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                                                                   EXHIBIT 10.36






                    RETIREMENT PLAN FOR SIMMONS CO. EMPLOYEES

                    (Amended and Restated as of May 1, 1997)







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CONTENTS





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         INTRODUCTION                                                         V

         Article 1. Definitions                                               1
1.1 Accrued Benefit                                                           1
1.2 Actuarial (or Actuarially) Equivalent                                     1
1.3 Annuity Starting Date                                                     1
1.4 Average Monthly Compensation                                              1
1.5 Beneficiary                                                               2
1.6 Board of Directors                                                        3
1.7 Computation Year                                                          3
1.8 Credited Service                                                          3
1.9 Employee                                                                  5
1.10 Employer                                                                 5
1.11 Hour of Service                                                          5
1.12 Member                                                                   6
1.13 Member's Contributions Account                                           6
1.14 Monthly Earnings                                                         6
1.15 Normal Form of Retirement Income                                         7
1.16 One Year Break in Service                                                8
1.17 Pension Committee or Committee                                           8
1.18 Plan                                                                     8
1.19 Plan Year                                                                8
1.20 Predecessor Plan                                                         8
1.21 Primary Social Security Benefit                                          9
1.22 Retirement Date                                                          9
1.23 Trust Agreement                                                          9
1.24 Trustee                                                                  9
1.25 Trust Fund                                                               9
1.26 Vesting Service                                                          9
1.27 Year of Eligibility Service                                             10

         Article 2. Eligibility For Membership                               11
2.1 Eligibility for Membership                                               11
2.2 Transfer of Employment                                                   11


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2.3 Change of Status                                                         11

         Article 3. Contributions                                            12
3.1 Member Contributions - Retirement Benefits                               12
3.2 Member Contributions - Insurance Benefits                                12
3.3 Repayment of Member Contributions                                        13
3.4 Employer Contributions                                                   13
3.5 Payment of Expenses                                                      13

         Article 4. Retirement Dates                                         14
4.1 Retirement Date                                                          14
4.2 Normal Retirement Date                                                   14
4.3 Early Retirement Date                                                    14
4.4 Deferred Retirement Date                                                 14

         Article 5. Retirement Benefits For Members Of The
         Collective Bargaining Organizations Set Forth On Schedule B         15
5.1 Upon Normal or Deferred Retirement                                       15
5.2 Upon Early Retirement                                                    15

         Article 5.-II Retirement Benefits For Members Of The
         Collective Bargaining Organizations Set Forth On Schedule C
5.1 Upon Normal or Deferred Retirement                                       17
5.2 Upon Early Retirement                                                    17

         Article 5.-III Retirement Benefits For Members Of The
         Collective Bargaining Organizations Set Forth On Schedule D
5.1 Upon Normal or Deferred Retirement                                       19
5.2 Upon Early Retirement                                                    19

         Article 6. Termination Benefits                                     21
6.1 Upon Termination of Employment                                           21
6.2 Early Payment of Vested Benefit                                          21

         Article 7. Benefits Payable Upon Death                              22
7.1 Death Prior to Attainment of Age 65 and
         Completion of Five Years of Vesting Service                         22
7.2 Death Subsequent to Attainment of Age 65 or Completion of
         Five Years of Vesting Service And Prior to Actual Retirement        22
7.3 Death of a Retired Member                                                23

         Article 8. Benefit Limitations And Payment                          24


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8.1 Duplication of Benefits                                                  24
8.2 Benefit Reduction for Cost of Insurance Coverage                         24
8.3 Maximum Benefit Limitation                                               24
8.4 Application for Benefits                                                 27
8.5 Benefit Payment Period                                                   27
8.6 Form of Benefit Payment                                                  28
8.7 Reemployment                                                             32
8.8 Substitute Payee                                                         33
8.9 Unclaimed Benefits                                                       33
8.10 Distribution                                                            33
8.11 Top-Heavy Plan Adjustments                                              34
8.12 Eligible Rollover Distributions                                         36

