordinate the investment of plan assets with the plan's
      financial needs.

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  (d) Valuation of the Fund
      The fund shall be valued by the trustee on the first day of each plan
      year and as of any interim allocation date determined by the plan
      administrator.  The valuation shall be made on the basis of the
      current fair market value of all property in the fund.

  (e) Expenses
      The trust fund shall pay the expenses incurred in the administration
      of the plan and the investment of the fund, provided the cost is
      reasonable.  Such expenses shall include legal fees incurred by the
      plan administrator or the trustee, provided such fiduciaries are not
      proven to have committed a prohibited transaction.

                  ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN

Section 7.1 - Right to Discontinue and Amend
   It is the expectation of the employer that it will continue this plan
   indefinitely and make the payments of its contributions hereunder, but
   the continuance of the plan is not assumed as a contractual obligation
   of the employer and the right is reserved by the employer, at any time,
   to reduce, suspend or discontinue its contributions hereunder.

Section 7.2 - Amendments
   Except as herein limited, the employer shall have the right to amend
   this plan at any time to any extent that it may deem advisable.  Such
   amendment shall be stated in writing.  It shall be authorized by action
   of the board of directors under the corporate by-laws if the employer is
   a corporation, by action of the agreement of the partners as required
   under the partnership agreement if the employer is a partnership, or by
   action of the sole proprietor if the employer is a sole proprietorship.
   The authorization of an employer's board of directors shall designate
   the person to execute the amendment.
   The employer's right to amend the plan shall be limited as follows:

  (a) No amendment shall increase the duties or liabilities of the plan
      administrator, the trustee, or other fiduciary without their
      respective written consent.

  (b) No amendments shall have the effect of vesting in the employer any
      interest in or control over any contracts issued pursuant hereto or
      any other property in the fund.

  (c) 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 paragraph, 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.  Furthermore, if the vesting schedule of
      a plan is amended, in the case of an employee who is a participant as
      of the later of the date such amendment is adopted or the date it
      becomes effective, the nonforfeitable percentage (determined as of
      such date) of such employee's right to his employer-derived accrued
      benefit will not be less than his percentage computed under the plan
      without regard to such amendment.

  (d) No amendment to the vesting schedule adopted by the employer
      hereunder shall deprive a participant of his vested portion of his
      employer contribution accounts to the date of such amendment.  If the
      plan's vesting schedule is amended, or the plan is amended in any way
      that directly or indirectly affects the computation of the
      participant's nonforfeitable percentage or if the plan is deemed
      amended by an automatic change to or from a top-heavy vesting
      schedule, each participant with at least 3 years of service with the
      employer may elect, within a reasonable period after the adoption of
      the amendment or change, to have the nonforfeitable percentage
      computed under the plan without regard to such amendment or change.
      For participants who do not have at least one hour of service in any
      plan year beginning after December 31, 1988, "5 years of service"
      shall be substituted for "3 years of service" in the preceding
      sentence.  The period during which the election may be made shall
      commence with the date the amendment is adopted or deemed to be made
      and shall end on the latest of:

      (1) 60 days after the amendment is adopted;

      (2) 60 days after the amendment becomes effective; or

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      (3) 60 days after the participant is issued written notice of the
          amendment by the employer or plan administrator.

Section 7.3 - Protection of Benefits in Case of Plan Merger
   In the event of a merger or consolidation with, or transfer of assets to
   any other plan, each participant will receive a benefit immediately
   after such merger, consolidation or transfer (if the plan then
   terminated) which is at least equal to the benefit the participant was
   entitled to immediately before such merger, consolidation or transfer
   (if the plan had terminated).

Section 7.4 - Termination of Plan
  (a) When Plan Terminates - This plan shall terminate upon the
      happening of any of the following events:  legal adjudication of the
      employer as bankrupt; a general assignment by the employer to or for
      the benefit of its creditors; the legal dissolution of the employer;
      or termination of the plan by the employer.

  (b) Allocation of Assets - Upon termination, partial termination, or
      complete discontinuance of employer contributions, the account
      balance(s) of each affected participant who is an active participant
      or who is not an active participant but has neither received a
      complete distribution of his vested accrued benefit nor incurred five
      one-year breaks in service shall be 100% vested and nonforfeitable.
      The amount of the fund assets shall be allocated to each participant,
      subject to provisions for expenses of administration of the
      liquidation, in the ratio that such participant's account(s) bears to
      all accounts.  If a participant under this plan has terminated his
      employment at any time after the first day of the plan year in which
      the employer made his final contribution to the plan, and if any
      portion of any account of such terminated participant was forfeited
      and reallocated to the remaining participants, such forfeiture shall
      be reversed and the forfeited amount shall be credited to the account
      of such terminated participant.

                    ARTICLE VIII - MISCELLANEOUS PROVISIONS

Section 8.1 - Exclusive Benefit - Non-Reversion

   The plan is created for the exclusive benefit of the employees of the
   employer and shall be interpreted in a manner consistent with its being
   a qualified plan as defined in section 401(a) of the Internal Revenue
   Code and with ERISA.  The corpus or income of the trust may not be
   diverted to or used for other than the exclusive benefit of the
   participants or their beneficiaries (except for defraying reasonable
   expenses of administering the plan).

   Notwithstanding the above, a contribution paid by the employer to the
   trust may be repaid to the employer under the following circumstances:

   (a) Any contribution made by the employer because of a mistake of fact
       must be returned to the employer within one year of the contribution.

   (b) In the event the deduction of a contribution made by the employer
       is disallowed under Code section 404, such contribution (to the
       extent disallowed) must be returned to the employer within one year
       of the disallowance of the deduction.

   (c) If the Commissioner of Internal Revenue determines that the plan
       not initially qualified under the Internal Revenue Code, any
       contribution made incident to that initial qualification by the
       employer must be returned to the employer within one year after the
       date the initial qualification is denied, but only if the application
       for the qualification is made by the time prescribed by law for
       filing the employer's return for the taxable year in which the plan
       is adopted, or such later date as the Secretary of the Treasury may
       prescribe.

Section 8.2 - Inalienability of Benefits
   No benefit or interest available hereunder including any annuity
   contract distributed herefrom shall be subject to assignment or
   alienation, either voluntarily or involuntarily.  The preceding sentence
   shall also apply to the creation, assignment, or recognition of a right
   to any benefit payable with respect to a participant pursuant to a
   domestic relations order, unless such order is determined to be a
   qualified domestic relations order as defined in Code section 414(p), or
   any domestic relations order entered before January 1, 1985.  A loan
   made to a participant and secured by his nonforfeitable account
   balance(s) under Section 4.4(b) will not be treated as an assignment or
   alienation and such securing account balance(s) shall be subject to
   attachment by the plan in the event of default.

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   Notwithstanding the preceding paragraph, effective with respect to
   judgments, orders, and decrees issued, and settlement agreements entered
   into, on or after August 5, 1997, a participant's benefit (and that of
   his spouse) shall be reduced to satisfy liabilities of the participant
   to the plan due to (1) the participant being convicted of committing a
   crime involving the plan, (2) a civil judgment (or consent order or
   decree) entered by a court in an action brought in connection with a
   violation of the fiduciary provisions of part 4 of subtitle B of Title I
   of ERISA, or (3) a settlement agreement between the Secretary of Labor
   or the Pension Benefit Guaranty Corporation and the participant in
   connection with a violation of such  fiduciary provisions of ERISA.  No
   reduction shall be made pursuant to this paragraph, unless the judgment,
   order, decree, or settlement agreement shall expressly provide for the
   offset of all or part of the amount ordered or required to be paid to
   the Plan against the participant's benefits provided under the Plan.

Section 8.3 - Employer-Employee Relationship
   This plan is not to be construed as creating or changing any contract of
   employment between the employer and its employees, and the employer
   retains the right to deal with its employees in the same manner as
   though this plan had not been created.

Section 8.4 - Binding Agreement
   This plan shall be binding on the heirs, executors, administrators,
   successors and assigns as such terms may be applicable to any or all
   parties hereto, and on any participants, present or future.

Section 8.5 - Separability
   If any provision of this plan shall be held invalid or unenforceable,
   such invalidity or unenforceability shall not affect any other provision
   hereof and this plan shall be construed and enforced as if such
   provision had not been included.

Section 8.6 - Construction
   The plan shall be construed in accordance with the laws of the state in
   which the employer was incorporated (or is domiciled in the case of an
   unincorporated employer) and with ERISA.

Section 8.7 - Copies of Plan
   This plan may be executed in any number of counterparts, each of which
   shall be deemed as an original, and said counterparts shall constitute
   but one and the same instrument that may be sufficiently evidenced by
   any one counterpart.

Section 8.8 - Interpretation
   Wherever appropriate, words used in this plan in the singular may
   include the plural or the plural may be read as singular, and the
   masculine may include the feminine.

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                       Weis Markets, Inc. Profit Sharing Plan
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IN WITNESS WHEREOF, the Employer has caused this plan to be executed
this 12th day of November, 2002.

                                       Employer:
                                       Weis Markets, Inc.

                                       /S/William R. Mills
                                       -------------------
                                       By: William R. Mills
                                       Title: Senior Vice President
                                              and Treasurer/ CFO

EX-10

                              WEIS MARKETS, INC.
                               STOCK BONUS PLAN


                            Originally Effective
                               January 1, 1978


                      As Amended And Restated Effective
                               January 1, 1997



Blank page


                     Weis Markets, Inc. Stock Bonus Plan

                               TABLE OF CONTENTS

PREAMBLE                                                                    1

ARTICLE I - DEFINITIONS                                                     2
  Section 1.1 - References                                                  2
  Section 1.2 - Compensation                                                2
  Section 1.3 - Dates                                                       3
  Section 1.4 - Employee                                                    4
  Section 1.5 - Employer                                                    5
  Section 1.6 - Fiduciaries                                                 5
  Section 1.7 - Participant/Beneficiary                                     5
  Section 1.8 - Participant Accounts                                        6
  Section 1.9 - Plan                                                        6
  Section 1.10 - Service                                                    6
  Section 1.11 - Trust                                                      7
  Section 1.12 - Stock Bonus Plan Specific Definitions                      8

ARTICLE II - PARTICIPATION                                                  8
  Section 2.1 - Eligibility Service                                         8
  Section 2.2 - Plan Participation                                          8
  Section 2.3 - Termination of Participation                                9
  Section 2.4 - Re-Participation (Break In Service Rules)                   9

ARTICLE III - ALLOCATIONS TO PARTICIPANT ACCOUNTS                          10
  Section 3.1 - General Provisions                                         10
  Section 3.2 - Employer Contributions                                     11
  Section 3.3 - Employee Nondeductible Contributions                       12
  Section 3.4 - Rollover/Transfer Contributions                            12
  Section 3.5 - Allocation of Investment Results                           12

ARTICLE IV - PAYMENT OF PARTICIPANT ACCOUNTS                               13
  Section 4.1 - Vesting Service Rules                                      13
  Section 4.2 - Vesting of Participant Accounts                            13
  Section 4.3 - Payment of Participant Accounts                            16
  Section 4.4 - In-Service Payments                                        19
  Section 4.5 - Distributions under Domestic Relations Orders              19

ARTICLE V - ADDITIONAL QUALIFICATION RULES                                 20
  Section 5.1 - Limitations on Allocations under Code Section 415          20
  Section 5.2 - Joint and Survivor Annuity Requirements                    23
  Section 5.3 - Distribution Requirements                                  25
  Section 5.4 - Top Heavy Provisions                                       29
  Section 5.5 - Deductible Voluntary Employee Contributions                33
  Section 5.6 - Stock Bonus Plan Distribution Options                      33

ARTICLE VI - ADMINISTRATION OF THE PLAN                                    35
  Section 6.1 - Fiduciary Responsibility                                   35
  Section 6.2 - Plan Administrator                                         36
  Section 6.3 - Claims Procedure                                           37
  Section 6.4 - Trust Fund                                                 37
  Section 6.5 - Investment Policy                                          38


                      Weis Markets, Inc. Stock Bonus Plan

  Section 6.6 - Prohibitions Against Allocations                           38
  Section 6.7 - Valuation of the Trust Fund                                39
  Section 6.8 - Voting Corporate Stock                                     39

ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN                            40
  Section 7.1 - Right to Discontinue and Amend                             40
  Section 7.2 - Amendments                                                 40
  Section 7.3 - Protection of Benefits in Case of Plan Merger              41
  Section 7.4 - Termination of Plan                                        41

ARTICLE VIII - MISCELLANEOUS PROVISIONS                                    41
  Section 8.1 - Exclusive Benefit - Non-Reversion                          41
  Section 8.2 - Inalienability of Benefits                                 41
  Section 8.3 - Employer-Employee Relationship                             42
  Section 8.4 - Binding Agreement                                          42
  Section 8.5 - Separability                                               42
  Section 8.6 - Construction                                               42
  Section 8.7 - Copies of Plan                                             42
  Section 8.8 - Interpretation                                             42


                     Weis Markets, Inc. Stock Bonus Plan

                                   PREAMBLE

This amended and restated plan, executed on the date indicated at the end
hereof, is made effective as of January 1, 1997, except as provided
otherwise in Section 1.3(c), by Weis Markets, Inc., a Corporation, with its
principal office located in Sunbury, Pennsylvania.

                             W I T N E S S E T H :

WHEREAS, effective January 1, 1978, the employer established the employee
stock ownership plan for its employees; and,

WHEREAS, effective January 1, 1988, the employer amended the plan to a
stock bonus plan and desires to continue to maintain a permanent qualified
plan in order to enable its employees to share in the growth and prosperity
of the Corporation and to provide its employees and their beneficiaries
with financial security in the event of retirement, disability, or death;
and

WHEREAS, effective January 1, 2002, the employer, amended the plan in
conformity with changes in federal law, and to clarify dispositions to
beneficiaries by amending Section 4.2(a)(5)(B) in Article IV.

WHEREAS, it is desired to amend said plan;

NOW THEREFORE, the premises considered, the original plan is hereby
replaced by this amended and restated plan, and the following are the
provisions of the qualified plan of the employer as restated herein;
provided, however, that each employee who was previously a participant
shall remain a participant, and no employee who was a participant in the
plan before the date of amendment shall receive a benefit under this
amended plan which is less than the benefit he was then entitled to receive
under the plan as of the day prior to the amendment.

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                  Copyright @ 2001 by Conrad M. Siegel, Inc.

                     Weis Markets, Inc. Stock Bonus Plan

                            ARTICLE I - DEFINITIONS

Section 1.1 - References

    (a) Code means the Internal Revenue Code of 1986, as it may be amended
        from time to time.

    (b) ERISA means the Employee Retirement Income Security Act of 1974,
        as amended.

Section 1.2 - Compensation

    (a) Compensation means, except as provided in Section 1.2(b) hereof,
        any earnings reportable as W-2 wages for Federal income tax
        withholding purposes and earned income, plus elective contributions,
        for the plan year.

        However, compensation shall not include any earnings reportable as W-
        2 wages that are payable following the termination of employment
        pursuant to a severance agreement.

        Elective contributions are amounts excludible from the employee's
        gross income and contributed by the employer, at the employee's
        election to:

                  *  A cafeteria plan (excludible under Code section 125);

                  *  A Code section 401(k) arrangement (excludible under Code
                     section 402(e)(3));

                  *  A simplified employee pension (excludible under Code
                     section 402(h));

                  *  A tax sheltered annuity (excludible under Code section
                     403(b)); or

                  *  Effective for plan years beginning on or after
                     January 1, 1998, a Code section 132(f)(4) qualified
                     transportation fringe benefit plan.

        "Earned Income" means net earnings from self-employment in the trade
        or business with respect to which the employer has established the
        plan, provided that personal services of the individual are a
        material income producing factor.  Net earnings shall be determined
        without regard to items excluded from gross income and the deductions
        allocable to those items.  Net earnings shall be determined after the
        deduction allowed to the self-employed individual for all
        contributions made by the employer to a qualified plan and, for plan
        years beginning after December 31, 1989, the deduction allowed to the
        self-employed under Code section 164(f) for self-employment taxes.

        Any reference in this plan to compensation shall be a reference to
        the definition in this Section 1.2, unless the plan reference
        specifies a modification to this definition.  The plan administrator
        shall take into account only compensation actually paid by the
        employer for the relevant period.  A compensation payment includes
        compensation by the employer through another person under the common
        paymaster provisions in Code sections 3121 and 3306.  Compensation
        from an employer that is not a participating employer under this plan
        shall be excluded.

    (b) Exclusions From Compensation - Notwithstanding the provisions of
        Section 1.2(a), the following types of remuneration shall be excluded
        from the participant's compensation:

                  *  Contributions to or benefits from this plan

                  *  Compensation in excess of $100,000 (for purposes of
                     allocations in Section 3.2)

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                  Copyright @ 2001 by Conrad M. Siegel, Inc.

                     Weis Markets, Inc. Stock Bonus Plan

                  *  Distributions from a nonqualified deferred compensation
                     Plan

    (c) Limitations on Compensation

        (1) Compensation Dollar Limitation - For any plan year beginning
            after December 31, 2001, the plan administrator shall take into
            account only the first $200,000 (or beginning January 1, 2003,
            such larger amount as the Commissioner of Internal Revenue may
            prescribe) of any participant's compensation for determining all
            benefits provided under the plan.  For any plan year beginning
            after December 31, 1993 but before January 1, 2002, the plan
            administrator shall take into account only the first $150,000 (or,
            for plan years beginning after December 31, 1994 but before
            January 1, 2002, such larger amount as the Commissioner of
            Internal Revenue may prescribe) of any participant's compensation
            for determining all benefits provided under the plan.  For any
            plan year beginning after December 31, 1988 but before
            January 1, 1994, the plan administrator shall take into account
            only the first $200,000 (or, for plan years beginning after
            December 31, 1989 but before January 1, 1994, such larger amount
            as the Commissioner of Internal Revenue may prescribe) of any
            participant's compensation for determining all benefits provided
            under the plan.  The compensation dollar limitation for a plan
            year shall be the limitation amount in effect on January 1 of the
            calendar year in which the plan year begins.  For any plan year
            beginning before January 1, 1989, the $200,000 limitation (but not
            the family aggregation requirement described in Section 1.2(c)(2))
            applies only if the plan is top heavy for such plan year or
            operates as a deemed top heavy plan for such plan year.  If the
            plan should determine compensation on a period of time that
            contains less than 12 calendar months (such as for a short plan
            year), the annual compensation dollar limitation shall be an
            amount equal to the compensation dollar limitation for the plan
            year multiplied by the ratio obtained by dividing the number of
            full months in the period by 12.

        (2) Application of Compensation Limitation to Certain Family
            Members - For any plan year beginning after December 31, 1988 but
            before January 1, 1997, the compensation dollar limitation shall
            apply to the combined compensation of the employee and of any
            family member who is either (A) the employee's spouse, or (B) the
            employee's lineal descendant under the age of 19 as described in
            this Section 1.2(c)(2).  If, for such a plan year, the combined
            compensation of the employee and such family members who are
            participants entitled to an allocation for that plan year shall
            exceed the compensation dollar limitation, compensation for each
            such participant, for purposes of the contribution and allocation
            provisions of Article III, shall mean his adjusted compensation.

            Adjusted compensation shall mean the amount that bears the same
            ratio to the compensation dollar limitation as the affected
            participant's compensation (without regard to the compensation
            dollar limitation) bears to the combined compensation of all the
            affected participants in the family unit.

    (d) Compensation for Nondiscrimination Testing - For purposes of
        determining whether the plan discriminates in favor of highly
        compensated employees, compensation means compensation as defined in
        this Section 1.2, except that the employer will not give effect to
        any exclusion from compensation specified in Section 1.2(b).
        Notwithstanding the above, the employer shall exclude from this
        nondiscrimination definition of compensation the following items of
        compensation excludible under Code section 414(s) and the applicable
        Treasury regulations:

                  *  Contributions to or benefits from this plan

                  *  Compensation in excess of $100,000 (for purposes of
                     allocations in Section 3.2)

                  *  Distributions from a nonqualified deferred compensation
                     Plan

Section 1.3 - Dates

    (a) Accounting Date means the date(s) on which investment results are
        allocated to participants' accounts as set forth below:

            December 31

    (b) Allocation Date means the date as of which any contribution is
        allocated to participants' accounts.  The employer contribution and
        forfeitures shall be allocated as of December 31.

    (c) The Effective Date of the plan is January 1, 1978.

        The effective date of this amendment and restatement is January 1,
        1997; provided, however that the plan provision required to comply
        with the Family and Medical Leave Act shall be effective August 5,
        1993, the plan provisions required to comply with the Uniformed
        Services Employment and Reemployment Rights Act of 1994 shall be
        effective December 12, 1994, the plan provisions required to comply
        with the Retirement Protection Act of 1994 shall generally be
        effective on the first day of the first limitation year beginning
        after December 31, 1994, the plan provisions required to comply with
        the Small Business Job Protection Act of 1996 shall generally be
        effective on the first day of the plan year beginning after December
        31, 1996, the plan provisions required to comply with the Taxpayer
        Relief Act of 1997 shall generally be effective on the first day of
        the plan year beginning after August 5, 1997, and the plan provisions

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                  Copyright @ 2001 by Conrad M. Siegel, Inc.

                     Weis Markets, Inc. Stock Bonus Plan

        required to comply with the Economic Growth and Tax Relief
        Reconciliation Act of 2001 (EGTRRA) shall generally be effective on
        the first day of the plan year beginning after December 31, 2001,
        except as specified otherwise in this plan or in said Acts.  The plan
        provisions amended to comply with EGTRRA are intended as good faith
        compliance with the requirements of EGTRRA and are to be construed in
        accordance with EGTRRA and guidance issued thereunder.
        Effective for plan years beginning before January 1, 1998, the dollar
        amount appearing in Sections 4.2(b), 4.2(c), 4.3(d), 4.4(b) and 4.5
        shall be $3,500 as provided under the prior provisions of the plan
        before this restatement.  The $5,000 dollar amount in such Sections
        shall be effective for plan years beginning after December 31, 1997.

        Effective as of January 1, 2002, the beneficiary designation section
        4.2(a)(5)(B) has been amended.

    (d) Plan Entry Date means the participation date(s) specified in
        Article II.

    (e) Plan Year means the 12-consecutive month period beginning on
        January 1 and ending on December 31.

    (f) Limitation Year means the plan year.

Section 1.4 - Employee

    (a) (1) Employee means any person employed by the employer, including
            an owner-employee or other self-employed individual (as defined in
            Section 1.4(a)(3)).  The term employee shall include any employee
            of the employer maintaining the plan or of any other
            employer required to be aggregated with such employer under Code
            section 414 (b), (c), (m) or (o).  The term employee shall also
            include any leased employee deemed to be an employee of any such
            employer as provided in Code section 414 (n) or (o) and as defined
            in Section 1.4(a)(2).

        (2) Leased Employee means an individual (who otherwise is not an
            employee of the employer) who, pursuant to a leasing agreement
            between the employer and any other person, has performed services
            for the employer (or for the employer and any persons related to
            the employer within the meaning of Code section 414(n)(6)) on a
            substantially full time basis for at least one year and such
            services are performed under the primary direction or control of
            the employer.  If a leased employee is treated as an employee by
            reason of this Section 1.4(a)(2), compensation from the leasing
            organization that is attributable to services performed for the
            employer shall be considered as compensation under the plan.
            Contributions or benefits provided a leased employee by the
            leasing organization that are attributable to services performed
            for the employer shall be treated as provided by the employer.

            Safe harbor plan exception - The plan shall not treat a leased
            employee as an employee if the leasing organization covers the
            employee in a safe harbor plan and, prior to application of this
            safe harbor plan exception, 20% or less of the employer's
            nonhighly compensated employees are leased employees.  A safe
            harbor plan is a money purchase pension plan providing immediate
            participation, full and immediate vesting, and a nonintegrated
            contribution formula equal to at least 10% of the employee's
            compensation without regard to employment by the leasing
            organization on a specified date.  The safe harbor plan must
            determine the 10% contribution on the basis of compensation as
            defined in Section 1.2(a) without regard to Section 1.2(b).

        (3) Owner-Employee/Self Employed Individual - Owner-employee means
            a self-employed individual who is a sole proprietor, (if the
            employer is a sole proprietorship) or who is a partner (if the
            employer is a partnership) owning more than 10% of either the
            capital or profits interest of the partnership.  Self-employed
            individual means an individual who has earned income for the
            taxable year from the trade or business for which the plan is
            established, or who would have had earned income but for the fact
            that the trade or business had no net profits for the taxable
            year.

