APL RETIREMENT ACCOUNT PLAN

         (Amended and Restated as of June 1, 1997)


                       Execution Copy
                              
                     TABLE OF CONTENTS
                                                        Page
PREAMBLE                                                   v

ARTICLE 1     DEFINITIONS                                  1

ARTICLE 2     ELIGIBILITY                                  9
              2.1                      Date of Participation    9
              2.2                 Participation Requirements    9

ARTICLE 3     RETIREMENT DATE                             11
              3.1                            Retirement Date     11
              3.2                     Normal Retirement Date     11
              3.3                      Early Retirement Date     11
              3.4                    Vested Termination Date     11
              3.5                  Postponed Retirement Date     11
              3.6                 In-Service Retirement Date     12

ARTICLE 4     AMOUNT OF RETIREMENT INCOME                 13
              4.1                          Retirement Income     13
              4.2                            Minimum Benefit     13
              4.3                         Retirement Account     13
              4.4             Supplemental Retirement Income     16
              4.5                          Protected Benefit     16
              4.6                            Late Retirement     17
              4.7       Special Rule for Any Participant Who
                  Ceased To Be an Eligible Employee Prior to
                       June 1, 1997 and Who Again Becomes an
                        Eligible Employee After June 1, 1997     17
              4.8              Retirement Income Limitations     17
              4.9  Return to Employment Following Retirement     23
              4.10           Deemed Termination After Normal
                                             Retirement Date     23
              4.11                Grandfathered Participants     23
              4.12 Participants Transferring to/from Another
                                      Company-Supported Plan     24

ARTICLE 5     TERMINATION OF EMPLOYMENT PRIOR TO
              RETIREMENT                                         25
              5.1       Termination of Service After Vesting     25
              5.2      Termination of Service Before Vesting     25
              5.3                                Forfeitures     25

ARTICLE 6     FORMS OF BENEFIT PAYMENT                           26
              6.1           Normal Form of Retirement Income     26
              6.2Normal Form of Supplemental Retirement Income   26
              6.3        Optional Forms of Retirement Income     27
              6.4                             Small Payments     30
              6.5         General Rule on Commencement Dates     31

ARTICLE 7     PRERETIREMENT DEATH BENEFITS                       32
              7.1                        Benefit Eligibility     32
              7.2                   Payment of Death Benefit     32
              7.3           Form and Amount of Death Benefit     32
              7.4             Involuntary Lump Sum Cash-Outs     33
              7.5  Beneficiary Designation for Preretirement
                                               Death Benefit     33
              7.6            Notice of Death Benefit Options     34
              7.7                       Other Death Benefits     35

ARTICLE 8     FINANCING THE PLAN                                 36
              8.1                  Participant Contributions     36
              8.2                     Employer Contributions     36
              8.3                            Trust Agreement     36
              8.4                        Reversion of Assets     36

ARTICLE 9     ADMINISTRATION OF THE PLAN AND
              MANAGEMENT OF ASSETS                               38
              9.1        Plan Sponsor and Plan Administrator     38
              9.2            Administrative Responsibilities     38
              9.3                  Management of Plan Assets     38
              9.4            Trustee and Investment Managers     38
              9.5   Delegation of Fiduciary Responsibilities     39
              9.6                           Enrolled Actuary     39
              9.7                       Reliance Upon Advice     39
              9.8                             Funding Policy     40
              9.9           Communication of Financial Needs     40
              9.10                   Administrative Expenses     40
              9.11                        Manner of Payments     40

ARTICLE 10    AMENDMENT OR TERMINATION                           41
              10.1                                Amendments     41
              10.2         Merger, Consolidation or Transfer     41
              10.3   Rights and Obligations Upon Termination     41
              10.4   Limitations Upon Highest-Paid Employees     42

ARTICLE 11    GENERAL PROVISIONS                                 44
              11.1            No Implied Employment Contract     44
              11.2                   Benefits Not Assignable     44
              11.3         Payments Under Qualified Domestic
                                      Relations Order (QDRO)     44
              11.4        Payments of Benefits to Infants or
                                                Incompetents     45
              11.5                 Proof of Age and Marriage     45
              11.6                        Source of Benefits     45
              11.7            Overpayments and Underpayments     45
              11.8  Service in Multiple Fiduciary Capacities     46
              11.9                             Criminal Acts     46
              11.10                        IRS Qualification     46
              11.11                     Construction of Plan     46
              11.12            Forms for Plan Communications     47
              11.13                            Governing Law     47

ARTICLE 12    PERIOD OF SERVICE                                  48
              12.1         Period of Employment Relationship     48
              12.2    Interval Between Periods of Employment     48
              12.3                     Predecessor Companies     49
              12.4                             Other Periods     49
              12.5              Years in a Period of Service     49

ARTICLE 13    CLAIMS AND INQUIRIES                               51
              13.1                  Application for Benefits     51
              13.2                     Denial of Application     51

ARTICLE 14    REVIEW OF DENIED CLAIMS                            52
              14.1                              Review Panel     52
              14.2                        Request for Review     52
              14.3                        Decision on Review     52
              14.4                 Rules and Interpretations     53
              14.5                    Exhaustion of Remedies     53

ARTICLE 15    TOP-HEAVY PROVISIONS                               54
              15.1         Determination of Top-Heavy Status     54
              15.2                           Minimum Benefit     54
              15.3                           Minimum Vesting     54
              15.4      Effect of Change in Top-Heavy Status     54
              15.5             Impact on Benefit Limitations     54
              15.6                               Definitions     55

ARTICLE 16    EXECUTION                                          57

APPENDIX A    ACTUARIAL EQUIVALENT FACTORS                       58

APPENDIX B    DIRECT ROLLOVER PROVISIONS                         62

APPENDIX C    GRANDFATHERED BENEFIT                              64

APPENDIX D    SUPPLEMENTAL RETIREMENT INCOME                     73

APPENDIX E    MINIMUM CASH BALANCE BENEFITS                      75


                          PREAMBLE

     The APL Retirement Account Plan, as set forth herein,
shall become effective as of June 1, 1997, except as
otherwise provided.  It constitutes an amendment and
restatement and continuation of the Plan effective as of
January 1, 1993.  Except as may specifically be provided
otherwise in the Plan, the rights of Participants who
retired or who terminated their employment prior to June 1,
1997, shall be determined solely in accordance with the
provisions of the Plan then in effect.  In addition, the
rights of Participants who retire on an Early, Normal or
Postponed Retirement Date prior to June 1, 1997, shall be
determined in accordance with the provisions of the Plan in
effect on May 31, 1997, and the amendments taking effect on
June 1, 1997, shall not apply to such Participants.

     The Plan is a defined benefit pension plan intended to
qualify under section 401(a) of the Internal Revenue Code of
1986, as amended.  The purpose of this Plan is to provide
Eligible Employees with retirement income.  Effective as of
June 1, 1997 these benefits are provided pursuant to the
cash balance formula set forth herein.  All accrued benefits
under the provisions of the Plan in effect as of May 31,
1997 shall be preserved and continued under the Plan.

                         ARTICLE 1

                        DEFINITIONS


Unless clearly indicated by the context, the capitalized
terms set forth in this Plan shall have the meanings set
forth below.

1.1  "Actuarial Equivalent" means the equivalent of the
     benefit otherwise payable to a Participant, determined
     in accordance with the actuarial equivalent factors set
     forth in Appendix A to the Plan, attached hereto.

1.2  "Affiliate" means any member of a group of one or more
     chains of corporations connected through stock
     ownership with the Company, if:

          (A)  Stock possessing at least eighty
          percent (80%) of the total combined voting power
          of all classes of stock entitled to vote or at
          least eighty percent (80%) of the total value of
          shares of all classes of stock of each of the
          corporations, except the Company, is owned by one
          or more of the other corporations; and

          (B)  The Company owns stock possessing at least
          eighty percent (80%) of the total combined voting
          power of all classes of stock entitled to vote or
          at least eighty percent (80%) of the total value
          of shares of all classes of stock of at least one
          of the other corporations excluding, in computing
          such voting power or value, stock owned directly
          by such other corporations.

     In addition, the term "Affiliate" includes any other
     entity which the Company has designated in writing as
     an Affiliate for purposes of the Plan.  An entity shall
     be considered an Affiliate only with respect to periods
     for which such designation is in effect or during which
     the relationship described in Paragraphs (A) and (B)
     above exists.

1.3  "Allocation Percentage" means the percentage determined
     in accordance with Section 4.3(D).

1.4  "Alternate Payee" means any spouse, former spouse,
     child or other dependent of a Participant who is
     recognized by a qualified domestic relations order (as
     defined in section 414(p) of the Code) as having a
     right to receive all or a portion of the benefits
     payable under the Plan with respect to the Participant.

1.5  "Base Compensation" means a Participant's basic
     earnings while the Participant is an Eligible Employee,
     including amounts contributed on a pretax basis under
     sections 125 or 401(k) of the Code to a plan maintained
     by the Employer, and excluding overtime pay, bonuses,
     commissions, incentive compensation and Employer
     contributions (other than salary deferrals) to this or
     any other benefit plan.

1.6  "Beneficiary" means one or more persons designated by
     the Participant by filing the prescribed form with the
     Company prior to his death.  If the Participant has not
     designated a Beneficiary, or if the designated
     Beneficiary (or Beneficiaries) are not living at the
     time any payment is to be made hereunder, then (i) the
     spouse of the deceased Participant shall be his or her
     Beneficiary; or (ii) if the Participant has no spouse
     living at the time of such payment, his or her then
     living children shall be his or her Beneficiaries, in
     equal shares; or (iii) if the Participant has neither a
     spouse nor children living at the time of such payment,
     his or her then living parents shall be his or her
     Beneficiaries, in equal shares; or (iv) if none of the
     individuals described in (i) through (iii) are living
     at the time of such payment, his or her estate shall be
     his or her Beneficiary.  The designation of a
     Beneficiary other than the Participant's Spouse to
     receive a death benefit under Article 7 shall be
     subject to the rules, including the spousal consent
     rules, described in Section 7.5.

1.7  "Benefit Compensation" shall mean a Participant's
     Eligible Compensation divided by two.  Benefit
     Compensation taken into account under the Plan shall in
     no event exceed the limitation in effect for that year
     under section 401(a)(17) of the Code.  This limitation
     shall automatically be adjusted for each calendar year
     to reflect the cost-of-living adjustment (if any)
     announced by the Commissioner of Internal Revenue for
     such calendar year.

1.8  "Benefit Distribution Date" means the first day of the
     period for which Retirement Income is paid as an
     annuity or, in the case of Retirement Income payable in
     the form of a lump sum, the date on which the lump sum
     is paid.

1.9  "Cash Balance Benefit" means the benefit provided based
     on the Participant's Retirement Account.

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

1.11 "Company" means APL Limited, a Delaware corporation.

1.12 "Death Benefit"  means the benefit provided to a
     Participant's Beneficiary pursuant to Article 7.

1.13 "Eligible Compensation" for any calendar year means the
     sum of:

          (A)  The Participant's annual Base Compensation
          during such calendar year;

          (B)  Any bonus that he receives during the 1997
          calendar year under the Company's year-end bonus
          plan for executives and key employees;

          (C)  Any overtime pay that he receives during such
          calendar year as an Eligible Employee;

          (D)  Any payment he receives during such calendar
          year under the Company's Team Up For Success
          program during the 1997 calendar year;

          (E)  Any bonus received under the Company's
          Worldwide Bonus program during such calendar year;
          and

          (F)  Any portion of a Participant's annual
          earnings (including any bonus which would
          otherwise be includible as Eligible Compensation)
          deferred by the Participant pursuant to a
          nonqualified plan sponsored by the Participant's
          Employer.

1.14 "Eligible Employee" means an Employee who meets the
     requirements of Section 2.2, except an Employee who is
     a "leased employee" (within the meaning of section
     414(n) of the Code) with respect to an Employer.

1.15 "Employee" means an individual who is (i) a common-law
     employee of an Employer or (ii) a "leased employee"
     (within the meaning of section 414(n) of the Code) with
     respect to an Employer.

1.16 "Employee Aggregate Contributions" shall have the
     meaning set forth in Appendix D.

1.17 "Employer" means each Affiliate which has been
     designated in writing as an Employer by the Company,
     while such designation is in effect.  The Company, in
     writing, may designate an Affiliate as an Employer with
     respect to certain Employees, to the exclusion of the
     other Employees of such Affiliate.

1.18 "Enrolled Actuary" means an individual who has been
     approved by the Joint Board for the Enrollment of
     Actuaries to perform actuarial services required by
     ERISA or the regulations thereunder.

1.19 "ERISA" means Public Law No. 93-406, the Employee
     Retirement Income Security Act of 1974, as amended.

1.20 "Grandfathered Benefit" means the amount of Retirement
     Income accrued by a Grandfathered Participant in
     accordance with Section 4.11(B).

1.21 "Grandfathered Participant" means an individual who is
     both a Participant and an Eligible Employee on June 1,
     1997 and who satisfies the following requirements:

          (A)  Has attained age 45 on or before June 1,
          1997;

          (B)  Has a Period of Service equal to five (5) or
          more years as of June 1, 1997; and

          (C)  The sum of his age and Period of Service
          equals or exceeds fifty-five (55) as of June 1,
          1997.

     For purposes of Section 1.21(C), the sum of a
     Participant's age and Period of Service shall be
     determined in the same manner as the Participant's
     "Allocation Points" are determined under Section
     4(D).

1.22 "Highly Compensated Employee" means an active Employee
     who:

          (A)  During the look-back year received Total
          Compensation of more than $80,000 (or such
          larger amount as may be adopted by the
          Commissioner of Internal Revenue to reflect a
          cost-of-living adjustment) and was a member
          of the Top-Paid Group; or

          (B)  At any time during the look-back year or
          the determination year was a five-percent
          owner (as defined in section 416(i)(1) of the
          Code).

     For purposes of this Section, the determination year
     shall be the Plan Year and the look-back year shall be
     the 12-month period immediately preceding the
     determination year, unless the Company has made the
     calendar-year election described in Income Tax
     Regulations section 1.414(q)-1T A-14(b) or its
     successor.

     The determination of who is a Highly Compensated
     Employee, including the determinations of the number
     and identity of Employees in the Top-Paid Group and the
     Total Compensation that is considered, will be made in
     accordance with section 414(q) of the Code and
     regulations thereunder.

     The Company may elect to modify the method described in
     this Section for defining "Highly Compensated Employee"
     by electing to apply the $80,000 limit described above
     without regard to whether an Employee is in the Top-
     Paid Group.

1.23 "Highly Compensated Former Employee" means a former
     Employee who separated from service (or is deemed to
     have separated) prior to the determination year,
     performs no service for any member of the Affiliated
     Group during the determination year, and was a Highly
     Compensated Employee as an active Employee for either
     the separation year or any determination year ending on
     or after the Employee's 55th birthday.  The
     determination of who is a Highly Compensated Former
     Employee will be made in accordance with section 414(q)
     of the Code and regulations thereunder.

1.24 "Hour of Service" means:

          (A)  Each hour for which an Employee is directly
          or indirectly paid, or entitled to payment, by an
          Employer for the performance of services,

          (B)  Each hour for which an Employee is directly
          or indirectly paid, or entitled to payment, by an
          Employer on account of a period of time during
          which no services are performed (without regard to
          whether the employment relationship between the
          Employee and the Employer has terminated) due to
          vacation, holiday, illness, incapacity,
          disability, layoff, jury duty, military duty or
          leave of absence with pay, and

          (C)  Each hour for which an Employee is directly
          or indirectly paid, or entitled to payment of an
          amount as back pay (without regard to mitigation
          of damages) either awarded or agreed to by an
          Employer.

          The foregoing notwithstanding:

                    (1)  No more than 501 Hours of
               Service shall be credited to an Employee
               under Paragraph (B) or (C) above on
               account of any single continuous period
               of time during which no services are
               performed.

