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                                                                   Exhibit 10.36

                                   WERNER CO.
                            PREMIUM CONVERSION PLAN


<TABLE>
<S>                                                                           <C>
Introduction ................................................................    1
Premium Conversion ..........................................................    1
Salary Reduction Agreements .................................................    2
Miscellaneous ...............................................................    4
Administration And Appeals ..................................................    6
Changing or Ending the Plan .................................................    7
Statement of ERISA Rights ...................................................    7
</TABLE>



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                                  INTRODUCTION

        PLAN DOCUMENT AND SPD. This is the plan document and the summary plan
description for the Werner Co. Premium Conversion Plan (which we will simply
call the "plan"). This is a "cafeteria plan" within the meaning of the Internal
Revenue Code. It is also an employee welfare benefit plan under the federal
Employee Retirement Income Security Act of 1974. Its plan number is 503.

        SPONSOR AND ADMINISTRATOR. The plan is sponsored by Werner Co. (which we
will call "Werner"), whose address is 93 Werner Road, Greenville, PA 16125, and
whose employer identification for federal tax purposes is 25-1754435. The plan
is administered by the Chief Financial Officer of Werner Co. (whom we will call
"the plan administrator"), whose address is 93 Werner Road, Greenville, PA 16125
and telephone number is (724) 588-2000.

        PLAN YEAR. You will see references to the "plan year" in this document.
The "plan year" is the 12-month period ending each December 31.

        EFFECTIVE DATE AND HISTORICAL NOTE. This plan takes effect on January 1,
1999. As of that date, it entirely supersedes and replaces all prior plans and
programs (if any) providing benefits of the same type as the benefits set forth
in this plan.

        QUESTIONS. If you have questions after you read the plan, ask the plan
administrator for help. Better yet, write the question down and give it to the
plan administrator so that there is no misunderstanding. Don't rely on what
anyone else (such as a supervisor or co-employee) tells you, because only the
plan administrator is authorized to interpret and apply the plan.

                               PREMIUM CONVERSION

        THE BENEFIT OF PREMIUM CONVERSION. Normally, employee contributions for
health insurance are deducted from your paycheck after payment of federal income
tax and Social Security tax (FICA). This plan offers you the opportunity to
have the employee contributions made before federal income tax and Social
Security tax.

        WHAT'S GOOD ABOUT PREMIUM CONVERSION. If you choose to take advantage of
this plan, you will pay less in taxes, because you won't be paying federal
income and Social Security taxes on your employee contribution. Nor will you be
paying state or local income taxes on your employee contributions (except in a
few localities).

        Federal income tax is at least 15% (more if you're in a higher tax
bracket). Your share of FICA is 7.65%. So using this plan of the plan saves you
at least 22.65% of the cost of your employee contribution in federal taxes 
alone.

        Please note: Under the current Social Security system, when you retire
and claim Social Security benefits, your benefits are based on the earnings on
which you paid Social Security taxes. Using this plan to reduce the earnings on
which you pay Social Security taxes will reduce the earnings that the Social
Security Administration uses to compute your Social Security benefits and may
result in a lower Social Security benefit. Most people feel that saving Social
Security taxes now is worth much more than the potential reduction in Social
Security benefits at retirement, but we want you to be aware of the situation so
that you can make up your own mind.

        WHO IS ELIGIBLE FOR COVERAGE. All employees are eligible for coverage
under this plan as long as they are required to make an employee contribution
for health insurance coverage and are receiving a paycheck from Werner (or are
on a leave to which they are entitled under the federal Family and Medical Leave
Act of 1993). As an exception, employees whose terms and conditions of
employment are 



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governed by a collective bargaining agreement are not eligible for this plan
unless and until, and then only to the extent that, the collective bargaining
agreement provides for participation in this plan.

        WHEN COVERAGE STARTS. To take advantage of this plan, an eligible
employee needs to fill out a "salary reduction" agreement and return it to
Werner. Then Werner will sign it and give back a copy for the employee's
records.