         Article 9. Administration Of The Plan                               38
9.1 Appointment of Pension Committee                                         38
9.2 Organization and Operation of the Pension Committee                      38
9.3 Duties and Responsibilities of the Pension Committee                     39
9.4 Records and Reporting                                                    40
9.5 Required Information                                                     40
9.6 Payment of Expenses                                                      40
9.7 Indemnification                                                          40
9.8 Procedure For Appeal of Denial of Benefits                               41

         Article 10. Amendment, Merger, And Termination Of The Plan          42
10.1 Amendment                                                               42
10.2 Merger of Plans                                                         42
10.3 Termination                                                             42
10.4 Manner and Order of Allocation of Trust Fund                            43
10.5 Distribution Methods and Satisfaction of Liability                      44

         Article 11. Participating Employers                                 46
11.1 Adoption of Plan                                                        46
11.2 Alternative Provisions                                                  46
11.3 Discontinuance of Contributions, Withdrawal, or
         Termination By Participating Employers                              46
11.4 Merger of Two Employers                                                 46

         Article 12. Restrictions On Benefits                                47
12.1 Restrictions Prior to May 14, 1990                                      47
12.2 Restrictions on Benefits                                                48

         Article 13. General Provisions                                      49


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13.1 Exclusiveness of Benefits                                            49
13.2 Limitation of Rights                                                 49
13.3 Nonassignability                                                     49
13.4 Military Service                                                     50
13.5 Construction of Agreement                                            50
13.6 Severability                                                         50
13.7 Titles and Headings                                                  50
13.8 Counterparts as Original                                             50
13.9 Construction                                                         50
13.10 Internal Revenue Service Approval                                   50

         Schedule A                                                      A-1
Participating Employers                                                  A-1

         Schedule B                                                      B-1
Collective Bargaining Units Recognized By Employer                       B-1

         Schedule C                                                      C-1
IAM Local 315 of Elizabeth, New Jersey                                   C-1

         Schedule D                                                      D-1
UFWA Local 262 of San Leandro, California                                D-1

         Exhibit I                                                       I-1
Actuarial Equivalent                                               Exhibit-1


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INTRODUCTION





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Effective as of May 1, 1947, a predecessor of Simmons U.S.A. Corporation
established an employee retirement plan known as The Retirement Plan for Simmons
Employees (the "Predecessor Plan"). This plan was terminated October 30, 1987.

Effective as of October 31, 1987, Simmons U.S.A. Corporation, the predecessor of
Simmons Company, established this Retirement Plan for Simmons Co. Employees (the
"Plan") for eligible employees of adopting Employers.

The Plan was amended and restated effective as of May 1, 1989 to conform with
the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1986, the
Technical and Miscellaneous Revenue Act of 1988, and other regulatory and
legislative changes.

The Plan was amended and restated in 1995, but effective as of May 1, 1989 to
comply with regulatory and legislative requirements and to also make other
changes to the Plan.

Except as otherwise provided, the effective date of this restatement is May 1,
1997. The provisions of this Plan are applicable only to Employees who are
employed by an Employer on or after May 1, 1997. The Plan is being amended and
restated to comply with recent legislative and regulatory changes. Except as
otherwise provided in a retroactively effective provision of this restatement,
any person covered by the Plan who had a termination of service before May 1,
1997 shall continue to be entitled to the retirement benefits (if any) provided
under the Plan as in effect on his or her termination of service.


                                       v

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ARTICLE 1. DEFINITIONS

1.1 ACCRUED BENEFIT

The Normal Form of Retirement Income, as computed in accordance with Section
5.1, based on the Member's Credited Service to the date of reference.

Effective May 1, 1988, the portion of a Member's Accrued Benefit attributable to
the Member's own contributions, made in accordance with Section 3.1, shall be
the Actuarial Equivalent of the Member's Contributions Account expressed as an
annual benefit commencing at his or her Normal Retirement Date and as determined
pursuant to Section 411(c) of the Internal Revenue Code.