                    (2)  An hour for which an Employee
               is directly or indirectly paid or
               entitled to payment by an Employer on
               account of a period during which no
               services are performed shall not
               constitute an Hour of Service hereunder
               if such payment is made or due under a
               plan maintained solely for the purpose
               of complying with applicable workers'
               compensation, unemployment compensation
               or disability insurance laws.

                    (3)  Hours of Service shall not be
               credited for payments that solely
               reimburse an Employee for medical or
               medically related expenses.

                    (4)  The same Hour of Service shall
               not be credited to an Employee both
               under Paragraph (A) or (B) and under
               Paragraph (C).

                    (5)  The computation period to
               which Hours of Service determined under
               Paragraph (B) or (C) are to be credited
               shall be determined under applicable
               federal law and regulations, including,
               without limitation, Department of Labor
               Regulation section 2530.204-2.

               Each Employee for whom monthly records are
          not kept shall be credited with 190 hours for each
          month for which such Employee would be entitled to
          credit for one Hour of Service under Subsection
          (A), (B) or (C) above.

               The Company shall determine the number of
          Hours of Service, if any, to be credited to an
          Employee under the foregoing rules in a uniform
          and nondiscriminatory manner and in accordance
          with applicable federal laws and regulations,
          including, without limitation, Department of Labor
          Regulations section 2530.200b-2.

1.25 "Interest" means the rate determined in accordance with
     Section 4.3(C).

1.26 "Investment Manager" means any person who is
     (i) registered as an investment adviser under the
     Investment Advisers Act of 1940, (ii) a bank, as
     defined in such Act, or (iii) an insurance company
     qualified to perform investment management services
     under the laws of more than one state.

1.27 "Married Participant" means a Participant who is
     lawfully married, as determined under the laws of the
     state where such Participant is domiciled.

1.28 "Payroll" means the system used by an entity to pay
     those individuals it regards as its common law
     employees for their services and to withhold employment
     taxes from the compensation it pays to such common law
     employees.  "Payroll" does not include any system an
     entity uses to pay individuals whom it does not regard
     as its common law employees and for whom it does not
     actually withhold employment taxes (including, but not
     limited to, individuals it regards as independent
     contractors) for their services.

1.29 "Participant" means an Eligible Employee who becomes a
     Participant pursuant to Article 2 and who continues to
     be entitled to any benefits under the Plan.

1.30 "Period of Service" means an individual's period of
     employment with any Affiliate, as determined under
     Article 12.

1.31 "Plan" means this APL Retirement Account Plan, as
     amended from time to time.

1.32 "Plan Year" means the twelve (12) consecutive month
     period ending each May 31.

1.33 "Retirement Account" shall mean the hypothetical
     account established for each Participant to which the
     allocations and credits described in Section 4.3 are
     made.

1.34 "Retirement Income" means the retirement benefits
     provided to Participants and their spouses, joint
     annuitants and Beneficiaries in accordance with the
     applicable provisions of Articles 4 and 5, except that
     such term shall not include any benefits which are
     payable to an Alternate Payee pursuant to a qualified
     domestic relations order under section 414(p) of the
     Code.

1.35 "Supplemental Retirement Income" means the benefit
     provided by Appendix D.

1.36 "Termination Date" means the date on which a
     Participant ceases to be an Employee.

1.37 "Top-Paid Group" for any Plan Year means the top
     20 percent (in terms of Total Compensation) of all
     Employees of the Company and its Affiliates, excluding
     the following:

          (A)  Any Employee covered by a collective
          bargaining agreement who is not an Eligible
          Employee;

          (B)  Any Employee who is a nonresident alien with
          respect to the United States who receives no
          income with a source within the United States from
          a the Company or its Affiliates;

          (C)  Any Employee who has not completed six months
          of service by the end of the applicable year
          (including service in the preceding year);

          (D)  Any Employee who normally works less than 17 1/2
          hours per week;

          (E)  Any Employee who normally works no more than
          six months during any year; and

          (F)  Any Employee who has not attained the age of
          21 at the end of the Plan Year."

1.38 "Total Compensation" means "wages" as defined in
     section 3401(a) of the Code for purposes of income tax
     withholding at the source, but determined:

          (A)  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 section 3401(a)(2) of the
          Code); and

          (B)  By including amounts deferred but not
          refunded under a cafeteria plan, as such term is
          defined in section 125(c) of the Code and under a
          plan qualified under section 401(k) of the Code.

1.39 "Trust Agreement" means the trust agreement between the
     Company and the Trustee, established for the purpose of
     funding benefits under the Plan, or any successor trust
     agreement or agreements.

1.40 "Trustee" means the trustee or trustees appointed by
     the Company pursuant to Section 9.3.

1.41 "Trust Fund" means all money or other property held by
     the Trustee pursuant to the terms of the Trust
     Agreement.

1.42      "United States" means the 50 states of the United
  States, the District of Columbia, Puerto Rico and Guam.

                         ARTICLE 2

                        ELIGIBILITY

2.1  Date of Participation

     Each individual who is an Employee and who meets the
     requirements specified in Section 2.2 shall become a
     Participant upon completion of one hour of service.

2.2  Participation Requirements

     The requirements for becoming a Participant are that
     the Employee must be employed in the United States, or
     be employed outside the United States and be eligible
     for home leave.  In addition, to be eligible, an
     Employee must be paid on the U.S. dollar Payroll.
     Notwithstanding anything in this Plan to the contrary,
     an individual shall be ineligible to become a
     Participant if he is:

          (A)  A member of a collective bargaining unit
          covered by a collective bargaining agreement,
          unless such agreement provides for coverage of the
          bargaining unit members under the Plan;

          (B)  Classified by the Company as a temporary
          employee;

          (C)  Eligible to participate in or accrue benefits
          under any other funded pension or retirement plan
          to which his Employer makes contributions, other
          than federal Social Security and the APL Limited
          SMART Plan;

          (D)  Designated by the Company in writing as an
          individual or member of a class not eligible to
          participate in the Plan;

          (E)  Compensated for services by a person other
          than an Employer and for any reason is deemed to
          be an Employee;

          (F)  A leased employee within the meaning of
          section 414(n) of the Code, or would be a leased
          employee but for the period-of-service requirement
          of Code section 414(n)(2)(B), and who is providing
          services to an Employer;

          (G)  Subject to a written agreement that provides
          that such individual shall not be eligible to
          participate in the Plan;

          (H)  Not on the Payroll of an Employer and who, at
          any time and for any reason, is deemed to be an
          Employee;

     If, during any period, the Employer has not regarded an
     individual as an Employee and, for that reason, has not
     withheld employment taxes with respect to that
     individual, then that individual shall not be a
     Participant for that period, even in the event that the
     individual is determined, retroactively, to have been
     an Employee during all or any portion of that period.

     An individual's status as a Participant shall be
     determined by the Company.  All such determinations
     shall be conclusive and binding on all persons.

                         ARTICLE 3

                      RETIREMENT DATE

3.1  Retirement Date

     A Participant's "Retirement Date" shall be his Normal,
     Early, Postponed or In-Service Retirement Date or his
     Vested Termination date (whichever is applicable)
     unless the Participant's Retirement Income commences or
     is paid as of another date pursuant to Section 3.3 or
     5.1, which date shall be his Retirement Date.  In no
     event, however, shall a Participant's Retirement Income
     commence later than his In-Service Retirement Date.

3.2  Normal Retirement Date

     A Participant's "Normal Retirement Date" shall be the
     first day of the month coincident with or next
     following his sixty-fifth (65th) birthday.

3.3  Early Retirement Date

     An individual who became a Participant before
     November 11, 1986, may retire on the first day of any
     month coincident with or subsequent to his fifty-fifth
     (55th) birthday, which day shall be his "Early
     Retirement Date."

     An individual who becomes a Participant on or after
     November 11, 1986, may retire on the first day of any
     month coincident with or subsequent to the later of
     (i) his fifty-fifth (55th) birthday or (ii) the date
     when he completes a Period of Service of five (5)
     years, which day shall be his "Early Retirement Date."

3.4  Vested Termination Date

     Notwithstanding any provision of this Plan to the
     contrary, a Participant who separates from all service
     with any Affiliate shall, if the Participant's
     Retirement Income is 100% vested, be entitled to elect
     to receive an immediate distribution of his Retirement
     Income.  In such case the Participant's "Vested
     Termination Date" shall be the first day of any month
     coincident or subsequent to the Participant's
     Termination Date.

3.5  Postponed Retirement Date

     If a Participant continues in the service of any
     Affiliate beyond his Normal Retirement Date, the first
     day of the month coincident with or next following the
     termination of his employment after his Normal
     Retirement Date shall be his "Postponed Retirement
     Date."




                         ARTICLE 4

                AMOUNT OF RETIREMENT INCOME

4.1  Retirement Income

     This Plan is a defined-benefit plan within the meaning
     of section 3(35) of ERISA (without regard to
     paragraphs (A) and (B) thereof).  Under the Plan,
     subject to the second paragraph of this Section 4.1, a
     Participant's Retirement Income shall be determined
     based on the Participant's Cash Balance Benefit.  The
     Participant's Cash Balance Benefit is equal to the
     amount of the benefit which may be provided by the
     Retirement Account described below in Section 4.3.
     This Retirement Account represents the benefit promised
     by the Plan and is not an actual account to which Plan
     assets and investment income are allocated.  The
     account balance is credited with interest at the rate
     specified in Section 4.3 to the Participant's
     Retirement Date.

     Subject to the remaining Sections of this Article 4 and
     the provisions of Article 6 (Forms of Benefit Payment)
     and Section 10.4 (Limitations Upon Highest-Paid
     Employees), a Participant's Retirement Income
     commencing on his Retirement Date, shall be equal to
     the greater of the amount described in Sections 4.2,
     4.3 or 4.5.  In addition, a Grandfathered Participant's
     Retirement Income shall not be less than the amount
     described in Section 4.11.  Any Participant who is not
     described in Section 4.3(B), except for a Participant
     described in Section 4.7, shall receive as his
     Retirement Income the amount accrued under the Plan as
     of May 31, 1997.

4.2  Minimum Benefit

     As a minimum benefit, a Participant shall be entitled
     to receive the greater of:

          (A)  a single life annuity commencing on the
          Participant's Normal Retirement Date equal to one
          thousand dollars ($1,000) per year; or

          (B)  a Cash Balance Benefit which is based on the
          amount of his Retirement Account as set forth in
          Appendix E.

4.3  Retirement Account

     A Participant's Retirement Account consists of the sum
     of the following hypothetical credits to the account of
     the Participant:  the Participant's "Basic Employer
     Allocations," the Participant's "Initial Employer
     Allocation" (if any) and "Interest" credited on such
     allocations.  Initial Employer Allocations under
     Section 4.3 shall be credited as of June 1, 1997.  A
     Participant may alternatively receive an Initial
     Employer Allocation under Section 4.7 under the terms
     therein described.  These hypothetical allocations and
     the Interest credit are determined as follows:

          (A)  Basic Employer Allocation

               For each Plan Year commencing on or after
          June 1, 1997, at the end of each calendar year, a
          Participant's Retirement Account shall be credited
          with an amount equal to the Participant's
          Allocation Percentage multiplied by the
          Participant's Benefit Compensation.  With respect
          to the period from June 1, 1997 to December 31,
          1997, the amount determined under this Subsection
          shall be multiplied by 7/12; provided, however,
          that this sentence shall be inapplicable to any
          individual who first becomes a Participant on or
          after June 1, 1997.

               Notwithstanding the above, with respect to
          any Participant who terminates employment during
          any Plan Year, the allocation described above
          shall occur as of the Participant's Termination
          Date, provided, however, with respect to any
          Participant whose Termination Date is on or after
          June 1, 1997, but before December 31, 1997, any
          allocation with respect to such a terminated
          Participant shall equal the Participant's
          Allocation Percentage multiplied by the
          Participant's Benefit Compensation multiplied by a
          fraction, the numerator of which is the number of
          days between June 1, 1997 and the Termination Date
          (inclusive) and the denominator of which is the
          number of days between January 1, 1997 and the
          Termination Date (inclusive).

          (B)  Initial Employer Allocation

               Each Participant who is (i) an Eligible
          Employee on June 1, 1997; and who is (ii) either
          (1) receiving Compensation from the Employer, or
          (2) on short-term sick or other paid leave shall
          receive an initial allocation as of June 1, 1997
          equal to the greater of:

                    (1)  the Actuarially Equivalent single
               sum present value of the Participant's
               adjusted Retirement Income under this Plan as
               of May 31, 1997, determined under the terms
               of the Plan as then in effect (taking into
               account the factors set forth in Appendix A)
               as though the Participant had a Termination
               Date of May 31, 1997.  With respect to any
               Participant who was hired on or after June 1,
               1996, but prior to June 1, 1997, and who is
               an Eligible Employee on June 1, 1997, such a
               Participant shall receive an initial
               allocation as of June 1, 1997 equal to the
               Actuarial Equivalent single sum present value
               of the Participant's adjusted Retirement
               Income as determined under the terms of this
               Plan as in effect on May 31, 1997 (taking
               into account the factors set forth in
               Appendix A), but disregarding the one-year of
               service participation requirement in effect
               on May 31, 1997 and substituting the
               Participant's rate of pay when he became an
               Eligible Employee for the rate of pay on June
               1; or

                    (2)  the amount set forth in Appendix E.

               The Initial Employer Allocation shall not
          include any amount attributable to the
          Participant's Supplemental Retirement Income.

          (C)  Interest

               As of December 31 of each Plan Year beginning
          on or after June 1, 1997 and prior to the
          Participant's Retirement Date, a Participant's
          Retirement Account shall be increased by the rate
          of Interest.

               The rate of Interest shall be determined
          as of the beginning of each calendar year.
          This rate shall be equal to the annual rate
          of interest on 30-year Treasury Securities
          (within the meaning of section 417(e)(3) of
          the Code) for the month of November which
          precedes the beginning of the applicable
          calendar year.  With regard to any partial
          allocation of Interest, the allocation shall
          be made based on the number of days in the
          applicable period divided by 365.

          (D)  Allocation Percentage

               As of the end of each calendar year, each
          Participant's Allocation Percentage shall be
          determined based upon the Participant's Allocation
          Points (determined as of the allocation date
          determined pursuant to Section 4.3(A)).  The
          Applicable Percentage shall be determined from the
          chart set forth below:

            Allocation        Applicable Percentage
              Points      
                           On all Benefit     On Benefit
                            Compensation     Compensation
                                             over One-half
                                              of the FICA
                                              Wage Basis
             Under 45            6%               6%
           45 and over,          8%               8%
           but under 55
           55 and over,          10%              10%
           but under 65
            65 and over          12%              10%


               A Participant's "Allocation Points" shall be
          the sum of the Participant's Period of Service and
          age.  Solely for purposes of Section 1.21 and this
          Section 4.3(D), a Participant's age shall be
          expressed as a number rounded to the fourth
          decimal place determined by dividing the number of
          days from the Participant's birth date to the
          allocation date by three hundred sixty-five (365).
          The amount of Allocation Points obtained by adding
          together the Participant's Period of Service and
          age shall not be rounded up.


4.4  Supplemental Retirement Income

     If a Participant is described in Appendix D, then, in
     addition to his Retirement Income, the Participant
     shall also be entitled to receive a Supplemental
     Retirement Income.

4.5  Protected Benefit

          (A)  Notwithstanding any provision of this Plan to
          the contrary, the Participant's Retirement Income
          under this Plan shall not be less than his or her
          accrued benefit under the terms of the Plan as in
          effect through May 31, 1997, based on the terms of
          the Plan in effect on May 31, 1997.

          (B)  With respect to a period of reemployment, a
          Participant shall cease to be entitled to a
          protected benefit under this Section 4.5 if prior
          to his reemployment the Participant received a
          lump sum distribution of his entire nonforfeitable
          interest in the Plan.