        HOW PREMIUM CONVERSION WORKS. The salary reduction agreement is a
contract between the employee and Werner, in which the employee chooses an
alternative package of pay and benefits:

        - In the ordinary package of pay and benefits (that is, if the employee
does not choose premium conversion), the employee gets a certain amount of pay
and also gets health insurance coverage that requires employee contributions (as
described in the health insurance plan).

        - In the alternative package that the employee gets by choosing premium
conversion, the employee gets a package in which the pay is slightly less but
the employee contribution in the health insurance plan is waived. The amount of
the reduction in the pay component is exactly equal to the employee contribution
that would ordinarily be required under the health insurance plan.

        It seems a little artificial, but this is how the law works: in the
alternative package of pay and benefits, the amount that used to be an employee
contribution is now an employer contribution. Since it is an employer
contribution, it is not subject to federal income tax or FICA.

        CLAIMS FOR BENEFITS UNDER THE PLAN. Please keep in mind: this plan
doesn't pay any health insurance benefits. The only function of this plan is to
transform after-tax employee contributions for health insurance into pre-tax
employer contributions. Claims for benefits under this plan are limited to
employees who believe they are entitled to take advantage of this plan and who
have filed salary reduction agreements with Werner but who aren't getting
pre-tax employee contributions.

        Claims should be filed in writing with the plan administrator. The plan
administrator will respond in writing within 90 days and, if the claim is
denied, point out the specific reasons and plan provisions on which the denial
is based, describe any additional information needed to complete the claim, and
describe the appeal procedure.

        FUNDING. This plan is not funded or insured in any way. (It couldn't be,
because no money changes hands.) In return for the employee's agreement to take
a reduction in salary or wages under this plan, the employee gets a waiver of
the employee contribution that would otherwise be required under the health
insurance plan. 


                                SALARY REDUCTION
                                   AGREEMENTS

        IRS REQUIREMENTS. Salary reduction agreements are required to implement
the plan, in accordance with detailed rules of the Internal Revenue Service.
This section of the plan describes the rules.

        FIRST TIME. You can make a salary reduction agreement at any time after
meeting the eligibility requirements for the plan.

        WHEN IT TAKES EFFECT. A salary reduction agreement only applies to pay
earned after the agreement is filed. That means it doesn't take effect until the
paycheck received for the next pay period that begins after the form is filed.
(And if it is changed, the change only applies to pay that earned after the new
salary reduction agreement is filed.)

        HOW LONG IT LASTS. A salary reduction agreement lasts for a whole plan
year at a time. (In the year when you first sign up, it lasts for the rest of
the plan year.) This means that if you leave the plan and come back before the
end of the same plan year, the salary reduction agreement will spring back into
effect for the balance of the plan year. If you leave the plan and come back
after the end of that plan year, a new salary reduction agreement will be
necessary.

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        ANNUAL CHANGES. During open enrollment period at the end of each plan
year, you may change the salary reduction agreement that is on file for you, but
if you do not make any change, the salary reduction agreement will continue in
force for the following plan year.

        MID-YEAR CHANGES IN SALARY REDUCTION AGREEMENTS. As an exception to the
general rule that a salary reduction agreement lasts for a whole plan year at a
time, you may change a salary reduction agreement in the following
circumstances:

        Changes in health plan enrollment permitted by HIPAA. You may change
your salary reduction agreement in order to exercise your special enrollment
rights under the Health Insurance Portability and Accountability Act of 1996, as
reflected in section 9801(f) of the Code.

        Significant change in health coverage by third-party provider. If 
health coverage that you have chosen is provided by an independent,
third-party provider and is significantly curtailed or ceases, you may change
your salary reduction agreement in order to choose instead any other, similar
coverage that is available under the group health plan (prospectively only, of
course). For this purpose, withdrawal of a hospital system from an HMO, or
withdrawal of a set of doctors, may be considered a significant curtailment of
coverage. A significant change in health coverage does not entitle you to drop
health coverage altogether.