The portion of a Member's Accrued Benefit attributable to the Employer's
contributions shall be the excess of the Member's Accrued Benefit over the
portion of the Accrued Benefit attributable to the Member's own contributions.

1.2 ACTUARIAL (OR ACTUARIALLY) EQUIVALENT (EFFECTIVE MAY 1, 2000)

In the case of any Member, a benefit of equal value determined on the basis of
the actuarial equivalent assumptions last adopted by the Pension Committee, as
set forth in Exhibit I.

With respect to any lump sum payment that may be payable under the Plan, the
Actuarial Equivalent lump sum value for payments made in any Plan Year shall be
calculated by using the applicable interest rate and the applicable mortality
table where:

         (a)      the "applicable interest rate" is the annual rate of interest
                  on 30-year Treasury securities for the second month preceding
                  the first day of the Plan Year in which distribution is made;

         (b)      the "applicable mortality table" is the table prescribed by
                  the Secretary of the Treasury, based on the prevailing
                  commissioners' standard table as described in Code Section
                  807(d)(5)(A) used to determine reserves for group annuity
                  contracts issued on the date as of which the Actuarial
                  Equivalent is being determined (without regard to any other
                  subparagraph of Code Section 807(d)(5)).

1.3 ANNUITY STARTING DATE

The first day of the first period for which an amount is payable as an annuity
or, in the case of a benefit not payable in the form of an annuity, the first
day on which all events have occurred that entitle the Member to that benefit.

1.4 AVERAGE MONTHLY COMPENSATION

The Monthly Compensation of a Member for the 60 consecutive months that produce
the highest annual average during the 120-month period, or the number of months
as an


                                       1
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Employee if fewer than 120, prior to the Member's Retirement Date, date of
termination of employment, or date of death, whichever date is applicable.

Where a Member retires or terminates employment with the Employer and is
subsequently rehired, for purposes of this Section only, his or her employment
prior to and subsequent to the date of rehire shall be deemed consecutive if the
Member fails to remain in the employ of the Employer for at least 60 months
following rehire.

As used herein, "Monthly Compensation" shall mean total remuneration paid by the
Employer during each calendar year for services rendered to the Employer,
exclusive of the cost to the Employer of fringe benefits, divided by the number
of full months that the Member was employed by the Employer during the calendar
year.

The total amount of Monthly Compensation taken into account for any Plan Year
beginning on or after May 1, 1989 and prior to May 1, 1994 shall not exceed
$200,000 (or other amount determined by the Secretary of the Treasury under
Section 401(a)(17) of the Internal Revenue Code). Notwithstanding the preceding
sentence, a Member's Accrued Benefit shall not be less than his or her Accrued
Benefit as of April 30, 1989, determined without regard to this limitation on
Monthly Compensation.

The total amount of Monthly Compensation taken into account for any Plan Year
beginning on or after May 1, 1994 shall not exceed $150,000 (or other amount
determined by the Secretary of the Treasury under Section 401(a)(17) of the
Internal Revenue Code). Notwithstanding the preceding sentence, a Member's
Accrued Benefit shall not be less than his or her Accrued Benefit as of April
30, 1994, determined with regard to the limitation on Monthly Compensation then
in effect.

For Plan Years beginning prior to May 1, 1997, in determining Monthly
Compensation for purposes of the limitations in the preceding paragraphs, the
rules of Section 414(q)(6) of the Internal Revenue Code shall apply, except that
in applying these rules, the term "family" shall include only the Employee's
spouse and lineal descendants who have not attained age 19 before the end of the
Plan Year. If as a result of applying these rules the limit in Section
401(a)(17) of the Internal Revenue Code is exceeded, the limitation shall be
prorated among the affected individuals in proportion to each such individual's
Monthly Compensation as determined prior to the application of this limitation.

1.5 BENEFICIARY

The person or persons designated by the Member to receive benefits under the
Plan in the event of death, subject to the spousal consent requirements of
Section 8.6(e). If no designation is made or if no designated person survives
the Member, "Beneficiary" shall mean the first person or persons in the
following classes of successive beneficiaries surviving at the death of payee:
The Member's (a) spouse, (b) children, or (c) executor or administrator.