    (b) Highly Compensated Employee means any employee who:

        (1) was a more than 5% owner of the employer (applying the
            constructive ownership rules of Code section 318, and applying the
            principles of Code section 318, for an unincorporated entity) at
            any time during the current or the preceding plan year; or

        (2) for the preceding plan year -

            (A) had compensation from the employer in excess of $80,000 (as
                adjusted by the Commissioner of Internal Revenue pursuant to
                Code section 415(d), except that the base period shall be the
                calendar quarter ending September 30, 1996), and

            (B) if the employer elects the application of this Subparagraph
                for such preceding plan year, was in the top-paid group of
                employees for such preceding plan year.  For this purpose, an
                employee is in the top-paid group of employees for any plan
                year if such employee is in the group consisting of the top
                20% of the employees when ranked on the basis of compensation
                paid during such plan year.

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        The term highly compensated employee also includes any former
        employee who separated from service (or has a deemed separation from
        service, as determined under Treasury regulations) prior to the plan
        year, performs no service for the employer during the plan year, and
        was a highly compensated employee either for the separation plan
        year or any plan year ending on or after his 55th birthday, based on
        the applicable rules in effect for such plan year.

        For purposes of determining who is a highly compensated employee
        under this Section 1.4(b), compensation means compensation as defined
        in Section 1.2(a) without regard to Section 1.2(b).

        The plan administrator shall make the determination of who is a
        highly compensated employee, and, if the employer so amends this
        plan, this determination shall include the determination of the
        number and identity of the top-paid 20% group, consistent with Code
        section 414(q) and regulations issued thereunder.  The employer may
        amend this plan to make a calendar year data election with regard to
        the plan year preceding the current plan year to determine the
        employees with compensation in excess of $80,000 and the top-paid 20%
        group, as prescribed by Treasury regulations.  A top-paid 20% group
        election or a calendar year data election must apply to all plans and
        arrangements of the employer.

        This Section 1.4(b) is effective for plan years beginning after
        December 31, 1996, except that, in determining whether an employee is
        a highly compensated employee in 1997, this provision shall be
        treated as having been in effect for the last plan year beginning
        before January 1, 1997.

    (c) Nonhighly Compensated Employee means any employee who is not a
        highly compensated employee.

Section 1.5 - Employer

    (a) Employer means Weis Markets, Inc. or any successor entity by
        merger, purchase, consolidation, or otherwise; or an organization
        affiliated with the employer that may assume the obligations of this
        plan with respect to its employees by becoming a party to this plan.
        Another employer, whether or not it is affiliated with the sponsor
        employer, may adopt this plan to cover its employees by filing with
        the sponsor employer a written resolution adopting the plan, upon
        which the sponsor employer shall indicate its acceptance of such
        employer as an employer under the plan.  Each such employer shall be
        deemed to be the employer only as to persons who are on its payroll.

    (b) Employer for Compliance Testing - For purposes of determining
        whether the plan satisfies the participation coverage requirements of
        Code section 410(b) and the limitations on benefits and allocations
        under Code section 415, employer shall mean the employer that adopts
        this plan, and all members of a controlled group of corporations (as
        defined in Code section 414(b)), all commonly controlled trades or
        businesses (as defined in Code section 414(c)) or affiliated service
        groups (as defined in Code section 414(m)) of which the adopting
        employer is a part, and any other entity required to be aggregated
        with the employer pursuant to regulations under Code section 414(o).

Section 1.6 - Fiduciaries

    (a) Named Fiduciary means the person or persons having fiduciary
        responsibility for the management and control of plan assets.

    (b) Plan Administrator means the person or persons appointed by the
        named fiduciary to administer the plan.

    (c) Trustee means the trustee named in the trust agreement executed
        pursuant to this plan, or any duly appointed successor trustee.

    (d) Investment Manager means a person or corporation other than the
        trustee appointed for the investment of plan assets.

Section 1.7 - Participant/Beneficiary

    (a) Participant means an eligible employee of the employer who becomes
        a member of the plan pursuant to the provisions of Article II, or a
        former employee who has an accrued benefit under the plan.

    (b) Beneficiary means a person designated by a participant who is or
        may become entitled to a benefit under the plan.  A beneficiary who
        becomes entitled to a benefit under the plan remains a beneficiary
        under the plan until the trustee has fully distributed his benefit to
        him.  A beneficiary's right to (and the plan administrator's, or a
        trustee's duty to provide to the beneficiary) information or data
        concerning the plan shall not arise until he first becomes entitled
        to receive a benefit under the plan.

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Section 1.8 - Participant Accounts


    (a) Employer Contribution Account means the balance of the separate
        account derived from employer's contributions, including forfeitures
        (if any) (if so provided under Section 3.2).

    (b) Rollover/Transfer Account means the balance of the separate
        account derived from rollover contributions and/or transfer
        contributions (if so provided under Section 3.4).

    (c) Accrued Benefit means the total of the participant's account
        balances as of the accounting date falling on or before the day on
        which the accrued benefit is being determined.

Section 1.9 - Plan

    Plan means Weis Markets, Inc. Stock Bonus Plan as set forth herein and
    as it may be amended from time to time.

Section 1.10 - Service

    (a) Service means any period of time the employee is in the employ of
        the employer, including any period the employee is on an unpaid leave
        of absence authorized by the employer under a uniform,
        nondiscriminatory policy applicable to all employees.  Separation
        from service means that the employee no longer has an employment
        relationship with the employer.

    (b) (1) Hour of Service means:

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

            (B) Each hour for which an employee is paid, or entitled to
                payment, by the employer on account of a period of time during
                which no duties are performed (irrespective of whether the
                employment relationship has terminated) due to vacation,
                holiday, illness, incapacity (including disability), layoff,
                jury duty, military duty or leave of absence.  No more than 501
                hours of service shall be credited under this Subparagraph (B)
                for any single continuous period (whether or not such period
                occurs in a single computation period).  An hour of service
                shall not be credited to an employee under this Subparagraph
                (B) if the employee is paid, or entitled to payment, under a
                plan maintained solely for the purpose of complying with
                applicable worker's compensation or unemployment compensation
                or disability insurance laws.  Hours under this Subparagraph
                (B) shall be calculated and credited pursuant to section
                2530.200b-2 of the Department of Labor Regulations that are
                incorporated herein by this reference; and

            (C) Each hour for which back pay, irrespective of mitigation of
                damages, is either awarded or agreed to by the employer.  The
                same hours of service shall not be credited both under
                Subparagraph (A) or Subparagraph (B), as the case may be, and
                under this Subparagraph (C).  These hours shall be credited to
                the employee for the computation period or periods to which
                the award or agreement pertains rather than the computation
                period in which the award, agreement, or payment is made.

        Hours of service shall be determined on the basis of actual hours
        for which an employee is paid or entitled to payment.  The above
        provisions shall be construed so as to resolve any ambiguities in
        favor of crediting employees with hours of service.

        If, for the purposes of the plan, an employee's records are
        maintained on other than an hourly basis, the plan administrator,
        according to uniform rules applicable to a class of employees, may
        apply the following equivalencies for the purpose of crediting
        hours of service:

          Basis Upon Which Records             Credit Granted to Individual if
            Are Maintained                       Individual Earns One or More
                                                Hours of Service During Period
           _______________________             _______________________________
                    Shift                         Actual hours of full shift

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                            Day                      10 hours of service
                           Week                      45 hours of service
                Semi-Monthly Payroll Period          95 hours of service
                    Months of Employment            190 hours of service

        (2) Solely for purposes of determining whether a break in service
            for participation and vesting purposes has occurred in a
            computation period, an individual who is absent from work for
            maternity or paternity reasons shall receive credit for the hours
            of service that would otherwise have been credited to such
            individual but for such absence, or in any case in which such
            hours cannot be determined, 8 hours of service per day of such
            absence.  For purposes of this paragraph, an absence from work for
            maternity or paternity reasons means an absence (A) by reason of
            the pregnancy of the individual, (B) by reason of a birth of a
            child of the individual, (C) by reason of the placement of a child
            with the individual in connection with the adoption of such child
            by such individual, or (D) for purposes of caring for such child
            for a period beginning immediately following such birth or
            placement.  The hours of service credited under this paragraph
            shall be credited:  (A) in the computation period in which the
            absence begins if the crediting is necessary to prevent a break in
            service in that period, or (B) in all other cases, in the
            following computation period.  No more than 501 hours of service
            shall be credited under this paragraph for any single continuous
            period (whether or not such period occurs in a single computation
            period).

        (3) Solely for purposes of determining whether a break in service
            for participation and vesting purposes has occurred in a
            computation period, an individual who is absent from work on
            unpaid leave under the Family and Medical Leave Act shall receive
            credit for the hours of service that would otherwise have been
            credited to such individual but for such absence, or in any case
            in which such hours cannot be determined, 8 hours of service per
            day of such absence.  Such an individual shall be treated as
            actively employed for the purposes of participation and
            eligibility for an allocation of any employer contribution that
            may be provided under this plan.  Notwithstanding the preceding,
            this paragraph shall not apply if the employer or the particular
            employee is not subject to the requirements of the Family and
            Medical Leave Act at the time of the absence.

        (4) Hours of service shall be credited for employment with other
            members of an affiliated service group (under Code section
            414(m)), a controlled group of corporations (under Code section
            414(b)), or a group of trades or businesses under common control
            (under Code section 414(c)), of which the adopting employer is a
            member.  Hours of service shall also be credited for any leased
            employee who is considered an employee for purposes of this plan
            under Code section 414(n) or Code section 414(o).

    (c) (1) Year of Service means a 12-consecutive month computation period
            during which the employee completes the required number of hours of
            service with the employer as specified in Sections 2.1 or 4.1.  No
            more than one year of service will be credited for
            any 12 consecutive-month period unless otherwise required by Code
            section 410 or 411.

        (2) Service with Related Employers - For purposes of crediting
            years of service, hours of service credited in accordance with
            Section 1.10(b)(4) shall be taken into account.

        (3) Predecessor Service - If the employer maintains the plan of a
            predecessor employer, service with such predecessor employer shall
            be treated as service for the employer.  If the employer does not
            maintain the plan of a predecessor employer, then service as an
            employee of a predecessor employer shall not be considered as
            service under the plan, except as noted below:

                  *  No credit for predecessor service.

    (d) Break in Service (or One Year Break in Service) means a 12-
        consecutive month computation period during which a participant or
        former participant does not complete the specified number of hours of
        service with the employer as set forth in Sections 2.1(b) and 4.1(b).

    (e) Qualified Military Service - Notwithstanding any provision of this
        plan to the contrary, effective December 12, 1994, contributions,
        benefits, and service credit with respect to qualified military
        service will be provided in accordance with Code section 414(u).

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                     Weis Markets, Inc. Stock Bonus Plan

Section 1.11 - Trust

    (a) Trust means the qualified trust created under the employer's plan.

    (b) Trust Fund means all property held or acquired by the plan.

Section 1.12 - Stock Bonus Plan Specific Definitions

    (a) Stock Bonus Plan means a stock bonus plan as defined in Regulation
        section 1.401-1(b)(1)(iii) that meets the requirements of ERISA
        section 407(d)(3).

    (b) Corporate Stock means common stock issued by the employer (or by a
        corporation that is a member of the controlled group of corporations
        of which the employer is a member) that is readily tradable on an
        established securities market.  If there is no common stock that
        meets the foregoing requirement, the term corporate stock means
        common stock issued by the employer (or by a corporation that is a
        member of the same controlled group) having a combination of voting
        power and dividend rights equal to or in excess of:  (1) that class
        of common stock of the employer (or of any other such corporation)
        having the greatest voting power, and (2) that class of stock of the
        employer (or of any other such corporation) having the greatest
        dividend rights.  Noncallable preferred stock shall be deemed to be
        corporate stock if such stock is convertible at any time into stock
        that constitutes corporate stock hereunder and if such conversion is
        at a conversion price that (as of the date of the acquisition by the
        trust) is reasonable.  For purposes of the preceding sentence,
        pursuant to Code regulations, preferred stock shall be treated as
        noncallable if after the call there will be a reasonable opportunity
        for a conversion that meets the requirements of the preceding
        sentence.

    (c) Corporation means the entity whose corporate stock is the subject
        of this stock bonus plan.

    (d) Investment Accounts - For investment purposes, a participant's
        accounts may be placed in the two accounts as described herein.

        (1) Corporate Stock Account means the investment account of a
            participant that is credited with the shares of corporate stock
            purchased and paid for by the trust fund or contributed to the
            trust fund.

        (2) Other Investment Account means the investment account of a
            participant that is credited with his share of the net gain (or
            loss) of the plan, forfeitures, and employer contributions in
            other than corporate stock and that is debited with payments made
            to pay for corporate stock.

                          ARTICLE II - PARTICIPATION

Section 2.1 - Eligibility Service

    (a) Eligibility Year of Service means an eligibility computation
        period during which the employee completes at least 1,000 hours of
        service with the employer.

    (b) One Year Break in Service means for the purposes of this Article
        II an eligibility computation period during which the participant or
        former participant does not complete more than 500 hours of service
        with the employer.

    (c) Eligibility Computation Period - The initial eligibility
        computation period shall be the 12-consecutive month period beginning
        with the day on which the employee first performs an hour of service
        with the employer (employment commencement date).

        Succeeding eligibility computation periods shall be the 12-
        consecutive month periods beginning on the first anniversary of the
        employee's employment commencement date and succeeding anniversaries
        thereof.

Section 2.2 - Plan Participation

    (a) Eligibility

        (1) Age/service requirements - An employee who is a member of the
            eligible class of employees shall be eligible for plan
            participation after he has satisfied the following participation
            requirement(s):

            (A) Completion of 2 years of service.

            (B) No age requirement.

        (2) Eligible class of employees - All employees of the employer
            shall be eligible to be covered under the plan except for
            employees in the following categories:

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                  *  Individuals not directly employed by the employer as
                     defined in Section 1.5(a).  An employee of the employer
                     as that term is defined in Section 1.5(b) with respect to
                     the sponsoring employer shall not participate in this
                     plan unless such employee's direct employer affirmatively
                     elects to become a participating employer hereunder.

                  *  An employee prohibited from receiving an allocation of
                     certain corporate stock pursuant to Section 6.6(a).

                  *  Leased employees who are considered employees under the
                     plan.

                  *  Employees who are non-resident aliens (as defined in Code
                     section 7701(b)(1)(B)) and who receive no earned income
                     (as defined in Code section 911(d)(2)) from the employer
                     that constitutes income from sources within the United
                     States (as defined in Code section 861(a)(3)).

                  *  Employees included in a unit of employees covered by a
                     collective bargaining agreement between the employer and
                     employee representatives if retirement benefits were the
                     subject of good faith bargaining and if less than two
                     percent of the employees of the employer who are covered
                     pursuant to that agreement are professionals as defined
                     in Regulation section 1.410(b)-9(g).  For this purpose,
                     the term "employee representatives" does not include any
                     organization more than half of whose members are employees
                     who are owners, officers, or executives of the employer.

                  *  Commission salesmen.

                  *  Employees compensated on an hourly basis who are not
                     employed in a clerical capacity.

                  *  Employees who are employed as pharmacists or grocery
                     managers.

                  *  Highly compensated employees as defined in Section 1.4(b).

    (b) Entry Date - An eligible employee shall participate in the plan on
        the earlier of the January 1 or July 1 entry date coinciding with or
        immediately following the date on which he has met the age and
        service requirements.  If an employee who is not a member of the
        eligible class of employees becomes a member of the eligible class,
        such employee shall participate immediately, if he has satisfied the
        age and service requirements and would have otherwise previously
        become a participant.

Section 2.3 - Termination of Participation

    A participant shall continue to be an active participant of the plan so
    long as he is a member of the eligible class of employees and he does
    not incur a one-year break in service due to termination of employment.
    He shall become an inactive participant when he incurs a one-year break
    in service due to termination of employment, or at the end of the plan
    year during which he ceases to be a member of the eligible class of
    employees.  He shall cease participation completely upon the later of
    his receipt of a total distribution of his nonforfeitable account
    balance(s) under the plan or the forfeiture of the nonvested portion of
    the account balance(s).

Section 2.4 - Re-Participation (Break In Service Rules)

    (a) Vested Participant - A former participant who had a nonforfeitable
        right to all or a portion of his account balance derived from
        employer contributions at the time of his termination from service
        shall become a participant immediately upon returning to the employ
        of the employer, if he is a member of the eligible class of
        employees.

    (b) Nonvested Participant - In the case of a former participant who
        did not have any nonforfeitable right to his account balance derived
        from employer contributions at the time of his termination from
        service, years of service before a period of consecutive one-year
        breaks in service shall not be taken into account in computing
        service if the number of consecutive one-year breaks in service in
        such period equals or exceeds the greater of 5 or the aggregate
        number of years of service before such breaks in service.  Such
        aggregate number of years of service shall not include any years of
        service disregarded under the preceding sentence by reason of prior
        breaks in service.

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                     Weis Markets, Inc. Stock Bonus Plan

        If such former participant's years of service before termination from
        service are disregarded pursuant to the preceding paragraph, he shall
        be considered a new employee for eligibility purposes.  If such
        former participant's years of service before termination from service
        may not be disregarded pursuant to the preceding paragraph, he shall
        participate immediately upon returning to the employ of the employer,
        if he is a member of the eligible class of employees.

    (c) Return to Eligible Class - If a participant becomes an inactive
        participant, because he is no longer a member of the eligible class
        of employees, but does not incur a break in service; such inactive
        participant shall become an active participant immediately upon
        returning to the eligible class of employees.  If such participant
        incurs a break in service, eligibility shall be determined under the
        re-participation rules in Section 2.4(a) and (b) above.

               ARTICLE III - ALLOCATIONS TO PARTICIPANT ACCOUNTS

Section 3.1 - General Provisions

    (a) Maintenance of Participant Accounts - The plan administrator shall
        maintain separate accounts covering each participant under the plan
        as herein described.  Such accounts shall be increased by
        contributions, reallocation of forfeitures (if any), investment
        income, and market value appreciation of the fund.  They shall be
        decreased by market value depreciation of the fund, forfeiture of
        nonvested amounts, benefit payments, withdrawals, and expenses.

    (b) Amount and Payment of Employer Contribution

        (1) Amount of Contribution - For each plan year, the employer
            contribution to the plan shall be the amount that is determined
            under the provisions of this Article; provided however, the
            employer may not make a contribution to the plan for any plan year
            to the extent the contribution would exceed fifteen percent of the
            aggregate participant compensation (as defined in Code
            section 415(c)(3)) for the plan year for plan years beginning
            before January 1, 2002.  Effective for plan years beginning on or
            after January 1, 2002, the employer may not make a contribution to
            the plan for any plan year to the extent the contribution would
            exceed twenty-five percent of the aggregate participant
            compensation (as defined in Code section 415(c)(3)) for the plan
            year.  Further, the employer contribution shall not exceed the
            maximum amount deductible under Code section 404.

            The employer contributes to this plan on the conditions that its
            contribution is not due to a mistake of fact and that the Internal
            Revenue Service will not disallow the deduction for its
            contribution.  The trustee, upon written request from the
            employer, shall return to the employer the amount of the
            employer's contribution made due to a mistake of fact or the
            amount of the employer's contribution disallowed as a deduction
            under Code section 404.  The trustee shall not return any portion
            of the employer's contribution under the provisions of this
            paragraph more than one year after the earlier of:  (A) The date
            on which the employer made the contribution due to a mistake of
            fact; or (B) The time of disallowance of the contribution as a
            deduction, and then, only to the extent of the disallowance.  The
            trustee will not increase the amount of the employer contribution
            returnable under this Section for any earnings attributable to the
            contribution, but the trustee will decrease the employer
            contribution returnable for any losses attributable to it.  The
            trustee may require the employer to furnish whatever evidence it
            deems necessary to confirm that the amount the employer has
            requested be returned is properly returnable under ERISA.

        (2) Payment of Contribution - The employer shall make its
            contribution to the plan in cash or corporate stock within the
            time prescribed by the Code or applicable Treasury regulations.
            Subject to the consent of the trustee, the employer may make its
            contribution in other property, provided the contribution of such
            property is not a prohibited transaction under the Code or ERISA.
            Corporate stock and other property will be valued at fair market
            value at the time of actual contribution.  Notwithstanding the
            preceding, the employer shall make its contribution solely in cash
            if it is obligated to contribute a specified dollar amount by an
            action of its board of directors.

        (3) Omission of Eligible Employee - If, in any plan year, any
            employee who should be included as a participant in the plan is
            erroneously omitted and discovery of such omission is not made
            until after a contribution by the employer for the year has been
            made and allocated, the employer shall make a subsequent
            contribution with respect to (or credit an unallocated forfeiture
            to) the omitted employee in the amount that the employer would
            have contributed with respect to him had he not been omitted (plus
            any applicable investment return).  Such contribution shall be
            made regardless of whether or not it is deductible in whole or in
            part in any taxable year under applicable provisions of the Code.

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        (4) Inclusion of Ineligible Employee - If, in any plan year, any
            person who should not have been included as a participant in the
            plan is erroneously included and discovery of such incorrect
            inclusion is not made until after a contribution for the year has
            been made, the employer shall not be entitled to recover the
            contribution made with respect to the ineligible person regardless
            of whether or not a deduction is allowable with respect to such
            contribution.  In such event, the amount contributed with respect
            to the ineligible person shall constitute a forfeiture (except for
            deferred compensation that shall be distributed to the ineligible
            person) for the plan year in which the discovery is made.

        (5) Allocation If More Than One Employer - If the employer consists
            of more than one entity, the contribution made by each such entity
            shall be allocated among the applicable accounts of the
            participants employed by the contributing employer.  If a
            participant is employed by more than one entity during the
            applicable period, the entity employing the participant on the
            last day of the plan year shall contribute with respect to the
            total plan year compensation earned by the participant while
            employed by any entity within the employer.

    (c) Limitations and Conditions - Notwithstanding the allocation
        procedures set forth in this Article, the allocations to
        participants' accounts shall be limited or modified to the extent
        required to comply with the provisions of Article V (limitations on
        allocations under Code section 415, top-heavy provisions under Code
        section 416, and related employer provisions under Code section 414).

        In any limitation year in which the allocation to one or more
        participants' accounts would be in excess of the limitations on
        allocations under Code section 415, the annual additions under this
        plan will be reduced to the extent necessary to comply with such
        limitations first.  If any further reduction is required in any
        limitation year commencing before January 1, 2000, the annual
        additions or benefits under any other plan that the employer sponsors
        will then be reduced with respect to such participants.  If any
        further reduction is required in any limitation year commencing on or
        after January 1, 2000, the annual additions under any other defined
        contribution plan that the employer sponsors will then be reduced
        with respect to such participants.

    (d) Recapture of Tax Credit - If any portion of the tax credit taken
        by the employer for a fiscal year prior to 1984 is subject to
        reduction or recapture, then such portion will remain in the trust
        fund and will be treated as a deductible contribution to a plan
        qualified under Code section 401.

Section 3.2 - Employer Contributions

    (a) Amount of Contribution - The employer shall determine, in its sole
        discretion, the amount of employer contribution to be made to the
        plan each year; provided, however, that the employer shall contribute
        such amount as may be required for restoration of a forfeited amount
        under Section 4.2.

    (b) Conditions for Allocations - An active participant shall be
        eligible for an allocation of the employer contribution and
        forfeitures as of an allocation date, provided that he satisfies the
        following condition(s):

        (1) He completed at least 1,000 hours of service during the current
            plan year except that the hours of service requirement shall not
            apply with respect to any minimum top heavy allocation as provided
            in Section 5.4.

                                     AND

        (2) He is employed by the employer on the last day of the plan
            year.

    (c) (1) Allocation Formula

        The employer contribution and forfeitures for the plan year shall
        be allocated to the employer contribution account of each eligible
        participant in the ratio that such participant's compensation bears
        to the compensation of all participants.

        (2) Top-Heavy Plan Years
            In any plan year in which this plan is top-heavy (as defined in
            Section 5.4(e)(2) when aggregated with the Weis Markets, Inc.
            Profit Sharing Plan and the Weis Markets, Inc. Retirement Savings
            Plan that the employer also sponsors, the top-heavy minimum
            benefit requirement shall be met under the Weis Markets, Inc.
            Retirement Savings Plan.