4.6  Late Retirement

     Any Participant who is entitled to receive a pension
     under Section 3.5 and whose In-Service Retirement Date
     precedes his Termination Date shall nonetheless
     continue to be credited with allocations under
     Section 4.3 for service on or after his In-Service
     Retirement Date.  This additional accrual shall be
     distributed to the Participant in the same form as
     previously elected by the Participant.

4.7  Special Rule for Any Participant Who Ceased To Be an
     Eligible Employee Prior to June 1, 1997 and Who Again
     Becomes an Eligible Employee After June 1, 1997

     If a Participant ceased be an Eligible Employee prior
     to June 1, 1997 (or ceased active participation in the
     Plan due to a leave of absence or disability) and again
     becomes an active Participant in the Plan after June 1,
     1997 upon again becoming an Eligible Employee (or
     returning from such a leave or disability) and if such
     Participant has earned Retirement Income attributable
     to his prior period of active participation in the
     Plan, the Retirement Income shall be converted to an
     Initial Employer Allocation credited as of December 31
     of the calendar year in which the Eligible Employee
     again becomes an active Participant in the Plan.  The
     initial allocation under this Section 4.7 shall be made
     in a manner consistent with Section 4.3(B) utilizing
     the actuarial factors applicable on June 1, 1997.

4.8  Retirement Income Limitations

     The provisions of this Section 4.8 shall apply with
     respect to all calendar years after December 31, 1986.

          (A)  General Rule

               Unless the alternative limitation of
          Paragraph (B) below applies, a Participant's
          Annual Benefit shall not exceed the lesser of the
          following amounts:

                    (1)  Ninety thousand dollars ($90,000),
               adjusted as described below; or

                    (2)  The amount of the Participant's
               Average Annual Compensation, as defined in
               Paragraph (I) below.

               As of January 1 of each calendar year, the
          adjusted dollar limitation for such calendar year
          announced by the Commissioner of Internal Revenue
          pursuant to section 415(d) of the Code shall
          automatically be substituted for the ninety
          thousand dollar ($90,000) amount set forth in
          Subparagraph (1) above and shall become the dollar
          limitation applicable under the Plan during such
          calendar year.  The adjusted dollar limitation for
          a calendar year shall apply in determining the
          amount of all Annual Benefits commencing in such
          calendar year, and such Annual Benefits thereafter
          shall not be adjusted (except as provided in the
          following sentence).  In the case of a Participant
          whose Employment terminates on or after January 1,
          1993, and whose Annual Benefit is limited by the
          dollar limitation under Subparagraph (1) above,
          such Annual Benefit shall automatically be
          recalculated as of January 1 of each calendar year
          following the termination of his Employment,
          commencing on January 1, 1994, to reflect the
          adjusted dollar limitation for such calendar year.
          An increased Retirement Benefit resulting from the
          recalculation of the Annual Benefit shall be
          payable under the Plan in the same form as the
          original Retirement Benefit.  No further
          adjustments shall be made once the adjusted dollar
          limitation exceeds the amount of the Annual
          Benefit.

               If a Participant's Annual Benefit would
          exceed the limitation of this Section 4.8, then
          such Annual Benefit shall be reduced by reducing
          the components thereof as necessary in the order
          in which they are listed in Paragraph (H) below;
          provided, however, that a Participant's Annual
          Benefit shall in no event be reduced below the
          amount of such Annual Benefit as of December 31,
          1986, determined under the applicable plans
          (including their benefit limitations) as then in
          effect.

          (B)  Alternative Limitation for Retirement Income
          up to $10,000

               A Participant's Retirement Income shall not
          be subject to the limitations of Paragraph (A)
          above if each of the following requirements is
          met:

                    (1)  The sum of the Participant's annual
               Retirement Income under this Plan and his
               aggregate annual retirement benefits under
               all other qualified defined-benefit plans
               maintained by any Affiliate does not exceed
               the lesser of (i) ten thousand dollars
               ($10,000) or (ii) the amount determined under
               Paragraph (D) below (concerning only
               Particiants whose Period of Service is less
               than ten (10) years); and

                    (2)  The Participant has never
               participated in a qualified
               defined-contribution plan maintained by any
               Affiliate.

          (C)  Reduced Limitations for Participants With
          Less Than 10 Years of Participation

               In the case of a Participant whose Credited
          Period of Service is less than ten (10) years, the
          amount described in Paragraph (A)(1) above shall
          be multiplied by a fraction determined as follows:

                    (1)  The numerator of such fraction
               shall be the number of completed months in
               such Credited Period of Service (but not less
               than twelve (12)); and

                    (2)  The denominator of such fraction
               shall be one hundred twenty (120).

               To the extent provided in Income Tax
          Regulations, this Paragraph (C) shall apply
          separately to each change in the benefit structure
          of the Plan, as if such change caused the
          commencement of a new Credited Period of Service.

          (D)  Reduced Limitations for Participants With
          Less Than 10 Years of Service

               In the case of a Participant whose Period of
          Service is less than ten (10) years, the amount
          described in Paragraph (A)(2) above and the ten
          thousand dollar ($10,000) amount described in
          Paragraph (B)(1) above shall be multiplied by a
          fraction determined as follows:

                    (1)  The numerator of such fraction
               shall be the number of completed months in
               such Period of Service (but not less than
               twelve (12)); and

          (E)  Adjusted Dollar Limitation for Benefits
               Commencing Before or After the Social
               Security Retirement Age

               In the case of a Participant whose Retirement
          Income commences before his Social Security
          retirement age, the dollar amount described in
          Paragraph (A)(1) above shall be reduced.  The
          reduced dollar amount shall be determined by
          treating the dollar limitation in Paragraph (A)(1)
          above as an annual annuity payable for life
          commencing at the Participant's Social Security
          retirement age and then converting it to an
          actuarially equivalent annual annuity payable for
          life commencing as of the date when the
          Participant's Retirement Income commences.
          Actuarial equivalency for this purpose shall be
          based on the following actuarial assumptions:

                    (1)  For calendar years prior to
               January 1, 1995, the actuarial assumptions
               specified in Appendix A, provided that the
               interest rate assumption shall equal the
               greater of the rate specified in Appendix A
               or five percent (5%); and

                    (2)  For calendar years after
               December 31, 1994, an interest rate
               assumption equal to the greater of the rate
               specified in Appendix A or the Applicable
               Interest Rate.

               In the case of a Participant whose Retirement
          Income commences after his Social Security
          retirement age, the amount described in Paragraph
          (A)(1) above shall be increased.  The increased
          dollar limit shall be determined by treating the
          dollar limitation in Paragraph (A)(1) above as an
          annual annuity payable for life commencing at the
          Participant's Social Security retirement age and
          then converting it to an actuarially equivalent
          annual annuity payable for life commencing as of
          the date when the Retirement Income commences.
          Actuarial equivalency for this purpose shall be
          based on the following actuarial assumptions:

                    (1)  For calendar years prior to
               January 1, 1995, the actuarial assumptions
               specified in Appendix A, provided that the
               interest rate assumption shall equal the
               lesser of the rate specified in Appendix A or
               five percent (5%); and

                    (2)  For calendar years after
               December 31, 1994, an interest rate
               assumption equal to the lesser of the rate
               specified in Appendix A or five percent (5%).

               For purposes of this Paragraph (E), a
          Participant's "Social Security retirement age"
          means the age determined pursuant to the following
          schedule:

               Date of Participant's Birth            Age

               Before January 1, 1938                  65

                    On or after January 1, 1938
                 but before January 1, 1955            66

               On or after January 1, 1955             67

          (F)  Combined Limitation on Benefits and
          Contributions

               The sum of a Participant's Defined-Benefit
          Plan Fraction and his Defined-Contribution Plan
          Fraction shall not exceed one (1) with respect to
          any calendar year beginning prior to January 1,
          2000.  The terms "Defined-Benefit Plan Fraction"
          and "Defined-Contribution Plan Fraction" shall
          have the meaning given to such terms by
          section 415(e) of the Code and the regulations
          thereunder.  If a Participant would exceed the
          foregoing limitation, then his Annual Benefit
          shall be reduced as necessary pursuant to
          Paragraph (A) above; provided, however, that the
          changes in this Section 4.8 taking effect on
          January 1, 1987 shall in no event reduce a
          Participant's Annual Benefit (in any form) below
          the amount of such Annual Benefit as of
          December 31, 1986, determined under the applicable
          plans (including their benefit limitations) as
          then in effect.

          (G)  Affiliate

               For purposes of this Section 4.8, the term
          "Affiliate" shall include any Affiliate (as
          defined in Section 1.2), except that, for purposes
          of this Section 4.8 only, the phrase "more than
          fifty percent (50%)" shall be substituted for the
          phrase "at least eighty percent (80%)" wherever it
          occurs in Section 1.2, and the penultimate
          sentence of Section 1.2 shall not apply.

          (H)  Annual Benefit

               For purposes of this Section 4.8, a
          Participant's "Annual Benefit" shall be equal to
          the sum of the following:

                    (1)  The annual Retirement Income to
               which the Participant is entitled under this
               Plan; and

                    (2)  The aggregate annual retirement
               benefits (if any) to which the Participant is
               entitled under all other qualified
               defined-benefit plans maintained by any
               Affiliate.

               A Participant's Supplemental Retirement
          Income shall not be considered a part of the
          Participant's "Annual Benefit."

               If an Annual Benefit (or any portion thereof)
          is payable in any form other than a single-life
          annuity or a qualified joint and survivor annuity,
          as defined in section 417(b) of the Code, then
          such Annual Benefit (or such portion) shall, for
          purposes of this Paragraph (H), be converted into
          a single-life annuity which is its actuarial
          equivalent.  Actuarial equivalency for this
          purpose shall be based on the following actuarial
          assumptions:

                    (1)  For calendar years prior to
               January 1, 1995, the actuarial assumptions
               specified in Appendix A, provided that the
               interest rate assumption shall equal the
               greater of the rate specified in Appendix A
               or five percent (5%); and

                    (2)  For calendar years after
               December 31, 1994, the Applicable Mortality
               Table and an interest rate assumption equal
               to the greater of the rate specified in
               Appendix A or the Applicable Interest Rate.

          (I)  Applicable Interest Rate

               For purposes of this Section 4.8, the term
          "Applicable Interest Rate" shall mean the annual
          rate of interest set forth in Appendix A for these
          purposes.

          (J)  Applicable Mortality Table

               For purposes of this Section 4.8, the term
          "Applicable Mortality Table" shall mean the table
          prescribed by Appendix A for these purposes.

          (K)  Average Annual Compensation

               For purposes of this Section 4.8 only, the
          term "Average Annual Compensation" shall mean the
          Participant's annual Compensation, as defined in
          Paragraph (L) below, averaged over that series of
          consecutive twelve (12) month periods (not in
          excess of three (3)) for which his cumulative
          Compensation is highest.  In the case of a
          Participant who has severed from all employment
          with any Affiliate, the amount determined under
          the preceding sentence shall be increased with
          respect to any calendar year following his
          separation from employment by multiplying it by a
          fraction determined as follows:

                    (1)  The numerator of such fraction
               shall be the amount described in
               Paragraph (A)(1) above, as in effect for such
               calendar year; and

                    (2)  The denominator of such fraction
               shall be the amount described in
               Paragraph (A)(1) above, as in effect for the
               calendar year in which the Participant
               severed from all employment with any
               Affiliate; provided that such denominator
               shall in no event be greater than the
               numerator described in Subparagraph (1)
               above.

          (L)  Compensation

               For purposes of this Section 4.8 only, the
          term "Compensation" shall mean "wages," as defined
          in section 3401(a) of the Code for purposes of
          income tax withholding at the source, 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 section 3401(a)(2) of the
          Code).

4.9  Return to Employment Following Retirement

     If a Participant returns to the service of an Employer
     after his Retirement Date (other than an In-Service
     Retirement Date) and is receiving annuity or
     installment payments, then payment of his Retirement
     Income and Supplemental Retirement Income benefits
     shall continue to be paid to him during his period of
     reemployment.

4.10 Deemed Termination After Normal Retirement Date

     Section 4.6 notwithstanding, in the case of a
     Participant who is employed beyond his Normal
     Retirement Date, the Participant's employment shall be
     deemed to terminate for the purposes of the Plan
     immediately prior to the first day of any calendar
     month in which there are less than eight days during
     which he is paid (or is entitled to payment) by an
     Affiliate, whether for the performance of duties or for
     any other reason.  Accordingly, the first day of such
     month shall be considered a Postponed Retirement Date
     and payment of the Participant's Retirement Income and
     Supplemental Retirement Income (if any) shall commence
     as of such date, as provided in Section 4.6.  Upon a
     Participant's actual Postponed Retirement Date or In-
     Service Retirement Date, this Section 4.10 shall cease
     to apply and the Participant's Retirement Income and
     Supplemental Retirement Income shall be recomputed in
     the manner described in Section 4.6.  For the purposes
     of this Section 4.10, whether a corporation is an
     Affiliate shall be determined as of the Participant's
     Normal Retirement Date and without regard to the
     penultimate sentence of Section 1.2.

4.11 Grandfathered Participants

     The Retirement Income of each Participant who is a
     Grandfathered Participant shall equal the greater of:

          (A)  The Cash Balance Benefit determined pursuant
          to the provisions of this Article 4, without
          regard to this Section 4.11; and

          (B)  The single sum value of the Participant's
          adjusted Retirement Income calculated in
          accordance with the provisions of Appendix C
          (taking into account the factors set forth in
          Appendix A).

     Notwithstanding the above, effective June 1, 2007, the
     benefit determined in accordance with Section 4.11(B)
     shall be converted on June 1, 2007 into an Initial
     Employer Allocation (in a manner consistent with
     Section 4.3(B) utilizing the actuarial factors
     applicable on June 1, 2007) and, thereafter, the
     Participant shall have his Retirement Income determined
     in accordance with the method set forth in Section 4.3.

4.12 Participants Transferring to/from Another
     Company-Supported Plan

     In the case of an Employee who becomes eligible to
     participate in another plan funded at least in part by
     Employer contributions (and who, therefore, ceases
     active participation in this Plan pursuant to
     Section 2.2), the Retirement Income shall be computed
     as of the date he ceases active participation pursuant
     to Section 2.2 and upon the Plan's benefit formula then
     in effect.  With respect to any Participant who was a
     participant in the Retirement Plan for Employees of
     American President Lines, Ltd. Represented by The
     Professional, Office and Industrial Division, Marine
     Engineers' Beneficial Association (AFL-CIO) and The
     Marine Clerks Association, Local 63, I.L.W.U. (the
     "Bargained Retirement Plan") and who becomes eligible
     to participate in this Plan, the Company may elect to
     transfer from the Bargained Retirement Plan to this
     Plan assets and liabilities associated with the
     benefits of such a Participant.  Any such transfer
     shall be made in accordance with section 414(l) of the
     Code and shall not result in the reduction of any
     protected benefits within the meaning of section
     411(d)(6) of the Code and the regulations promulgated
     thereunder.  After any such transfer, the affected
     Participant shall cease to be a Participant in the
     Bargained Retirement Plan and shall receive his entire
     benefit from this Plan.


                         ARTICLE 5

       TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT

5.1  Termination of Service After Vesting

     If a Participant (i) separates from all service with
     any Affiliate prior to an Early Retirement Date, other
     than by reason of death, and (ii) has completed a five
     (5) or more year Period of Service, then he shall be
     entitled to receive one hundred percent (100%) of the
     Retirement Income accrued by him pursuant to Article 4
     commencing as of a date determined in accordance with
     Article 3.


5.2  Termination of Service Before Vesting

     A Participant who separates from all service with any
     Affiliate prior to his attainment of age sixty-five
     (65), and prior to his completion of a five (5) year
     Period of Service or death, for reasons other than
     retirement on his Retirement Date, shall not be
     entitled to any Retirement Income benefits under the
     Plan.