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1.6 BOARD OF DIRECTORS

The Board of Directors or the Executive Committee of the Board of Directors of
Simmons Company, a Delaware corporation, and any legal successor thereof.

1.7 COMPUTATION YEAR

The 12 consecutive month period commencing on each May 1.

1.8 CREDITED SERVICE

(a)      PRIOR TO MAY 1, 1963

         The most recent period of uninterrupted employment with the Employer,
         or any predecessor of the Employer, as determined in accordance with
         the Predecessor Plan.

(b)      SUBSEQUENT TO APRIL 30, 1963 AND PRIOR TO MAY 1, 1976

The most recent period of uninterrupted employment with the Employer, or any
predecessor of the Employer, as determined in accordance with the Predecessor
Plan, exclusive of any period of employment during which the Member was eligible
to participate in the Predecessor Plan, but did not participate because the
Member failed to make the contributions required by the Predecessor Plan.

(c)      SUBSEQUENT TO APRIL 30, 1976

         (1)      The total period of employment with the Employer, or with any
                  other business entity which is a member of a controlled group
                  with the Employer as defined in Section 1563(a) of the
                  Internal Revenue Code (determined without regard to
                  Subsections (a)(4) and (e)(3)(C) thereof) until the Employee's
                  severance from service (as defined below), exclusive of any
                  period of time during which the Member was eligible to
                  participate in the Predecessor Plan or this Plan, but did not
                  participate because the Member failed to make the
                  contributions required by the Predecessor Plan or Section 3.1
                  of the Plan.

                  For purposes of this Section, a severance from service means
                  the earlier of (A) or (B) below:

                  (A)      the date the Employee quits, retires, is discharged,
                           or dies; or

                  (B)      the first anniversary of the first day of an
                           Employee's absence from employment for any reason
                           other than in (A) above, such as vacation, sickness,
                           leave of absence, layoff, or military service (except
                           as otherwise provided in Subsection (e)).
                           Notwithstanding the foregoing, in no event shall an
                           Employee have a severance from service solely as a
                           result of taking a leave of absence pursuant to the
                           Family and Medical Leave Act of 1993.


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                  An Employee who fails to return to employment at the
                  expiration of an absence shall be deemed to have had a
                  severance from service on the first to occur of the expiration
                  of the Employee's absence or the first anniversary of the
                  first day of the Employee's absence.

         (2)      Credited Service shall be measured in years and full months.

                  A Member who retires or terminates employment with the
                  Employer shall be considered for all purposes of the Plan to
                  have retired or terminated employment on the last day of the
                  month of reference if the retirement or termination of
                  employment occurs subsequent to the fifteenth day of the
                  month. If the retirement or termination of employment occurs
                  prior to the sixteenth day of the month of reference, the
                  Member shall be considered to have retired or terminated
                  employment as of the first day of the month.

         (3)      Notwithstanding Subsection (i), upon the reemployment of an
                  Employee who was not a Vested Member in accordance with
                  Section 6.1(a) at the time of his or her earlier severance
                  from service, the Employee shall be deemed a new Employee and
                  shall not receive credit for Credited Service prior to the
                  severance from service unless (A) the Employee's period of
                  service with the Employer prior to the severance from service
                  was equal to or greater than the period of absence after the
                  severance from service; or (B) the Employee's absence after
                  the severance from service did not exceed five years.

                  Solely for purposes of this Subsection (c)(iii), in the case
                  of an Employee who is absent on Parental Leave (as defined in
                  Section 1.16) beyond the first anniversary of the first date
                  of an absence, the date on which the Employee incurs a
                  severance from service shall be the second anniversary of the
                  Employee's absence from employment. The period between the
                  first and second anniversaries of the first date of absence
                  shall not constitute service under Subsection (c)(i).