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            For such a plan year, the contribution on behalf of each
            participant who is a non-key employee and who participates in both
            plans shall be increased as necessary under such other sponsored
            defined contribution plan to equal 3.00% of such participant's
            compensation or the largest percentage of employee 401(k) elective
            deferral contribution, employer contribution, and forfeitures
            allocated under the aggregated plans on behalf of any key employee
            for that year, whichever is less.

            If a participant only participates in this plan, the contributions
            and forfeitures allocable to the employer contribution account
            shall be increased as necessary for compliance with the top-heavy
            minimum benefit requirement.  The total of the contributions and
            forfeitures allocated to such account for such a participant shall
            not be less than an amount equal to 3% of his compensation, or the
            largest percentage of employee 401(k) elective deferral
            contribution, employer contribution, and forfeiture allocated
            under the aggregated plans on behalf of any key employee for that
            year, whichever is less.

        (3) Compensation - For purposes of the allocation of the employer
            contribution, compensation means compensation as defined in
            Section 1.2 (a) and (b) for the entire plan year.  However, for
            purposes of the top-heavy contribution, compensation means
            compensation as defined in Section 5.1(d)(2), subject to the
            limitations of Section 1.2(c).

Section 3.3 - Employee Nondeductible Contributions

    Employee nondeductible contributions are not permitted under this plan
    and no amount shall be credited to the employee nondeductible
    contribution account.

Section 3.4 - Rollover/Transfer Contributions

    Rollover and transfer contributions shall not be permitted under this
    plan and no amount shall be credited to the rollover/transfer account.

Section 3.5 - Allocation of Investment Results

    (a) Corporate Stock Account - The corporate stock account of each
        participant shall be credited as of each allocation date with
        forfeitures of corporate stock and his allocable share of corporate
        stock (including fractional shares) purchased and paid for by the
        plan or contributed in kind by the employer.  Stock dividends on
        corporate stock held in his corporate stock account shall be credited
        to his corporate stock account when paid.

        Promptly upon receipt of any cash contribution pursuant to Section
        3.2, the trustee shall apply such contribution to the purchase, in
        one or more transactions, of the maximum number of whole shares
        obtainable at then prevailing prices, including any brokerage
        commissions and other reasonable expenses incurred in connection with
        such purchases.  Such purchases may be made on any securities
        exchange where the corporate stock is traded, in the over-the-counter
        market, or in public or private negotiated transactions, and may be
        on such terms as to price, delivery and otherwise as the trustee may
        determine to be in the best interest of the participants.  The
        trustee shall complete such purchases as soon as practical after
        receipt of each such contribution, have due regard for any applicable
        requirements of law affecting the timing or manner of such purchases.

        Any cash balance of any contribution received pursuant to Section
        3.2, which shall remain after the maximum number of whole shares
        shall have been purchased pursuant to this Section 3.5(a), shall be
        held by the trustee to be invested with the next such contribution or
        dividends received by the trust.

    (b) Other Investments Account - As of each allocation date, prior to
        the allocation of employer contributions and forfeitures, any
        earnings or losses (net appreciation or net depreciation) of the
        trust fund shall be allocated in the same proportion that each
        participant's other investments account bears to the total of all
        participants' other investment accounts as of such date.  For this
        purpose, each account balance shall be equal to the average balance
        for the period commencing on the day following the prior accounting
        date and ending on the current accounting date.  Earnings or losses
        include the increase (or decrease) in the fair market value of assets
        of the trust fund (other than corporate stock in the participants'
        corporate stock accounts) since the preceding allocation date.

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    (c) Dividends - Any cash dividends declared by the employer and
        applicable to shares held in the corporate stock account of a
        participant shall be converted to shares by the trustee in one or
        more transactions as soon as practical, having due regard for any
        applicable requirements of law affecting the time or manner of such
        purchases.  Dividends shall be converted to the maximum number of
        whole shares which can be purchased at prevailing prices, including
        any brokerage charges and other reasonable expenses incurred in
        connection with such purchases, and such purchases may be made any
        may be on such terms as to price, delivery, and otherwise as the
        trustee may determine to be in the best interest of the participants.

        Notwithstanding the preceding paragraph, pursuant to the instructions
        of the employer, the trustee shall become a participant in the
        employer's Dividend Reinvestment and Stock Purchase Plan and all
        dividends will be reinvested pursuant to the provisions of that plan,
        to the maximum extent permitted.

        Any cash balance of any dividend received by the trustee that shall
        remain after the maximum number of whole shares shall have been
        purchased pursuant to the preceding paragraphs, shall be held by the
        trustee in the participant's other investment account to be invested
        with the next employer contribution or dividend received by the
        trustee.

                 ARTICLE IV - PAYMENT OF PARTICIPANT ACCOUNTS

Section 4.1 - Vesting Service Rules

    (a) Vesting Year of Service means a vesting computation period during
        which the employee completes at least 1,000 hours of service with the
        employer.  All of an employee's years of service with the employer
        shall be counted to determine the nonforfeitable percentage in the
        employee's account balance(s) derived from employer contributions,
        except:

        (1) Years of service disregarded under the break in service rules
            in Section 4.1(d) below.  (Post-ERISA break in service rules)

        (2) Years of service before the effective date of ERISA if such
            service would have been disregarded under the break in service
            rules of the prior plan in effect from time to time before such
            date.  For this purpose, break in service rules are rules that
            result in the loss of prior vesting or benefit accruals, or that
            deny an employee eligibility to participate, by reason of
            separation or failure to complete a required period of service
            within a specified period of time.  (Pre-ERISA break in service
            rules)

    (b) One Year Break in Service means for the purposes of this Article
        IV a vesting computation period during which the participant or
        former participant does not complete more than 500 hours of service
        with the employer.

    (c) Vesting Computation Period means the 12-consecutive month period
        coinciding with the plan year.

    (d) Break in Service Rules

        (1) Vested Participant - A former participant who had a
            nonforfeitable right to all or a portion of his account balance(s)
            derived from employer contributions at the time of his termination
            from service shall retain credit for all vesting years of service
            prior to a break in service.

        (2) Nonvested Participant - In the case of a former participant who
            did not have any nonforfeitable right to his account balance(s)
            derived from employer contributions at the time of his termination
            from service, years of service before a period of consecutive one-
            year breaks in service shall not be taken into account in
            computing service if the number of consecutive one-year breaks in
            service in such period equals or exceeds the greater of 5 or the
            aggregate number of years of service before such breaks in
            service.  Such aggregate number of years of service shall not
            include any years of service disregarded under the preceding
            sentence by reason of prior breaks in service.

        (3) Vesting for Pre-Break and Post-Break Accounts - In the case of
            a participant who has 5 or more consecutive one-year breaks in
            service, all years of service after such breaks in service shall
            be disregarded for the purpose of vesting the employer-derived
            account balance(s) that accrued before such breaks in service.
            Whether or not such participant's pre-break service counts in
            vesting the post-break employer-derived account balance(s) shall
            be determined according to the rules set forth in
            Section 4.1(d)(1) and (2) above.  Separate accounts shall be
            maintained for each of the participant's pre-break and post-break
            employer-derived account balance(s).  All accounts shall share in
            the investment earnings and losses of the fund.

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Section 4.2 - Vesting of Participant Accounts

    (a) Determination of Vesting

        (1) Normal Retirement - A participant's right to his account
            balance(s) shall be 100% vested and nonforfeitable upon the
            attainment of age 65, the normal retirement age.  If the employer
            enforces a mandatory retirement age, the normal retirement age
            shall be the lesser of the mandatory age or the age specified
            herein.

        (2) Late Retirement - If a participant remains employed after his
            normal retirement age, his account balance(s) shall remain 100%
            vested and nonforfeitable.  Such participant shall continue to
            receive allocations to his account as he did before his normal
            retirement age.

        (3) Early Retirement - Not applicable.

        (4) Disability - If a participant separates from service due to
            disability, such participant's right to his account balance(s) as
            of his date of disability shall be 100% vested and nonforfeitable.
            Disability means 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 that
            has lasted or can be expected to last for a continuous period of
            not less than 12 months.  The permanence and degree of such
            impairment shall be supported by medical evidence.
            Notwithstanding such definition, a participant who is eligible for
            Social Security disability benefits shall automatically satisfy
            the definition of disability.  Disability shall be determined by
            the plan administrator after consultation with a physician chosen
            by the plan administrator.  In the administration of this section,
            all employees shall be treated in a uniform manner in similar
            circumstances.

        (5) (A) Death - In the event of the death of a participant who has an
                accrued benefit under the plan, (whether or not he is an
                active participant), 100% of the participant's account
                balance(s) as of the date of death shall be paid to his
                surviving spouse; except that, if there is no surviving
                sspouse, or if the surviving spouse has already consented in
                a manner that is (or conforms to) a qualified election under
                the joint and survivor annuity provisions of Code section
                417(a) and regulations issued pursuant thereto and as set
                forth in Section 5.2, then such balance(s) shall be paid to
                the participant's designated beneficiary.

            (B) Beneficiary Designation - Subject to the spousal consent
                requirements of Section 5.2, the participant shall have the
                right to designate his beneficiaries, including a contingent
                death beneficiary, and shall have the right at any time prior
                to his death to change such beneficiaries. The designation
                shall be effective only if made in writing on a form signed
                by the participant and supplied by and filed with the plan
                administrator prior to his death. If the participant fails to
                designate a beneficiary, or if the designated person or
                persons predecease the participant, "beneficiary" shall mean:
                (a) the spouse, (b) if no surviving spouse, then to the
                surviving children in equal shares, (c) if no surviving
                children, then to the surviving parents in equal shares,
                (d) if no surviving parents, then to the surviving brothers
                and sisters in equal shares, (e) if no surviving brothers and
                sisters, then (f) to the participant's estate if an estate is
                opened within 2 years of the participant's death; and
                otherwise to a charity selected in the sole discretion of the
                plan administrator.

                If a designated beneficiary dies after the participant has
                died but before the plan has commenced or made distribution to
                the designated beneficiary, the plan shall be administered as
                set forth in this paragraph. The death benefit will be paid to
                the beneficiary's designated beneficiary, if any designated
                prior to such beneficiary's death in connection with the
                beneficiary's election of a form of payment of the
                participant's death benefit to which he is entitled; and if no
                such designation is on file with the plan administrator, then
                to the beneficiary's estate in a single lump sum payment if an
                estate is opened within 2 years of the participant's death;
                and otherwise to a charity selected in the sole discretion of
                the plan administrator.  If the deceased designated
                beneficiary was not the participant's surviving spouse,
                distribution under this paragraph will be completed by
                December 31 of the fifth year following the participant's date
                of death.  If the deceased designated beneficiary was the
                participant's surviving spouse, distribution under this
                paragraph will be completed by December 31 of the fifth year
                following the beneficiary's date of death.

                For purposes of this Section, if a spouse or beneficiary of
                the participant dies simultaneously with the participant, for
                purposes of the plan, the participant shall be deemed to be
                the survivor and to have died subsequent to such spouse or
                beneficiary.  Likewise, if a beneficiary designated by a
                designated beneficiary dies simultaneously with a designated
                beneficiary, the designated beneficiary shall be deemed to be
                the survivor and to have died subsequent to the beneficiary
                designated by the designated beneficiary.

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        (6) Termination From Service

            (A) If a portion of a participant's account is forfeited,
                corporate stock allocated to the participant's corporate stock
                account must be forfeited only after any other investment
                allocable to the participant has been depleted.  If interest
                in more than one class of corporate stock has been allocated
                to a participant's account, the participant must be treated
                as forfeiting the same proportion of each such class.

            (B) A participant shall separate from the service of the
                employer without forfeiture of any portion of his employer
                contribution account.  His employer contribution account shall
                be 100% immediately vested upon the date of his participation
                in the plan.

    (b) Forfeitures

        (1) Time of Forfeiture - If a participant terminates employment
            before his account balances derived from employer contributions
            are fully vested, the nonvested portion of his accounts shall be
            forfeited on the earlier of:

            (A) The last day of the vesting computation period in which the
                participant first incurs 5 consecutive one-year breaks in
                service, or

            (B) The date the participant receives his entire vested accrued
                benefit.

        (2) Cashout Distributions and Restoration

            (A) Cashout Distribution - If an employee terminates service and
                the value of his vested account balances derived from employer
                and employee contributions are not greater than $5,000, the
                employee shall receive a distribution of the value of the
                entire vested portion of such account balances and the
                nonvested portion will be treated as a forfeiture.  For
                purposes of this section, if the value of an employee's vested
                account balances is zero, he shall be deemed to have received
                a distribution of such vested account balances.  (Effective
                for distributions made on or after March 22, 1999, for the
                purpose of determining the value of a participant's vested
                account balance, prior distributions shall be disregarded if
                distributions have not commenced under an optional form of
                payment described in Section 4.3.)

                If an employee terminates service and the value of his vested
                account balances exceeds $5,000, he may elect to receive the
                value of his vested account balances after such termination as
                provided in Section 4.3.  The nonvested portion shall be
                treated as a forfeiture as of the date of distribution.  If
                the employee elects to have distributed less than the entire
                vested portion of the account balances derived from employer
                contributions, the part of the nonvested portion that will be
                treated as a forfeiture is the total nonvested portion
                multiplied by a fraction, the numerator of which is the amount
                of the distribution attributable to employer contributions and
                the denominator of which is the total value of the vested
                employer-derived account balances.

            (B) Restoration of Accounts - If an employee receives a cashout
                distribution pursuant to this section and resumes employment
                covered under this plan before he incurs 5 consecutive
                one-year breaks in service, his employer-derived account
                balances shall each be restored to the amount on the date of
                distribution, if he repays to the plan the full amount of the
                distribution attributable to employer contributions before the
                earlier of 5 years after the first date on which he is
                subsequently re-employed by the employer, or the date he
                incurs 5 consecutive one-year breaks in service following the
                date of the distribution.  If an employee is deemed to receive
                a distribution pursuant to this Section 4.2(b)(2), and he
                resumes employment covered under this plan before he incurs 5
                consecutive one-year breaks in service, upon the reemployment
                of such employee his employer-derived account balances will be
                restored to the amount on the date of such deemed distribution.

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                Any amount required to restore such forfeitures shall be
                deducted from forfeitures occurring in the plan year of
                restoration.  If forfeitures are insufficient for the
                restoration, the employer may make a contribution to the plan
                for such plan year to satisfy the restoration.  However, by
                the end of the plan year following the plan year of
                restoration, sufficient forfeitures or employer contributions
                shall be credited to the account to satisfy the restoration.

    (c) Disposition of Forfeitures - The employer contribution account is
        not subject to forfeiture.

    (d) Withdrawal of Employee Nondeductible Contributions - No
        forfeitures shall occur solely as a result of an employee's
        withdrawal of employee nondeductible contributions.

    (e) Unclaimed Benefits

        (1) Forfeiture - The plan does not require the trustee or the plan
            administrator to search for, or to ascertain the whereabouts of,
            any participant or beneficiary.  At the time the participant's or
            beneficiary's benefit becomes distributable under the plan, the
            plan administrator, by certified or registered mail addressed to
            his last known address of record, shall notify any participant or
            beneficiary that he is entitled to a distribution under this
            plan.  If the participant or beneficiary fails to claim his
            distributive share or make his whereabouts known in writing to the
            plan administrator within twelve months from the date of mailing
            of the notice, the plan administrator shall treat the
            participant's or beneficiary's unclaimed payable accrued benefit
            as forfeited and shall reallocate such forfeiture in accordance
            with Section 4.2(c).  A forfeiture under this paragraph shall
            occur at the end of the notice period or, if later, the earliest
            date applicable Treasury regulations would permit the forfeiture.
            These forfeiture provisions apply solely to the participant's or
            beneficiary's accrued benefit derived from employer contributions.

        (2) Restoration - If a participant or beneficiary who has incurred
            a forfeiture of his accrued benefit under the provisions of this
            Subsection makes a claim, at any time, for his forfeited accrued
            benefit, the plan administrator shall restore the participant's or
            beneficiary's forfeited accrued benefit to the same dollar amount
            as the dollar amount of the accrued benefit forfeited, unadjusted
            for any gains or losses occurring after the date of the
            forfeiture.  The plan administrator shall make the restoration
            during the plan year in which the participant or beneficiary makes
            the claim from forfeitures occurring in that plan year.  If
            forfeitures are insufficient for the restoration, the employer
            shall make a contribution to the plan to satisfy the restoration.
            The plan administrator shall direct the trustee to distribute the
            participant's or beneficiary's restored accrued benefit to him not
            later than 60 days after the close of the plan year in which the
            plan administrator restores the forfeited accrued benefit.

Section 4.3 - Payment of Participant Accounts

    (a) Time of Payment

        (1) Commencement of Benefits - Unless the participant elects
            otherwise, distribution of benefits shall begin no later than the
            60th day after the latest of the close of the plan year in which:

            (A) The participant attains age 65 (or the plan's normal
                retirement age, if earlier);

            (B) Occurs the 10th anniversary of the year in which the
                participant commenced participation in the plan; or

            (C) the participant terminates service with the employer, (i.e.
                late retirement).

        (2) Payment Upon Retirement, Disability, or Death - Subject to the
            provisions set forth in Section 4.3(a)(1) and in the Distribution
            Requirements of Section 5.3, if the participant terminates
            employment due to retirement, disability, or death, his account(s)
            shall be paid as soon as administratively possible after the
            occurrence of the event creating the right to a distribution.

        (3) Payment Upon Other Termination of Employment - Subject to the
            provisions set forth in Section 4.3(a)(1), and in the Distribution
            Requirements of Section 5.3, if the participant terminates
            employment other than by retirement, disability, or death, his
            account(s) shall be paid as soon as administratively possible
            after the end of the plan year in which severance of employment
            occurs.

        (4) Notwithstanding the foregoing, the failure of a participant (or
            spouse where the spouse's consent is required) to consent to a
            distribution while a benefit is immediately distributable, within
            the meaning of Section 5.2(a), shall be deemed to be an election
            to defer commencement of payment of any benefit sufficient to
            satisfy this section.

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    (b) Period for Distribution of Benefits

        (1) The plan administrator, pursuant to the written election of the
            participant (or if no election has been made prior to the
            participant's death, by his beneficiary), shall direct the trustee
            to distribute to a participant or his beneficiary any amount to
            which he is entitled under the plan in one of the following
            methods, provided that such distribution complies with the
            Distribution Requirements of Section 5.3.

            If a distribution is required under the Distribution Requirements
            of Section 5.3, the vested balance of the account(s) exceeds
            $5,000, and the participant fails to elect payment, the trustee
            shall pay the benefit in installment payments that meet the
            requirements of Section 5.3 over the joint life and last survivor
            expectancy of the participant and his designated beneficiary.
            However, if the vested accrued benefit is no more than $5,000,
            benefits shall automatically be paid in a cash lump sum.

            (A) A lump sum payment.

            (B) Instalment payments - Effective solely for distributions
                made before January 1, 2003, installment payments over a
                period of years that meets the Distribution Requirements of
                Section 5.3 in annual installments.  The period over which
                such payment is to be made shall not extend beyond the limited
                distribution period provided for in Section 4.3(b)(2), if
                applicable.  Effective solely for distributions made before
                January 1, 2002, installment payments may be made in monthly,
                quarterly, or semiannual installments.

        (2) Unless the participant elects in writing a longer distribution
            period, distributions to a participant or his beneficiary
            attributable to corporate stock shall be in substantially equal
            annual installments over a period not longer than five years.  In
            the case of a participant with an account balance attributable to
            corporate stock in excess of $500,000, the five year period shall
            be extended one additional year (but not more than five additional
            years) for each $100,000 or fraction thereof by which such balance
            exceeds $500,000.  The dollar limits shall be adjusted at the same
            time and in the same manner as provided in Code section 415(d).

    (c) General Payment Provisions

       (1) Any part of a participant's benefit that is retained in the
            plan after the allocation date on which his participation ends
            will continue to be treated as a corporate stock account or other
            investment account subject to Section 4.2(a)(6)(A).  However, no
            further employer contributions or forfeitures will be credited.

        (2) All distributions due to be made under this plan shall be made
            on the basis of the amount to the credit of the participant as of
            the accounting date coincident with or immediately preceding the
            occurrence of the event calling for a distribution.

            If a distributable event occurs after an allocation date and
            before allocations have been made to the account of the
            participant, the distribution shall also include the amounts
            allocable to the account as of such allocation date.

        (3) If any person entitled to receive benefits hereunder is
            physically or mentally incapable of receiving or acknowledging
            receipt thereof, and if a legal representative has been appointed
            for him, the plan administrator may direct the benefit payment to
            be made to such legal representative.

            In the event a distribution is to be made to a minor, then the
            plan administrator may direct that such distribution be paid to
            the legal guardian, or if none, to a parent of such beneficiary or
            a responsible adult with whom the beneficiary maintains his
            residence, or to the custodian for such beneficiary under the
            Uniform Gift to Minors Act or the Gift to Minors Act, if such is
            permitted by the laws of the state in which said beneficiary
            resides.  Such a payment to the legal guardian, custodian or
            parent of a minor beneficiary shall fully discharge the trustee,
            employer, plan administrator, and plan from further liability on
            account thereof.

        (4) Each optional form of benefit provided under the plan shall be
            made available to all participants on a nondiscriminatory basis.
            The plan may not retroactively reduce or eliminate optional forms
            of benefits and any other Code section 411(d)(6) protected
            benefits, except as provided in Regulation section 1.411(d)-4,
            Q&A-2(b) and in other relief granted statutorily or by the
            Commissioner of Internal Revenue.  Any reduction or elimination of
            optional forms of benefits shall apply only to benefits accrued
            after the later of the effective date or the adoption date of such
            change.

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        (5) The participant's election of a form of benefit payment shall
            be irrevocable as of the annuity starting date, subject to the
            notice requirements contained in Section 4.3(e).

    (d) Eligible Rollover Distributions

        Effective for distributions made on or after January 1, 1993,
        notwithstanding the optional forms of payment listed in Section
        4.3(b), a distributee may elect, at the time and in the manner
        prescribed by the plan administrator, to have any portion of an
        eligible rollover distribution paid directly to an eligible
        retirement plan specified by the distributee in a direct rollover.

        (1) Eligible Rollover Distribution - An eligible rollover
            distribution is any distribution of all or any portion of the
            balance to the credit of the distributee, except that an eligible
            rollover distribution does not include:  any distribution that is
            one of a series of substantially equal periodic payments (not less
            frequently than annually) made for the life (or life expectancy)
            of the distributee or the joint lives (or joint life expectancies)
            of the distributee and the distributee's designated beneficiary,
            or for a specified period of ten years or more; any distribution
            to the extent such distribution is required under Code section
            401(a)(9), the portion of any distribution that is not includible
            in gross income (determined without regard to the exclusion for
            net unrealized appreciation with respect to employer securities),
            a hardship withdrawal made on or after January 1, 1999 from a
            participant's employee 401(k) elective deferral account before he
            has attained age 59 1/2, and any withdrawal made on or after
            January 1, 2002 from any account that is made upon hardship of the
            participant.

        (2) Eligible Retirement Plan - Effective for distributions made
            before January 1, 2002, an eligible retirement plan is an
            individual retirement account described in Code section 408(a), an
            individual retirement annuity described in Code section 408(b), an
            annuity plan described in Code section 403(a), or a qualified
            trust described in Code section 401(a), that accepts the
            distributee's eligible rollover distribution.  However, in the
            case of an eligible rollover distribution to the surviving spouse,
            an eligible retirement plan is an individual retirement account or
            individual retirement annuity.

            Effective for distributions made on or after January 1, 2002
            whether made to the participant or his surviving spouse, an
            eligible retirement plan is an individual retirement account
            described in Code section 408(a), an individual retirement annuity
            described in Code section 408(b), an annuity plan described in
            Code section 403(a), a tax-sheltered annuity or account described
            in Code section 403(b), a 457 plan described in Code section 457,
            or a qualified trust described in Code section 401(a), that
            accepts the distributee's eligible rollover distribution.

        (3) Distributee - A distributee includes an employee or former
            employee.  In addition, the employee's or former employee's
            surviving spouse and the employee's or former employee's spouse or
            former spouse who is the alternate payee under a qualified
            domestic relations order, as defined in Code section 414(p), are
            distributees with regard to the interest of the spouse or former
            spouse.

        (4) Direct Rollover - A direct rollover is a payment by the plan to
            the eligible retirement plan specified by the distributee.