        Change in health coverage due to spouse's employment. You may change
your salary reduction agreement if the change is on account of, and consistent
with, a significant change in the health coverage of either you or your husband
or wife that is attributable to your husband's or wife's employment. Your
husband's or wife's becoming eligible for Medicare does not constitute a
significant change in the health coverage for this purpose, nor does exhaustion
of limits of coverage under your husband' or wife's plan.

        Significant change in cost of health coverage. If there is a change in
the cost of health coverage provided by an independent, third-party provider,
your salary reduction agreement will be adjusted automatically to reflect the
change. A significant change in the cost of health coverage does not entitle you
to drop health coverage.

        Change in status. You may change your salary reduction agreement if (a)
one of the following changes in status causes you, your husband or wife, or a
dependent to gain or lose eligibility for coverage (under a Werner plan or a
plan of the spouse's employer or dependent's employer) and (b) the change in
your choices is consistent with that gain or loss of eligibility.

        By way of explanation, gaining or losing eligibility for a particular
benefit package option (such as a managed care option) will be considered
gaining or losing eligibility for coverage. Becoming eligible for COBRA
continuation coverage will be considered gaining eligibility for coverage. If
the change of status is to become eligible for coverage under a plan of your
husband's or wife's employer or your dependent's employer, a change of election
under our plan is consistent with that change of status only if the individual
actually elects coverage under the plan of the spouse's or dependent's employer.

The changes in status are as follows:

        - your marital status legally changes, including marriage, divorce,
legal separation (if it exists and constitutes a change in marital status under
state law), annulment, or death of your husband or wife.

        - the number of your dependents changes, including birth, adoption, 
placement for adoption, or death of a dependent.

        - you, your husband or wife, or a dependent begins or ends employment.

        - the hours of employment of you, your husband or wife, or a dependent
change, including a switch between full-time and part-time status, a strike or
lockout, or taking or returning from an unpaid leave of absence.

        - a dependent becomes eligible or ceases to be eligible under the plan,
including attainment of a particular age or cessation of student status.



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        - there is a change in the place where you, your husband or wife, or a 
dependent works or resides.

        Entitlement to Medicare or Medicaid. You may change your salary
reduction agreement in order to drop health insurance coverage for an individual
(whether yourself, your husband or wife, or a dependent) who enrolls in Medicare
or Medicaid (other than the program of vaccinations for children).

        Court orders. You may change your salary reduction agreement in order to
add health insurance coverage for a child if required to do so by a judgment,
decree or order resulting from divorce, legal separation, annulment or change in
legal custody, including a qualified medical child support order. Likewise, you
may change your salary reduction agreement in order to drop health insurance
coverage for a child if such an order requires your former husband or wife to
provide coverage (rather than you).

        Separation from service. If you separate from the service of the
employer, there is not necessarily any need for a change in your salary
reduction agreement. For example, if you cease to be eligible for health
insurance upon separation from service, no change in your choices is needed
because, although your choice remains in effect, there is nothing to which it
applies. If you return to service with the employer and resume coverage under
the health insurance plan during the same plan year, your existing choice
remains in effect for the balance of that plan year (unless it is changed for
some other reason).

        CHANGING A SALARY REDUCTION AGREEMENT. To change a salary reduction
agreement, just complete a new one and turn it in to Werner.

                                 MISCELLANEOUS

        TAX STATUS. This plan is designed to meet the requirements of section
125 of the Code as a cafeteria plan, and the description above assumes that it
does. However, there is no procedure by which the IRS issues determination
letters assuring the sponsor and the employees that a plan meets those
requirements. Accordingly, Werner makes no guarantee that the tax consequences
of participating in the plan will be as described above.

        FAMILY AND MEDICAL LEAVE. While on a leave of absence to which you are
entitled under the federal Family and Medical Leave Act of 1993, you will not
suffer the loss of any "employment benefit" (as defined for the purpose of the
Family and Medical Leave Act) under the plan which had accrued before you took
the leave and which would not have been lost if you had remained actively at
work. But you will not accrue any additional "employment benefits" under the
plan during the leave. If the leave is unpaid (so that you have no salary),
there will be no salary reduction.