(d)      Notwithstanding Subsections (a), (b), and (c), a Member shall not be
         entitled to Credited Service for any period of prior employment with
         the Employer preceding his or her termination of employment, where the
         Member returns to the employ of the Employer following his or her
         receipt of a lump sum payment equal to the Member's Contributions
         Account, unless the Member repays the full amount of such distribution,
         plus interest, in accordance with Section 3.3.

(e)      A Member's Credited Service shall include any period the Member is on
         any absence from work with the Employer for voluntary or involuntary
         military service with the armed forces of the United States, but not to
         exceed the period required under the law pertaining to veterans'
         reemployment rights. However, if the Member fails to



                                       4
<PAGE>

         report for work at the end of this absence before his or her
         reemployment rights expire, the Member shall not receive credit for
         this period of absence.

1.9 EMPLOYEE

All classifications as herein defined:

Any person in the employ of the Employer who is represented by a collective
bargaining unit which is recognized by the Employer and set forth in Schedule B,
C, or D. This term shall include leased employees within the meaning of Section
414(n)(2) of the Internal Revenue Code. In addition, members of the Upholsterers
International Union of North America who are covered by a pension plan to which
the Employer contributes by virtue of a collective bargaining agreement with
that union shall not be deemed "Employees" for purposes of this plan.

For purposes of determining the number or identity of highly compensated
employees as defined in Section 414(q) of the Internal Revenue Code the
employees of the Employer shall include leased employees.

1.10 EMPLOYER

(a)      Simmons Company, a Delaware corporation, and any legal successor
         thereof; and

(b)      any other corporation, division, plant, or other entity that duly
         adopts the Plan with the approval of the Board of Directors.

1.11 HOUR OF SERVICE

Each hour for which an Employee is paid or entitled to payment for the
performance of duties for the Employer during the applicable Computation Year,
each hour for which an Employee is paid or entitled to payment on account of a
period of time during which no duties are performed (irrespective of whether the
employment relationship was terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty, or leave of
absence, and each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer, provided, however, that
no more than 501 Hours of Service shall be credited to an Employee on account of
any period during which the Employee performs no duties (whether or not the
period occurs in a single Computation Year).

Hours of Service shall be determined from records maintained by the Employer.
With respect to employment prior to May 1, 1976, for purposes of Section 2.1,
the Employer may, if records of the number of hours worked by an Employee are
not available, approximate the number of hours worked on the basis of any
records that are available and, if there are none, make a reasonable estimate of
these hours and credit the Employee with this approximation or estimate. For
employment subsequent to April 30, 1976, Hours of Service shall include hours of
service with any other business entity which is a member of a controlled group
with



                                       5
<PAGE>

the Employer as defined in Section 1563(a) of the Internal Revenue Code
(determined without regard to Subsections (a)(4) and (e)(3)(C) thereof).

An Employee shall also receive an Hour of Service for each hour of the
normally-scheduled workweek for each week during any period the Employee is on
any absence from work with the Employer for voluntary or involuntary military
service with the armed forces of the United States, but not to exceed the period
required under the law pertaining to veterans' reemployment rights. However, if
the Employee fails to report for work at the end of this absence before his or
her reemployment rights expire, the Employee shall not receive credit for hours
on the leave.

All Hours of Service will be credited in accordance with Department of Labor
Regulation sections 2530.200b-2(b) and (c).

1.12 MEMBER

All classifications as herein defined:

(a)       ACTIVE MEMBER - An Employee participating in the Plan as of July 1,
          1989, in accordance with Article 2 and the terms of a collective
          bargaining agreement.

(b)       INACTIVE MEMBER - A participant in the Plan who is no longer an Active
          Member but who shall be treated as an Active Member for all purposes
          of the Plan, except that the months during which he or she is
          classified as an Inactive Member will not count as Credited Service.
          In addition, effective July 1, 1989, months during which an individual
          is classified as an Inactive Member will be disregarded in determining
          both Monthly Earnings and Average Monthly Compensation.

(c)       RETIRED MEMBER - A participant in the Plan who has retired and is in
          receipt of a benefit in accordance with Article IV or a participant in
          the Plan who has terminated employment and is in receipt of a benefit
          in accordance with Article VI.