    (e) Payment Election Procedures

        As described in Section 5.2(c), an account balance in excess of
        $5,000 shall not be immediately distributed without the consent of
        the participant.  The participant shall receive the notice required
        under Regulation section 1.411(a)-11(c) no less than 30 days and no
        more than 90 days before the annuity starting date with respect to
        the distribution.  Effective for distributions made on or after
        January 1, 1993, for any distribution in excess of $200, the plan
        administrator shall give the participant notice of his eligible
        rollover distribution rights.  The participant shall receive such
        notice in the same time period as the 411 notice is required to be
        provided.  Effective for distributions made on or after January 1,
        1994, if a distribution is one to which Code sections 401(a)(11) and
        417 do not apply, such distribution may commence less than 30 days
        after the 411 notice is given, provided that:

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

        (2) The participant, after receiving the notice, affirmatively
            elects a distribution.

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    (f) Form of Distribution

        (1) Distribution of a participant's benefit may be made in cash or
            corporate stock or both, provided, however, that if a participant
            or beneficiary so demands, such benefit shall be distributed only
            in the form of corporate stock.  Prior to making a distribution of
            benefits, the plan administrator shall advise the participant or
            his beneficiary, in writing, of the right to demand that benefits
            be distributed solely in corporate stock.

        (2) If a participant or beneficiary demands that benefits be
            distributed solely in corporate stock, distribution of a
            participant's benefit will be made entirely in whole shares or
            other units of corporate stock.  If the corporate stock consists
            of more than one class, the participant will receive substantially
            the same proportion of each such class.  Any balance in a
            participant's other investments account will be applied to acquire
            for distribution the maximum number of whole shares or other units
            of corporate stock at the then fair market value.  Any fractional
            unit value unexpended will be distributed in cash.  If corporate
            stock is not available for purchase by the trustee, then the
            trustee shall hold such balance until corporate stock is acquired
            and then make such distribution, subject to Sections 4.3(a)(1),
            5.2 and 5.3.

        (3) The trustee shall make distribution from the trust only on
            instructions from the plan administrator.

        (4) Put Option - Shares of corporate stock are currently publicly
            traded securities.  In the event the securities cease to be
            publicly traded or become subject to certain restrictions so that
            the securities are not freely tradable, then the employer will
            honor a put option for such securities.  The employer's obligation
            to purchase distributed corporate stock shall be as described in
            Section 5.6(e).

        (5) Right of First Refusal - There is no right of first refusal at
            this time with respect to the corporate stock.

Section 4.4 - In-Service Payments

    (a) Withdrawals - No payments shall be made before separation from
        service.

    (b) Participant Loans - No participant loans shall be permitted under
        this plan.

Section 4.5 - Distributions under Domestic Relations Orders

    Nothing contained in this plan prevents the trustee, in accordance with
    the direction of the plan administrator, from complying with the
    provisions of a qualified domestic relations order (as defined in Code
    section 414(p)).

    A distribution will not be made to an alternate payee until the
    participant attains (or would have attained) his earliest retirement
    age.  For this purpose, earliest retirement age means the earlier of:
    (1) the date on which the participant is entitled to a distribution
    under this plan; or (2) the later of the date the participant attains
    age 50 or the earliest date on which the participant could begin
    receiving benefits under this plan if the participant separated from
    service.

    Nothing in this Section gives a participant a right to receive
    distribution at a time otherwise not permitted under the plan nor does
    it permit the alternate payee to receive a form of payment not otherwise
    permitted under the plan.

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

    If any portion of the participant's nonforfeitable accrued benefit is
    payable during the period the plan administrator is making its
    determination of the qualified status of the domestic relations order,
    the plan administrator shall make a separate accounting of the amounts
    payable.  If the plan administrator determines the order is a qualified
    domestic relations order within 18 months of the date amounts first are
    payable following receipt of the order, it shall direct the trustee to
    distribute the payable amounts in accordance with the order.  If the
    plan administrator does not make its determination of the qualified
    status of the order within the 18-month determination period, it shall
    direct the trustee to distribute the payable amounts in the manner the
    plan would distribute if the order did not exist and shall apply the
    order prospectively if it later determines the order is a qualified
    domestic relations order.

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                  ARTICLE V - ADDITIONAL QUALIFICATION RULES

Section 5.1 - Limitations on Allocations under Code Section 415

    (a) Single Plan Limitations

        (1) If the participant does not participate in, and has never
            participated in another qualified plan maintained by the employer,
            a welfare benefit fund (as defined in Code section 419(e))
            maintained by the employer, or an individual medical account (as
            defined in Code section 415(l)(2)) maintained by the employer,
            that provides an annual addition as defined in Section 5.1(d)(1),
            the amount of annual additions that may be credited to the
            participant's account for any limitation year will not exceed the
            lesser of the maximum permissible amount or any other limitation
            contained in this plan.  If the employer contribution that would
            otherwise be contributed or allocated to the participant's account
            would cause the annual additions for the limitation year to exceed
            the maximum permissible amount, the amount contributed or
            allocated will be reduced so that the annual additions for the
            limitation year will equal the maximum permissible amount.

        (2) Prior to determining the participant's actual compensation for
            the limitation year, the employer may determine the maximum
            permissible amount for a participant on the basis of a reasonable
            estimation of the participant's compensation for the limitation
            year, uniformly determined for all participants similarly
            situated.

        (3) As soon as is administratively feasible after the end of the
            limitation year, the maximum permissible amount for the limitation
            year will be determined on the basis of the participant's actual
            compensation for the limitation year.

        (4) If pursuant to Section 5.1(a)(3) or as a result of either the
            allocation of forfeitures or a reasonable error in determining the
            amount of elective deferrals that may be made with respect to a
            participant, there is an excess amount, the excess will be
            disposed of as follows:

            (A) Any employee nondeductible contributions (and any gain
                attributable thereto), to the extent they would reduce the
                excess amount, will be returned to the participant.

            (B) If after the application of Subparagraph (A) an excess
                amount still exists, the excess amount shall be allocated and
                reallocated to the employer contribution account of the other
                participants in the plan to the extent permissible under the
                limitations of this Section 5.1.

            (C) If after the application of Subparagraph (B) an excess
                amount still exists, the excess amount will be held
                unallocated in a suspense account.  The suspense account will
                be applied to reduce future employer contributions for all
                active participants in the next limitation year, and each
                succeeding limitation year if necessary.

            (D) If a suspense account is in existence at any time during a
                limitation year pursuant to this Section 5.1(a)(4), it will
                not participate in the allocation of the trust's investment
                gains and losses.  If a suspense account is in existence at
                any time during a particular limitation year, all amounts in
                the suspense account must be allocated and reallocated to
                participants' accounts before any employer, elective deferral,
                or employee nondeductible contributions may be made to the
                plan for that limitation year.  Excess amounts may not be
                distributed to participants or former participants.

    (b) Combined Limitations - Other Defined Contribution Plan

        (1) This Section 5.1(b) applies if, in addition to this plan, the
            participant is covered under another qualified defined
            contribution plan maintained by the employer, a welfare benefit
            fund (as defined in Code section 419(e)) maintained by the
            employer, or an individual medical account (as defined in Code
            section 415(1)(2)), maintained by the employer, that provides an
            annual addition as defined in Section 5.1(d)(1), during any
            limitation year.  The annual additions that may be credited to a
            participant's account under this plan for any such limitation year
            will not exceed the maximum permissible amount reduced by the
            annual additions credited to a participant's account under the
            other plans and welfare benefit funds for the same limitation
            year.  If the annual additions with respect to the participant
            under other defined contribution plans and welfare benefit funds
            maintained by the employer are less than the maximum permissible
            amount and the employer contribution that would otherwise be
            contributed or allocated to the participant's account under this
            plan would cause the annual additions for the limitation year to
            exceed this limitation, the amount contributed or allocated will
            be reduced so that the annual additions under all such plans and
            funds for the limitation year will equal the maximum permissible
            amount.  If the annual additions with respect to the participant
            under such  other defined contribution plans and welfare benefit
            funds in the aggregate are equal to or greater than the maximum
            permissible amount, no amount will be contributed or allocated to
            the participant's account under this plan for the limitation year.

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        (2) Prior to determining the participant's actual compensation for
            the limitation year, the employer may determine the maximum
            permissible amount for a participant in the manner described in
            Section 5.1(a)(2).

        (3) As soon as is administratively feasible after the end of the
            limitation year, the maximum permissible amount for the limitation
            year will be determined on the basis of the participant's actual
            compensation for the limitation year.

        (4) If, pursuant to Section 5.1(b)(3) or as a result of the
            allocation of forfeitures, a participant's annual additions under
            this plan and such other plans would result in an excess amount
            for a limitation year, the excess amount will be deemed to consist
            of the annual additions last allocated, except that annual
            additions attributable to a welfare benefit fund or individual
            medical account will be deemed to have been allocated first
            regardless of the actual allocation date.

        (5) If an excess amount was allocated to a participant on an
            allocation date of this plan that coincides with an allocation
            date of another plan, the excess amount will be disposed of in the
            manner provided in Section 3.1(c).

        (6) Any excess amount attributed to this plan will be disposed of
            in the manner described in Section 5.1(a)(4).

    (c) Combined Limitations - Other Defined Benefit Plan

        If the employer maintains, or at any time maintained, a qualified
        defined benefit plan covering any participant in this plan, the sum
        of the participant's defined benefit plan fraction and defined
        contribution plan fraction will not exceed 1.0 in any limitation
        year.  Any excess amounts shall be disposed of in the manner provided
        in Section 3.1(c).  Any excess amount attributed to this plan will be
        disposed of in the manner described in Section 5.1(a)(4).

        Effective with respect to limitation years beginning after December
        31, 1999, this Section 5.1(c) shall no longer be in effect.  The
        following definitions in Section 5.1(d) shall no longer apply:
        defined benefit plan fraction, defined contribution plan fraction,
        highest average compensation, projected annual benefit.

    (d) Definitions (Code Section 415 Limitations)

        (1) Annual Additions - The sum of the following amounts credited to
            a participant's account for the limitation year:  (A) employer
            contributions, (B) employee contributions, (C) forfeitures, and
            (D) amounts allocated, after March 31, 1984, to an individual
            medical account, as defined in Code section 415(l)(2), that is
            part of a pension or annuity plan maintained by the employer
            are treated as annual additions to a defined contribution
            plan. Also, amounts derived from contributions paid or accrued
            after December 31, 1985 (in taxable years ending after such
            date), that 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
            benefit fund (as defined in Code section 419(e)) maintained by
            the employer are treated as annual additions to a defined
            contribution plan.

            For this purpose, any excess amount applied under Section 5.1(a)
            (4) or (b)(6) in the limitation year to increase the accounts of
            participants who did not have an excess amount or to reduce
            employer contributions will be considered annual additions for
            such limitation year.

            Annual additions shall not include forfeitures of corporate
            stock purchased with the proceeds of an exempt loan and
            employer contributions applied to the payment of interest on
            an exempt loan if no more than one-third of the employer
            contribution for the year is allocated to the account of
            highly compensated employees.  Annual additions may be
            calculated with respect to employer contributions used to
            repay an exempt loan rather than with respect to corporate
            stock allocated to participants.  Further, annual additions
            shall not include proceeds from the sale of corporate stock as
            such proceeds constitute earnings on a plan asset and are
            allocable as such.

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        (2) Compensation - A participant's earned income and any earnings
            reportable as W-2 wages for Federal income tax withholding
            purposes.  W-2 wages means wages as defined in Code
            section 3401(a) but determined without regard to any rules that
            limit the remuneration included in wages based on the nature or
            location of the employment or the services performed (such as the
            exception for agricultural labor in Code section 3401(a)(2)).

            For limitation years beginning after December 31, 1991, for
            purposes of applying the limitations of this Section 5.1,
            compensation for a limitation year is the compensation actually
            paid or includible in gross income during such limitation year.

            For limitation years beginning after December 31, 1997,
            compensation shall include elective contributions as defined in
            Section 1.2(a) and elective contributions under a Code section 457
            plan or a Code section 501(c)(18) plan.

            Notwithstanding the preceding, compensation for a participant in a
            defined contribution plan who is permanently and totally disabled
            (as defined in Code section 22(e)(3)) is the compensation such
            participant would have received for the limitation year if the
            participant had been paid at the rate of compensation paid
            immediately before becoming permanently and totally disabled; such
            imputed compensation for the disabled participant may be taken
            into account only if contributions made on behalf of such
            participant are nonforfeitable when made.

        (3) Defined Benefit Fraction - A fraction, the numerator of which
            is the sum of the participant's projected annual benefits under
            all the defined benefit plans (whether or not terminated)
            maintained by the employer, and the denominator of which is the
            lesser of 125 percent of the dollar limitation determined for the
            limitation year under Code sections 415(b) and (d) or 140 percent
            of the highest average compensation, including any adjustments
            under Code section 415(b).

            Notwithstanding the above, if the participant was a participant as
            of the first day of the first limitation year beginning after
            December 31, 1986, in one or more defined benefit plans maintained
            by the employer which were in existence on May 6, 1986, the
            denominator of this fraction will not be less than 125 percent of
            the sum of the annual benefits under such plans which the
            participant had accrued as of the close of the last limitation
            year beginning before January 1, 1987, disregarding any changes in
            the terms and conditions of the plan after May 5, 1986.  The
            preceding sentence applies only if the defined benefit plans
            individually and in the aggregate satisfied the requirements of
            Code section 415 for all limitation years beginning before
            January 1, 1987.

        (4) Defined Contribution Dollar Limitation - $30,000, as adjusted
            under Code section 415(d) for limitation years beginning after
            December 31, 1994 and not beginning before January 1, 2002.  For
            limitation years beginning after December 31, 2001, the defined
            contribution dollar limitation shall be $40,000, as adjusted under
            Code section 415(d) for limitation years beginning after
            December 31, 2002.

        (5) Defined Contribution Fraction - A fraction, the numerator of
            which is the sum of the annual additions to the participant's
            account under all the defined contribution plans (whether or not
            terminated) maintained by the employer for the current and all
            prior limitation years (including the annual additions
            attributable to the participant's nondeductible employee
            contributions to all defined benefit plans, whether or not
            terminated, maintained by the employer, and the annual additions
            attributable to all welfare benefit funds, as defined in Code
            section 419(e), and individual medical accounts, as defined in
            Code section 415(l)(2), maintained by the employer), and the
            denominator of which is the sum of the maximum aggregate amounts
            for the current and all prior limitation years of service with the
            employer (regardless of whether a defined contribution plan was
            maintained by the employer).  The maximum aggregate amount in any
            limitation year is the lesser of 125 percent of the dollar
            limitation determined under Code sections 415(b) and (d) in effect
            under Code section 415(c)(1)(A) or 35 percent of the participant's
            compensation for such year.

            If the employee was a participant as of the end of the first day
            of the first limitation year beginning after December 31, 1986, in
            one or more defined contribution plans maintained by the employer
            which were in existence on May 6, 1986, the numerator of this
            fraction will be adjusted if the sum of this fraction and the
            defined benefit fraction would otherwise exceed 1.0 under the
            terms of this plan.  Under the adjustment, an amount equal to the
            product of (1) the excess of the sum of the fractions over 1.0
            times (2) the denominator of this fraction, will be permanently
            subtracted from the numerator of this fraction.  The adjustment is
            calculated using the fractions as they would be computed as of the
            end of the last limitation year beginning before January 1, 1987,
            and disregarding any changes in the terms and conditions of the
            plan made after May 5, 1986, but using the Code section 415
            limitation applicable to the first limitation year beginning on or
            after January 1, 1987.

            The annual addition for any limitation year beginning before
            January 1, 1987, shall not be recomputed to treat all employee
            contributions as annual additions.

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        (6) Employer - For purposes of this Section 5.1, employer shall
            mean the employer as defined in Section 1.5(b) but including all
            members of a controlled group of corporations(as defined in Code
            section 414(b) as modified by Code section 415(h) and all commonly
            controlled trades or businesses as defined in Code section 414(c)
            as modified by Code section 415(h).

        (7) Excess Amount - The excess of the participant's annual
            additions for the limitation year over the maximum permissible
            amount.

        (8) Highest Average Compensation - The average compensation for the
            three consecutive years of service with the employer that produces
            the highest average.  A year of service with the employer is the
            12-consecutive month period coinciding with the plan year.

        (9) Limitation Year - The 12-consecutive month period defined in
            Section 1.3(f).  All qualified plans maintained by the employer
            must use the same limitation year.  If the limitation year is
            amended to a different 12-consecutive month period, the new
            limitation year must begin on a date within the limitation year in
            which the amendment is made.

        (10)Maximum Permissible Amount - The maximum annual addition that
            may be contributed or allocated to a participant's account under
            the plan for any limitation year shall not exceed the lesser of:

            (A) the defined contribution dollar limitation as defined in
                Section 5.1(d)(4); or

            (B) 25 percent of the participant's compensation for the
                limitation year for limitation years beginning before
                January 1, 2002; 100 percent of the participant's compensation
                for the limitation year for limitation years beginning after
                December 31, 2001.

            The compensation limitation referred to in (B) shall not apply
            to any contribution 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 419A(d)(2).

            For limitation years beginning prior to July 13, 1989, the
            dollar limitation referred to in (A) shall be increased by the
            lesser of the dollar amount determined under (A) or the amount
            of corporate stock contributed, or purchased with cash
            contributed.  The dollar amount shall be increased provided no
            more than one-third of the employer's contributions for the
            year were allocated to highly compensated employees.

            If a short limitation year is created because of an amendment
            changing the limitation year to a different 12-consecutive
            month period, the maximum permissible amount will not exceed
            the defined contribution dollar limitation multiplied by the
            following fraction:

                 Number of months in the short limitation year
                                      12

        (11)Projected Annual Benefit - The annual retirement benefit
            (adjusted to an actuarially equivalent straight life annuity if
            such benefit is expressed in a form other than a straight life
            annuity or qualified joint and survivor annuity) to which the
            participant would be entitled under the terms of the plan
            assuming:

            (A) the participant will continue employment until normal
                retirement age under the plan (or current age, if later); and

            (B) the participant's compensation for the current limitation
                year and all other relevant factors used to determine benefits
                under the plan will remain constant for all future limitation
                years.

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Section 5.2 - Joint and Survivor Annuity Requirements

    No annuity form of payment is provided under Section 4.3(b) and no
    direct or indirect transfer is accepted under Section 3.4 from a defined
    benefit plan, money purchase pension plan (including a target benefit
    plan), stock bonus or profit sharing plan which would otherwise have
    provided for a life annuity form of payment to any participant;
    therefore, the joint and survivor annuity requirements of Code section
    401(a)(11) and 417 shall not apply to this plan, except for the
    provisions of this Section 5.2.

    (a) Restrictions on Immediate Distributions - If the value of a
        participant's vested account balance derived from employer and
        employee contributions exceeds (or at the time of any prior
        distribution (1) in plan years beginning before January 1, 1998,
        exceeded $3,500 or (2) in plan years beginning after
        December 31, 1997, exceeded) $5,000, and the account balance is
        immediately distributable, the participant (or where the participant
        has died, the participant's spouse) must consent to any distribution
        of such account balance.  Effective for distributions made on or
        after March 22, 1999, for the purpose of determining the value of a
        participant's vested account balance, prior distributions shall be
        disregarded if distributions have not commenced under an optional
        form of payment described in Section 4.3.  The consent of the
        participant (or the participant's surviving spouse) shall be obtained
        in writing within the 90-day period ending on the annuity starting
        date.  The annuity starting date is the first day of the first period
        for which an amount is paid as an annuity or in any other form.  The
        plan administrator shall notify the participant (or the participant's
        surviving spouse) of the right to defer any distribution until the
        participant's account balance is no longer immediately distributable.
        Such notification shall include a general description of the material
        features, and an explanation of the relative values of, the optional
        forms of benefit available under the plan in a manner that would
        satisfy the notice requirements of Code section 417(a)(3), and shall
        be provided no less than 30 days and no more than 90 days prior to
        the annuity starting date.

        If payment in the form of a qualified joint and survivor annuity is
        not required with respect to the participant pursuant to Section
        5.2(b), only the participant need consent to the distribution of an
        account balance that is immediately distributable.  Neither the
        consent of the participant nor the participant's spouse shall be
        required to the extent that a distribution is required to satisfy
        Code section 401(a)(9) or section 415.  In addition, upon termination
        of this plan if the plan does not offer an annuity option (purchased
        from a commercial provider) and if the employer or any entity within
        the same controlled group as the employer does not maintain another
        defined contribution plan (other than an employee stock ownership
        plan as defined in Code section 4975(e)(7)), the participant's
        account balance may, without the participant's consent, be
        distributed to the participant.  However, if any entity within the
        same controlled group as the employer maintains another defined
        contribution plan (other than an employee stock ownership plan), the
        participant's account balance will be transferred, without the
        participant's consent, to the other plan if the participant does not
        consent to an immediate distribution.

        An account balance is immediately distributable if any part of the
        account balance could be distributed to the participant (or surviving
        spouse) before the participant attains (or would have attained if not
        deceased) the later of normal retirement age or age 62.

    (b) Safe Harbor Rules

        This Section 5.2(b) shall apply to a participant in this stock bonus
        plan, and to any distribution, made on or after the first day of the
        first plan year beginning after December 31, 1988, from or under a
        separate account attributable solely to accumulated deductible
        employee contributions, as defined in Code section 72(o)(5)(B), and
        maintained on behalf of a participant in a money purchase pension
        plan, (including a target benefit plan).  This plan satisfies and
        shall continue to satisfy the following conditions:  (1) the
        participant cannot elect payments in the form of a life annuity; and
        (2) on the death of a participant, the participant's vested account
        balance will be paid to the participant's surviving spouse, but if
        there is no surviving spouse, or if the surviving spouse has
        consented in a manner conforming to a qualified election, then to the
        participant's designated beneficiary.  The surviving spouse may elect
        to have distribution of the vested account balance commence within
        the 90-day period following the date of the participant's death.  The
        account balance shall be adjusted for gains or losses occurring after
        the participant's death in accordance with the provisions of the plan
        governing the adjustment of account balances for other types of
        distributions.  This Section 5.2(b) shall not be operative with
        respect to a participant in an employee stock ownership or stock
        bonus plan if the plan is a direct or indirect transferee of a
        defined benefit plan, money purchase plan, a target benefit plan,
        stock bonus, or profit-sharing plan which is subject to the survivor
        annuity requirements of Code section 401(a)(11) and section 417.

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        (1) The participant may waive the spousal death benefit described
            in this Section 5.2(b) at any time provided that no such waiver
            shall be effective unless it satisfies the conditions of Section
            5.2(c)(1) that would apply to the participant's waiver of the
            qualified preretirement survivor annuity.

        (2) For purposes of this Section 5.2(b), vested account balance
            shall mean, in the case of a money purchase pension plan or a
            target benefit plan, the participant's separate account balance
            attributable solely to accumulated deductible employee
            contributions within the meaning of Code section 72(o)(5)(B).  In
            the case of a profit-sharing plan, stock bonus plan, or an
            employee stock ownership plan, vested account balance shall have
            the same meaning as provided in Section 5.2(c)(3).

    (c) Definitions (Code Section 417 Requirements)

        (1) Qualified Election - A waiver of a qualified preretirement
            survivor annuity.  Any waiver of a qualified preretirement
            survivor annuity shall not be effective unless:  (a) the
            participant's spouse consents in writing to the election; (b) the
            election designates a specific beneficiary, including any class of
            beneficiaries or any contingent beneficiaries, which may not be
            changed without spousal consent (or the spouse expressly permits
            designations by the participant without any further spousal
            consent); (c) the spouse's consent acknowledges the effect of the
            election; and (d) the spouse's consent is witnessed by a plan
            representative or notary public.  If it is established to the
            satisfaction of a plan representative that there is no spouse or
            that the spouse cannot be located, a waiver will be deemed a
            qualified election.

            Any consent by a spouse obtained under this provision (or
            establishment that the consent of a spouse may not be obtained)
            shall be effective only with respect to such spouse.  A consent
            that permits designations by the participant without any
            requirement of further consent by such spouse must acknowledge
            that the spouse has the right to limit consent to a specific
            beneficiary, and a specific form of benefit where applicable, and
            that the spouse voluntarily elects to relinquish either or both of
            such rights.  A revocation of a prior waiver may be made by a
            participant without the consent of the spouse at any time before
            the commencement of benefits.  The number of revocations shall not
            be limited.