        MILITARY SERVICE. If you are absent due to service in the uniformed
services of the United States and you meet the requirements of the federal
Uniformed Services Employment and Reemployment Rights Act of 1994, you will be
entitled to all the same benefits under this plan (if any) as any other employee
on leave of absence, unless you knowingly provide written notice of intent not
to return to employer after the uniformed service (in accordance with the
USERRA).

        In addition, upon re-employment in accordance with the USERRA, you are
entitled to all the same rights and benefits under this plan that you had when
your absence began plus those which would you would have attained under the plan
if you had remained continuously employed. And no exclusion or waiting period
will be applied that would not have been applied if you had remained
continuously employed, except with respect to an illness or injury determined by
the Secretary of Veterans Affairs to have been incurred in, or aggravated
during, performance of service in the uniformed services.

        QUALIFIED MEDICAL CHILD SUPPORT ORDERS. If the plan administrator
receives a child support order that is (i) a judgment, decree or order of a
court (including approval of a settlement agreement) (or else issued through an
administrative process established under state law that has the force and effect
of law under applicable state law) that (ii) provides for child 



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support for a child of an eligible employee and (iii) either relates to benefits
under this plan or enforces a federally prescribed state law relating to
Medicaid recipients, then the plan administrator will notify you and the child
that the order has been received and describe the procedure that the plan
administrator will follow in deciding whether to honor the order.

        Next, the administrator will separately account for health care claims
filed that, in the absence of the order, would not be paid. Payment of these
claims will be neither approved nor denied while the plan administrator decides
whether to honor the order.

        The plan will not honor a child support order unless it constitutes a
"qualified medical child support order" under the law. That means the plan will
not honor a child support order unless it specifies:

        - that it applies to this plan;

        - the name and last known mailing address of the affected employee;

        - the name and last known mailing address of the child;

        - a reasonable description of the type of coverage to be provided 
by the plan to each child or the manner in which the coverage is to be
determined; and

        - the time period to which the order applies.

        Also, the plan will not honor a child support order that purports to
require the plan to provide any type or form of benefit, or any option, that is
not already provided for in the plan (except as necessary to satisfy a federally
prescribed state law relating to Medicaid recipients).

        Upon making the decision whether the order is a "qualified medical child
support order" under the law, the plan administrator will notify the employee
and the child and act in accordance with the decision. Whichever way the
decision goes, the decision will be considered a denial of benefits subject to
the appeal procedure described later in the plan under the heading
"Administration and Appeals."

        FAIL-SAFE PROVISIONS FOR COMPLIANCE WITH HIPAA. Though we believe that
the ordinary terms of the plan, which are set out in this document, fully comply
with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), we
want to be sure there is no misunderstanding. And so we recite here that,
effective with the first plan year beginning on or after July 1, 1997:

        Access. To the extent that this plan constitutes a "group health plan"
under HIPAA, it will not exclude an employee, or impose a longer waiting period
to get into the plan, or require any individual to pay a premium or contribution
that is greater than the premium or contribution for "a similarly situated
individual" on the basis of health status, medical condition (whether physical
or mental), claims experience, receipt of health care, medical history, genetic
information, evidence of insurability (including "conditions arising out of acts
of domestic violence"), or disability, disregarding premium discounts or rebates
or modification of copayments or deductibles in return for adherence to programs
of health promotion and disease prevention-all within the meaning of HIPAA.

        Enrollment. If an employee does not enroll in this plan when first
eligible because he has other coverage, then, to the extent that this plan
constitutes "group health plan" under HIPAA, the employee may enroll himself
(and any spouse or dependent children) afterward when he exhausts his COBRA, he
ceases to be eligible for the other coverage (such as divorce, death, etc.), or
the employer ceases contributing toward the other coverage.

        In the same fashion, if an employee enrolls himself when first eligible
but chooses not to enroll a spouse or dependent child, he may add the spouse or
dependent child when any of the foregoing events occurs for the spouse or
dependent child.