5.3  Forfeitures

     Prior to the termination of the Plan, any forfeiture
     arising from the operation of this Article 5 or any
     other provision of the Plan shall be used to reduce
     future Employer contributions pursuant to Article 8.

                         ARTICLE 6

                  FORMS OF BENEFIT PAYMENT

6.1  Normal Form of Retirement Income

     Although a Participant may, in accordance with the
     provisions of this Article 6, elect to receive his
     Retirement Income in the form of a lump sum payment, a
     Participant's "Normal Form of Retirement Income" shall
     be the form of benefit described in this Section 6.1.

          (A)  Single Participants

               Except as otherwise provided for Married
          Participants pursuant to Paragraph (B) below, the
          Retirement Income shall be payable in the form of
          a life annuity commencing as of the Participant's
          Retirement Date and terminating with the last
          monthly payment due prior to his death.  The life
          annuity shall be the Actuarial Equivalent of the
          Participant's Retirement Income.

          (B)  Married Participants

               In the case of a Married Participant who has
          been married for at least one (1) year at the time
          of his death and had been married to the same
          spouse before his Benefit Distribution Date, the
          Actuarial Equivalent of the Participant's
          Retirement Income shall be payable to him in the
          form of a monthly payment commencing as of the
          Participant's Retirement Date and, after the
          Participant's death, such spouse who is living at
          the time of the Participant's death shall continue
          to receive fifty percent (50%) of such monthly
          payments for life.

6.2  Normal Form of Supplemental Retirement Income

          (A)  Single Participants

               Except as otherwise provided for Married
          Participants pursuant to Paragraph (B) below, or
          unless an optional form of Retirement Income
          described in Section 6.3 is duly elected by a
          Participant pursuant to Section 6.3(F), the
          Supplemental Retirement Income provided pursuant
          to Section 4.4 and Appendix D, if any, shall be
          payable in the form of a monthly payment
          commencing as of his Retirement Date and
          terminating with the last monthly payment due
          prior to his death.

     (B)  Married Participants

               Solely with respect to Married Participants,
          unless an optional form of Retirement Income
          described in Section 6.3 is duly elected, the
          Supplemental Retirement Income provided pursuant
          to Section 4.4 and Appendix D shall be the
          Actuarial Equivalent of the Supplemental
          Retirement Income provided under Paragraph (A)
          above, payable as a reduced monthly Supplemental
          Retirement Income to such Married Participant for
          life commencing as of his Retirement Date.  Upon
          the death of the Married Participant, fifty
          percent (50%) of the reduced Supplemental
          Retirement Income shall be paid to and during the
          life of the spouse to whom the Participant was
          married on the date when the Supplemental
          Retirement Income became payable, if such spouse
          is then living.  Such payments shall terminate
          with the last monthly payment due prior to the
          spouse's death.

6.3  Optional Forms of Retirement Income

     Within a reasonable time before the Participant's
     Benefit Distribution Date, the Company shall make
     available to such Participant (i) a written explanation
     of the terms and conditions of the normal form of
     Retirement Income, (ii) a written explanation of the
     Participant's right to make or revoke an election of an
     optional form of Retirement Income and of the effect of
     such election or revocation, (iii) a written
     explanation of the effect of a failure to make an
     election of an optional form of payment and (iv) a
     written explanation of the rights of the Participant's
     spouse under Paragraph (F) below.

     In lieu of the normal form of Retirement Income
     provided in Section 6.1 and the normal form of
     Supplemental Retirement Income provided in Section 6.2,
     a Participant may elect one of the following options,
     subject to the conditions of Paragraph (F) below:

     (A)  Supplemental Retirement Income Options

               A Participant who is not eligible to receive
          a Retirement Income but who is eligible to receive
          a Supplemental Retirement Income pursuant to
          Section 4.4 and Appendix D may elect, during the
          election period described in Paragraph (F) below,
          to receive his Employee Aggregate Contributions in
          a single lump sum, payable upon his separation
          from all service with any Affiliate.  The amount
          of his Employee Aggregate Contributions shall
          contain interest accrued to the date of payment in
          accordance with Section 1(e) of Appendix D.  In
          the case of a Married Participant, the election
          shall be effective only when agreed to in writing
          by such Participant's spouse in the manner
          described in Paragraph (F) below.

               A Married Participant who (i) does not elect
          to receive his Supplemental Retirement Income
          pursuant to the foregoing paragraph and (ii) does
          not elect to receive an optional form of
          Retirement Income pursuant to Paragraphs (B) or
          (D) below may elect, during the election period
          described in Paragraph (F) below, to receive his
          Supplemental Retirement Income commencing upon his
          Retirement Date and terminating with the last
          monthly payment prior to his death.  Such
          Supplemental Retirement Income shall be the
          Actuarial Equivalent of the Supplemental
          Retirement Income otherwise payable under
          Section 6.2(B).  The election shall be effective
          only when agreed to in writing by the Married
          Participant's spouse in the manner described in
          Paragraph (F) below.  However, the election may be
          revoked by the Married Participant by means of a
          written notice to the Company at any time prior to
          the commencement of such payments, which
          revocation shall become effective immediately.

               A Participant who (i) does not elect to
          receive his Supplemental Retirement Income in an
          optional form described above and (ii) elects to
          receive his Retirement Income in an optional form
          pursuant to Paragraphs (B), (C) or (D) below shall
          receive his Supplemental Retirement Income in the
          same form as his Retirement Income.  If
          Paragraph (B) below is elected, the actual
          Supplemental Retirement Income payable shall be
          the Actuarial Equivalent of the benefit payable
          under Section 6.2.  If a lump sum payment under
          Paragraph (D) below is elected, the Participant
          shall receive his employee contributions with
          interest accrued to the date of payment pursuant
          to Section 1(e) of Appendix D.  If an installment
          distribution under Paragraph (D) below is elected,
          the Participant's employee contributions with
          interest accrued to the date of the first
          installment pursuant to Section 1(e) of  Appendix
          D shall be added to the Participant's entire
          interest pursuant to Paragraph (D).

     (B)  Contingent Annuitant Options

               A Participant may elect to receive the
          Actuarial Equivalent of the Retirement Income
          otherwise payable under Section 6.1, commencing
          upon his Retirement Date and, after his death,
          payable to the contingent annuitant designated by
          the Participant, if then living, in the same
          amount or in an amount equal to fifty percent
          (50%) of the payments made to the Participant.

               If the Participant's contingent annuitant
          dies before the Participant's Benefit Distribution
          Date, the normal form of Retirement Income
          automatically shall become payable, as if a
          contingent annuitant option had not been elected,
          unless the Participant elects another optional
          form of payment within the applicable election
          period.  If the contingent annuitant predeceases
          the Participant after his Benefit Distribution
          Date, the Retirement Income payments to the
          Participant will not be adjusted and will cease
          upon the Participant's death.  Except as provided
          in Article 7, no income will be payable to a
          surviving contingent annuitant if the Participant
          dies before his Benefit Distribution Date.

               An election of a contingent annuitant option
          shall not become effective if an annual rate of
          Retirement Income of less than one hundred twenty
          dollars ($120) would be payable either to the
          Participant or to his contingent annuitant.

          (C)  Single Life Annuity for Married Participant

               A Married Participant may elect to receive
          his Retirement Income in the form of a monthly
          payment commencing as of the Participant's
          Retirement Date and terminating with the last
          monthly payment due prior to his death.  An
          election pursuant to this Paragraph (C) shall be
          effective only when agreed to in writing by such
          Participant's spouse in the manner described in
          Paragraph (F) below.

     (D)  Payment in a Lump Sum or in Installments

               At the request of the Participant, payment to
          a retiring Participant may be made in a lump sum
          or, in the case of a Participant who is an
          Employee on December 31, 1992, in annual
          installments.  The lump sum payment of a
          Participant's Cash Balance Benefit shall equal the
          Participant's Retirement Account.  The lump sum
          payment of any other benefit payable under this
          Plan shall equal the Actuarial Equivalent of the
          Participant's normal form of Retirement Income as
          of his Retirement Date.

               Installments shall be paid over one of the
          following periods:

                    (1)  A period certain not longer than
               the life expectancy of the Participant; or

                    (2)  A period certain not longer than
               the joint life expectancy of the Participant
               and his spouse.

               The amount to be distributed each year shall
          not be smaller than the amount obtained by
          dividing the entire interest of the Participant at
          the time the distribution is made by the life
          expectancy of the Participant or the joint life
          expectancy of the Participant and his spouse
          (whichever is applicable).  However, no
          distribution need be made in any year, or a lesser
          amount may be distributed, if the aggregate
          amounts distributed by the end of such year are at
          least equal to the aggregate of the minimum
          amounts required by this Paragraph (D) to be
          distributed by the end of such year.  Any
          installments that remain unpaid upon the
          Participant's death shall be paid to his
          Beneficiary in a lump sum.

               A Participant's "entire interest" shall equal
          the lump sum value of his Retirement Income as of
          the Participant's Retirement Date, increased by
          earnings (in accordance with Section 6.3(E) or, if
          the Participant's entire interest is maintained in
          a separate interest-bearing account at a financial
          institution, the amount actually earned), and
          decreased by the amount of installment payments
          previously made.

               Life expectancies shall be determined in
          accordance with the regulations and tables issued
          under section 72 of the Code.

          (E)  Interest on Installments

               If the payment of a Participant's Retirement
          Income is made in installments, the unpaid amount
          shall be credited with interest compounded
          annually at the rate prescribed in Section 4.3(C).

          (F)  Election Requirements

               An election of an optional form of payment or
          a Retirement Date before the Normal Retirement
          Date shall be made by a Participant on the
          prescribed form and filed with the Company.  Such
          election may be made only during an election
          period consisting of the ninety (90) consecutive
          days prior to the Participant's Benefit
          Distribution Date.  A Participant may revoke such
          an election by providing a written notice to the
          Company on the prescribed form at any time prior
          to the end of the election period.

6.4  Small Payments

     If the Actuarial Equivalent of all benefits payable to
     any person under the Plan, expressed as a lump sum, is
     not more than three thousand five hundred dollars
     ($3,500), then the Actuarial Equivalent of such
     benefits shall be paid to such person in a single lump
     sum in lieu of monthly payments.  For this purpose, a
     Retirement Income of $0 shall be deemed paid to any
     Participant who separates from service without being
     entitled to any Retirement Income benefits, as provided
     under Section 5.2 of the Plan.  The lump sum payment
     shall be made as soon as reasonably practicable after
     the Participant separates from service or, in the case
     of a death benefit, the date of the Participant's
     death.  However, no distribution shall be made under
     the preceding sentence after a Married Participant's
     Benefit Distribution Date, unless the Married
     Participant and his spouse (or surviving spouse if the
     Married Participant has died) consent in writing to the
     distribution within the ninety- (90-) day period prior
     to distribution.

6.5  General Rule on Commencement Dates

     All distributions under the Plan shall be made in
     accordance with the Income Tax Regulations under
     section 401(a)(9) of the Code.  Such regulations are
     incorporated in the Plan by reference and shall
     override any inconsistent provisions of the Plan.  In
     applying such regulations, no individual's life
     expectancy shall be recalculated with respect to the
     payment of any Retirement Income under the Plan, except
     to the extent that a recalculation is requested by such
     individual in writing and is permitted by such
     regulations.
                         ARTICLE 7

                PRERETIREMENT DEATH BENEFITS

7.1  Benefit Eligibility

     The Beneficiary of a Participant shall be entitled to a
     Death Benefit under this Article 7 if the Participant
     dies prior to his Benefit Distribution Date, but on or
     after June 1, 1997.  Any benefit payable with respect
     to a Participant who dies prior to June 1, 1997 shall
     be determined in accordance with the provisions of the
     Plan in effect on May 31, 1997.

7.2  Payment of Death Benefit

          (A)  If the Beneficiary is not the surviving
          spouse of the Participant, payment shall be made
          as soon as is practicable after the Participant's
          death.

          (B)  If the Beneficiary is the surviving spouse of
          the Participant, payment of the Death Benefit
          shall commence as of the first day of the month
          coincident or next following the later of (1) the
          Participant's Normal Retirement Date or (2) the
          date of the Participant's death.  If the
          Participant's death occurs prior to the
          Participant's Normal Retirement Date, the
          surviving spouse may, in the manner prescribed by
          the Company, elect to receive the Death Benefit on
          an earlier commencement date, provided the
          surviving spouse's election is made within the
          ninety (90) day period prior to the desired
          commencement date.  If, pursuant to Section 7.3,
          the Death Benefit is to be paid in a lump sum
          payment, then the payment shall be made as soon as
          practicable on or after the date set forth herein.
          If payment is in the form of an annuity, the
          payments shall be computed as of the date set
          forth herein and shall commence as soon as
          practicable on or after such date.

7.3  Form and Amount of Death Beneficiary

     If the Participant's Beneficiary is not the surviving
     spouse, payment of the Death Benefit shall be made in a
     lump-sum payment in cash.  If the Participant's
     Beneficiary is not the surviving spouse, and if the
     Participant is eligible for the Supplemental Retirement
     Income provided by Appendix D, then the Participant's
     death benefit shall also include the Participant's
     employee contributions plus interest pursuant to the
     provisions of Section 1(e) of Appendix D to the date of
     payment.

     If the Participant's surviving spouse is his
     Beneficiary, payment shall be made as an annuity for
     the life of the surviving spouse that is payable
     monthly, unless the surviving spouse elects to receive
     the benefit as a lump-sum payment in cash.  For
     purposes of this Section 7.3:

          (A)  If payable in a lump-sum and accrued under
          Section 4.3, the vested portion of the Death
          Benefit shall be in an amount equal to the
          Participant's Cash Balance Benefit as of the date
          payment of such benefit is commenced.  If payable
          in a lump-sum and accrued under any other
          provision of the Plan, the Death Benefit shall be
          equal to the Actuarial Equivalent of the vested
          Retirement Income based on the factors set forth
          in Appendix A.

          (B)  If payable to the surviving spouse as a
          single- life annuity and accrued under Section
          4.3, the Death Benefit shall be payable in an
          Actuarially Equivalent single-life annuity based
          on the factors set forth in Appendix A and the
          surviving spouse's age at the time the benefit is
          commenced in accordance with the factors set forth
          in Appendix A.  If the Participant is eligible for
          the Supplemental Retirement Income provided by
          Appendix D, then the Death Benefit shall also
          include an amount, payable for the life of such
          spouse, which is the Actuarial Equivalent of the
          Participant's employee contributions plus interest
          pursuant to Section 1(e) of Appendix D.  If,
          however, the spouse does not survive to receive a
          total Death Benefit equal to the Participant's
          employee contributions plus interest pursuant to
          Section 1(e) of Appendix D at his death, then the
          excess shall be paid in a lump sum to the
          Participant's Beneficiary.

7.4  Involuntary Lump Sum Cash-Outs

     Any other provision of the Article notwithstanding, if
     the value of the Participant's vested Retirement Income
     is not more than $3,500 as of the date of his death,
     payment of the Death Benefit shall be made to the
     Beneficiary in a single lump-sum payment in cash as
     soon as practicable after the date of the Participant's
     death.