        (2) Spouse (Surviving Spouse) - The spouse or surviving spouse of
            the participant, provided that a former spouse will be treated as
            the spouse or surviving spouse and a current spouse will not be
            treated as the spouse or surviving spouse to the extent provided
            under a qualified domestic relations order as described in Code
            section 414(p).

        (3) Vested Account Balance - The aggregate value of the
            participant's vested account balances derived from employer and
            employee contributions (including rollovers), whether vested
            before or upon death, including the proceeds of insurance
            contracts, if any, on the participant's life.  The provisions of
            this Section 5.2 shall apply to a participant who is vested in
            amounts attributable to employer contributions, employee
            contributions, or both at the time of death or distribution.

Section 5.3 - Distribution Requirements

    Subject to Section 5.2 Joint and Survivor Annuity Requirements, the
    requirements of this Section 5.3 shall apply to any distribution of a
    participant's interest and will take precedence over any inconsistent
    provisions of this plan.

    The provisions of this Section shall apply to calendar years beginning
    after December 31, 1984.  All distributions required under this Section
    shall be determined and made in accordance with the proposed regulations
    under Code section 401(a)(9), including the minimum distribution
    incidental benefit requirement of Proposed Regulation section
    1.401(a)(9)-2.

    With respect to distributions under the plan made in calendar years
    beginning on or after January 1, 2001, the Plan will apply the minimum
    distribution requirements of Code section 401(a)(9) in accordance with
    the regulations under section 401(a)(9) that were proposed in January
    2001, notwithstanding any provision of the plan to the contrary.  This
    preceding sentence shall continue in effect until the end of the last
    calendar year beginning before the effective date of final regulations
    under Code section 401(a)(9) or such other date specified in guidance
    published by the Internal Revenue Service.

    (a) Required Beginning Date - The entire interest of a participant
        must be distributed or begin to be distributed no later than the
        participant's required beginning date.

    (b) Limits on Distribution Periods - As of the first distribution
        calendar year, distributions, if not made in a single-sum, may only
        be made over one of the following periods (or a combination thereof):

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        (1) the life of the participant;

        (2) the life of the participant and a designated beneficiary;

        (3) a period certain not extending beyond the life expectancy of
            the participant; or

        (4) a period certain not extending beyond the joint life and last
            survivor expectancy of the participant and a designated
            beneficiary.

    (c) Determination of Amount to Be Distributed Each Year - If the
        participant's interest is to be distributed in other than a single
        sum, the following minimum distribution rules shall apply on or after
        the required beginning date.

        (1) Individual Account

            (A) If a participant's benefit is to be distributed over (1) a
                period not extending beyond the life expectancy of the
                participant or the joint life and last survivor expectancy of
                the participant and the participant's designated beneficiary
                or (2) a period not extending beyond the life expectancy of
                the designated beneficiary, the amount required to be
                distributed for each calendar year, beginning with
                distributions for the first distribution calendar year, must
                at least equal the quotient obtained by dividing the
                participant's benefit by the applicable life expectancy.

            (B) For calendar years beginning before January 1, 1989, if the
                participant's spouse is not the designated beneficiary, the
                method of distribution selected must assure that at least 50%
                of the present value of the amount available for distribution
                is paid within the life expectancy of the participant.

            (C) For calendar years beginning after December 31, 1988, the
                amount to be distributed each year, beginning with
                distributions for the first distribution calendar year shall
                not be less than the quotient obtained by dividing the
                participant's benefit by the lesser of (1) the applicable life
                expectancy or (2) if the participant's spouse is not the
                designated beneficiary, the applicable divisor determined from
                the table set forth in Q&A-4 of Proposed Regulation section
                1.401(a)(9)-2.  Distributions after the death of the
                participant shall be distributed using the applicable life
                expectancy in Section 5.3(c)(1)(A) above as the relevant
                divisor without regard to Proposed Regulation section
                1.401(a)(9)-2.

            (D) The minimum distribution required for the participant's
                first distribution calendar year must be made on or before the
                participant's required beginning date.  The minimum
                distribution for other calendar years, including the minimum
                distribution for the distribution calendar year in which the
                employee's required beginning date occurs, must be made on or
                before December 31 of that distribution calendar year.

        (2) Other Forms - If the participant's benefit is distributed in
            the form of an annuity purchased from an insurance company,
            distributions thereunder shall be made in accordance with the
            requirements of Code section 401(a)(9) and the proposed
            regulations thereunder.

    (d) Death Distribution Provisions

        (1) Distribution beginning before death - If the participant dies
            after distribution of his interest has begun, the remaining
            portion of such interest will continue to be distributed at least
            as rapidly as under the method of distribution being used prior to
            the participant's death.

        (2) Distribution beginning after death - If the participant dies
            before distribution of his interest begins, distribution of the
            participant's entire interest shall be completed by December 31 of
            the calendar year containing the fifth anniversary of the
            participant's death except to the extent that an election is made
            to receive distributions in accordance with (A) or (B) below:

            (A) If any portion of the participant's interest is payable to a
                designated beneficiary, distributions may be made over the
                life or over a period certain not greater than the life
                expectancy of the designated beneficiary commencing on or
                before December 31 of the calendar year immediately following
                the calendar year in which the participant died;

            (B) If the designated beneficiary is the participant's surviving
                spouse, the date distributions are required to begin in
                accordance with (A) above shall not be earlier than the later
                of (i) December 31 of the calendar year immediately following
                the calendar year in which the participant died and (ii)
                December 31 of the calendar year in which the participant
                would have attained age 70 1/2.

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            If the participant has not made an election pursuant to this
            Section 5.3 by the time of his death, the participant's
            designated beneficiary must elect the method of distribution
            no later than the earlier of (1) December 31 of the calendar
            year in which distributions would be required to begin under
                this Section 5.3(d)(2), or (2) December 31 of the calendar
            year which contains the fifth anniversary of the date of death
            of the participant.  If the participant has no designated
            beneficiary, or if the designated beneficiary does not elect a
            method of distribution, distribution of the participant's
            entire interest must be completed by December 31 of the
            calendar year containing the fifth anniversary of the
            participant's death.

        (3) For purposes of Section 5.3(d)(2) above, if the surviving
            spouse dies after the participant, but before payments to such
            spouse begin, the provisions of Section 5.3(d)(2) with the
            exception of Section 5.3(d)(2)(B) therein, shall be applied as if
            the surviving spouse were the participant.

        (4) For purposes of this Section 5.3(d), any amount paid to a child
            of the participant will be treated as if it had been paid to the
            surviving spouse if the amount becomes payable to the surviving
            spouse when the child reaches the age of majority.

        (5) For the purposes of this Section 5.3(d), distribution of a
            participant's interest is considered to begin on the participant's
            required beginning date (or, if Section 5.3(d)(3) above is
            applicable, the date distribution is required to begin to the
            surviving spouse pursuant to Section 5.3(d)(2)(B) above).  If
            distribution in the form of an annuity irrevocably commences to
            the participant before the required beginning date, the date
            distribution is considered to begin is the date distribution
            actually commences.

    (e) Definitions (Code Section 401(a)(9) Requirements)

        (1) Applicable Life Expectancy - The life expectancy (or joint life
            and last survivor expectancy) calculated using the attained age of
            the participant (or designated beneficiary) as of the
            participant's (or designated beneficiary's) birthday in the
            applicable calendar year reduced by one for each calendar year
            which has elapsed since the date life expectancy was first
            calculated.  If life expectancy is being recalculated, the
            applicable life expectancy shall be the life expectancy as so
            recalculated.  The applicable calendar year shall be the first
            distribution calendar year, and if life expectancy is being
            recalculated such succeeding calendar year.

        (2) Designated Beneficiary - The individual who is designated as
            the beneficiary under the plan in accordance with Code section
            401(a)(9) and the proposed regulations thereunder.

        (3) Distribution Calendar Year - A calendar year for which a
            minimum distribution is required.  For distributions beginning
            before the participant's death, the first distribution calendar
            year is the calendar year immediately preceding the calendar year
            which contains the participant's required beginning date.  For
            distributions beginning after the participant's death, the first
            distribution calendar year is the calendar year in which
            distributions are required to begin pursuant to Section 5.3(d)
            above.

        (4) Life Expectancy - Life expectancy and joint life and last
            survivor expectancy are computed by use of the expected return
            multiples in Tables V and VI of section 1.72-9 of the Income Tax
            Regulations.

            Unless otherwise elected by the participant (or spouse, in the
            case of distributions described in Section 5.3(d)(2)(B) above) by
            the time distributions are required to begin, life expectancies
            shall be recalculated annually.  Such election shall be
            irrevocable as to the participant (or spouse) and shall apply to
            all subsequent years.  The life expectancy of a nonspouse
            beneficiary may not be recalculated.

        (5) Participant's Benefit

            (A) The account balance as of the last valuation date in the
                calendar year immediately preceding the distribution calendar
                year (valuation calendar year) increased by the amount of any
                contributions or forfeitures allocated to the account balance
                as of dates in the valuation calendar year after the valuation
                date and decreased by distributions made in the valuation
                calendar year after the valuation date.

            (B) Exception for second distribution calendar year - If any
                portion of the minimum distribution for the first distribution
                calendar year is made in the second distribution calendar year
                on or before the required beginning date, the amount of the
                minimum distribution made in the second distribution calendar
                year shall be treated as if it had been made in the
                immediately preceding distribution calendar year.

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        (6) Required Beginning Date

            (A) Non-5-percent owner - The required beginning date is April 1
                of the calendar year following the later of:  (i) the calendar
                year in which the participant attains age 70 1/2, or (ii) the
                calendar year in which the participant retires.  If a
                participant who is not a 5-percent owner attains age 70 1/2
                after December 31, 1995 and before January 1, 2002, the
                participant shall be permitted to elect to commence the
                distribution of his benefits as if his required beginning date
                were April 1 of the calendar year following the calendar year
                in which he attains age 70 1/2.  Payments shall be in the form
                of installments elected; the participant shall have a new
                annuity starting date as of the date payments are elected to
                commence following his termination of employment.

            (B) 5-percent owner - The required beginning date for a
                participant who is a 5-percent owner is April 1 of the
                calendar year following the calendar year in which the
                participant attains age 70 1/2.  A participant is treated as a
                5-percent owner for purposes of this Section 5.3(e)(6) if such
                participant is a 5-percent owner as defined in Code section
                416(i) (determined in accordance with section 416 but without
                regard to whether the plan is top-heavy) at any time during
                the plan year ending with or within the calendar year in which
                such participant attains age 70 1/2.

            (C) Once distributions have begun to a 5-percent owner under
                this Section 5.3(e)(6), they must continue to be distributed,
                even if the participant ceases to be a 5-percent owner in a
                subsequent year.

    (f) Transitional Rule

        (1) Notwithstanding the other requirements of this Section 5.3 and
            subject to the requirements of Section 5.2, Joint and Survivor
            Annuity Requirements, distribution on behalf of any employee,
            including a 5-percent owner, may be made in accordance with all of
            the following requirements (regardless of when such distribution
            commences).

            (A) The distribution by the trust is one which would not have
                disqualified such trust under Code section 401(a)(9) as in
                effect prior to amendment by the Deficit Reduction Act of 1984.

            (B) The distribution is in accordance with a method of
                distribution designated by the employee whose interest in the
                trust is being distributed or, if the employee is deceased, by
                a beneficiary of such employee.

            (C) Such designation was in writing, was signed by the employee
                or the beneficiary, and was made before January 1, 1984.

            (D) The employee had accrued a benefit under the plan as of
                December 31, 1983.

            (E) The method of distribution designated by the employee or the
                beneficiary specifies the time at which distribution will
                commence, the period over which distributions will be made,
                and in the case of any distribution upon the employee's death,
                the beneficiaries of the employee listed in order of priority.

            A distribution upon death will not be covered by this
            transitional rule unless the information in the designation
            contains the required information described above with respect
            to the distributions to be made upon the death of the employee.

        (2) For any distribution which commences before January 1, 1984,
            but continues after December 31, 1983, the employee, or the
            beneficiary, to whom such distribution is being made, will be
            presumed to have designated the method of distribution under which
            the distribution is being made if the method of distribution was
            specified in writing and the distribution satisfies the
            requirements in this Section 5.3(f).

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        (3) If a designation is revoked any subsequent distribution must
            satisfy the requirements of Code section 401(a)(9) and the
            proposed regulations thereunder.  If a designation is revoked
            subsequent to the date distributions are required to begin, the
            trust must distribute by the end of the calendar year following
            the calendar year in which the revocation occurs the total amount
            not yet distributed which would have been required to have been
            distributed to satisfy Code section 401(a)(9) and the proposed
            regulations thereunder, but for the election made under Tax Equity
            and Fiscal Responsibility Act of 1982 section 242(b)(2).  For
            calendar years beginning after December 31, 1988, such
            distributions must meet the minimum distribution incidental
            benefit requirements in Proposed Regulation section
            1.401(a)(9)-2.  Any changes in the designation will be considered
            to be a revocation of the designation. However, the mere
            substitution or addition of another beneficiary (one not named in
            the designation) under the designation will not be considered to
            be a revocation of the designation, so long as such substitution
            or addition does not alter the period over which distributions are
            to be made under the designation, directly or indirectly (for
            example, by altering the relevant measuring life).  In the case in
            which an amount is transferred or rolled over from one plan to
            another plan, the rules in Proposed Regulation section
            1.401(a)(9)-1 Q&A J-2 and Q&A J-3 shall apply.

Section 5.4 - Top Heavy Provisions

    (a) Application of Provisions - If the plan is or becomes top-heavy in
        any plan year beginning after December 31, 1983, the provisions of
        Section 5.4 will supersede any conflicting provisions in the plan.

    (b) Minimum Allocation

        (1) Except as otherwise provided in Section 5.4(b)(3) and (4)
            below, the employer contributions and forfeitures allocated on
            behalf of any participant who is not a key employee shall not be
            less than the lesser of three percent of such participant's
            compensation or in the case where the employer has no defined
            benefit plan which designates this plan to satisfy Code
            section 401, the largest percentage of employer contributions and
            forfeitures, as a percentage of the key employee's compensation
            which may be taken into account under Section 1.2(c), allocated on
            behalf of any key employee for that year.  The minimum allocation
            is determined without regard to any Social Security contribution.
            This minimum allocation shall be made even though, under other
            plan provisions, the participant would not otherwise be entitled
            to receive an allocation, or would have received a lesser
            allocation for the year because of (i) the participant's failure
            to complete 1,000 hours of service (or any equivalent provided in
            the plan), or (ii) the participant's failure to make mandatory
            employee contributions to the plan, or (iii) compensation less
            than a stated amount.

        (2) For purposes of computing the minimum allocation, compensation
            shall mean compensation as defined in Section 5.1(d)(2), subject
            to the limitations of Section 1.2(c).

        (3) The provision in Section 5.4(b)(1) above shall not apply to any
            participant who was not employed by the employer on the last day
            of the plan year.

        (4) The provision in Section 5.4(b)(1) above shall not apply to any
            participant to the extent the participant is covered under any
            other plan or plans of the employer and the employer has provided
            in Section 3.2 that the minimum allocation or benefit requirement
            applicable to top-heavy plans will be met in the other plan or
            plans.  If this plan is intended to meet the minimum allocation or
            benefit requirement applicable to another plan or plans, the
            employer shall so provide in Section 3.2.

        (5) The minimum allocation required (to the extent required to be
            nonforfeitable under Code section 416(b)) may not be forfeited
            under Code section 411(a)(3)(B) or 411(a)(3)(D).

        (6) Matching contributions - Employer matching contributions shall
            be taken into account for purposes of satisfying the minimum
            contribution requirements of Code section 416(c)(2) and the plan
            if so provided in Section 3.2 or 3.3.  The preceding sentence
            shall apply with respect to matching contributions under the plan
            or, if the plan provides that the minimum contribution requirement
            shall be met in another plan, such other plan.  Employer matching
            contributions that are used to satisfy the minimum contribution
            requirements shall be treated as matching contributions for
            purposes of the actual contribution percentage test and other
            requirements of Code section 401(m).

    (c) Adjustments in Code Section 415 Limits - If the plan is top-heavy,
        the defined benefit fraction and the defined contribution fraction
        shall be computed by applying a factor of 1.0 (instead of 1.25) to
        the applicable dollar limits under Code section 415(b)(1)(A) and
        415(c)(1)(A) for such year, unless the plan meets the following
        conditions:

        (1) Such plan would not be a top-heavy plan if "90%" were
            substituted for "60%" in the top-heavy tests; and

        (2) The minimum employer contribution percentage under Section
            5.4(b) is 4 percent instead of 3 percent.

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        (3) A non-key employee who participates in this plan and in a
            defined benefit plan aggregated herewith will receive in
            accordance with Section 3.2(c)(2) either (i) a minimum employer
            contribution of 7.5% under this plan or another defined
            contribution plan aggregated herewith or (ii) a minimum monthly
            nonintegrated accrued benefit of 3% of average annual
            compensation, not to exceed a cumulative accrued benefit of 30%
            under the defined benefit plan.

            However, the reduced Code section 415 factor of 1.0 shall not
            apply under a top-heavy plan with respect to any individual so
            long as there are no employer contributions, forfeitures, or
            voluntary employee non-deductible contributions allocated to such
            individual.

            Effective with respect to limitation years beginning after
            December 31, 1999, this Section 5.4(c) shall no longer be in
            effect.

    (d) Minimum Vesting Schedule - For any plan year in which this plan is
        top-heavy, the 100% immediately vesting as provided in Section
        4.2(a)(6) shall continue to apply to the plan.

    (e) Definitions (Code Section 416 Requirements)

        (1) Key Employee

            (A) Effective for plan years beginning before January 1, 2002,
                any employee or former employee (and the beneficiaries of such
                employee) who at any time during the determination period was
                an officer of the employer if such individual's annual
                compensation exceeds 50 percent of the dollar limitation under
                Code section 415(b)(1)(A), an owner (or considered an owner
                under Code section 318) of one of the ten largest interests in
                the employer if such individual's compensation exceeds 100
                percent of the dollar limitation under Code section
                415(c)(1)(A), a 5-percent owner of the employer, or a
                1-percent owner of the employer who has an annual compensation
                of more than $150,000.  Annual compensation means compensation
                as defined in Section 5.1(d)(2), but including elective
                contributions as defined in Section 1.2(a) and elective
                contributions under a Code section 457 plan or a Code section
                501(c)(18) plan for any plan year and subject to the
                limitations of Section 1.2(c).  The determination period is
                the plan year containing the determination date and the four
                preceding plan years.  The determination of who is a key
                employee will be made in accordance with Code section
                416(i)(1) and the regulations thereunder.

            (B) Effective for plan years beginning on or after
                January 1, 2002, any employee or former employee (and the
                beneficiaries of such employee) who at any time during the
                determination period was an officer of the employer if such
                individual's annual compensation exceeds $130,000 (as adjusted
                under Code section 415(d) for plan years beginning after
                December 31, 2002), a 5-percent owner of the employer, or a 1-
                percent owner of the employer who has an annual compensation
                of more than $150,000.  Annual compensation means compensation
                as defined in Section 5.1(d)(2), but including elective
                contributions as defined in Section 1.2(a) and elective
                contributions under a Code section 457 plan or a Code section
                501(c)(18) plan for any plan year and subject to the
                limitations of Section 1.2(c).  The determination period is
                the plan year containing the determination date.  The
                determination of who is a key employee will be made in
                accordance with Code section 416(i)(1) and the regulations
                thereunder.

                This Section 5.4(e)(1)(B) is effective for plan years
                beginning on or after January 1, 2002, except that, in
                determining whether an employee is a key employee in 2002,
                this provision shall be treated as having been in effect for
                the last plan year beginning before January 1, 2002.

        (2) Top-Heavy Plan - For any plan year beginning after December 31,
            1983, this plan is top-heavy if any of the following conditions
            exists:

            (A) If the top-heavy ratio for this plan exceeds 60 percent and
                this plan is not part of any required aggregation group or
                permissive aggregation group of plans.

            (B) If this plan is a part of a required aggregation group of
                plans but not part of a permissive aggregation group and the
                top-heavy ratio for the group of plans exceeds 60 percent.

            (C) If this plan is a part of a required aggregation group and
                part of a permissive aggregation group of plans and the top-
                heavy ratio for the permissive aggregation group exceeds 60
                percent.

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        (3) Top-Heavy Ratio

            (A) Effective for plan years beginning before January 1, 2002,
                the top-heavy ratio shall be determined as follows.

                (i)   If the employer maintains one or more defined
                      contribution plans (including any Simplified Employee
                      Pension Plan) and the employer has not maintained any
                      defined benefit plan which during the 5-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 aggregation
                      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 5-year
                      period ending on the determination date(s)), and the
                      denominator of which is the sum of all account balances
                      (including any part of any account balance distributed
                      in the 5-year period ending on the determination
                      date(s)), both computed in accordance with Code section
                      416 and the regulations thereunder.  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 and the
                      regulations thereunder.

                (ii)  If the employer maintains one or more defined
                      contribution plans (including any Simplified Employee
                      Pension Plan) and the employer maintains or has
                      maintained one or more defined benefit plans which
                      during the 5-year period ending on the determination
                      date(s) has or has had any accrued 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 account balances under
                      the aggregated defined contribution plan or plans for
                      all key employees, determined in accordance with Section
                      5.4(e)(3)(A)(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 Section 5.4(e)(3)(A)(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 and the regulations
                      thereunder.  The accrued benefits under a defined
                      benefit plan in both the numerator and denominator of
                      the top-heavy ratio are increased for any distribution
                      of an accrued benefit made in the five-year period
                      ending on the determination date.

                (iii) For purposes of Section 5.4(e)(3)(A)(i) and (ii) above
                      the value of account balances and the present value of
                      accrued benefits will be determined as of the most
                      recent valuation date that falls within or ends with the
                      12-month period ending on the determination date, except
                      as provided in Code section 416 and the regulations
                      thereunder for the first and second plan years of a
                      defined benefit plan.  The account balances and accrued
                      benefits of a participant (1) who is not a key employee
                      but who was a key employee in a prior year, or (2) who
                      has not been credited with at least one hour of service
                      with any employer maintaining the plan at any time
                      during the 5-year period ending on the determination
                      date will be disregarded.  The calculation of the
                      top-heavy ratio, and the extent to which distributions,
                      rollovers, and transfers are taken into account will be
                      made in accordance with Code section 416 and the
                      regulations thereunder.  Deductible employee
                      contributions 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 (1) the method, if
                      any, that uniformly applies for accrual purposes under
                      all defined benefit plans maintained by the employer, or
                      (2) 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).

            (B) Effective for plan years beginning on or after
                January 1, 2002, the top-heavy ratio shall be determined as
                follows.

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                (i)   If the employer maintains one or more defined
                      contribution plans (including any Simplified Employee
                      Pension Plan) and the employer has not maintained any
                      defined benefit plan which during the 1-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 aggregation
                      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 1-year
                      period ending on the determination date(s) and any in-
                      service distribution in the 5-year period ending on the
                      determination date(s)), and the denominator of which is
                      the sum of all account balances (including any part of
                      any account balance distributed in the 1-year period
                      ending on the determination date(s) and any in-service
                      distribution in the 5-year period ending on the
                      determination date(s)), both computed in accordance with
                      Code section 416 and the regulations thereunder.  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 and the regulations thereunder.

                (ii)  If the employer maintains one or more defined
                      contribution plans (including any Simplified Employee
                      Pension Plan) and the employer maintains or has
                      maintained one or more defined benefit plans which
                      during the 1-year period ending on the determination
                      date(s) has or has had any accrued 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 account balances under
                      the aggregated defined contribution plan or plans for
                      all key employees, determined in accordance with Section
                      5.4(e)(3)(B)(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 Section 5.4(e)(3)(B)(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 and the regulations
                      thereunder.  The accrued benefits under a defined
                      benefit plan in both the numerator and denominator of
                      the top-heavy ratio are increased for any distribution
                      of an accrued benefit made in the one-year period ending
                      on the determination date.

                (iii) For purposes of Section 5.4(e)(3)(B)(i) and (ii) above
                      the value of account balances and the present value of
                      accrued benefits will be determined as of the most
                      recent valuation date that falls within or ends with the
                      12-month period ending on the determination date, except
                      as provided in Code section 416 and the regulations
                      thereunder for the first and second plan years of a
                      defined benefit plan.  The account balances and accrued
                      benefits of a participant (1) who is not a key employee
                      but who was a key employee in a prior year, or (2) who
                      has not been credited with at least one hour of service
                      with any employer maintaining the plan at any time
                      during the 1-year period ending on the determination
                      date will be disregarded.  The calculation of the
                      top-heavy ratio, and the extent to which distributions,
                      rollovers, and transfers are taken into account will be
                      made in accordance with Code section 416 and the
                      regulations thereunder.  Deductible employee
                      contributions 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 (1) the method, if
                      any, that uniformly applies for accrual purposes under
                      all defined benefit plans maintained by the employer, or
                      (2) 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).