        And if an employee acquires a spouse or dependent child by marriage,
birth, adoption or placement for adoption, the employee may enroll himself (or
himself and the spouse or dependent child) at that time, even if the employee
has previously declined coverage. In the case of birth, adoption or placement
for adoption, the coverage will take effect retroactively to that date if the
employee enrolls the dependent child within 30 



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days of the event. In the case of a spouse or dependent child acquired by
marriage, the coverage will take effect no later than the first of the month
after the employee files the application, if the employee applies with 30 days
after the marriage.

        Portability. This plan does not impose a pre-existing condition
limitation. But, to the extent that this plan constitutes a "group health plan"
under HIPAA, each person who is covered under the plan is entitled to a
certificate of creditable coverage in the circumstances prescribed by HIPAA,
including regulations under HIPAA. This means each employee, each spouse, and
each dependent child is treated as a separate individual entitled to a
certificate (provided they are covered, of course).

        MATERNITY. To the extent that the plan that constitutes a "group health
plan," it will comply with the Newborns' and Mothers' Health Protection Act of
1996. In that regard, government regulations also require us to provide this
statement, effective on the same date, drafted by the federal government: "Group
health plans and health insurance issuers offering group insurance coverage
generally may not, under federal law, restrict benefits for any hospital length
of stay in connection with childbirth for the mother or newborn child to less
than 48 hours following a normal vaginal delivery, or less than 96 hours
following a caesarean section, or require that a provider obtain authorization
from the plan or the insurance issuer for prescribing a length of stay not in
excess of the above periods."

        MENTAL HEALTH. To the extent that the plan constitutes a "group health
plan," it will comply with the Mental Health Parity Act of 1996 if two
conditions are met: (1) the employer has 50 employees or more and (2) compliance
would not raise the cost of health insurance coverage under the plan by 1 % or
more.

        PROSPECTIVE APPLICATION OF PLAN AND ANY CHANGES. The plan does not apply
to any employee who is not actively employed by Werner after Werner adopts this
plan. Any changes to the plan do not apply to any employee who is not actively
employed after the effective date of the changes.

        SELF-EMPLOYED. The plan does not cover self-employed individuals (such
as partners) or people who are considered self-employed by the Internal Revenue
Code (such as 2% owners of Subchapter S corporations).

        UTILIZATION TEST. While the plan makes the same benefits available to
all eligible employees, regardless of the level of their compensation, it is
possible for the top-level employees to actually take advantage of the plan to a
significantly greater extent than other employees. In that case (which we see as
highly unlikely), the Internal Revenue Code denies the tax advantage to these
top-level employees. (Everyone else still enjoys the full tax advantage.) The
plan administrator will monitor this situation and notify any top-level employee
who is affected by it. The plan administrator also has authority to cut back the
utilization of top-level employees in order to avoid the problem.

                                 ADMINISTRATION
                                  AND APPEALS

        ADMINISTRATION. The plan administrator has all rights, duties and powers
necessary or appropriate for the administration of the plan, except to the
extent that they are vested in the appeals authority in accordance with the
appeal procedure described below.

        APPEAL PROCEDURE. If your claim is denied and you disagree and want to
pursue the matter, you must file an appeal in accordance with the following
procedure. You cannot take any other steps unless and until you have exhausted
the appeal procedure. For example, if your claim is denied and you do not use
the appeal procedure, the denial of your claim is conclusive and cannot be
challenged, even in court.

        To file an appeal write to the Chief Administrative Officer of Werner
Co. (which we will call "the appeals authority") at 93 Werner Road, Greenville,
PA 16125, stating the reasons why you disagree with the denial of your claim.
You must do this within 60 days after the claim was denied. In the appeal
process, you have the right to review pertinent documents. You have the right
to be represented by 



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anyone else, including a lawyer if you wish. And you have the right to present
evidence and arguments in support of your position.

        The appeals authority will issue a written decision within 60 days. The
appeals authority may, in its sole discretion, decide to hold a hearing, in
which case it will issue its decision within 120 days. The decision will explain
the reasoning of the appeals authority and refer to the specific provisions of
this plan on which the decision is based.