7.5  Beneficiary Designation for Preretirement Death Benefit

     The Participant may not designate a non-spouse
     Beneficiary to receive the Death Benefit under this
     Article 7 without the consent of his spouse in
     accordance with this Section 7.5.  Any spousal consent
     under this Section 7.5 above shall be in writing, shall
     identify the non-spouse Beneficiary, shall acknowledge
     the effect of such election and shall be witnessed by a
     Plan representative (if permitted by the Employer) or
     by a notary public.  A consent, once given by a spouse,
     shall not be revocable by such spouse, unless the
     Participant revokes the designation.  The spouse's
     consent shall not be required if (a) the Participant
     establishes to the Employer's satisfaction that the
     spouse's consent cannot be obtained because the spouse
     cannot be located or (b) the Participant is legally
     separated or has been abandoned (within the meaning of
     local law) and has an appropriate court order (unless a
     qualified domestic relations order provides otherwise)
     and, in either such case, (c) the Participant's
     designated Beneficiary agrees in writing that, if the
     Employer is compelled by a court of competent
     jurisdiction or other authority to pay all or any
     portion of the Death Benefit to or on behalf of such
     spouse, the designated Beneficiary will indemnify the
     Employer, by paying to the Employer, upon written
     demand, an amount equal to such payment, together with
     reasonable attorneys' fees and expenses.  The Employer
     may, in its sole discretion, waive the indemnification
     requirement.  If the spouse is legally incompetent to
     give consent, the spouse's legal guardian (including
     the Participant) may give consent.

7.6   Notice of Death Benefit Options

     The Employer shall provide each Participant within the
     applicable period, a written explanation of the Death
     Benefit detailing the terms and conditions on which the
     Death Benefit will be paid to the surviving spouse of
     the Participant, the Participant's right to elect a non-
     spouse Beneficiary to receive the Death Benefit, the
     right of the spouse with respect to the Death Benefit,
     and the effect on the spouse of the spouse's consent to
     the Participant's designation of a non-spouse
     Beneficiary.

     For purposes of this Section 7.6, the "applicable
     period" is whichever of the following periods ends
     last:

          (A)  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; except that in the case of a
          Participant who separates from service before
          attaining age 35, the applicable period means the
          period beginning one year before the separation
          from service and ending one year after such
          separation.  If such a Participant is later
          reemployed, notice will be given during the
          reemployment applicable period.

          (B)  A reasonable period ending after the
          individual becomes a Participant.  A "reasonable
          period" is the period beginning one year prior to
          and ending on the earlier of 30 days prior to the
          Benefit Distribution Date or one year after the
          date the individual becomes a Participant.

7.7  Other Death Benefits

     If a Participant's death occurs after commencement of
     his Retirement Income, the Plan shall not provide any
     death benefits except in the following cases:

          (A)  If the form of Retirement Income which the
          Participant was receiving contains provisions for
          the payment of benefits after the Participant's
          death, a benefit shall be paid accordingly; and

          (B)  If the Participant made employee
          contributions under the Natomas Plan or a Prior
          Plan, his Beneficiary shall receive, when the
          later to survive of the Participant or his spouse
          dies, a lump sum payment equal to the excess (if
          any) of the Participant's employee contributions
          plus interest pursuant to Section 1(e) of Appendix
          D as of the Benefit Distribution Date over the
          total amount of Retirement Income and Supplemental
          Retirement Income received by the Participant and
          his spouse.  Payment shall be made as soon as
          practicable (but in no event later than five (5)
          years) after the Participant's death.

                         ARTICLE 8

                     FINANCING THE PLAN

8.1  Participant Contributions

     Participants are not required or permitted to
     contribute to the Plan.  However, for any Participant
     who was a Participant in a Prior Plan or the Natomas
     Plan and had a balance in his contribution account when
     his participation in the Prior Plan or the Natomas Plan
     concluded, his balance in that account shall become a
     part of the Trust Fund and shall be payable in
     accordance with the provisions of this Plan.

8.2  Employer Contributions

     Each Employer shall make such contributions from time
     to time as it deems necessary to provide the benefits
     of the Plan.  The minimum amount of such contributions
     shall be that amount which is required to meet the
     minimum funding standard of ERISA and any governmental
     regulations and rulings issued in connection with
     ERISA.  However, the Employer is under no obligation to
     make any contributions under the Plan after the Plan is
     terminated, whether or not benefits accrued or vested
     prior to the date of termination have been fully
     funded.

8.3  Trust Agreement

     The Company has entered into a Trust Agreement, which
     shall be a part of the Plan.  All contributions made
     pursuant to this Article 8 shall be paid to the Trust
     Fund.  All such contributions and increments thereon
     shall be held and disbursed in accordance with the
     provisions of the Plan and the Trust Agreement.  No
     person shall have any interest in, or right to, any
     part of the funds held in the Trust Fund, except as
     expressly provided in the Plan or Trust Agreement.

8.4  Reversion of Assets

     Prior to the termination of the Plan, the assets of the
     Plan shall not inure to the benefit of an Employer and
     shall be held for the exclusive purposes of providing
     benefits to Participants and their contingent
     annuitants and Beneficiaries and for defraying the
     reasonable expenses of administering the Plan, except
     that:

          (A)  In the case of an Employer contribution which
          is made because of a mistake of fact, such
          contribution shall be returned to the Employer
          within one (1) year after the payment of the
          contribution; and

          (B)  Each Employer contribution is expressly condi
          tioned upon the deductibility of the contribution
          under section 404 of the Code.  If the deducti
          bility of a contribution is disallowed, the amount
          for which a deduction was disallowed (reduced by
          any losses incurred with respect to such amount)
          shall be returned to the Employer within one (1)
          year after the date of disallowance.

                         ARTICLE 9

    ADMINISTRATION OF THE PLAN AND MANAGEMENT OF ASSETS

9.1  Plan Sponsor and Plan Administrator

     The Company is the "plan sponsor" and the "plan
     administrator" of the Plan, as such terms are used in
     ERISA and the Code.

9.2  Administrative Responsibilities

     The Company shall be the named fiduciary which has the
     authority to control and manage the operation and
     administration of the Plan.  The Company in its sole
     discretion shall make such rules, interpretations and
     computations and take such other actions to administer
     the Plan as the Company may deem appropriate.  The
     Company shall have sole discretion to interpret the
     terms of the Plan and to determine eligibility for
     benefits pursuant to the objective criteria set forth
     in the Plan.  The rules, interpretations, computations
     and other actions of the Company shall be binding and
     conclusive on all persons.  In administering the Plan,
     the Company shall act in a nondiscriminatory manner to
     the extent required by section 401(a) and related
     provisions of the Code and shall at all times discharge
     its duties with respect to the Plan in accordance with
     the standards set forth in section 404(a)(1) of ERISA.

9.3  Management of Plan Assets

     The Company shall be a named fiduciary with respect to
     control and management of the assets of the Plan, but
     only to the extent that it shall have the authority
     (i) to appoint one or more trustees to hold the assets
     of the Plan in trust and to enter into a trust
     agreement with each trustee it appoints, (ii) to
     appoint one or more Investment Managers for any assets
     of the Plan and to enter into an investment management
     agreement with each Investment Manager it appoints,
     (iii) to direct the investment of any Plan assets not
     assigned to an Investment Manager and (iv) to remove
     any trustee or Investment Manager it previously
     appointed.  Each Investment Manager so appointed shall
     acknowledge in writing that it is a fiduciary with
     respect to the Plan.

9.4  Trustee and Investment Managers

     The Trustee shall have the exclusive authority and
     discretion to control and manage the Plan assets held
     in trust by it, except to the extent that (i) the
     Company directs how such assets shall be invested or
     (ii) the Company allocates the authority to manage such
     assets to one or more Investment Managers.  Each
     Investment Manager appointed under Section 9.3 shall
     have the exclusive authority to manage, including the
     power to acquire and dispose of, the Plan assets
     assigned to it by the Company.  The Trustee and any
     Investment Manager shall be solely responsible for
     diversifying the investment, in accordance with section
     404(a)(1)(C) of ERISA, of the Plan assets assigned to
     them by the Company, except to the extent that the
     Company directs how such assets shall be invested.

9.5  Delegation of Fiduciary Responsibilities

     The Company may engage such attorneys, actuaries,
     accountants, consultants or other persons to render
     advice or to perform services with regard to any of its
     responsibilities under the Plan as it shall determine
     to be necessary or appropriate.  The Company may
     designate by written instrument (signed by both
     parties) one or more persons to carry out, where
     appropriate, fiduciary responsibilities of the Company.
     The duties and responsibilities of the Company under
     the Plan shall be carried out by the directors,
     officers and employees of the Company, acting on behalf
     and in the name of the Company in their capacities as
     directors, officers and employees and not as individual
     fiduciaries.  Except as provided in Section 14.1
     (Review Panel), the Company is specifically prohibited
     from designating any director, officer or employee of
     the Company as a fiduciary and from allocating or
     delegating to any such person any of its fiduciary
     responsibilities.

9.6  Enrolled Actuary

     The Company shall appoint an Enrolled Actuary to make
     actuarial valuations of the liabilities under the Plan;
     to recommend to it the actuarial funding method and
     actuarial assumptions for use from time to time in
     actuarial and other computations for any purpose under
     the Plan; to recommend to it the range of permissible
     contributions to be made by each Employer; and to
     perform such other services as the Company shall deem
     necessary or desirable in connection with the
     administration of the Plan.

9.7  Reliance Upon Advice

     To the extent permitted by law, the Company shall be
     entitled to rely conclusively upon, and shall be fully
     protected in any action taken or suffered in good faith
     in reliance upon, any attorney, actuary, accountant,
     consultant or other person selected by the Company, or
     in reliance upon any tables, valuations, certificates,
     opinions or reports which shall be furnished by any of
     them or by the Trustee.

9.8  Funding Policy

     The Company shall have the fiduciary responsibility for
     establishing a funding policy and method that satisfies
     the requirements of Part 3 of Subtitle B of Title I of
     ERISA, and shall review the funding policy and method
     at least annually.

9.9  Communication of Financial Needs

     The Company shall communicate to the Trustee (or
     Investment Manager, where appropriate) from time to
     time (but at least annually) its determination of the
     Plan's short- and long-term financial needs.

9.10 Administrative Expenses

     All expenses that arise in connection with the
     administration of the Plan, including (but not limited
     to) the compensation of the Trustee, administrative
     expenses and proper charges or disbursements of the
     Trustee and compensation or other charges and expenses
     of any Investment Manager, attorney, actuary,
     accountant, consultant, or other person who shall be
     employed by the Company in connection with the
     administration of the Plan, shall be paid from the
     Trust Fund to the extent not paid by the Company.  The
     Company shall have complete and unfettered discretion
     to determine whether an expense of the Plan shall be
     paid by the Company or out of the Trust Fund, and the
     Company's discretion and authority to direct the
     payment of expenses out of the Trust Fund shall not be
     limited in any way by any prior decision or practice
     regarding payment of the expenses of the Plan.

9.11 Manner of Payments

     Subject to the provisions of the Trust Agreement, the
     Company shall determine the manner in which the funds
     of the Plan shall be disbursed pursuant to the Plan.

                         ARTICLE 10

                  AMENDMENT OR TERMINATION

10.1  Amendments

      The Company may amend (retroactively or prospectively)
      any or all of the provisions of the Plan at any time
      by action of its board of directors or by action of a
      committee or individual(s) acting pursuant to a valid
      delegation of authority; provided, however, that no
      amendment shall make it possible for any part of the
      corpus or income of the Trust Fund to be used for, or
      diverted to, purposes other than the exclusive benefit
      of Participants and their contingent annuitants and
      Beneficiaries prior to the satisfaction of all
      liabilities with respect to Participants and their
      contingent annuitants and Beneficiaries under the
      Plan; and provided that no amendment shall make it
      possible to deprive any Participant of a previously
      accrued benefit, except to the extent permitted by
      section 412(c)(8) of the Code.

10.2  Merger, Consolidation or Transfer

      Except as otherwise provided in regulations under the
      Code, in the event of any merger or consolidation
      with, or transfer of assets or liabilities to, any
      other plan, the benefit that each Participant would be
      entitled to receive if the Plan were to terminate
      immediately after the merger, consolidation or
      transfer shall not be less than the benefit he would
      have been entitled to receive if the Plan had
      terminated immediately before the merger,
      consolidation or transfer.

10.3  Rights and Obligations Upon Termination

           (A) It is the intention of the Company that the
           Plan will continue indefinitely, but the Company
           may, at any time and for any reason, by action of
           its board of directors or by action of a
           committee or individual(s) acting pursuant to a
           valid delegation of authority, terminate the Plan
           or permanently discontinue Company contributions
           with respect to any or all Employers hereunder
           without terminating the Trust Agreement or the
           other provisions of the Plan.  Any other
           provision hereof notwithstanding, no Employer
           shall have any obligation to continue to make
           contributions to the Plan after the termination
           thereof with respect to such Employer.  Upon
           termination of the Plan, the accrued benefits of
           all Employees (to the extent funded) shall become
           fully vested and nonforfeitable.

           (B) It is the intent of this Section 10.3 that
           any termination of the Plan be accomplished in
           accordance with ERISA section 4044 and sections
           401(a)(4) and 411(d)(3) of the Code and related
           regulations.  Prior to any intended termination
           of the Plan, the Plan shall be amended to provide
           for allocation and distribution of Plan assets
           attributable to accrued benefits among
           Participants and Beneficiaries in compliance with
           such laws, and such allocation and distribution
           shall then be made by the Company in accordance
           with the Plan as so amended.  Upon termination of
           the Plan, excess assets of the Trust Fund shall
           revert to the Company to the extent permitted by
           ERISA.

           (C) If any partial termination (as determined by
           the Company in accordance with applicable Code
           provisions) of the Plan occurs, then the accrued
           benefits of those Employees with respect to whom
           the Plan is so terminated (to the extent funded)
           shall become fully vested and nonforfeitable.

           (D) Until the final distribution of all Plan
           assets allocated on account of any termination or
           partial termination of the Plan, the Trust Fund
           shall continue, and the Company and the Trustee
           shall continue to have and may exercise all of
           the powers conferred upon them by the Plan and
           the Trust Agreement.

10.4  Limitations Upon Highest-Paid Employees

           (A) Restriction on Benefits

               In the event of the termination of the Plan,
           the benefit of any Highly Compensated Employee or
           any Highly Compensated Former Employee shall be
           limited to a benefit that is nondiscriminatory
           under section 401(a)(4) of the Code.

           (B) Pre-Termination Restrictions on Distributions

                    (1)  Limit on Annual Payments

                         The annual payments to a Restricted
               Employee under the Plan shall be restricted
               to an amount equal to the payments that would
               be made on behalf of such Restricted Employee
               under a single-life annuity that is the
               Actuarial Equivalent of the sum of his
               accrued benefit and his other Benefits under
               the Plan.  The restrictions in this Section
               10.4 shall not apply, however, if:

                              (a)  After payment to a
                    Restricted Employee of all Benefits, the
                    value of the Plan's assets equals or
                    exceeds one hundred ten percent (110%)
                    of the value of current liabilities (as
                    defined in section 412(l)(7) of the
                    Code); or

                              (b)  The value of the Benefits
                    for a Restricted Employee is less than
                    one percent (1%) of the value of current
                    liabilities; or

                              (c)  The value of the Benefits
                    for a Restricted Employee is $3,500 or
                    less.

                    (2)  Definition of Benefit

                         For purposes of this Section 10.4
               only, the term "Benefit" shall include, among
               other benefits, loans in excess of the amount
               set forth in section 72(p)(2)(A) of the Code,
               any periodic income, any withdrawal values
               payable to a living Participant and any death
               benefits not provided by insurance on the
               Participant's life.

                    (3)  Definition of Restricted Employee

                         For purposes of this Section 10.4
               only, the term "Restricted Employee" with
               respect to any Plan Year shall mean one of
               the twenty-five (25) Highly Compensated
               Employees and Highly Compensated Former
               Employees whose Compensation (as defined in
               Section 4.8) is highest for such Plan Year.

                         ARTICLE 11

                     GENERAL PROVISIONS

11.1  No Implied Employment Contract

      The Plan shall not be deemed (i) to give any Employee
      or other person any right to be retained in the employ
      of an Employer nor (ii) to interfere with the right of
      an Employer to discharge any Employee or other person
      at any time and for any reason.