        (4) Permissive Aggregation Group - The required aggregation group
            of plans plus any other plan or plans of the employer which, when
            considered as a group with the required aggregation group, would
            continue to satisfy the requirements of Code sections 401(a)(4)
            and 410.

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        (5) Required Aggregation Group - (1) Each qualified plan of the
            employer in which at least one key employee participates or
            participated at any time during the determination period
            (regardless of whether the plan has terminated), and (2) any other
            qualified plan of the employer which enables a plan described
            in (1) to meet the requirements of Code sections 401(a)(4) or 410.

        (6) Determination Date - For any plan year subsequent to the first
            plan year, the last day of the preceding plan year.  For the first
            plan year of the plan, the last day of that year.

        (7) Valuation Date - The last day of the plan year shall be the
            date as of which account balances or accrued benefits are valued
            for purposes of calculating the top-heavy ratio.

        (8) Present Value - Present value shall be based only on the
            interest and mortality rates specified in the employer's defined
            benefit plan.

        (9) Non-Key Employee - Any employee who is not a key employee.
            Non-key employees include employees who are former key employees.

Section 5.5 - Deductible Voluntary Employee Contributions

    The plan administrator will not accept deductible employee
    contributions within the meaning of Code section 72(o)(5)(B).

Section 5.6 - Stock Bonus Plan Distribution Options

    (a) The employer retains the discretion to implement the provisions of
        this Section 5.6.

    (b) Right to Receive Stock

        The right to receive distributions in the form of shares of corporate
        stock shall be automatically terminated in the event of the sale or
        other disposition by the trustee of all shares of corporate stock
        held by the trust.

    (c) Restricted Stock

        (1) Notwithstanding anything contained herein to the contrary, if
            the employer's charter or by-laws restrict ownership of
            substantially all shares of corporate stock to employees and the
            trust fund, as described in Code section 409(h)(2), the plan
            administrator shall distribute a participant's account entirely in
            cash without granting the participant the right to demand
            distribution in shares of corporate stock.

        (2) Except as otherwise provided herein, corporate stock
            distributed by the trustee may be restricted as to sale or
            transfer by the by-laws or articles of incorporation of the
            employer, provided restrictions are applicable to all corporate
            stock of the same class.  If a participant is required to offer
            the sale of his corporate stock to the employer before offering to
            sell his corporate stock to a third party, in no event may the
            employer pay a price less than that offered to the distributee by
            another potential buyer making a bona fide offer and in no event
            shall the trustee pay a price less than the fair market value of
            the corporate stock.

    (d) Right of First Refusal

        (1) If any participant, his beneficiary or any other person to whom
            shares of corporate stock are distributed from the plan (the
            selling participant) shall, at any time that the stock is not
            publicly traded, desire to sell some or all of such shares (the
            offered shares) to a third party; the selling participant shall
            give written notice of such desire to the employer and the plan
            administrator.  The notice shall contain the number of shares
            offered for sale, the proposed terms of the sale, and the names
            and addresses of both the selling participant and third party.
            Both the trust fund and the employer shall each have the right of
            first refusal for a period of 14 days from the date the selling
            participant gives such written notice to the employer and the plan
            administrator to acquire the offered shares.  The fourteen day
            period shall run concurrently against the trust fund and the
            employer.  As between the trust fund and the employer, the trust
            fund shall have priority to acquire the shares pursuant to the
            right of first refusal.  The selling price and terms shall not be
            less than the greater of the value of the stock determined under
            Section 6.7(b) or the price and terms offered by the third party.

        (2) If the trust fund and the employer do not exercise their right
            of first refusal within the required fourteen day period provided
            above, the selling participant shall have the right, at any time
            following the expiration of such period, to dispose of the offered
            shares to the third party; provided, however, that (i) no
            disposition shall be made to the third party on terms more
            favorable to the third party than those set forth in the written
            notice previously given by the selling participant, and (ii) if
            such disposition shall not be made to a third party on the terms
            offered to the employer and the trust fund, the offered shares
            shall again be subject to the right of first refusal set forth
            above.

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        (3) The closing pursuant to the exercise of the right of first
            refusal shall take place at such place agreed upon between the
            plan administrator and the selling participant, but not later than
            10 days after the employer or the trust fund shall have notified
            the selling participant of the exercise of the right of first
            refusal.  At such closing, the selling participant shall deliver
            certificates representing the offered shares duly endorsed in
            blank for transfer, or with stock powers attached duly executed in
            blank with all required transfer tax stamps attached or provided
            for, and the employer or the trust fund shall deliver the purchase
            price, or an appropriate portion thereof, to the selling
            participant.

    (e) Put Option

        (1) If corporate stock is distributed to a participant and such
            corporate stock is not readily tradable on an established
            securities market, a participant has a right to require the
            employer to repurchase the corporate stock distributed to such
            participant under a fair valuation formula.  Such stock shall be
            subject to the provisions of Section 5.6(c).

        (2) The put option must be exercisable only by a participant, by
            the participant's donees, or by a person (including an estate or
            its distributee) to whom the corporate stock passes by reason of a
            participant's death.  The put option must permit a participant (or
            beneficiary) to put the corporate stock to the employer.  Under no
            circumstances may the put option bind the plan.  However, it shall
            grant the plan an option to assume the rights and obligations of
            the employer at the time that the put option is exercised.  If it
            is known at the time a loan is made that federal or state law will
            be violated by the employer's honoring such put option, the put
            option must permit the corporate stock to be put, in a manner
            consistent with such law, to a third party (e.g., an affiliate of
            the employer or a shareholder other than the plan) that has
            substantial net worth at the time the loan is made and whose net
            worth is reasonably expected to remain substantial.

            The put option shall commence as of the day following the date the
            corporate stock is distributed to the participant (or beneficiary)
            and end 60 days thereafter; and, if not exercised within such 60-
            day period, an additional 60-day option shall commence on the
            first day of the fifth month of the plan year next following the
            date the stock was distributed to the participant (or such other
            60-day period as provided in regulations issued under the Code).
            However, in the case of corporate stock that is publicly traded
            without restrictions when distributed but ceases to be so traded
            within either of the 60-day periods described herein after
            distribution, the employer must notify each holder of such
            corporate stock in writing on or before the tenth day after the
            date the corporate stock ceases to be so traded that for the
            remainder of the applicable 60-day period the corporate stock is
            subject to the put option.  The number of days between the tenth
            day and the date on which notice is actually given, if later than
            the tenth day, must be added to the duration of the put option.
            The notice must inform distributees of the term of the put options
            that they are to hold.  The terms must satisfy the requirements of
            this Section 5.6(e)(2).

            The put option is exercised by the holder by notifying the
            employer in writing that the put option is being exercised.  The
            notice shall state the name and address of the holder and the
            number of shares to be sold.  Upon receipt of a written
            notification from the holder, the employer shall immediately
            inform the plan administrator of such notice.  The plan
            administrator shall have 10 days to notify the employer if it
            wishes the trust fund to assume the rights and obligations of the
            employer with respect to the required purchase of corporate stock.

            The period during which a put option is exercisable does not
            include any time when a distributee is unable to exercise it,
            because the party bound by the put option is prohibited from
            honoring it by applicable federal or state law.  The price at
            which a put option must be exercisable is the value of the
            corporate stock determined in accordance with Section 6.7(b) as of
            the allocation date coincident with or immediately preceding the
            employer's receipt of the written notification.  The total
            purchase price shall be paid to the holder within 30 days after
            the notification, provided however, that the employer may defer
            such payments on a reasonable basis, if it gives written notice to
            the holder within the 30 day period.  Such deferred payments shall
            be paid in substantially equal monthly, quarterly, semiannual, or
            annual installments over a period certain beginning not later than
            30 days after the exercise of the put option and not extending
            beyond 5 years.  The deferral of payment is reasonable if adequate
            security and a reasonable interest rate on the unpaid amounts are
            provided.  The amount to be paid under the put option involving
            installment distributions must be paid not later than 30 days
            after the exercise of the put option.  Payment under a put option
            must not be restricted by the provisions of a loan or any other
            arrangement, including the terms of the employer's articles of
            incorporation, unless so required by applicable state law.

            For purposes of this Section 5.6(e), total distribution means a
            distribution to a participant or his beneficiary within one
            taxable year of the participant's entire vested account.

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        (3) An arrangement involving the plan that creates a put option
            must not provide for the issuance of put options other than as
            provided under this Section 5.6(e).  The plan (and the trust fund)
            must not otherwise obligate itself to acquire corporate stock from
            a particular holder thereof at an indefinite time determined upon
            the happening of an event such as the death of the holder.

        (4) The participant and beneficiary rights and protections created
            under this Section 5.6(e) as they pertain to plan assets acquired
            with the proceeds of an exempt loan shall be nonterminable.
            Therefore, such rights and protections shall continue even after
            such exempt loan has been repaid although this plan ceased to be
            an ESOP effective January 1, 1988.

                    ARTICLE VI - ADMINISTRATION OF THE PLAN

Section 6.1 - Fiduciary Responsibility

    (a) Fiduciary Standards - A fiduciary shall discharge his duties with
        respect to a plan solely in the interest of the participants and
        beneficiaries and -

                  *   For the exclusive purpose of providing benefits to
                      participants and their beneficiaries and defraying
                      reasonable expenses of administering the plan;

                  *   With the care, skill, prudence, and diligence under the
                      circumstances then prevailing that a prudent man acting
                      in a like capacity and familiar with such matters would
                      use in the conduct of an enterprise of a like character
                      and with like aims;

                  *   By diversifying the investments of the plan so as to
                      minimize the risk of large losses, unless under the
                      circumstances it is clearly prudent not to do so; and

                  *   In accordance with the documents and instruments
                      governing the plan insofar as such documents and
                      instruments are consistent with the provisions of ERISA.

    (b) Allocation of Fiduciary Responsibility

        (1) It is intended to allocate to each fiduciary, either named or
            otherwise, the individual responsibility for the prudent
            execution of the functions assigned to him.  None of the
            allocated responsibilities or any other responsibilities shall be
            shared by two or more fiduciaries unless specifically provided
            for in the plan.

        (2) When one fiduciary is required to follow the directions of
            another fiduciary, the two fiduciaries shall not be deemed to
            share such responsibility.  Instead, the responsibility of the
            fiduciary giving the directions shall be deemed to be his sole
            responsibility and the responsibility of the fiduciary receiving
            directions shall be to follow those directions insofar as such
            instructions on their face are proper under applicable law.

        (3) Any person or group of persons may serve in more than one
            fiduciary capacity with respect to this plan.

        (4) A fiduciary under this plan may employ one or more persons,
            including independent accountants, attorneys and actuaries to
            render advice with regard to any responsibility such fiduciary has
            under the plan.

    (c) Indemnification by Employer - Unless resulting from the gross
        negligence, willful misconduct or lack of good faith on the part of a
        fiduciary who is an officer or employee of the employer, the employer
        shall indemnify and save harmless such fiduciary from, against, for
        and in respect of any and all damages, losses, obligations,
        liabilities, liens, deficiencies, costs and expenses, including
        without limitation, reasonable attorney's fees and other costs and
        expenses incident to any suit, action, investigation, claim or
        proceedings suffered in connection with his acting as a fiduciary
        under the plan.

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    (d) Named Fiduciary - The person or persons named by the employer as
        having fiduciary responsibility for the management and control of
        plan assets shall be known as the "named fiduciary" hereunder.  Such
        responsibility shall include the appointment of the plan
        administrator (Section 6.2(a)), the trustee (Section 6.4(a)) and the
        investment manager (Section 6.4(b)), and the deciding of benefit
        appeals (Section 6.3).

Section 6.2 - Plan Administrator

    (a) Appointment of Plan Administrator

        The named fiduciary shall appoint a plan administrator who may be a
        person or an administrative committee consisting of no more than five
        members.  Vacancies occurring upon resignation or removal of a plan
        administrator or a committee member shall be filled promptly by the
        named fiduciary.  Any plan administrator may resign at any time by
        giving notice of his resignation to the named fiduciary, and any plan
        administrator may be removed at any time by the named fiduciary.  The
        named fiduciary shall review at regular intervals the performance of
        the plan administrator(s) and shall re-evaluate the appointment of
        such administrator(s).  After the named fiduciary has appointed the
        plan administrator and has received a written notice of acceptance,
        the fiduciary responsibility for administration of the plan shall be
        the responsibility of the plan administrator or plan administrative
        committee.

    (b) Duties and Powers of Plan Administrator

        The plan administrator shall have the following duties and
        discretionary powers and such other duties and discretionary powers
        as relate to the administration of the plan:

        (1) To determine in a non-discriminatory manner all questions
            relating to the eligibility of employees to become participants.

        (2) To determine in a non-discriminatory manner eligibility for
            benefits and to determine and certify the amount and kind of
            benefits payable to participants.

        (3) To authorize all disbursements from the fund.

        (4) To appoint or employ any independent person to perform
            necessary plan functions and to assist in the fulfillment of
            administrative responsibilities as he deems advisable, including
            the retention of a third party administrator, custodian, auditor,
            accountant, actuary, or attorney.

        (5) When appropriate, to select an insurance company and annuity
            contracts which, in his opinion, will best carry out the purposes
            of the plan.

        (6) To construe and interpret any ambiguity in the plan and to
            make, publish, interpret, alter, amend or revoke rules for the
            regulation of the plan which are consistent with the terms of the
            plan and with ERISA.

        (7) To prepare and distribute, in such manner as determined to be
            appropriate, information explaining the plan.

        (8) To establish and communicate to participants a procedure and
            method to insure that each participant will vote corporate stock
            allocated to such participant's corporate stock account pursuant
            to Section 6.8.

        (9) To assist any participant regarding his rights, benefits, or
            elections available under the plan.

    (c) Allocation of Fiduciary Responsibility Within Plan Administrative
        Committee

        If the plan administrator is a plan administrative committee, the
        committee shall choose from its members a chairperson and a
        secretary.  The committee may allocate responsibility for those
        duties and powers listed in Section 6.2(b)(1) and (2) (except
        determination of qualification for disability retirement) and other
        purely ministerial duties to one or more members of the committee.
        The committee shall review at regular intervals the performance of
        any committee member to whom fiduciary responsibility has been
        allocated and shall re-evaluate such allocation of responsibility.
        After the plan administrative committee has made such allocations of
        responsibilities and has received written notice of acceptance, the
        fiduciary responsibilities for such administrative duties and powers
        shall then be considered as the responsibilities of such committee
        member(s).

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    (d) Miscellaneous Provisions

        (1) Plan Administrative Committee Actions - The actions of such
            committee shall be determined by the vote or other affirmative
            expression of a majority of its members.  Either the chairperson
            or the secretary may execute any certificate or other written
            direction on behalf of the committee.  A member of the committee
            who is a participant shall not vote on any question relating
            specifically to himself.  If the remaining members of the
            committee, by majority vote thereof, are unable to come to a
            determination of any such question, the named fiduciary shall
            appoint a substitute member who shall act as a member of the
            committee for the special vote.

        (2) Expenses - The plan administrator shall serve without
            compensation for service as such.  All reasonable expenses of the
            plan administrator shall be paid by the employer or from the fund.

        (3) Examination of Records - The plan administrator shall make
            available to any participant for examination during business hours
            such of the plan records as pertain only to the participant
            involved.

        (4) Information to the Plan Administrator - To enable the plan
            administrator to perform the administrative functions, the
            employer shall supply full and timely information to the plan
            administrator on all participants as the plan administrator may
            require.

Section 6.3 - Claims Procedure

    (a) Notification - The plan administrator shall notify each
        participant in writing of his determination of benefits.  If the plan
        administrator denies any benefit, such written denial shall include:

                  *   The specific reasons for denial;

                  *   Reference to provisions on which the denial is based;

                  *   A description of and reason for any additional
                      information needed to process the claim; and

                  *   An explanation of the claims procedure.

    (b) Appeal - The participant or his duly authorized representative may:

                  *   Request a review of the participant's case in writing to
                      the named fiduciary;

                  *   Review pertinent documents;

                  *   Submit issues and comments in writing.

        The written request for review must be submitted no later than 60
        days after receiving written notification of denial of benefits.

    (c) Review - The named fiduciary must render a decision no later than
        60 days after receiving the written request for review, unless
        circumstances make it impossible to do so; but in no event shall the
        decision be rendered later than 120 days after the request for review
        is received.

    (d) Limitation on Time Period for Litigation of a Benefit Claim -
        Following receipt of the written rendering of the named fiduciary's
        decision under Section 6.3(c), the participant shall have 365 days in
        which to file suit in the appropriate court.  Thereafter, the right
        to contest the decision shall be waived.

Section 6.4 - Trust Fund

    (a) Appointment of Trustee

        The named fiduciary shall appoint a trustee for the proper care and
        custody of all funds, securities and other properties in the trust,
        and for investment of plan assets (or for execution of such orders as
        it receives from an investment manager appointed for investment of
        plan assets).  The duties and powers of the trustee shall be set
        forth in a trust agreement executed by the employer, which is
        incorporated herein by reference.  The named fiduciary shall review
        at regular intervals the performance of the trustee and shall re-
        evaluate the appointment of such trustee.  After the named fiduciary
        has appointed the trustee and has received a written notice of
        acceptance of its responsibility, the fiduciary responsibility with
        respect to the proper care and custody of plan assets shall be
        considered as the responsibility of the trustee.  Unless otherwise
        allocated to an investment manager, the fiduciary responsibility with
        respect to investment of plan assets shall likewise be considered as
        the responsibility of the trustee.

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    (b) Appointment of Investment Manager

        The named fiduciary may appoint an investment manager who is other
        than the trustee, which investment manager may be a bank or an
        investment advisor registered with the Securities and Exchange
        Commission under the Investment Advisors Act of 1940.  Such
        investment manager, if appointed, shall have sole discretion in the
        investment of plan assets, subject to the funding policy.  The named
        fiduciary shall review at regular intervals no less frequently than
        annually, the performance of such investment manager and shall re-
        evaluate the appointment of such investment manager.  After the named
        fiduciary has appointed an investment manager and has received a
        written notice of acceptance of its responsibility, the fiduciary
        responsibility with respect to investment of plan assets shall be
        considered as the responsibility of the investment manager.

    (c) Expenses

        The trust fund shall pay the expenses incurred in the administration
        of the plan and the investment of the fund, provided the cost is
        reasonable.  Such expenses shall include legal fees incurred by the
        plan administrator or the trustee, provided such fiduciaries are not
        proven to have committed a prohibited transaction.

Section 6.5 - Investment Policy

    (a) The plan is designed to invest primarily in corporate stock.  It
        is specifically intended that this stock bonus plan qualify and
        operate as an eligible individual account plan as defined in ERISA
        section 407(d)(3).  As such, and without limiting the generality of
        the foregoing, the trustee is hereby specifically authorized to:

        (1) acquire, hold, sell, and distribute corporate stock that is
            qualified employer stock.

        (2) invest in such corporate stock and not limit its holdings of
            such stock to 10% of trust assets.  The trustee may invest up to
            100% of plan assets in corporate stock without regard to any plan
            or trust agreement requirement to diversify investments as
            permitted under ERISA section 404(a)(2).

        (3) acquire or sell corporate stock in a transaction with a
            disqualified person or a party in interest (as those terms are
            defined in ERISA and the Code) provided that no commission is
            charged and the transaction is for adequate consideration.

    (b) With due regard to Section 6.5(a), the plan administrator may also
        direct the trustee to invest funds under the plan in other property
        described in the Trust Agreement or in life insurance policies to the
        extent permitted by Section 6.5(c), or the trustee may hold such
        funds in cash or cash equivalents.

    (c) With due regard to Section 6.5(a), the plan administrator may also
        direct the trustee to invest funds under the plan in insurance
        policies on the life of any keyman employee.  The proceeds of a
        keyman insurance policy may not be used for the repayment of any
        indebtedness owed by the plan which is secured by corporate stock but
        shall be allocated to participants in proportion to their account
        balances.  The amount of employer contribution to be allocated to
        participants under Section 3.2 shall be reduced by the amount of
        premiums paid on keyman insurance policies during the plan year.  The
        employer shall contribute an amount each year which is sufficient to
        pay the required premiums.  No insurance company which may issue such
        policies shall be deemed to be a party to this plan.

    (d) The plan may not obligate itself to acquire corporate stock from a
        particular holder thereof at an indefinite time determined upon the
        happening of an event such as the death of the holder.

    (e) The plan may not obligate itself to acquire corporate stock under
        a put option binding upon the plan.  However, at the time a put
        option is exercised, the plan may be given an option to assume the
        rights and obligations of the employer under a put option binding
        upon the employer.

    (f) All purchases of corporate stock shall be made at a price which,
        in the judgment of the plan administrator, does not exceed the fair
        market value thereof.  All sales of corporate stock shall be made at
        a price which, in the judgment of the plan administrator, is not less
        than the fair market value thereof.  The valuation rules set forth in
        Section 6.7 shall be applicable.

Section 6.6 - Prohibitions Against Allocations

    (a) Transactions Involving Corporate Stock - This Section 6.6(a) shall
        apply to corporate stock acquired by the plan after October 22, 1986
        in a sale to which Code section 1042 or, for estates of decedents who
        died prior to December 20, 1989, Code section 2057 (as in effect
        December 19, 1989) applies.

        (1) No portion of the trust fund attributable to (or allocable
            instead of) such corporate stock may accrue or be allocated
            directly or indirectly under any qualified plan maintained by the
            employer during the nonallocation period, for the benefit of:

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            (A) Any taxpayer who makes an election under Code
                section 1042(a) with respect to corporate stock  or any
                decedent if the executor of the estate of the decedent makes a
                qualified sale to which Code section 2057 applies;

            (B) Any individual who is related to the taxpayer or the
                decedent (as defined in Code section 267(b)); or

            (C) Any other person who owns more than 25% of:

                (i)   any class of outstanding stock of the employer or
                      affiliated employer which issued such corporate stock; or

                (ii)  the total value of any class of outstanding stock of
                      the employer or affiliated employer.

                For the purpose of determining ownership, the attribution
                rules of Code section 318(a) shall be applied with the
                exception of Code section 318(a)(2)(B)(i).

        (2) An individual who is related to the taxpayer (or the decedent)
            shall not include lineal descendants of the taxpayer, if the
            aggregate amount allocated to the benefit of all such lineal
            descendants during the nonallocation period does not exceed more
            than 5% of the corporate stock (or amounts allocated in their
            stead) held by the plan which are attributable to a sale to the
            plan by any person related to such descendants (within the meaning
            of Code section 267(c)(4)) in a transaction to which Code
            section 1042 or Code section 2057 is applied.

        (3) A person shall be treated as meeting the 25% stock ownership
            requirement of Section 6.6(a)(1)(C) if such person owns more than
            25% of the stock:  (A) at any time during the one year period
            ending on the date of sale of corporate stock to the plan, or
            (B) on the date as of which corporate stock is allocated to
            participants in the plan.

        (4) For purposes of Section 6.6(a)(1), nonallocation period for
            plan years beginning after December 31, 1986, means the period
            beginning on the date of the sale of the corporate stock and
            ending on the later of the date which is ten years after the date
            of sale or the date of the plan allocation attributable to the
            final payment of acquisition indebtedness incurred in connection
            with such sale.

    (b) Disqualified Persons under Plan Sponsored by S Corporation - Reserved.

Section 6.7 - Valuation of the Trust Fund

    (a) The plan administrator shall direct the trustee, as of each
        allocation date, and at such other date or dates deemed necessary by
        the plan administrator, herein called valuation date, to determine
        the net worth of the assets comprising the trust fund as it exists on
        the valuation date prior to taking into consideration any
        contribution to be allocated for that plan year.  In determining such
        net worth, the trustee shall value the assets comprising the trust
        fund at their fair market value as of the valuation date and shall
        deduct all expenses for which the trustee has not yet obtained
        reimbursement from the employer or the trust fund.