(d)       VESTED MEMBER - A participant in the Plan whose employment has
          terminated with the Employer and is entitled to a benefit in
          accordance with Article VI.

1.13 MEMBER'S CONTRIBUTIONS ACCOUNT

The account that evidences the value of the Member's contributions to the Plan,
including credited interest, as described in Section 3.1(b).

1.14 MONTHLY EARNINGS

The Employee's Hourly Rate of Pay during the calendar year preceding the
computation period, multiplied by 173 and 1/3.

As used herein, "Hourly Rate of Pay" shall mean an Employee's actual annual
earnings, including vacation pay, for the previous calendar year ending December
31, excluding


                                       6
<PAGE>


overtime, divided by the actual number of hours worked, including paid vacation
hours, but excluding overtime.

The total amount of Monthly Earnings taken into account for any Plan Year
beginning on or after May 1, 1989 and prior to May 1, 1994 shall not exceed
$200,000 (or other amount determined by the Secretary of the Treasury under
Section 401(a)(17) of the Internal Revenue Code). Notwithstanding the preceding
sentence, a Member's Accrued Benefit shall not be less than his or her Accrued
Benefit as of April 30, 1989, determined without regard to this limitation on
Monthly Earnings.

The total amount of Monthly Earnings taken into account for any Plan Year
beginning on or after May 1, 1994 shall not exceed $150,000 (or other amount
determined by the Secretary of the Treasury under Section 401(a)(17) of the
Internal Revenue Code). Notwithstanding the preceding sentence, a Member's
Accrued Benefit shall not be less than his or her Accrued Benefit as of April
30, 1994, determined with regard to the limitation on Monthly Earnings then in
effect.

For Plan Years beginning prior to May 1, 1997, in determining Monthly Earnings
for purposes of the limitations in the preceding paragraphs, the rules of
Section 414(q)(6) of the Internal Revenue Code shall apply, except that in
applying these rules, the term "family" shall include only the Employee's spouse
and lineal descendants who have not attained age 19 before the end of the Plan
Year. If as a result of applying these rules the limit in Section 401(a)(17) of
the Internal Revenue Code is exceeded, the limitation shall be prorated among
the affected individuals in proportion to each such individual's Monthly
Earnings as determined prior to the application of this limitation.

1.15 NORMAL FORM OF RETIREMENT INCOME

(a)       For a Member with no living spouse on his or her Annuity Starting
          Date: A pension payable, from the applicable benefit commencement
          date, for the life of the Member, provided that in the event of the
          Member's death prior to the receipt of 60 monthly payments or the
          receipt of benefits equal to the Member's Contributions Account, his
          or her Beneficiary shall be entitled to the greater of the balance of
          the 60 monthly payments or the excess of the Member's Contribution
          Account over the benefits paid to the Member.

(b)       For a Member with a spouse living on his or her Annuity Starting Date:
          A pension, equal to the Actuarial Equivalent of the Normal Form of
          Retirement Income set forth in Subsection (a), payable from the
          applicable benefit commencement date for the life of the Member, with
          the provision that after his or her death 50 percent of the benefit
          shall continue during the life of the Member's spouse (who was married
          to the Member on the date his or her benefit commenced), if the spouse
          survives the Member.


                                       7
<PAGE>


1.16 ONE YEAR BREAK IN SERVICE

A Computation Year during which an Employee shall not have accumulated more than
500 Hours of Service.

Notwithstanding the foregoing, a Member shall accrue Hours of Service in order
to prevent a One Year Break in Service equal to each hour the Member normally
would have been credited (if normal hours cannot be determined, eight hours for
each day) while the Member is absent on a Parental Leave. As used herein, a
Parental Leave occurs when the Member is absent due to:

(a)      the Member's pregnancy,

(b)      the birth of the Member's child,

(c)      the placement of a child in connection with the child's adoption by the
         Member, or

(d)      the caring for a child during the period immediately following the
         child's birth or placement for adoption.