11.2  Benefits Not Assignable


      Except as otherwise provided in Section 11.7 or
      section 414(p) of the Code with respect to qualified
      domestic relations orders, no distribution or payment
      under the Plan to any Participant, Beneficiary or
      contingent annuitant shall be subject in any manner to
      anticipation, alienation, sale, transfer, assignment,
      pledge, encumbrance or charge, whether voluntary or
      involuntary, and any attempt to anticipate, alienate,
      sell, transfer, assign, pledge, encumber or charge the
      same shall be void; nor shall any distribution or
      payment in any way be liable for or subject to the
      debts, contracts, liabilities, engagements or torts of
      any person entitled to the distribution or payment.
      If any Participant, Beneficiary or contingent
      annuitant has been adjudicated a bankrupt or has
      purported to anticipate, alienate, sell, transfer,
      assign, pledge, encumber or charge any distribution or
      payment, voluntarily or involuntarily, then the
      Company, in its discretion, may direct the Trustee to
      hold or apply the distribution or payment or any part
      thereof to or for the benefit of such Participant,
      Beneficiary or contingent annuitant in such manner as
      the Company shall direct.  The Company shall establish
      reasonable procedures to determine the qualified
      status of domestic relations orders and to administer
      distributions under qualified domestic relations
      orders.

11.3  Payments Under Qualified Domestic Relations Order

      The creation or recognition of the right of an
      Alternate Payee to any Retirement Income payable with
      respect to a Participant by, and the payment of
      benefits pursuant to, a qualified domestic relations
      order (as defined in section 414(p) of the Code) shall
      not constitute a violation of Section 11.2.  The
      Company shall establish reasonable, written procedures
      to determine the qualified status of a domestic
      relations order and to administer distributions under
      such orders.  Pursuant to a qualified domestic
      relations order, the Plan may distribute the Actuarial
      Equivalent of any benefit payable to an Alternate
      Payee prior to the Participant's Benefit Distribution
      Date, but no earlier than the Participant's Early
      Retirement Date or (if earlier) Normal Retirement
      Date, without regard to whether the Participant is
      then retired.  An Alternate Payee's election of a
      contingent annuitant option, lump sum option or
      installment option for distribution of his Plan
      benefit shall be conditioned upon satisfying any
      election requirement equivalent to those applicable to
      the Participant.  To the extent that a qualified
      domestic relations order creates, assigns or
      recognizes an Alternate Payee's right to any portion
      of the Retirement Income otherwise payable to or with
      respect to a Participant, such portion thereafter
      shall not be taken into account in determining the
      Retirement Income payable to or with respect to such
      Participant.

11.4  Payments of Benefits to Infants or Incompetents

      If the Company determines that any person entitled to
      payments under the Plan is an infant or is incompetent
      by reason of a physical or mental disability, then it
      may cause all payments thereafter becoming due to such
      person to be made to any other person for his benefit,
      without responsibility for the application of amounts
      so paid.  Payments made pursuant to this provision
      shall completely discharge the Employer, the Trustee
      and the Company.

11.5  Proof of Age and Marriage

      Participants, spouses and contingent annuitants shall
      furnish proof of age and marital status satisfactory
      to the Company at such time or times as the Company
      may prescribe.  Subject to Section 6.5, the Company
      may delay the disbursement of any benefit due under
      the Plan until all pertinent information with respect
      to age and marital status has been so furnished.

11.6  Source of Benefits

      The Trust Fund shall be the sole source of benefits
      under the Plan, and each Employee, Participant,
      contingent annuitant, Beneficiary or other person who
      claims the right to any payment or benefit under the
      Plan shall only be entitled to look to the Trust Fund
      for such payment or benefit and shall not have any
      right, claim or demand therefor against any Employer
      or any officer or director of the Employer.

11.7  Overpayments and Underpayments

      If any person has received a payment from the Plan in
      excess of the amount (if any) to which he was entitled
      under the Plan, then the excess may be withheld from
      one or more subsequent payments to such person (or to
      any person who derives his rights under the Plan from
      the person who received the overpayment); provided
      that no single periodic payment under the Plan shall
      be reduced by more than twenty-five percent (25%) on
      account of one or more prior overpayments.  In
      addition, the Company may employ any other lawful
      means to recover overpayments on behalf of the Plan.
      If any person has received less than the amount to
      which he is entitled under the Plan, then the entire
      amount of the deficiency shall be paid to him (or to
      his representative) as soon as reasonably practicable
      after the discovery of the underpayment.

11.8  Service in Multiple Fiduciary Capacities

      Any person or group of persons may serve in more than
      one fiduciary capacity with respect to the Plan and
      Trust Agreement.

11.9  Criminal Acts

      Any Participant who (i) has not attained the age of
      sixty-five (65), (ii) has less than a five (5) year
      Period of Service and (iii) admits to, or is convicted
      of, any criminal act against an Employer shall not be
      entitled to any Retirement Income benefits for service
      after November 15, 1972, attributable to Employer
      contributions, unless the Plan is terminated prior to
      the date when he admits to, or is convicted of, such
      criminal act.

11.10 IRS Qualification

      The Company intends that the Plan (including the Trust
      Agreement forming a part thereof) shall be a qualified
      pension plan for the exclusive benefit of Employees
      and their Beneficiaries, as provided in
      sections 401(a) and 501(a) of the Code.

11.11 Construction of Plan

      Headings to the Articles, Sections or Subsections of
      the Plan are for reference only.  In the event of a
      conflict between a heading and the text of the Plan,
      the text of the Plan shall control.  In the event of a
      conflict between the text of the Plan and any summary,
      description or other information regarding the Plan,
      the text of the Plan shall control.

      Words indicating gender shall be construed to include
      males and females wherever appropriate.  The singular
      shall include the plural, and the plural shall include
      the singular, unless the context otherwise requires.

11.12 Forms for Plan Communications

      All communications from a Participant or other person
      with regard to the Plan shall become effective only
      when made in writing and filed with the Company.  If
      the Company has adopted prescribed forms for any
      communications, such communications shall be effective
      only if filed on such forms.

11.13 Governing Law

      The provisions of the Plan shall be construed,
      administered and governed according to ERISA and, to
      the extent not superseded by ERISA, the laws of the
      State of California.


                         ARTICLE 12

                     PERIOD OF SERVICE

12.1  Period of Employment Relationship

      An individual's Period of Service shall include any
      period during which he maintains an employment
      relationship with any Affiliate, determined as
      follows:

      (A)  General Rule

               An individual's employment relationship shall
           begin as of the date on which he first performs
           duties as an employee of any Affiliate for which
           he receives (or is entitled to receive)
           compensation and shall end as of the date on
           which he retires, dies, quits, is discharged or
           otherwise severs from all employment with any
           Affiliate.

      (B)  Approved Absence

               If an individual is absent (with or without
           pay) with the approval of an Affiliate and if the
           absence does not exceed twelve (12) months, then
           the absence shall not be considered a quit.  If
           the absence exceeds twelve (12) months but the
           individual complies with all terms and conditions
           imposed from time to time by the Affiliate (which
           may include a requirement of reemployment), then
           the absence also shall not be considered a quit.
           If the absence exceeds twelve (12) months and if
           the individual fails to comply with such terms
           and conditions, then the absence shall be
           considered a quit as of the expiration of the
           first twelve (12) months.

           (C) Military Leave

               If an individual enters into military service
           with the United States, then his entry into
           military service shall not be considered a quit;
           provided, however, that the entry into military
           service shall be considered a quit as of the time
           when it occurs if the individual fails to return
           to employment with an Affiliate within the period
           during which his reemployment rights are
           protected by law.

12.2  Interval Between Periods of Employment

      The Period of Service of an individual who is rehired
      by an Affiliate within 365 days after the end of his
      previous employment relationship with an Affiliate, as
      determined pursuant to Section 12.1, shall include the
      period between the end of the previous employment
      relationship and the commencement of the new
      employment relationship.

12.3  Predecessor Companies

      In determining an individual's nonforfeitable interest
      in his Retirement Income, his Period of Service also
      shall include any Period of Service with a company
      merged or consolidated with an Employer, or a
      substantial part of the assets or business of which
      has been acquired by an Employer (hereafter
      "Predecessor Company"):

           (A) If the Employer continues to maintain an
           employee pension benefit plan of such Predecessor
           Company;

           (B) If, and to the extent, such employment with
           the Predecessor Company is required to be treated
           as employment with the Employer under regulations
           prescribed by the Secretary of the Treasury; or

           (C) If, and to the extent, granted by the Company
           in its sole discretion, effected on a
           nondiscriminatory basis, regarding all persons
           similarly situated.

      For purposes of determining an individual's Retirement
      Income benefit, his Period of Service also may include
      a Period of Service with a Predecessor Company to the
      extent granted by the Company in its sole discretion,
      effected on a nondiscriminatory basis regarding all
      persons similarly situated.

12.4  Other Periods

      An individual's Period of Service shall include the
      following:

           (A) Any period recognized under the terms of the
           Plan as in effect on May 31, 1997; and

           (B) Any other period which constitutes a Period
           of Service under such written, uniform and
           nondiscriminatory rules as the Company may adopt
           from time to time.

12.5  Years in a Period of Service

      All of an individual's Periods of Service determined
      pursuant to this Article 12 shall be aggregated on the
      basis of days.  The number of years in the
      individual's aggregate Period of Service shall be
      expressed as a number rounded to the fourth decimal
      place determined by dividing the aggregate number of
      days in such period by three hundred sixty-five (365).

                         ARTICLE 13

                    CLAIMS AND INQUIRIES


13.1  Application for Benefits

      Applications for benefits and inquiries concerning the
      Plan (or concerning present or future rights to
      benefits under the Plan) shall be submitted to the
      Company in writing.  An application for benefits shall
      be submitted on the prescribed form and shall be
      signed by the Participant or, in the case of a benefit
      payable after his death, by his surviving spouse or
      Beneficiary.

13.2  Denial of Application

      In the event that an application for benefits is
      denied in whole or in part, the Company shall notify
      the applicant in writing of the denial and of the
      right to a review of the denial.  The written notice
      shall set forth, in a manner calculated to be
      understood by the applicant, specific reasons for the
      denial, specific references to the provisions of the
      Plan on which the denial is based, a description of
      any information or material necessary for the
      applicant to perfect the application, an explanation
      of why the material is necessary, and an explanation
      of the review procedure under the Plan.  The written
      notice shall be given to the applicant within a
      reasonable period of time (not more than ninety (90)
      days) after the Company received the application,
      unless special circumstances require further time for
      processing and the applicant is advised of the
      extension.  In no event shall the notice be given more
      than one hundred eighty (180) days after the Company
      received the application.



                         ARTICLE 14

                  REVIEW OF DENIED CLAIMS

14.1  Review Panel

      The Company shall from time to time appoint a panel
      (the "Review Panel") which shall consist of three (3)
      individuals who may, but need not, be Employees.  The
      Review Panel shall be the named fiduciary which has
      the authority to act with respect to any appeal from a
      denial of benefits or a determination of benefit
      rights.

14.2  Request for Review

      An applicant whose application for benefits was denied
      in whole or in part, or the applicant's duly
      authorized representative, may appeal from the denial
      by submitting to the Review Panel a request for a
      review of the application within ninety (90) days
      after receiving written notice of the denial from the
      Company.  The Company shall give the applicant or his
      representative an opportunity to review pertinent
      materials, other than legally privileged documents, in
      preparing the request for a review.  The request for a
      review shall be in writing.  The request for a review
      shall set forth all of the grounds on which it is
      based, all facts in support of the request, and any
      other matters which the applicant deems pertinent.
      The Review Panel may require the applicant to submit
      such additional facts, documents or other material as
      it may deem necessary or appropriate in making its
      review.

14.3  Decision on Review

      The Review Panel shall act on each request for a
      review within sixty (60) days after receipt, unless
      special circumstances require further time for
      processing and the applicant is advised of the
      extension.  In no event shall the decision on review
      be rendered more than one hundred twenty (120) days
      after the Review Panel received the request for a
      review.  The Review Panel shall give prompt written
      notice of its decision to the applicant and to the
      Company.  In the event that the Review Panel confirms
      the denial of the application for benefits in whole or
      in part, the notice shall set forth, in a manner
      calculated to be understood by the applicant, the
      specific reasons for the decision and specific
      references to the provisions of the Plan on which the
      decision is based.

14.4  Rules and Interpretations

      The Review Panel shall adopt such rules, procedures
      and interpretations of the Plan as it deems necessary
      or appropriate in carrying out its responsibilities
      under this Article 14.

14.5  Exhaustion of Remedies

      No legal action for benefits under the Plan shall be
      brought unless and until the claimant (i) has
      submitted a written application for benefits in
      accordance with Section 13.1, (ii) has been notified
      by the Company that the application is denied, (iii)
      has filed a written request for a review of the
      application in accordance with Section 14.2 and (iv)
      has been notified in writing that the Review Panel has
      affirmed the denial of the application; provided,
      however, that legal action may be brought after the
      Company or the Review Panel has failed to take any
      action on the claim within the time prescribed by
      Sections 13.2 and 14.3, respectively.


                         ARTICLE 15

                    TOP-HEAVY PROVISIONS

15.1  Determination of Top-Heavy Status

      Any other provision of the Plan notwithstanding, this
      Article 15 shall become effective for any Plan Year
      beginning after December 31, 1983, in which the Plan
      is a Top-Heavy Plan.  The Plan shall be considered a
      "Top-Heavy Plan" for a Plan Year if, as of the
      Determination Date for such Plan Year, the Top-Heavy
      Ratio for the Aggregation Group exceeds sixty percent
      (60%).

15.2  Minimum Benefit

      The annual Normal Retirement Income of each
      Participant shall not be less than the product of
      (i) two percent (2%) of the Participant's Average
      Compensation, as defined in Section 15.6(C), and
      (ii) the number of the Participant's Qualifying Years
      not in excess of ten (10).

15.3  Minimum Vesting

      Any other provision of the Plan notwithstanding, the
      vesting requirement under Section 5.1 shall be a three
      (3) or more year Period of Service (instead of a five
      (5) or more year Period of Service) for each
      Participant who completes any Period of Service in a
      Plan Year in which the Plan is a Top-Heavy Plan.

15.4  Effect of Change in Top-Heavy Status

      If the Plan at any time is a Top-Heavy Plan and
      thereafter ceases to be a Top-Heavy Plan, each
      Participant who would be vested under Section 15.3 as
      of the May 31 in the last Plan Year in which the Plan
      is a Top-Heavy Plan shall thereafter continue to be
      vested.  Each other Participant shall be vested in
      accordance with Article 4 or 5, whichever is
      applicable.  After the Plan ceases to be a Top-Heavy
      Plan, a Participant's Retirement Income shall be
      determined under Article 4 or 5, whichever is
      applicable, except that such benefit shall not be less
      than the benefit accrued under Section 15.2 as of the
      May 31 in the last Plan Year in which the Plan was a
      Top-Heavy Plan.

15.5  Impact on Benefit Limitations

      For each calendar year within a Plan Year in which the
      Plan is a Top-Heavy Plan, the number "1.00" shall be
      substituted for the number "1.25" wherever it appears
      in sections 415(e)(2) and (3) of the Code; provided,
      however, that such substitution shall not have the
      effect of reducing any benefit accrued under this Plan
      or any other defined-benefit plan maintained by any
      Affiliate prior to the first day of the Plan Year in
      which this Section 15.5 becomes applicable.

15.6  Definitions

      For purposes of this Article 15, the following
      definitions shall apply:

           (A) "Affiliate" means each Affiliate, as defined
           in Section 1.3, except that the penultimate
           sentence of Section 1.3 shall not apply.