        DISCRETIONARY AUTHORITY. The plan administrator and appeals authority
shall have and shall exercise complete discretionary authority to construe,
interpret and apply all of the terms of the plan, including all matters relating
to eligibility for benefits, amount, time or form of payment, and any disputed
or allegedly doubtful terms. In exercising such discretion, the plan
administrator and appeals authority shall give controlling weight to the intent
of the sponsor of the plan.

        All decisions of the appeals authority in the exercise of its authority
under the plan (or of the plan administrator if the decision is not appealed)
shall be final and binding on the plan, the plan sponsor and all participants
and beneficiaries.

                                  CHANGING OR
                                ENDING THE PLAN

        CHANGING THE PLAN. The right to change the plan is expressly reserved to
Werner, which may change the plan in any way and at any time and is not required
to give a reason for the changes. These changes can be retroactive. Any special
arrangement made by Werner for an individual will constitute an amendment to
this plan applicable only to that individual.

        ENDING THE PLAN. The plan has no set expiration date; when it was
established, it was not intended to be temporary. Nevertheless, Werner has the
right to end the plan (in whole or in part) at any time and is not required to
give a reason for doing so.

                                  STATEMENT OF
                                  ERISA RIGHTS

        INTRODUCTION. Regulations of the federal government require that the
following "Statement of ERISA Rights" appear in this document, and we are
reproducing it here with quotation marks. Not all of the statement is
necessarily accurate or applies to this plan. Neither Werner nor the plan
administrator takes any responsibility for the accuracy or completeness of this
statement, which is made to you by the federal government, not by anyone
connected with the plan:

        GOVERNMENT STATEMENT. "As a participant in this plan, you are entitled
to certain rights and protections under the Employee Retirement Income Security
Act of 1974 (ERISA). ERISA provides that all plan participants shall be entitled
to:

        "Examine, without charge, at the plan administrator's office and at
other specified locations, such as worksites and union halls, all plan
documents, including collective bargaining agreements and copies of all
documents filed by the plan with the U.S. Department of Labor, such as detailed
annual reports and plan descriptions.

        "Obtain copies of all plan documents and other plan information upon
written request to the plan administrator. The administrator may make a
reasonable charge for the copies.

        "Receive a summary of the plan's annual financial report. The plan
administrator is required by law to furnish each participant with a copy of this
summary annual report.

        "In addition to creating rights for plan participants, ERISA imposes
duties upon the people who are responsible for the operation of the employee
benefit plan. The people who operate your plan, called `fiduciaries' of the
plan, have a duty to do so prudently and in the interest of you and other plan


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participants and beneficiaries. No one, including your employer or any other
person, may fire you or otherwise discriminate against you in any way to prevent
you from obtaining a welfare benefit or exercising your rights under ERISA. If
your claim for a welfare benefit is denied in whole or in part you must receive
a written explanation of the reason for the denial. You have the right to have
the plan review and reconsider your claim. Under ERISA, there are steps you can
take to enforce the above rights. For instance, if you request materials from
the plan and do not receive them within 30 days, you may file suit in a federal
court. In such a case, the court may require the plan administrator to provide
the materials and pay you up to $100 a day until you receive the materials,
unless the materials were not sent because of reasons beyond the control of the
administrator. If you have a claim for benefits which is denied or ignored, in
whole or in part [and you have exhausted the plan's internal appeal procedure],
you may file suit in a state or federal court. If it should happen that plan
fiduciaries misuse the plan's money, or if you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a federal court. The court will decide who should
pay court costs and legal fees. If you are successful the court may order the
person you have sued to pay these costs and fees. If you lose, the court may
order you to pay these costs and fees, for example, if it finds your claim is
frivolous. If you have any questions about this statement or about your rights
under ERISA, you should contact the nearest office of the Pension and Welfare
Benefits Administration, U. S. Department of Labor, listed in your telephone
directory, or the Division of Technical Assistance and Inquiries, Pension and
Welfare Benefits Administration, U. S. Department of Labor, 200 Constitution
Avenue N.W., Washington, D.C. 20210."

        SERVICE OF PROCESS. Service of legal process may be made on the plan
administrator.

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