No more than 501 hours may be credited under this provision for any particular
Parental Leave. All the hours shall be credited in the year the absence begins
only if it is necessary to prevent a One Year Break in Service in that year.
Otherwise, all the hours shall be credited in the following year. The Pension
Committee may require certification, under reasonable and uniform rules, to
establish the validity of a Parental Leave.

In addition, solely for purposes of determining whether a One Year Break in
Service has occurred, an Employee shall receive an Hour of Service for each hour
of the normally-scheduled workweek for each week during any period the Employee
is on a leave of absence taken pursuant to the Family and Medical Leave Act of
1993.

1.17 PENSION COMMITTEE OR COMMITTEE

The persons appointed to administer the Plan, in accordance with Article IX.

1.18 PLAN

The Retirement Plan for Simmons CO. Employees described herein, as from time to
time supplemented and amended.

1.19 PLAN YEAR

The 12 consecutive month period commencing on each May 1.

1.20 PREDECESSOR PLAN

The Retirement Plan for Simmons Employees.



                                       8
<PAGE>


1.21 PRIMARY SOCIAL SECURITY BENEFIT

The monthly benefit to which the Member would be entitled to receive, upon
proper application, commencing at his or her Normal Retirement Date, computed
under the provisions of the federal Social Security Act in effect at the time
the Member ceases to be an Active Member, or his or her Normal Retirement Date,
if earlier, assuming that if the Member had ceased to be an Active Member prior
to his or her Normal Retirement Date, his or her earnings would continue until
his or her Normal Retirement Date at a rate equal to his or her Average Monthly
Compensation.

1.22 RETIREMENT DATE

The Member's Normal, Early, or Deferred Window Retirement Date, as provided in
Article IV.

1.23 TRUST AGREEMENT

The instrument or instruments executed by the Employer and the Trustee fixing
the rights and liabilities of each with respect to holding and administering the
Trust Fund for the purposes of the Plan.

1.24 TRUSTEE

The trustee, trustees, or any successor trustee, appointed by the Board of
Directors, acting at any time under the terms of the Trust Agreement.

1.25 TRUST FUND

All assets held at any time by the Trustee under the terms of the Trust
Agreement.

1.26 VESTING SERVICE

(a)      PRIOR TO MAY 1, 1976

         "Vesting Service" as determined in accordance with the provisions of
         the Predecessor Plan, excluding any period where the Employee, although
         otherwise eligible, declined to become a Member of the Predecessor
         Plan.

(b)      SUBSEQUENT TO APRIL 30, 1976 AND PRIOR TO AUGUST 1, 1985

         (1)      An Employee shall accrue one year of Vesting Service for each
                  Computation Year, following attainment of age 22 and prior to
                  attainment of age 25, in which he or she completes 1,000 Hours
                  of Service.

         (2)      An Employee shall accrue one year of Vesting Service for each
                  Computation Year, subsequent to attainment of age 25, in which
                  he or she completes 1,000 Hours of Service, during which time
                  the Employee was making the contributions required by the
                  Predecessor Plan or by Section 3.1.

(c)      SUBSEQUENT TO JULY 31, 1985



                                       9
<PAGE>


         (1)      An Employee shall accrue one year of Vesting Service for each
                  Computation Year, following the attainment of age 18 and prior
                  to attainment of age 21, in which he or she completes 1,000
                  Hours of Service.

         (2)      An Employee shall accrue one year of Vesting Service for each
                  Computation Year, subsequent to attainment of age 21, in which
                  he or she completes 1,000 Hours of Service, during which time
                  the Employee was making the contributions required by the
                  Predecessor Plan or by Section 3.1.

         (3)      If an Employee has a One Year Break in Service and is later
                  reemployed by the Employer, his or her period of Vesting
                  Service prior to the One Year Break in Service shall not be
                  taken into account until he or she again completes one Year of
                  Eligibility Service, provided that if the Employee was not
                  vested in accordance with Section 6.1 at the time the One Year
                  Break in Service commenced, his or her years of Vesting
                  Service accrued prior to such occurrence shall not be taken
                  into account unless the number of consecutive One Year Breaks
                  in Service is less than five or the aggregate number of years
                  of Vesting Service accrued before the One Year Break in
                  Service.