           (B) "Aggregation Group" means a group of
           qualified plans consisting of:

                    (1)  Each plan of the Affiliates in
               which a Key Employee participates and each
               other plan of the Affiliates which enables
               any plan in which a Key Employee participates
               to meet the requirements of sections
               401(a)(4) and 410 of the Code; or

                    (2)  All plans of the Affiliates
               included under (1) above, plus, at the
               election of the Company, one or more
               additional plans of the Affiliates which,
               when all such plans are considered together,
               satisfy the requirements of sections
               401(a)(4) and 410 of the Code.

           (C) "Average Compensation" means the
           Participant's average annual Compensation for the
           series of consecutive Plan Years (not in excess
           of five (5)) during which the Participant had the
           greatest aggregate Compensation.  For purposes of
           the preceding sentence, the following Plan Years
           shall be disregarded (and the preceding and
           following Plan Years shall be considered
           consecutive):

                    (1)  Any Plan Year during which the
               Participant has no Period of Service;

                    (2)  Any Plan Year ending before June 1,
               1984; and

                    (3)  Any Plan Year commencing after the
               close of the last Plan Year in which the Plan
               was a Top Heavy Plan.

           (D) "Compensation" shall have the meaning given
           such term in Section 4.8.

           (E) "Determination Date" means the last day of
           the preceding Plan Year.

           (F) "Key Employee" means a key employee, as
           defined by section 416(i) of the Code and the
           regulations thereunder.  In applying section
           416(i) of the Code, the term "compensation" shall
           have the meaning set forth in Paragraph (D)
           above.

           (G) "Qualifying Year" means each Plan Year with
           respect to which all of the following
           requirements are met:

                    (1)  The Plan is a Top-Heavy Plan;

                    (2)  The Participant is not a Key
               Employee;

                    (3)  The Participant completes any
               Period of Service; and

                    (4)  The Plan Year commenced on or after
               June 1, 1984.

           (H) "Top-Heavy Ratio" means the top-heavy ratio
           for the Affiliates, as computed in accordance
           with section 416(g) of the Code and the
           regulations thereunder.  In applying section
           416(g) of the Code, the present value of accrued
           benefits shall be determined on the basis of the
           interest assumption and the mortality assumptions
           used for the computation of plan costs under
           section 412 of the Code, and the valuation date
           shall be the last day of the Plan Year.

                         ARTICLE 16

                         EXECUTION

To record this amendment and restatement of the Plan to read
as set forth herein, effective as of June 1, 1997, the
Company has caused its authorized officer to execute this
document this 14 day of August, 1997.

                                                 APL LIMITED



                            By  /s/ Timothy J. Windle
                                    Assistant Secretary


                ACTUARIAL EQUIVALENT FACTORS

SECTION 1.      DEFINITIONS.

     As used herein, the following terms shall have the
following meanings:

     (a)  "Applicable Interest Rate" means the annual rate
of interest described in section 417(e)(3)(A)(ii)(II) of the
Code.  This rate shall be determined for each Plan Year, and
shall remain stable throughout the Plan Year.  This
determination shall be made as of the "Lookback Month" for
the applicable Plan Year. The "Lookback Month" shall be the
month of April which precedes the Plan Year for which the
determination is being made.

     (b)  "Applicable Mortality Table" means the table
described in section 417(e)(3)(A)(ii)(I) of the Code.

     Capitalized terms used in this Appendix A that are not
defined above shall have the same meaning as those terms do
in the Plan.

SECTION 2.     INITIAL EMPLOYER ALLOCATION.

     For purposes of determining a Participant's Initial
Employer Allocation as of May 31, 1997, the determination
shall be made utilizing the Applicable Mortality Table in
effect as of June 1, 1997 and an interest rate assumption of
7 percent (7%).  A Participant's "adjusted Retirement
Income" shall equal his Retirement Income as of May 31,
1997; however, in the case of a Participant whose Retirement
Income on May 31, 1997 was the Participant's "COLA-Adjusted
Retirement Income" (as defined by the Plan document in
effect on May 31, 1997), the "adjusted Retirement Income"
shall be equal to such COLA-Adjusted Retirement Income
adjusted by applying the following factors:

            Factors for Determining Eligibility
           for a COLA-Adjusted Retirement Income

                       Single Factors
  Age             2.5% Factors             1.5% Factors

   55                    1.276                    1.166
   56                    1.269                    1.161
   57                    1.262                    1.157
   58                    1.255                    1.153
   59                    1.248                    1.149
   60                    1.241                    1.145
   61                    1.235                    1.141
   62                    1.228                    1.137
   63                    1.221                    1.133
   64                    1.215                    1.129
   65                    1.208                    1.125


                      Married Factors
  Age             2.5% Factors             1.5% Factors

   55                    1.430                    1.307
   56                    1.423                    1.302
   57                    1.415                    1.297
   58                    1.407                    1.293
   59                    1.399                    1.288
   60                    1.391                    1.283
   61                    1.385                    1.279
   62                    1.377                    1.274
   63                    1.369                    1.270
   64                    1.362                    1.266
   65                    1.354                    1.261


Married Factors = Single Factors / 89.2%

SECTION 3.     CONVERSION OF RETIREMENT ACCOUNT TO A LIFE
               ANNUITY.

     For purposes of converting a Participant's Retirement
Account into a life annuity, the life annuity shall be the
Actuarial Equivalent of the Retirement Account determined
utilizing the Applicable Interest Rate and the Applicable
Mortality Table.

SECTION 4.     SINGLE SUM VALUE OF GRANDFATHERED BENEFIT.

     For purposes of Section 4.11(B), the single sum value
of the Grandfathered Benefit shall be made based on the
Applicable Mortality Table and the Applicable Interest Rate
in effect at the time of such determination.  If a
Participant's Grandfathered Benefit is equal to his "COLA-
Adjusted Retirement Income" (as defined in Section 2(d) of
Appendix C), then the determination of the single sum value
shall be made by also taking into account the "Factors for
Determining Eligibility for a COLA-Adjusted Retirement
Income" set forth in Section 2 of this Appendix A.

SECTION 5.     JOINT-AND-SURVIVOR ANNUITY OPTION FACTORS.

     Joint-and-survivor option factors shall be determined
by the following formulas:

100% Continuation:

     Retirement at age 65     80.6% plus .8% for each year
                              the contingent annuitant is
                              older than the Employee or
                              minus .8% for each year the
                              contingent annuitant is
                              younger than the Employee, but
                              in no event greater than 98%.

     Retirement at other 
      than age 65             The initial factor shall
                              be increased by .6%
                              for each year the Employee is
                              under age 65 and decreased by
                              .6% for each year the Employee
                              is over age 65, but the result
                              shall in no event be greater
                              than 98%.

50% Continuation:

     Retirement at age 65     89.2% plus .5% for each year
                              the contingent annuitant is
                              older than the Employee or
                              minus .5% for each year the
                              contingent annuitant is
                              younger than the Employee, but
                              in no event greater than 98%.

     Retirement at other
      than age 65             The initial factor shall
                              be increased by .4%
                              for each year the Employee is
                              under age 65 and decreased by
                              .4% for each year the Employee
                              is over age 65, but the result
                              shall in no event be greater
                              than 98%.


           Tables Illustrating Joint-and-Survivor
               Option Factors at Various Ages

                Contingent
Employee's    Annuitant's
Age on        Age on Nearest   100%          50%
Birthday      Birthday      Continuance   Continuance

   65            70            .846         .917
   65            65            .806         .892
   65            60            .766         .867
   65            55            .726         .842
   62            64            .840         .914
   62            60            .808         .894
   60            62            .852         .922
   55            53            .850         .922


SECTION 6.     ALL OTHER CALCULATIONS.

     For all other purposes under the Plan, except as may be
set forth in the applicable Section, calculations shall be
made based on the Applicable Interest Rate and the
Applicable Mortality Table.


                         APPENDIX B

                 DIRECT ROLLOVER PROVISIONS


SECTION 1.  DIRECT ROLLOVER OPTION.

     Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election
under this Appendix B, a Distributee may elect, subject to
the conditions and administrative procedures prescribed by
the Company, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover, as
described in section 401(a)(31) of the Code.  In the event
that the Distributee elects to receive a portion of the
Eligible Rollover Distribution and to transfer a portion to
another Eligible Retirement Plan in a Direct Rollover, the
Direct Rollover portion must be at least $500.

SECTION 2.  DEFINITIONS.

     As used herein, the following terms have the following
meanings:

     (a)  "Eligible Rollover Distribution" means 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 10
years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the
Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities); and a distribution of less than $200.

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

     (c)  "Distributee" means a Member, the Member's
surviving spouse and the Member's spouse or former spouse
who is an Alternate Payee.

     (d)  "Direct Rollover" means a payment by the Plan to
an Eligible Retirement Plan, including payment effected by
delivering to the Distributee a check made payable to the
Eligible Retirement Plan's custodian or trustee.

     Capitalized terms used in this Appendix B that are not
defined herein shall have the same meaning as those terms do
in the Plan.

                         APPENDIX C

                   GRANDFATHERED BENEFIT


     This Appendix C shall be applicable solely with respect
to Grandfathered Participants, as set forth in the Plan.
This Appendix shall be effective as of June 1, 1997.

SECTION 1.     DEFINITIONS.

     Capitalized terms used in this Appendix C that are not
defined herein shall have the same meaning as those terms do
in the Plan.  For purposes of this Appendix C, "Natomas
Company," "Natomas Plan" and "Prior Plan" shall have the
meanings set forth in Appendix D.

(a)  "Average Annual Compensation" means one fifth (1/5) of
the highest sum of a Participant's Grandfather Benefit
Compensation for any five (5) consecutive calendar years
during the Participant's Credited Period of Service.  If the
Participant's Credited Period of Service contains fewer than
five (5) June 1 dates, "Average Annual Compensation" means
the sum of his Grandfather Benefit Compensation for each of
the calendar years that contain a June 1 date divided by the
number of such years.  If a Participant is on an approved
absence (within the meaning of Section 12.1(B)), without
receiving any Base Grandfather Compensation from an
Employer, on June 1 of any calendar year, then the
Participant's Grandfather Benefit Compensation for the
calendar year that contains the June 1 date immediately
preceding the start of the absence shall be substituted in
the computation.

(b)  "Average Social Security Base" means "covered
compensation," as defined in section 401(l)(5)(E) of the
Code.

(c)  "Base Grandfather Compensation" means a Participant's
rate of basic earnings on June 1 while the Participant is an
Eligible Employee, including amounts contributed on a pretax
basis under section 125 or 401(k) of the Code to a plan
maintained by the Employer, and excluding overtime pay,
bonuses, commissions, incentive compensation and Employer
contributions (other than salary deferrals) to this or any
other benefit plan.

(d)  "Credited Period of Service" means:

          (1)  The credited period of service completed by
          the Participant prior to August 31, 1983, under
          the provisions of a Prior Plan applicable to
          service for benefit accrual purposes, determined
          without regard to any breaks in service; plus

          (2)  Any period completed by the Participant on or
          after August 31, 1983, to the extent that (i) such
          period constitutes a Period of Service under
          Article 12 and (ii) the Participant is an Eligible
          Employee during such period; plus

          (3)  In the case of an individual who first
          becomes an Employee on or after January 1, 1993
          and who thereafter becomes a Participant, any
          period completed by such individual prior to
          becoming a Participant to the extent that (i) such
          period constitutes a Period of Service under
          Article 12 and (ii) the individual is an Eligible
          Employee during such period; plus

          (4)  In the case of a Natomas Transferee, the
          credited period of service completed by the
          Natomas Transferee prior to his transfer, as
          determined under the provisions of the Natomas
          Plan applicable to service for benefit accrual
          purposes; minus

          (5)  The number of years (and fractions thereof)
          included in Paragraphs (1), (2), (3) and (4) above
          that were used to calculate a Retirement Income
          that was paid to the Participant in the form of a
          lump sum distribution under the Plan, unless the
          Participant is reemployed as an Eligible Employee
          and repays the lump sum distribution, together
          with interest thereon at the rate specified in
          Section 1(a) of Appendix D, prior to his
          subsequent Benefit Distribution Date.

          (6)  For purposes of applying Article 12 to
          determine a Participant's Credited Period of
          Service under this Section of Appendix C, the
          following provision shall replace Section 12.5
          under Article 12:  All of an individual's Periods
          of Service determined pursuant to Article 12 shall
          be aggregated on the basis of months.  The number
          of years in the individual's aggregate Period of
          Service is determined by dividing the number of
          months in such period by twelve (12).  Partial
          months of service are rounded up to the next
          higher whole month.

(e)  "Eligible Grandfather Compensation" means, for any
calendar year the sum of:

          (1)  The Participant's annual Base Grandfather
          Compensation during such calendar year;

          (2)  Any bonus that he receives during such
          calendar year under the Company's year-end bonus
          plan for executives and key employees;

          (3)  The total amount of any overtime pay that he
          receives during such calendar year, except that
          any overtime pay received during a calendar year
          in which he completes a Credited Period of Service
          of less than twelve (12) months shall be divided
          by the number of completed months in such Credited
          Period of Service and then multiplied by twelve
          (12);

          (4)  For Plan Years ending on or before May 31,
          1997, the total amount of any commissions that he
          receives during such calendar year, except that
          any commissions received during a calendar year in
          which he completes a Credited Period of Service of
          less than twelve (12) months shall be divided by
          the number of completed months in such Credited
          Period of Service and then multiplied by twelve
          (12);

          (5)  Any payment he receives under the Company's
          Team Up For Success program during the 1997
          calendar year;

          (6)  Any bonus received under the Company's
          Worldwide Bonus program during such calendar year;
          and

          (7)  Any portion of a Participant's annual
          earnings (including any bonus which would
          otherwise be includible as Eligible Grandfather
          Compensation) deferred by the Participant pursuant
          to a nonqualified plan sponsored by the
          Participant's Employer.

(f)  "Grandfather Benefit Compensation" shall mean a
Grandfathered Participant's Eligible Grandfather
Compensation divided by two (2).  Grandfather Benefit
Compensation taken into account under the Plan shall in no
event exceed the limitation in effect for that year under
section 401(a)(17) of the Code.  This limitation shall
automatically be adjusted for each calendar year to reflect
the cost-of-living adjustment (if any) announced by the
Commissioner of Internal Revenue for such calendar year.

(g)  "Natomas Transferee" means a Participant who was a
participant in the Natomas Plan and who, at any time prior
to November 30, 1983, has transferred directly from
employment with Natomas Company, or with another corporation
which adopted the Natomas Plan, to employment with an
Employer as an Eligible Employee.

(h)  "Primary Social Security Benefit" means the estimated
annual benefit to which a Participant will be entitled under
the Federal Social Security program upon attaining age 65.
A Participant's Primary Social Security Benefit shall be
estimated by the Company as of the date the Participant
ceases to be an Employee on the basis of:

          (1)  In the case of a Participant who retires on a
          Retirement Date, the assumption that such
          Participant has no income that constitutes "wages"
          for purposes of the Federal Social Security
          program after the earlier of his Retirement Date
          or age sixty-five (65);

          (2)  In the case of a Participant who ceases to be
          an Employee prior to a Retirement Date, the
          assumption that his income that constitutes
          "wages" for purposes of the Federal Social
          Security program for each calendar year beginning
          with the year in which he ceases to be an Employee
          and ending with the year that includes his sixty-
          fifth (65th) birthday is equal to the annualized
          rate of his compensation from the Affiliates that
          constitutes "wages" for purposes of the Federal
          Social Security program immediately prior to the
          date such Participant ceases to be an Employee;
          and

          (3)  The Participant's annualized rate of
          compensation during the Participant's initial
          period as an Employee (as determined by the
          Company), projected backward to reflect growth at
          the rate of the National Average Wage Index plus
          two percentage points; provided, however, that a
          Participant may supply the Company with
          documentation of the Participant's actual earnings
          history prior to the commencement of benefits
          under the Plan, in which case the Participant's
          Primary Social Security Benefit shall be estimated
          on the basis of such actual earnings history.