    (b) Valuations must be made in good faith and based on all relevant
        factors for determining the fair market value of securities.  In the
        case of a transaction between a plan and a disqualified person, value
        must be determined as of the date of the transaction.  For all other
        plan purposes, value must be determined as of the most recent
        valuation date under the plan.  An independent appraisal will not in
        itself be a good faith determination of value in the case of a
        transaction between the plan and a disqualified person.  However, in
        other cases, a determination of fair market value based on at least
        an annual appraisal independently arrived at by a person who
        customarily makes such appraisals and who is independent of any party
        to the transaction will be deemed to be a good faith determination of
        value.  Corporate stock not readily tradable on an established
        securities market shall be valued by an independent appraiser meeting
        requirements similar to the requirements of the Regulations
        prescribed under Code section 170(a)(1).

Section 6.8 - Voting Corporate Stock

    The trustee shall vote all corporate stock held by it as part of the
    plan assets at such time and in such manner as the plan administrator
    shall direct, provided, however, that if any agreement entered into by
    the trust provides for voting of any shares of corporate stock pledged
    as security for any obligation of the plan, then such shares of
    corporate stock shall be voted in accordance with such agreement.  If
    the plan administrator shall fail or refuse to give the trustee timely
    instructions as to how to vote any corporate stock as to which the
    trustee otherwise has the right to vote, the trustee shall not exercise
    its power to vote such corporate stock, except as described herein with
    respect to a tender offer or a corporate matter requiring pass-through
    voting rights.

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                     Weis Markets, Inc. Stock Bonus Plan

    This plan is a stock bonus plan holding a registration-type class of
    securities; therefore, participants shall not be entitled to direct the
    trustee as to the manner in which the corporate stock that is entitled
    to vote and that is allocated to the corporate stock account of such
    participant is to be voted.

                ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN

Section 7.1 - Right to Discontinue and Amend

    It is the expectation of the employer that it will continue this plan
    indefinitely and make the payments of its contributions hereunder, but
    the continuance of the plan is not assumed as a contractual obligation
    of the employer and the right is reserved by the employer, at any time,
    to reduce, suspend or discontinue its contributions hereunder.

Section 7.2 - Amendments

    Except as herein limited, the employer shall have the right to amend
    this plan at any time to any extent that it may deem advisable.  Such
    amendment shall be stated in writing.  It shall be authorized by action
    of the board of directors under the corporate by-laws and such
    authorization shall designate the person to execute the amendment.

    The employer's right to amend the plan shall be limited as follows:

    (a) No amendment shall increase the duties or liabilities of the plan
        administrator, the trustee, or other fiduciary without their
        respective written consent.

    (b) No amendments shall have the effect of vesting in the employer any
        interest in or control over any contracts issued pursuant hereto or
        any other property in the fund.

    (c) 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 paragraph, a plan amendment which
        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.  Furthermore, if the vesting schedule of
        a plan is amended, in the case of an employee who is a participant as
        of the later of the date such amendment is adopted or the date it
        becomes effective, the nonforfeitable percentage (determined as of
        such date) of such employee's right to his employer-derived accrued
        benefit will not be less than his percentage computed under the plan
        without regard to such amendment.

    (d) No amendment to the vesting schedule adopted by the employer
        hereunder shall deprive a participant of his vested portion of his
        employer contribution accounts to the date of such amendment.  If the
        plan's vesting schedule is amended, or the plan is amended in any way
        that directly or indirectly affects the computation of the
        participant's nonforfeitable percentage or if the plan is deemed
        amended by an automatic change to or from a top-heavy vesting
        schedule, each participant with at least 3 years of service with the
        employer may elect, within a reasonable period after the adoption of
        the amendment or change, to have the nonforfeitable percentage
        computed under the plan without regard to such amendment or change.
        For participants who do not have at least one hour of service in any
        plan year beginning after December 31, 1988, "5 years of service"
        shall be substituted for "3 years of service" in the preceding
        sentence.  The period during which the election may be made shall
        commence with the date the amendment is adopted or deemed to be made
        and shall end on the latest of:

        (1) 60 days after the amendment is adopted;

        (2) 60 days after the amendment becomes effective; or

        (3) 60 days after the participant is issued written notice of the

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                     Weis Markets, Inc. Stock Bonus Plan

            amendment by the employer or plan administrator.

Section 7.3 - Protection of Benefits in Case of Plan Merger

    In the event of a merger or consolidation with, or transfer of assets to
    any other plan, each participant will receive a benefit immediately
    after such merger, consolidation or transfer (if the plan then
    terminated) which is at least equal to the benefit the participant was
    entitled to immediately before such merger, consolidation or transfer
    (if the plan had terminated).

Section 7.4 - Termination of Plan

    (a) When Plan Terminates - This plan shall terminate upon the
        happening of any of the following events:  legal adjudication of the
        employer as bankrupt; a general assignment by the employer to or for
        the benefit of its creditors; the legal dissolution of the employer;
        or termination of the plan by the employer.

    (b) Allocation of Assets - Upon termination, partial termination, or
        complete discontinuance of employer contributions, the account
        balance(s) of each affected participant who is an active participant
        or who is not an active participant but has neither received a
        complete distribution of his vested accrued benefit nor incurred five
        one-year breaks in service shall be 100% vested and nonforfeitable.
        The amount of the fund assets shall be allocated to each participant,
        subject to provisions for expenses of administration of the
        liquidation, in the ratio that such participant's account(s) bears to
        all accounts.  If a participant under this plan has terminated his
        employment at any time after the first day of the plan year in which
        the employer made his final contribution to the plan, and if any
        portion of any account of such terminated participant was forfeited
        and reallocated to the remaining participants, such forfeiture shall
        be reversed and the forfeited amount shall be credited to the account
        of such terminated participant.

                    ARTICLE VIII - MISCELLANEOUS PROVISIONS

Section 8.1 - Exclusive Benefit - Non-Reversion

    The plan is created for the exclusive benefit of the employees of the
    employer and shall be interpreted in a manner consistent with its being
    a qualified plan as defined in section 401(a) of the Internal Revenue
    Code and with ERISA.  The corpus or income of the trust may not be
    diverted to or used for other than the exclusive benefit of the
    participants or their beneficiaries (except for defraying reasonable
    expenses of administering the plan).

    Notwithstanding the above, a contribution paid by the employer to the
    trust may be repaid to the employer under the following circumstances:

    (a) Any contribution made by the employer because of a mistake of fact
        must be returned to the employer within one year of the contribution.

    (b) In the event the deduction of a contribution made by the employer
        is disallowed under Code section 404, such contribution (to the
        extent disallowed) must be returned to the employer within one year
        of the disallowance of the deduction.

    (c) If the Commissioner of Internal Revenue determines that the plan
        is not initially qualified under the Internal Revenue Code, any
        contribution made incident to that initial qualification by the
        employer must be returned to the employer within one year after the
        date the initial qualification is denied, but only if the application
        for the qualification is made by the time prescribed by law for
        filing the employer's return for the taxable year in which the plan
        is adopted, or such later date as the Secretary of the Treasury may
        prescribe.

Section 8.2 - Inalienability of Benefits

    No benefit or interest available hereunder including any annuity
    contract distributed herefrom shall be subject to assignment or
    alienation, either voluntarily or involuntarily.  The preceding sentence
    shall also apply to the creation, assignment, or recognition of a right
    to any benefit payable with respect to a participant pursuant to a
    domestic relations order, unless such order is determined to be a
    qualified domestic relations order as defined in Code section 414(p), or
    any domestic relations order entered before January 1, 1985.  A loan
    made to a participant and secured by his nonforfeitable account
    balance(s) under Section 4.4(b) will not be treated as an assignment or
    alienation and such securing account balance(s) shall be subject to
    attachment by the plan in the event of default.

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                     Weis Markets, Inc. Stock Bonus Plan

    Notwithstanding the preceding paragraph, effective with respect to
    judgments, orders, and decrees issued, and settlement agreements entered
    into, on or after August 5, 1997, a participant's benefit (and that of
    his spouse) shall be reduced to satisfy liabilities of the participant
    to the plan due to (1) the participant being convicted of committing a
    crime involving the plan, (2) a civil judgment (or consent order or
    decree) entered by a court in an action brought in connection with a
    violation of the fiduciary provisions of part 4 of subtitle B of Title I
    of ERISA, or (3) a settlement agreement between the Secretary of Labor
    or the Pension Benefit Guaranty Corporation and the participant in
    connection with a violation of the fiduciary provisions of ERISA.  No
    reduction shall be made pursuant to this paragraph, unless the judgment,
    order, decree, or settlement agreement shall expressly provide for the
    offset of all or part of the amount ordered or required to be paid to
    the plan against the participant's benefits provided under the plan.

Section 8.3 - Employer-Employee Relationship

    This plan is not to be construed as creating or changing any contract of
    employment between the employer and its employees, and the employer
    retains the right to deal with its employees in the same manner as
    though this plan had not been created.

Section 8.4 - Binding Agreement

    This plan shall be binding on the heirs, executors, administrators,
    successors and assigns as such terms may be applicable to any or all
    parties hereto, and on any participants, present or future.

Section 8.5 - Separability

    If any provision of this plan shall be held invalid or unenforceable,
    such invalidity or unenforceability shall not affect any other provision
    hereof and this plan shall be construed and enforced as if such
    provision had not been included.

Section 8.6 - Construction

    The plan shall be construed in accordance with the laws of the state in
    which the employer was incorporated and with ERISA.

Section 8.7 - Copies of Plan

    This plan may be executed in any number of counterparts, each of which
    shall be deemed as an original, and said counterparts shall constitute
    but one and the same instrument which may be sufficiently evidenced by
    any one counterpart.

Section 8.8 - Interpretation

    Wherever appropriate, words used in this plan in the singular may
    include the plural or the plural may be read as singular, and the
    masculine may include the feminine.

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                     Weis Markets, Inc. Stock Bonus Plan


IN WITNESS WHEREOF, the Employer has caused this Plan to be executed
this 12 day of November, 2001.

                                       WEIS MARKETS, INC.

                                       By: /S/Willam R. Mills
                                       Title: Vice President Finance

EX-10

                             EMPLOYMENT AGREEMENT

     THIS AGREEMENT, made effective as of January 1, 2003 by and between WEIS
MARKETS, INC., a Pennsylvania corporation (the "Company"), and William R. Mills
(the "Executive"),

                               WITNESSETH THAT:

     WHEREAS, the Executive is currently serving as Chief Financial Officer
/ Treasurer of the Company, and the Company desires to retain the Executive
to continue to serve in such capacity or capacities as the Board of Directors
of the Company (the "Board") or the Chairman of the Board (the "Chairman") may
from time to time determine, and the Executive is willing to continue to serve
in such capacity or capacities, on the terms and conditions herein set forth;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto, each intending to be legally bound hereby, agree as
follows:

     1.  Employment.  The Company agrees to continue to employ the Executive,
and the Executive agrees to continue to be employed by the Company, for the
Term provided in Paragraph 3(a) below and upon the other terms and conditions
hereinafter provided.  The Executive hereby represents and warrants that he has
the legal capacity to execute and perform this Agreement, that it is a valid
and binding agreement, enforceable against him according to its terms, and that
its execution and performance by him do not violate the terms of any existing
agreement or understanding to which the Executive is a party.

     2.  Position and Responsibilities.  During the Term, the Executive agrees
to serve as the Chief Financial Officer/ Treasurer of the Company or in such
other executive capacity or capacities for the Company and/or any of its
subsidiaries or affiliated companies as the Board or the Chairman may from
time to time determine.  The Executive also agrees to serve, if elected and
without additional compensation, as a member of the Board and/or as an officer
and director of any other parent, subsidiary or affiliate of the Company.

     3.  Term and Duties.

     (a) Term of Agreement.  The term of the Executive's employment under this
     Agreement shall commence on January 1, 2003 and shall continue thereafter
     through December 31, 2007 (the "Term").

     (b) Duties.  During the Term, and except for illness or incapacity and
     reasonable vacation periods of not less than five weeks in any calendar
     year (or such greater periods as shall be consistent with the Company's
     policies for other key the Executives), the Executive shall devote all of
     his business time, attention, skill and efforts exclusively to the
     business and affairs of the Company and its subsidiaries and affiliates,
     shall not be engaged in any other business activity, and shall perform
     and discharge well and faithfully the duties which may be assigned to him
     from time to time by the Board or the Chairman; provided, however, that
     nothing in this Agreement shall preclude the Executive from devoting time
     during reasonable periods required for:

       (i) serving, in accordance with the Company's policies and with the
       prior approval of the Board or the Chairman, which prior approval
       will not be unreasonably withheld, as a director of any company or
       organization involving no actual or potential conflict of interest
       with the Company or any of its subsidiaries or affiliates;

       (ii) delivering lectures and fulfilling speaking engagements;

       (iii) engaging in charitable and community activities; and

       (iv) investing his personal assets in businesses in which his
       participation is solely that of an investor in such form or manner
       as will not violate Section 7 below or require any services on the
       part of the Executive in the operation or the affairs of such
       business, provided, however, that such activities do not materially
       affect or interfere with the performance of the Executive's duties
       and obligations to the Company.

     4.  Compensation.  For all services rendered by the Executive in any
capacity required hereunder during the Term, including, without limitation,
services as an the Executive, officer, director, or member of any committee of
the Company or any subsidiary, affiliate or division thereof, the Executive
shall be compensated as set forth below:

     (a)  Base Salary.  The Executive shall be paid a fixed salary ("Base
     Salary") of $285,000 per annum as of the effective date of this Agreement.
     The Base Salary amount is subject to periodic review and adjustment by
     the Board or its Executive Compensation Committee but shall not be less
     than $285,000 per annum during the Term of this Agreement.  Base Salary
     shall be payable in accordance with the customary payroll practices of
     the Company, but in no event less frequently than monthly.

     (b)  Bonus.  The Executive shall be eligible to participate in such
     annual or long-term bonus or incentive plans as the Company shall from
     time to time maintain for its senior the Executives.  The basis for the
     Executive's participation shall be the same as for other similarly
     situated the Executives, and it is understood that awards under any such
     plan may be discretionary.

     (c)  Equity-Based Compensation.  The Executive shall be eligible to
     participate in, and to be granted stock options, stock appreciation
     rights or other equity-based awards under, the Company's 1995 Stock Option
     Plan or such other stock option, stock ownership, stock incentive or
     other equity-based compensation plans as the Company shall from time to
     time maintain for its senior the Executives.  The basis for the
     Executive's participation shall be the same as for other similarly
     situated the Executives, and it is understood that awards under any such
     plan may be discretionary.

     (d)  SERP Contribution.  During the Term, the Company's annual
     contributions to the Executive's accounts under the Company's Supplemental
     Executive Retirement Plan (together with any successor plan, the "SERP")
     shall be determined annually by the Compensation Committee of the
     Board of Directors

     (e)  Additional Benefits.  Except as modified by this Agreement, the
     Executive shall be entitled to participate in all compensation or
     employee benefit plans or programs, and to receive all benefits,
     perquisites and emoluments, for which any member of senior management at
     the Company is eligible under any plan or program now or hereafter
     established and maintained by the Company for senior officers, to the
     extent permissible under the general terms and provisions of such plans
     or programs and in accordance with the provisions thereof, including
     group hospitalization, health, dental care, senior executive life or
     other life insurance, travel or accident insurance, disability plans,
     tax-qualified or non-qualified pension, savings, thrift and profit-
     sharing plans, deferred compensation plans, sick-leave plans, auto
     allowance or auto lease plans, and executive contingent compensation
     plans, including, without limitation, capital accumulation programs and
     stock purchase plans.  Notwithstanding the foregoing, the Executive
     acknowledges and agrees that the severance payments provided in certain
     circumstances under this Agreement are in lieu of any rights which the
     Executive might otherwise have under any and all other displacement,
     separation or severance plans or programs of the Company, and the
     Executive hereby waives all rights to participate in any of such plans
     or programs in the event of the termination of his employment during the
     Term.

     5.  Business Expenses.  The Company shall pay or reimburse the Executive
for all reasonable travel and other expenses incurred by the Executive (and
his spouse where there is a legitimate business reason for his spouse to
accompany him) in connection with the performance of his duties and
obligations under this Agreement, subject to the Executive's presentation of
appropriate vouchers in accordance with such policies and procedures as the
Company from time to time establish for senior officers.

     6.  Effect of Termination of Employment; Effect of Disability.

     (a)  Without Cause Termination or Termination by the Executive for Good
     Reason.  Subject to the provisions of Section 7 below, in the event the
     Executive's employment hereunder terminates due to either a Without Cause
     Termination (as defined in Section 6(f)(iii)) or a termination by the
     Executive for Good Reason (as defined in Section 6(f)(ii)):

       (i)  earned but unpaid Base Salary as of the Date of Termination
       (as defined in Section 14(b)) and any earned but unpaid bonuses for
       prior years (collectively, the "Accrued Obligations"), shall be
       payable in full, and the Company shall, as liquidated damages or
       severance pay, or both:

            (A)  continue to pay the Executive's Base Salary, as in effect
            at the Date of Termination, from the Date of Termination until
            the end of the Term, and

            (B)  pay to the Executive for the year of termination and for
            each subsequent calendar year or portion thereof during the
            remainder of the Term, an amount (prorated in the case of any
            partial year) equal to the highest annual incentive bonus
            received by the Executive for any year in the three years
            preceding the Date of Termination, such payments to be made at
            the normal times for payment of bonuses under the Company's
            annual bonus plan as in effect at the Date of Termination (the
            "Bonus Plan").

     With respect to the payments provided for in this Section 6(a)(i), the
     Executive shall be entitled, to the extent permitted by law as determined
     by the Company in good faith, to participate in any compensation deferral
     plans or arrangements then provided by the Company to senior the
     Executives on the same basis as if he had remained an employee through
     the end of the Term.

       (ii)  Until the end of the Term, the Company shall pay to the
       Executive, in lieu of Company contributions to the SERP and at the
       time such contributions would otherwise have been made to the SERP,
       the amount no less than what was made to the SERP the year prior to
       Termination.

       (iii)  The Company shall continue to provide the Executive and the
       Executive's spouse through December 31, 2001 with medical, dental,
       accident, disability and life insurance benefits upon substantially
       the same terms and conditions (including contributions required by
       the Executive for such benefits) as those of the applicable employee
       benefit plans in effect from time to time as applied to employees;
       provided, however, that if the Executive or his spouse cannot
       continue to participate under the terms of the Company plans
       providing such benefits, the Company shall otherwise provide such
       benefits on (as nearly as reasonably practicable) the same after-tax
       basis as if continued participation had been permitted.
       Notwithstanding the foregoing, in the event the Executive becomes re-
       employed with another employer and becomes eligible to receive
       welfare benefits from such employer, the welfare benefits described
       herein shall be secondary to such benefits during the period of the
       Executive's eligibility, but only to the extent that the Company
       reimburses the Executive for any increased cost and provides any
       additional benefits necessary to give the Executive the benefits
       provided hereunder.

       (iv)  The Executive shall be entitled to vested benefits under all
       other compensation or benefit plans in which the Executive
       participated as of the date of termination, as determined under the
       terms of the applicable plan or agreement.

     (b)  Disability.  In the event of the Executive's Disability, the Company
     may, by giving a Notice of Disability as provided in Section 14(c),
     remove the Executive from active employment and in that event shall
     provide the Executive with the same payments and benefits as those
     provided in Section 6(a), except that:

       (i) Base Salary payments under Section 6(a)(i)(A) shall be at the
       rate 50% of the Executive's Base Salary as in effect at the Date of
       Disability;

       (ii) in lieu of the bonus payments provided in Section 6(a)(i)(B),
       the Executive shall receive, at the same time as bonus payments for
       the year of Disability would otherwise be made under the Bonus Plan,
       a prorated bonus for the year of Disability only equal to the amount
       determined by the Company in good faith (which determination shall be
       final and conclusive) to be the amount of the bonus award the
       Executive would have received if he had been employed throughout the
       bonus year, prorated on a daily basis as of the Date of Disability;
       and

       (iii) except for Accrued Obligations, Base Salary payments shall be
       offset by any amounts otherwise payable to the Executive under the
       Company's disability program generally available to other employees.

     (c)  Death.  In the event the Executive's employment hereunder terminates
     due to death:

       (i)  Accrued Obligations as of the date of death shall be payable in
       full;

       (ii)  from the date of the Executive's death until the end of the
       Term, the Company shall, at the same times Base Salary would
       otherwise be payable hereunder, make payments at the rate of 50% of
       the Executive's Base Salary in effect at the date of death to (A)
       the Executive's spouse at the date of his death, should she survive
       him and (B) following the death of the Executive's spouse or should
       she not survive him, to the Executive's estate;

       (iii)  the Company shall pay to the Executive's estate, at the same
       time as bonus payments for the year of death would otherwise be made
       under the Bonus Plan, a prorated bonus for the year of death only
       equal to the amount determined by the Company in good faith (which
       determination shall be final and conclusive) to be the amount of the
       bonus award the Executive would have received if he had been
       employed throughout the bonus year, prorated on a daily basis as of
       the date of death; and

       (iv)  in the event the Executive is survived by his spouse, the
       Company shall continue to provide the Executive's spouse through
       December 31, 2011 with medical and dental insurance benefits in
       accordance with Section 6(a)(iii) above;

     (d)  Other Termination of Employment.  In the event the Executive's
     employment hereunder terminates due to a Termination for Cause or the
     Executive terminates employment with the Company other than for Good
     Reason, Disability, Retirement or death, Accrued Obligations and vested
     benefits as of the Date of Termination shall be payable in full.  No
     other payments shall be made, or benefits provided, by the Company except
     for benefits which have already become vested under the terms of employee
     benefit programs maintained by the Company or its affiliates for its
     employees generally as provided in Section 10.

     (e)  Definitions.  For purposes of this Agreement, the following terms,
     when capitalized, shall have the following meanings unless the context
     otherwise requires:

       (i)  "Termination for Cause" means, to the maximum extent permitted
       by applicable law, a termination of the Executive's employment by
       the Company by a vote of the majority of the Board members then in
       office, because the Executive (a) has been convicted of, or has
       entered a plea of nolo contendere to, a criminal offense involving
       moral turpitude, or (b) has willfully continued to fail to
       substantially perform his duties with the Company (other than any
       such failure resulting from the Executive's incapacity due to
       physical or mental illness or any such failure subsequent to the
       Executive being delivered a Notice of Termination without Cause by
       the Company or delivering a Notice of Termination for Good Reason to
       the Company) after a written demand for substantial performance is
       delivered to the Executive by the Board which specifically
       identifies the manner in which the Board believes that the Executive
       has not substantially performed his duties or (c) has committed an
       improper action resulting in personal enrichment at the expense of
       the Company or (d) has engaged in illegal or gross misconduct that
       is materially and demonstrably injurious to the Company, or (e) has
       violated the representations made in Section 1 above, or the
       provisions of Section 7 below; provided, however, that the Board has
       given the Executive advance notice of such Termination for Cause
       including the reasons therefor, together with a reasonable
       opportunity for the Executive to appear with counsel before the
       Board and to reply to such notice.

       (ii) a "termination by the Executive for 'Good Reason'" shall mean a
       termination of his employment by the Executive:

            (A)  by a Notice of Termination given during the period
            beginning 30 days and ending 180 days following the occurrence
            of a Change of Control, regardless of the reason or lack of
            reason for such termination; or

            (B)  by a Notice of Termination given otherwise during the
            period beginning on the date of a Change of Control and ending
            on the second anniversary of the date of the Change of Control
            due to:

              (1) any change in the duties or responsibilities (including
              reporting responsibilities) of the Executive that is
              inconsistent in any material and adverse respect with the
              Executive's position(s), duties, responsibilities or
              status with the Company immediately prior to such Change
              of Control (including any material and adverse diminution
              of such duties or responsibilities);

              (2)  a material and adverse change in the Executive's
              titles or offices (including, if applicable, membership on
              the Board) with the Company as in effect immediately prior
              to such Change of Control;

              (3)  a material and adverse change in the aggregate value
              of the Executive's compensation and benefits as in effect
              during the 12 months immediately prior to such Change of
              Control;

              (4)  any requirement of the Company that the Executive be
              based anywhere more than 60 miles from the office where
              the Executive is located at the time of the Change of
              Control; or

              (5)  the failure of the Company to obtain the assumption
              of this Agreement from any Surviving Corporation as
              contemplated in Section 6(f)(iv)(B)(4).