SECTION 2.  GRANDFATHERED RETIREMENT BENEFIT.

     The benefit described in Section 4.11(B) shall be
determined in accordance with the provisions of this
Section 2 of Appendix C.

(a)  Normal Retirement Benefit.  Subject to the remaining
Sections of this Appendix, Section 4.8, the provisions of
Article 6 (Forms of Benefit Payment) and Section 10.4
(Limitations Upon Highest-Paid Employees), a Participant's
annual rate of Retirement Income, commencing on his Normal
Retirement Date, shall be equal to the amount described in
Paragraph (1) below, minus the amount described in
Paragraph (2) below, but not greater than the amount
described in Paragraph (3) below.

          (1)  The amount described in this Paragraph (1)
          shall be equal to a percentage of the
          Participant's Average Annual Compensation.  Such
          percentage shall be equal to the sum of:

                    (A)  The product of four and two-fifths
               percent (4-2/5%) times the number of years in
               the Participant's Credited Period of Service
               completed prior to January 1, 1993 not in
               excess of twenty (20); plus

                    (B)  The product of two percent (2%)
               times the number of years in the
               Participant's Credited Period of Service
               completed prior to January 1, 1993 in excess
               of twenty (20); plus

                    (C)  The product of three and one-thirds
               percent (3-1/3%) times the number of years in
               the Participant's Credited Period of Service
               completed after December 31, 1992.

          (2)  The amount described in this Paragraph (2)
          shall be equal to a percentage of the
          Participant's Primary Social Security Benefit
          equal to the product of one and two-thirds percent
          (1-2/3%) times the number of years in the
          Participant's Credited Period of Service.

          (3)  The amount described in this
          Paragraph (3) shall be equal to fifty percent
          (50%) of the amount (if any) by which the
          Participant's Average Annual Compensation
          exceeds his Primary Social Security Benefit.
          Solely for purposes of this Section 2(a)(3),
          a Participant's Average Annual Compensation
          shall be determined based on the definition
          of "Grandfather Benefit Compensation"
          contained in Section 1(f) of this Appendix C,
          but substituting "one (1)" for "two (2)."

     Partial years in the Participant's Credited Period of
     Service shall be rounded up to the next higher whole
     month and then counted as the appropriate fraction of a
     year.

(b)  Participants Transferring Among Certain Companies.  In
the case of a Natomas Transferee, the annual rate of
Retirement Income, commencing on his Normal Retirement Date,
shall be the larger of the amounts described in
Paragraph (1) or (2) below.

          (1)  The amount described in this Paragraph (1)
          shall be equal to the amount computed pursuant to
          Section 2(b) of this Appendix C.  For this
          purpose, the Natomas Transferee's credited period
          of service under the Natomas Plan shall be
          included, as provided in Section 1(d)(4) of this
          Appendix C.

          (2)  The amount described in this Paragraph (2)
          shall be equal to the sum of:

                    (A)  The amount computed pursuant to
               Section 2(a) of this Appendix C, except that
               Section 1(d)(4) of this Appendix shall be
               disregarded and the Natomas Transferee's
               credited period of service under the Natomas
               Plan shall be excluded; plus

                    (B)  The annual normal retirement
               benefit which the Natomas Transferee had
               accrued under the Natomas Plan as of the date
               of his transfer to an Employer (in the form
               of a single-life annuity).

     In the case of a Participant who (i) had been
     transferred between Pacific Far East Lines, Inc.
     ("PFEL") and an Employer prior to July 1, 1971,
     (ii) was employed by an Employer on such date and
     (iii) retires while employed by an Employer after
     March 1, 1973, the Participant's Retirement Income
     provided in Section 2(a) of this Appendix C first shall
     be computed as if employment with PFEL had been with an
     Employer.  The amount so determined then shall be
     reduced by the annual normal retirement benefit which
     the Participant is eligible to receive (in the form of
     a single-life annuity) from the retirement plan of
     PFEL.

(c)  Early Retirement Income.  A Participant who retires on
an Early Retirement Date may elect to receive one of the
following:

          (1)  Commencing on his Normal Retirement Date, or
          on the first day of any month prior to his Normal
          Retirement Date but coinciding with or following
          his sixty-second (62nd) birthday, the Retirement
          Income benefit accrued by him pursuant to
          Section 2(a) of this Appendix C.

          (2)  Commencing on his Early Retirement Date or on
          the first day of any month between his Early
          Retirement Date and his sixty-second (62nd)
          birthday (as selected by the Participant pursuant
          to Section 6.3(F)), the Retirement Income benefit
          described in Paragraph (1) above, reduced by the
          interest rate assumption set forth in Appendix A.

     For the purpose of determining a Participant's
     eligibility to receive a Retirement Income pursuant to
     this Section of Appendix C (but not the amount of such
     Retirement Income), a Participant who transferred from
     another company described in Section 2(b) of this
     Appendix C shall be credited with a Credited Period of
     Service for his employment with the other company.  The
     amount of such Retirement Income shall be determined
     pursuant to such Section in conjunction with this
     Section of Appendix C.

(d)  COLA-Adjusted Retirement Income.  In lieu of a
Retirement Income determined under Section 2(a) of this
Appendix C, a Participant who retires or separates from
service after becoming vested pursuant to Article 5 shall be
entitled to receive his benefit accrued as of December 31,
1992, increased annually pursuant to this Section 2(d) of
Appendix C (a "COLA-Adjusted Retirement Income"), beginning
on the June 1 next following the commencement of his
Retirement Income, provided that the Company determines that
the present value of the Participant's COLA-Adjusted
Retirement Income is greater than that of his Retirement
Income when both are expressed as Actuarially Equivalent
lump sums as of the date of the Participant's retirement or
separation from service.  The surviving spouse or contingent
annuitant of a Participant who receives a COLA-Adjusted
Retirement Income shall also be entitled to receive a
benefit increased annually pursuant to this Section 2(d) of
Appendix C.  In the case of a Participant whom the Company
determines is entitled to a COLA-Adjusted Retirement Income
(or such Participant's surviving spouse or contingent
annuitant), references in the Plan to a Participant's
Retirement Income shall be deemed to mean such Participant's
COLA-Adjusted Retirement Income.

     Subject to the limitations in the next two sentences,
the COLA-Adjusted Retirement Income that a Participant,
spouse or contingent annuitant eligible under the preceding
paragraph receives for any Plan Year shall be the benefit
which results from multiplying the portion of the original
benefit he received attributable to his benefit accrued as
of December 31, 1992 by the ratio of (i) the CPI-W for U.S.
Cities on the February 1 preceding the starting date of the
increased benefit to (ii) the CPI-W for U.S. Cities on the
February 1 preceding the starting date of the original
benefit.  However, the increase in any Plan Year in a
benefit accrued before September 1, 1990, shall never be
larger than two and one-half percent (2 1/2%) of the benefit
received in the immediately preceding Plan Year.  The
increase in any Plan Year in a benefit accrued after
August 31, 1990 and prior to January 1, 1993, shall never be
larger than one and one-half percent (1 1/2%) of the benefit
received in the immediately preceding Plan Year.  The
"benefit accrued before September 1, 1990," shall be deemed
to be equal to the Retirement Income that the Participant or
his surviving spouse would have received if the Participant
had separated from all service with Affiliates on August 31,
1990.  The "benefit accrued as of December 31, 1992," shall
be deemed to be equal to the Retirement Income that the
Participant or his surviving spouse would have received if
the Participant had separated from all service with
Affiliates on December 31, 1992.  The "benefit accrued after
August 31, 1990 and prior to January 1, 1993," shall be
deemed to be equal to (i) the entire Retirement Income that
the Participant or his surviving spouse would have received
if the Participant had separated from all service with
Affiliates on December 31, 1992 minus (ii) the Retirement
Income that the Participant or his surviving spouse would
have received if the Participant had separated from all
service with Affiliates on August 31, 1990.

     This Section 2(d) of Appendix C shall be administered
so that changes in the base period of years used in
computing the CPI-W for U.S. Cities that occur after a
Participant's retirement or separation from service shall
not affect the cost-of-living adjustments for such
Participant, his surviving spouse or contingent annuitant.

     The cost-of-living adjustment provided by this Section
2(d) of Appendix C shall not apply to the Supplemental
Retirement Income payable to a Participant, his spouse or
contingent annuitant.

(e)  Prior Benefit Accrual.  The provisions of this Section
2(e) of Appendix C shall supersede any conflicting
provisions of the Plan.

          (1)  In the case of a Participant who was an
          Employee on May 31, 1989, his total Retirement
          Income shall in no event be less than his
          Retirement Income calculated (A) by counting only
          his Credited Period of Service before June 1,
          1989, and (B) by applying all of the provisions of
          the Plan in effect from time to time before
          June 1, 1989.  This calculation shall be made on
          the assumption that the Participant separated from
          all service with Affiliates on May 31, 1989, and
          without regard to any changes in the amount of his
          Average Annual Compensation or primary Social
          Security benefit after May 31, 1989.

               In calculating Average Annual Compensation
          for purposes of this Paragraph (1) only, the
          dollar limits described in Section 1(d) of this
          Appendix C shall not apply.

          (2)  In the case of a Participant who was an
          Employee on December 31, 1992, his total
          Retirement Income shall in no event be less than
          his Retirement Income calculated (A) by counting
          only his Credited Period of Service before
          January 1, 1993 and (B) by applying all of the
          provisions of the Plan in effect from time to time
          before January 1, 1993.  This calculation shall be
          made on the assumption that the Participant
          separated from all service with Affiliates on
          December 31, 1992, and without regard to any
          changes in the amount of his Average Annual
          Compensation or Average Social Security Base after
          December 31, 1992.

          (3)  In the case of a Participant who was an
          Employee on May 31, 1994, his total Retirement
          Income shall in no event be less than the sum of:
          (A) his Retirement Income calculated by counting
          only his Credited Period of Service before June 1,
          1994, and applying all of the provisions of the
          Plan in effect from time to time before June 1,
          1994 (ignoring the effects of Section 4.9(B) and
          Section 2(d) of this Appendix C, and (B) his
          Retirement Income calculated by counting only his
          Credited Period of Service on and after June 1,
          1994, and applying all of the provisions of the
          Plan in effect from time to time on and after
          June 1, 1994.  The calculation in (i) above shall
          be made on the assumptions that the Participant
          separated from all service with Affiliates on
          May 31, 1994 and that the limitation in effect
          under Code section 401(a)(17) was $235,840 for all
          Plan Years before June 1, 1994, and without regard
          to any changes in the amount of his Average Annual
          Compensation or primary Social Security benefit
          after May 31, 1994.

(f)  Disabled Participants.  Any other provision of the Plan
to the contrary notwithstanding, if a Participant becomes
disabled before his Normal Retirement Date he shall be
subject to the following provisions of this Section 2(f) of
this Appendix C.  For periods prior to June 1, 1997, a
disabled Participant shall be considered to be a Participant
and an Employee in the service of the Employer (for purposes
of this Plan only).  Subject to the additional provisions of
this Appendix, the disabled Participant shall continue to
receive credit toward his Period of Service and Credited
Period of Service during the period of his disability, the
latter based on the assumption that his Compensation for
such period is equal to his rate of basic earnings last paid
by the Employer.  For purposes of this Section, "Disabled"
means a Participant who is eligible for and receiving
benefits under the Company's Long Term Disability Plan.

     Effective June 1, 1997, a Participant who is Disabled
shall cease to accrue benefits under this Plan.

(g)  Cessation of Disability.  If a Participant who was
disabled ceases to be disabled before his Retirement Date,
no further Retirement Income shall be credited to him
pursuant to Section 2(f) of this Appendix C.  If such
Participant shall not then resume active employment with an
Employer, he shall be deemed a terminated Employee as of the
date he became disabled and his right to receive Retirement
Income, if any, from the Plan shall be determined pursuant
to Article 5 (Termination of Employment Prior to
Retirement).  If such Participant shall resume active
employment with an Employer, he shall be immediately
eligible to resume benefit accruals pursuant under the Plan.
The retirement Income standing to his credit by reason of
Section 2(f) of this Appendix C, as well as benefits
credited after such resumption of employment, shall be
subject to all the provisions of the Plan as then in effect.

                         APPENDIX D

               SUPPLEMENTAL RETIREMENT INCOME



SECTION 1.  DEFINITIONS.

     Capitalized terms used in this Appendix D that are not
defined herein shall have the same meaning as those terms do
in the Plan.

(a)  "Employee Aggregate Contributions" means the aggregate
of a Participant's employee contributions, if any, under a
Prior Plan or the Natomas Plan, with interest credited in
accordance with such plan to August 31, 1983, and compounded
annually at the rate of five percent (5%) for the period
from September 1, 1983, through May 31, 1988, and at the
rate prescribed by section 411(c)(2)(C) of the Code for all
periods subsequent to May 31, 1988.

(b)  "Natomas Company" means Natomas Company, a California
corporation and, prior to August 31, 1983, the parent
corporation of the Company.

(c)  "Natomas Plan" means the Retirement Plan for Employees
of Natomas Company and Participating Companies, a qualified
defined-benefit pension plan maintained by Natomas Company,
as in effect on August 31, 1983.

(d)  "Prior Plan" means (i) the Retirement Plan for Non-
Bargaining Unit Employees of American President Lines, Ltd.,
as in effect prior to August 31, 1983, and (ii) each "prior
plan," as defined therein.

(e)  "Supplemental Retirement Income" means the annual
benefit to which the Participant would be entitled,
commencing on his Normal Retirement Date, in the form of a
single-life annuity equal to the product of (i) his employee
contributions (if any) under a Prior Plan or the Natomas
Plan, plus interest credited in accordance with such plan to
August 31, 1983, and compounded annually at the rate of five
percent (5%) for the period from September 1, 1983, to the
date on which he would attain his Normal Retirement Date,
times (ii) a conversion factor of ten percent (10%).

SECTION 2.  ELIGIBILITY.

     An Employee shall be eligible to receive Supplemental
Retirement Income pursuant to this Appendix D only if the
Employee made employee contributions under a Prior Plan or
the Natomas Plan.

SECTION 3.  BENEFIT PAYMENT.

     If a Participant who is eligible for a Supplemental
Retirement Income separates from all service with any
Affiliate the Participant shall receive a Supplemental
Retirement Income determined under Section 1(e) of this
Appendix D.  Such Supplemental Retirement Income shall
commence on the Participant's Normal Retirement Date, unless
he receives a Retirement Income on a Retirement Date other
than the Normal Retirement Date.

     If a Participant elects to have his Retirement Income
commence on a Retirement Date which precedes his Normal
Retirement Date, his Supplemental Retirement Income also
shall commence on such Retirement Date and shall be reduced
by one one-hundred-eightieth (1/180th) for each of the first
sixty (60) months and by one three-hundred-sixtieth
(1/360th) for each of the next sixty (60) months by which
the commencement of benefits precedes his Normal Retirement
Date.

     If a Participant's Retirement Income commences on his
Postponed or In Service Retirement Date, his Supplemental
Retirement Income also shall commence on his Postponed or In-
Service Retirement Date and shall be increased by one
percent (1%) for each month by which retirement is postponed
beyond his Normal Retirement Date.

     A Participant's Supplemental Retirement Income shall be
payable in a form described in Article 6.  Death Benefits
payable from the Plan shall include an amount attributable
to the Supplemental Retirement Income in the manner
described in Section 7.

                         APPENDIX E

               MINIMUM CASH BALANCE BENEFITS


     The following table specifies the minimum Cash Balance
Benefit described in Section 4.2(B) for the affected
Participants.  Each listed Participant is identified by the
employee identification number associated with him or her in
the Plan's records:

Participant's Employee ID Number   Minimum Cash Balance
                                     Benefit

          2975                     $364,103.75

          7659                     $157,522.06

          6029                     $ 90,965.43

          9743                     $209,774.97

          3765                     $833,934.88

          2267                     $389,278.60