            (C)  at any time due to:

              (1) any reduction without the consent of the Executive in
              the Executive's salary below the amount then provided for
              under Paragraph 4(a) hereof; or

              (2)  a failure of the Company or its successor to fulfill
              its obligations under this Agreement in any material
              respect.  An isolated, insubstantial and inadvertent
              action taken in good faith and which is remedied by the
              Company within 10 days after receipt of notice thereof
              given by the Executive shall not constitute Good Reason.
              The Executive's right to terminate employment for Good
              Reason shall not be affected by the Executive's
              incapacities due to mental or physical illness and the
              Executive's continued employment shall not constitute
              consent to, or a waiver of rights with respect to, any
              event or condition constituting Good Reason; provided,
              however, that the Executive must provide notice of
              termination of employment within 180 days following the
              Executive's knowledge of an event constituting Good
              Reason or such event shall not constitute Good Reason
              under this Agreement.

       (iii)  "Without Cause Termination" means a termination of the
       Executive's employment by the Company other than due to Disability
       or expiration of the Term and other than a Termination for Cause.

       (iv)  "Change of Control" means the occurrence of any of the
       following events:

            (A)  individuals who on the effective date of this Agreement
            constitute the Board (the "Incumbent Directors") cease for any
            reason to constitute at least a majority of the Board, provided
            that any person becoming a director subsequent to the effective
            date, whose election or nomination for election was approved by
            a vote of at least two-thirds of the Incumbent Directors then
            on the Board (either by a specific vote or by approval of the
            proxy statement of the Company in which such person is named as
            a nominee for director, without written objection by such
            Incumbent Directors to such nomination) shall be deemed to be
            an Incumbent Director; provided, however, that no individual
            elected or nominated as a director of the Company initially as
            a result of an actual or threatened election contest with
            respect to directors or any other actual or threatened
            solicitation of proxies by or on behalf of any person other
            than the Board shall be deemed to be an Incumbent Director; or

            (B)  Any merger, consolidation, division, share exchange, sale
            or other transfer of assets, liquidation or other transaction
            or series of related transactions outside the ordinary course
            of business involving the Company or any of its subsidiaries
            (a "Business Combination"), unless immediately following such
            Business Combination there shall be a corporation (the
            "Surviving Corporation") which meets each of the following
            requirements:  (1) the Surviving Corporation owns, directly or
            indirectly through subsidiaries, consolidated assets of the
            Company which immediately prior to the Business Combination had
            an aggregate book value equal to more than 75% of the book value
            of the Company's consolidated total assets as of the close of
            the most recent fiscal quarter ended on or prior to the date of
            the first public announcement of the Business Combination; (2)
            at least a majority of the voting power in the election of
            directors of the Surviving Corporation is held by the
            shareholders of the Company having such power in the election
            of the Board immediately prior to the Business Combination and,
            other than as a result of an election by such shareholders to
            receive consideration other than in shares of the Surviving
            Corporation, such voting power is held by such shareholders in
            substantially the same proportions as immediately prior to the
            Business Combination; (3) at least a majority of the members of
            the board of directors of the Surviving Corporation were
            Incumbent Directors at the time of the Board's approval of the
            execution of the initial agreement providing for such Business
            Combination; and (4) the Surviving Corporation, if other than
            the Company, shall have expressly assumed in writing the
            obligations of the Company under this Agreement.

       (v)  "Disability" for purposes of this Agreement means the Executive
       shall be disabled so as to be unable to perform for 180 days in any
       365-day period, with or without reasonable accommodation, the
       essential functions of his positions under this Agreement, as
       determined by a person or entity experienced in this field selected
       by the Company and acceptable to the Executive or his representative.

       (vi)  "Retirement" means a voluntary termination of his employment by
       the Executive (1) on or after attainment of age 65, (2) on not less
       than 6 months' Notice of Retirement as provided in Section 14 and (4)
       under circumstances not constituting a Termination for Cause, Without
       Cause Termination, termination for Good Reason, Disability or death.

       (vii)  The "Date of Termination," "Date of Disability" and "Date of
       Retirement" shall have the meanings ascribed to them in Section 14.
       To the fullest extent permitted by applicable law, to the extent
       this Agreement requires the payment of Base Salary and/or the
       provision of coverages and benefits subsequent to the Date of
       Termination or Date of Disability, the Executive's Date of
       Termination or Date of Disability, as applicable, shall not be
       treated as a termination of employment (a "Benefit Plan Termination
       Date") from the Company for purposes of determining the Executive's
       rights, responsibilities and tax treatment under any and all
       employee pension, welfare and fringe benefit plans maintained by the
       Company.  Rather, the Benefit Plan Termination Date shall be the day
       following the last day for which any Base Salary and/or coverages
       and benefits are required to be provided by this Agreement.

     7.  Other Duties of the Executive During and After Term.

     (a)  Confidential Information.  The Executive recognizes and acknowledges
     that certain information pertaining to the affairs, business, suppliers,
     or customers of the Company or any of its subsidiaries or affiliates (any
     or all of such entities hereinafter referred to as the "Business"), as
     such information may exist from time to time, is confidential information
     and is a unique and valuable asset of the Business, access to and
     knowledge of which are essential to the performance of his duties under
     this Agreement.  The Executive shall not, through the end of the Term or
     at any time thereafter, except to the extent reasonably necessary in the
     performance of his duties under this Agreement, divulge to any person,
     firm, association, corporation or governmental agency, any information
     concerning the affairs, business, suppliers, or customers of the Business
     (except such information as is required by law to be divulged to a
     government agency or pursuant to lawful process or such information which
     is or shall become part of the public realm through no fault of the
     Executive), or make use of any such information for his own purposes or
     for the benefit of any person, firm, association or corporation (except
     the Business) and shall use his reasonable best efforts to prevent the
     disclosure of any such information by others.  All records and documents
     relating to the Business, whether made by the Executive or otherwise
     coming into his possession are, shall be, and shall remain the property
     of the Business.  No copies thereof shall be made which are not retained
     by the Business, and the Executive agrees, on any termination of his
     employment, or on demand of the Company, to deliver the same to the
     Company.

     (b)  Non-Competition.  During his employment by the Company, whether
     during or after the Term, and for a period of four years following the
     termination of his employment for any reason except for a Without Cause
     Termination or termination by the Executive for Good Reason, the
     Executive shall not, without express prior written approval by order of
     the Board, directly or indirectly, engage in, whether as an officer,
     director, employee, consultant, agent, partner, joint venturer,
     proprietor or otherwise, become interested in (other than as a
     shareholder owning not more than 1% of the outstanding shares of any
     class of securities registered under Section 12 of the Securities
     Exchange Act of 1934) or assist any business which (i) is in
     competition with the Company or any of its affiliates in the retail
     grocery business or (A) during his employment, in any other business in
     which the Company or any of its subsidiaries is then engaged or proposes
     to engage or (B) following the termination of his employment, in any
     other business which during the 12 months preceding the Executive's Date
     of Termination accounted for more than 2% of the Company's consolidated
     revenues and (ii) engages in any such business in any county in which the
     Company then engages in such business or any county contiguous thereto.

     (c)  Non-Interference.  During his employment with the Company and until
     four years after the termination of the Executive's employment, whether
     during or after the Term and notwithstanding the cause of termination,
     the Executive shall not (i) hire or employ, directly or indirectly
     through any enterprise with which he is associated, any employee of the
     Company or any of its affiliates or (ii) recruit, solicit or induce (or
     in any way assist another person or enterprise in recruiting, soliciting
     or inducing) any such employee or any consultant, vendor or supplier of
     the Company or any of its affiliates to terminate or reduce such person's
     employment, consulting or other relationship with the Company or any of
     its affiliates.

     (d)  Remedies.  The Company's obligation to make payments or provide for
     or increase any benefits under this Agreement (except to the extent
     previously vested) shall cease upon any violation of the provisions of
     this Section 7; provided, however, that the Executive shall first have the
     right to appear before the Board with counsel and that such cessation of
     payments or benefits shall require a vote of a majority of the Board
     members then in office.  In addition, in the event of a violation by the
     Executive of the provisions of this Section 7, the Company shall be
     entitled, if it shall so elect, to institute legal proceedings to obtain
     damages for any such breach, and/or to enforce the specific performance
     by the Executive of this Section 7 and to enjoin the Executive from any
     further violation, and may exercise such remedies cumulatively or in
     conjunction with such other remedies as may be available to the Company
     at law or in equity.  The Executive acknowledges, however, that the
     remedies at law for any breach by him of the provisions of this Section 7
     would be inadequate and agrees that the Company shall be entitled to
     injunctive relief against him in the event of any such breach.

     (d)  Survival; Authorization to Modify Restrictions.  The covenants of the
     Executive contained in this Section 7 shall survive any termination of the
     Executive's employment for the periods stated herein, whether during or
     after the Term and, except as otherwise provided in this Section 7,
     regardless of the reason for such termination.  The Executive represents
     that his experience and capabilities are such that the enforcement of the
     provisions of this Section 7 will not prevent him from earning his
     livelihood, and acknowledges that it would cause the Company serious and
     irreparable injury and cost if the Executive were to use his ability and
     knowledge in competition with the Company or to otherwise breach the
     obligations contained in this Section 7.  Accordingly, it is the
     intention of the parties that the provisions of this Section 7 shall be
     enforceable to the fullest extent permissible under applicable law, but
     that the unenforceability (or modification to conform to such law) of any
     provision or provisions hereof shall not render unenforceable, or impair,
     the remainder thereof.  If any provision or provisions hereof shall be
     deemed invalid or unenforceable, either in whole or in part, this
     Agreement shall be deemed amended to delete or modify, as necessary, the
     offending provision or provisions and to alter the bounds thereof to the
     extent required in order to render it valid and enforceable.

     8.  Certain Additional Payments by the Company.

     (a)  Anything in this Agreement to the contrary notwithstanding, in the
     event it shall be determined that any payment, award, benefit or
     distribution (or any acceleration of any payment, award, benefit or
     distribution) by the Company (or any of its affiliated entities) or any
     entity which effectuates a Change of Control (or any of its affiliated
     entities) to or for the benefit of the Executive (whether pursuant to the
     terms of this Agreement or otherwise, but determined without regard to
     any additional payments required under this Section 8) (the "Payments")
     would be subject to the excise tax imposed by Section 4999 of the
     Internal Revenue Code of 1986, as amended (the "Code"), or any interest
     or penalties are incurred by the Executive with respect to such excise
     tax (such excise tax, together with any such interest and penalties, are
     hereinafter collectively referred to as the "Excise Tax"), then the
     Company shall pay to the Executive an additional payment (a "Gross-Up
     Payment") in an amount such that after payment by the Executive of all
     taxes (including any Excise Tax) imposed upon the Gross-Up Payment, the
     Executive retains an amount of the Gross-Up Payment equal to the sum of
     (x) the Excise Tax imposed upon the Payments and (y) the product of any
     deductions disallowed because of the inclusion of the Gross-Up Payment in
     the Executive's adjusted gross income and the highest applicable marginal
     rate of federal income taxation for the calendar year in which the Gross-
     Up Payment is to be made.  For purposes of determining the amount of the
     Gross-Up Payment, the Executive shall be deemed to (i) pay federal income
     taxes at the highest marginal rates of federal income taxation for the
     calendar year in which the Gross-Up Payment is to be made, (ii) pay
     applicable state and local income taxes at the highest marginal rate of
     taxation for the calendar year in which the Gross-Up Payment is to be
     made, net of the maximum reduction in federal income taxes which could be
     obtained from deduction of such state and local taxes and (iii) have
     otherwise allowable deductions for federal income tax purposes at least
     equal to the Gross-Up Payment.  Notwithstanding the foregoing provisions
     of this Section 8(a), if it shall be determined that the Executive is
     entitled to a Gross-Up Payment, but that the Payments would not be
     subject to the Excise Tax if the Payments were reduced by an amount that
     is less than 5% of the portion of the Payments that would be treated as
     "parachute payments" under Section 280G of the Code, then the amounts
     payable to the Executive under this Agreement shall be reduced (but not
     below zero) to the maximum amount that could be paid to the Executive
     without giving rise to the Excise Tax (the "Safe Harbor Cap"), and no
     Gross-Up Payment shall be made to the Executive. The reduction of the
     amounts payable hereunder, if applicable, shall be made by reducing first
     the payments under Section 6(a)(ii), unless an alternative method of
     reduction is elected by the Executive.  For purposes of reducing the
     Payments to the Safe Harbor Cap, only amounts payable under this
     Agreement (and no other Payments) shall be reduced.  If the reduction of
     the amounts payable hereunder would not result in a reduction of the
     Payments to the Safe Harbor Cap, no amounts payable under this Agreement
     shall be reduced pursuant to this provision.

     (b)  Subject to the provisions of Section 8(a), all determinations
     required to be made under this Section 8, including whether and when a
     Gross-Up Payment is required, the amount of such Gross-Up Payment, the
     reduction of the Payments to the Safe Harbor Cap and the assumptions to
     be utilized in arriving at such determinations, shall be made by the
     public accounting firm that is retained by the Company as of the date
     immediately prior to the Change of Control (the "Accounting Firm") which
     shall provide detailed supporting calculations both to the Company and
     the Executive within 15 business days of the receipt of notice from the
     Company or the Executive that there has been a Payment, or such earlier
     time as is requested by the Company (collectively, the "Determination").
     In the event that the Accounting Firm is serving as accountant or auditor
     for the individual, entity or group effecting the Change of Control, the
     Executive may appoint another nationally recognized public accounting
     firm to make the determinations required hereunder (which accounting
     firm shall then be referred to as the Accounting Firm hereunder).  All
     fees and expenses of the Accounting Firm shall be borne solely by the
     Company, and the Company shall enter into any agreement requested by the
     Accounting Firm in connection with the performance of the services
     hereunder.  The Gross-Up Payment under this Section 8 with respect to
     any Payments shall be made no later than 30 days following such Payment.
     If the Accounting Firm determines that no Excise Tax is payable by the
     Executive, it shall furnish the Executive with a written opinion to such
     effect, and to the effect that failure to report the Excise Tax, if any,
     on the Executive's applicable federal income tax return will not result
     in the imposition of a negligence or similar penalty.  In the event the
     Accounting Firm determines that the Payments shall be reduced to the Safe
     Harbor Cap, it shall furnish the Executive with a written opinion to such
     effect.  The Determination by the Accounting Firm shall be binding upon
     the Company and the Executive.  As a result of the uncertainty in the
     application of Section 4999 of the Code at the time of the Determination,
     it is possible that Gross-Up Payments which will not have been made by
     the Company should have been made ("Underpayment") or Gross-Up Payments
     are made by the Company which should not have been made ("Overpayment"),
     consistent with the calculations required to be made hereunder.  In the
     event that the Executive thereafter is required to make payment of any
     Excise Tax or additional Excise Tax, the Accounting Firm shall determine
     the amount of the Underpayment that has occurred and any such
     Underpayment (together with interest at the rate provided in Section
     1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or
     for the benefit of the Executive.  In the event the amount of the Gross-
     Up Payment exceeds the amount necessary to reimburse the Executive for
     his Excise Tax, the Accounting Firm shall determine the amount of the
     Overpayment that has been made, and any such Overpayment (together with
     interest at the rate provided in Section 1274(b)(2) of the Code) shall be
     promptly paid by the Executive (to the extent he has received a refund if
     the applicable Excise Tax has been paid to the Internal Revenue Service)
     to or for the benefit of the Company.  The Executive shall cooperate, to
     the extent his expenses are reimbursed by the Company, with any
     reasonable requests by the Company in connection with any contests or
     disputes with the Internal Revenue Service in connection with the Excise
     Tax.

     9.  Resolution of Disputes.  Except as otherwise provided in Section 7(d)
     hereof, any dispute or controversy arising under or in connection with
     this Agreement shall be settled exclusively by arbitration in Sunbury,
     Pennsylvania, by three arbitrators in accordance with the rules of the
     American Arbitration Association then in effect.  Judgment may be entered
     on the arbitrators' award in any court having jurisdiction.  In the event
     of any arbitration, litigation or other proceeding between the Company
     and the Executive with respect to the subject matter of this Agreement
     and the enforcement of rights hereunder, the Company shall reimburse the
     Executive for his reasonable costs and expenses relating to such
     arbitration, litigation or other proceeding, including attorneys' fees
     and expenses, to the extent that such arbitration, litigation or other
     proceeding results in any:  (i) settlement requiring the Company to make
     a payment, continue to make payments or provide any other benefit to the
     Executive; or (ii) judgment, order or award against the Company in favor
     of the Executive or his spouse, legal representative or heirs, unless
     such judgment, order or award is subsequently reversed on appeal or in a
     collateral proceeding.  At the request of the Executive, costs and
     expenses (including attorneys' fees) incurred in connection with any
     arbitration, litigation or other proceeding referred to in this Section
     shall be paid by the Company in advance of the final disposition of the
     arbitration, litigation or other proceeding upon receipt of an
     undertaking by or on behalf of the Executive to repay the amounts
     advanced if it is ultimately determined that he is not entitled to
     reimbursement of such costs and expenses by the Company as set forth in
     this Section.

     10.  Full Settlement; No Mitigation; Non-Exclusivity of Benefits.  The
     Company's obligation to make any payment provided for in this Agreement
     and otherwise to perform its obligations hereunder shall be in lieu and
     in full settlement of all other severance payments to the Executive under
     any other severance plan, arrangement or agreement of the Company and its
     affiliates, and in full settlement of any and all claims or rights of the
     Executive for severance, separation and/or salary continuation payments
     resulting from the termination of his employment.  In no event shall the
     Executive be obligated to seek other employment or to take other action
     by way of mitigation of the amounts payable to the Executive under any of
     the provisions of this Agreement, and except as specifically provided
     herein, such amounts shall not be reduced whether or not the Executive
     obtains other employment.  Except as provided above in this Section 10,
     nothing in this Agreement shall prevent or limit the Executive's
     continuing or future participation in any plan, program, policy or
     practice provided by the Company or any of its affiliates for which the
     Executive may qualify, nor, except as otherwise specifically provided in
     this Agreement, shall anything herein limit or otherwise affect such
     rights as the Executive may have under any contract or agreement with the
     Company or any of its affiliates, including without limitation any stock
     option agreement.  Amounts or benefits which are vested benefits or which
     the Executive is otherwise entitled to receive under any such plan,
     program, policy, practice, contract or agreement prior to, at or
     subsequent to any Date of Termination, Date of Disability or Date of
     Retirement shall be paid or provided in accordance with the terms of such
     plan, program, policy, practice, contract or agreement except as
     explicitly modified by this Agreement.

     11.  Employment and Payments by Affiliates.  Except as herein otherwise
     specifically provided, references in this Agreement to employment by the
     Company shall include employment by affiliates of the Company, and the
     obligation of the Company to make any payment or provide any benefit to
     the Executive hereunder shall be deemed satisfied to the extent that such
     payment is made or such benefit is provided by any affiliate of the
     Company.

     12.  Withholding Taxes.  The Company may directly or indirectly withhold
     from any payments made under this Agreement all Federal, state, city or
     other taxes as shall be required pursuant to any law or governmental
     regulation or ruling.

     13.  Consolidation, Merger, or Sale of Assets.  Nothing in this Agreement
     shall preclude the Company from consolidating or merging into or with, or
     transferring all or substantially all of its assets to, another
     corporation or entity which assumes this Agreement and all obligations
     and undertakings of the Company hereunder.  Upon such a consolidation,
     merger or transfer of assets and assumption, the term, "Company" as used
     herein shall mean such other corporation or entity, and this Agreement
     shall continue in full force and effect.

     14.  Notices.

     (a)  General.  All notices, requests, demands and other communications
     required or permitted hereunder shall be given in writing and shall be
     deemed to have been duly given when delivered or 5 days after being
     deposited in the United States mail, certified and return receipt
     requested, postage prepaid, addressed as follows:

       (i)     To the Company:
            Weis Markets, Inc.
            1000 S. Second Street
            P.O. Box 471
            Sunbury, PA  17801

            Attention:  Norman S. Rich

       (ii)    To the Executive:
            William R. Mills
            R.R. 6
            Lewisburg, PA  17837

            or to such other address as the addressee party shall
            have previously specified in writing to the other.

     (b)  Notice of Termination.  Except in the case of death of the
     Executive, any termination of the Executive's employment hereunder,
     whether by the Executive or the Company, shall be effected only by a
     written notice given to the other party in accordance with this Section
     14 (a "Notice of Termination").  Any Notice of Termination shall (i)
     indicate the specific termination provision in Section 6 relied upon,
     (ii) in the case of a termination by the Company for Cause or by the
     Executive for Good Reason, set forth in reasonable detail the facts and
     circumstances claimed to provide a basis for such termination and (iii)
     specify the effective date of such termination of employment (the "Date
     of Termination"), which shall not be less than 15 days nor more than 60
     days after such notice is given.  The failure of the Executive or the
     Company to set forth in any Notice of Termination any fact or
     circumstance which contributes to a showing of Cause or Good Reason shall
     not waive any right of the Executive or the Company hereunder or preclude
     the Executive or the Company from asserting such fact or circumstance in
     enforcing the Executive's or the Company's rights hereunder.

     (c)  Notice of Disability.  Any finding of Disability by the Company
     shall be effected only by a written notice given to the Executive in
     accordance with this Section 14 (a "Notice of Disability").  Any Notice
     of Disability shall (i) set forth in reasonable detail the facts and
     circumstances claimed to provide a basis for such finding of Disability
     and (ii) specify an effective date (the "Date of Disability"), which
     shall not be less than 10 days after such notice is given.  The failure
     of the Company to set forth in any Notice of Disability any fact or
     circumstance which contributes to a showing of Disability shall not
     waive any right of the Company hereunder or preclude the Company from
     asserting such fact or circumstance in enforcing the Company's rights
     hereunder.

     (d)  Notice of Retirement.  Retirement shall be effected only by a
     written notice given by the Executive in accordance with this Section 14
     (a "Notice of Retirement").  Any Notice of Retirement shall (i) indicate
     that it is a Notice of Retirement and (ii) specify an effective date
     (the "Date of Retirement) which shall not be less than six months after
     such notice is given.

     15.  No Attachment.  Except as required by law, no right to receive
     payments under this Agreement shall be subject to anticipation,
     commutation, alienation, sale, assignment, encumbrance, charge, pledge,
     or hypothecation or to execution, attachment, levy or similar process or
     assignment by operation of law, and any attempt, voluntary or
     involuntary, to effect any such action shall be null, void and of no
     effect; provided, however, that nothing in this Section 15 shall preclude
     the assumption of such rights by executors, administrators, or other
     legal representatives of the Executive or his estate or their assigning
     any rights hereunder to the person or persons entitled thereto.

     16.  Source of Payments.  Subject to Section 11 hereof, all payments
     provided for under this Agreement shall be paid in cash from the general
     funds of the Company.  The Company shall not be required to establish a
     special or separate fund or other segregation of assets to assure such
     payments, and, if the Company shall make any investments to aid it in
     meeting its obligations hereunder, the Executive shall have no right,
     title or interest whatever in or to any such investments except as may
     otherwise be expressly provided in a separate written instrument relating
     to such investments.  Nothing contained in this Agreement, and no action
     taken pursuant to its provisions, shall create or be construed to create
     a trust of any kind, or a fiduciary relationship, between the Company and
     the Executive or any other person.  To the extent that any person
     acquires a right to receive payments from the Company hereunder, such
     right shall be no greater than the right of an unsecured creditor.

     17.  Binding Agreement.  This Agreement shall be binding upon, and shall
     inure to the benefit of, the Executive and the Company and, as permitted
     by this Agreement, their respective successors, assigns, heirs,
     beneficiaries and representatives.

     18.  Governing Law.  The validity, interpretation, performance and
     enforcement of this Agreement shall be governed exclusively by the laws
     of the Commonwealth of Pennsylvania, without regard to principles of
     conflicts of laws thereof.

     19.  Counterparts; Headings.  This Agreement may be executed in
     counterparts, each of which, when executed, shall be deemed to be an
     original and all of which together shall be deemed to be one and the same
     instrument.  The underlined Section headings contained in this Agreement
     are for convenience of reference only and shall not affect the
     interpretation or construction of any provision hereof.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
     by its officer thereunto duly authorized, and the Executive has signed
     this Agreement, all as of the date first above written.


                                               WEIS MARKETS, INC.


                                            By:      /S/Norman S. Rich
                                                ---------------------------
                                          Name:        Norman S. Rich
                                         Title:    President/ CEO


                                                    /S/William R. Mills
                                                ---------------------------
                                                     William R. Mills

EX-10

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