1.27 YEAR OF ELIGIBILITY SERVICE

The 12 month period commencing with the date of the Employee's employment,
provided that if the Employee has not completed 1,000 Hours of Service in this
12-month period, the subsequent computation periods for determining a Year of
Eligibility Service shall be the Computation Year beginning after the Employee's
employment date and each subsequent Computation Year.



                                       10
<PAGE>



ARTICLE 2. ELIGIBILITY FOR MEMBERSHIP

2.1 ELIGIBILITY FOR MEMBERSHIP

(a)      Each Employee who was an Active Member in the Plan on April 30, 1997
         shall automatically continue to be an Active Member on May 1, 1997, if
         he or she is still an Employee and makes the contributions required by
         Section 3.1.

(b)      Notwithstanding any provision to the contrary, no Employee shall become
         an Active Member after July 31, 1989.

(c)      Each Employee who was eligible to become an Active Member in accordance
         with subsection (b), but who does not comply with the provisions of
         Section 3.1, shall again be eligible to become an Active Member on the
         earlier of any subsequent May 1 or November 1, provided the Employee
         then makes the contributions required by Section 3.1.

2.2 TRANSFER OF EMPLOYMENT

If an Active or Inactive Member enters directly into the employ of another
Employer, the Member shall continue his or her membership hereunder. Such Member
shall receive credit for his or her aggregate Vesting Service with all
Employers, but employment by two or more Employers during the same period of
time shall not create more than one period of time for the purpose of
determining Vesting Service.

2.3 CHANGE OF STATUS

(a)      If an Active Member while still employed by the Employer or a business
         entity that is a member of a controlled group with the Employer as
         defined in Section 1563(a) of the Internal Revenue Code (determined
         without regard to Subsections (a)(4) or (e)(3)(C) thereof) ceases to be
         an Employee as defined in Section 1.9 because he or she is no longer a
         member of a collective bargaining unit recognized by the Employer, or
         if an Active Member discontinues required contributions in accordance
         with Section 3.1, the Member shall become an Inactive Member, but shall
         continue to accrue Vesting Service. In addition, effective July 1,
         1989, an Employee shall become an Inactive Member (but continue to
         accrue Vesting Service) if the collective bargaining agreement under
         which the Employee is covered provides that he or she shall become an
         Inactive Member.

(b)      If an Inactive Member retires or terminates employment with the
         Employer or a business entity which is a member of a controlled group
         with the Employer as defined in Section 1563(a) of the Internal Revenue
         Code (determined without regard to Subsections (a)(4) or (e)(3)(C)
         thereof), the Accrued Benefit, if any, to which the Member may be
         entitled under the Plan shall be determined as if he or she had retired
         or terminated employment on the date he or she became an Inactive
         Member.



                                       11
<PAGE>


ARTICLE 3. CONTRIBUTIONS

3.1 MEMBER CONTRIBUTIONS - RETIREMENT BENEFITS

(a)      Except as otherwise provided in Subsection (e) and Section 5.1(f) of
         Article V-II, each Active Member shall elect, by payroll deduction, to
         contribute 3-1/2 percent of the portion of his or her Monthly Earnings
         in excess of $550.

(b)      The term "Member's Contributions Account," wherever used in the Plan,
         shall mean the total of--

         (1)      the contributions of the Member made in accordance with
                  Subsection (a);

         (2)      interest on these contributions at the rate of 5 percent per
                  annum compounded annually from October 31, 1987 until April
                  30, 1988, or if earlier, until the Member's Retirement Date,
                  termination of employment, or death; and

         (3)      interest on the sum of (i) and (ii) compounded annually--

                  (A)      at the rate of 120 percent of the federal mid-term
                           rate (as in effect under Section 1274 of the Internal
                           Revenue Code for the first month of a Plan Year) for
                           the period beginning on May 1, 1988 and ending on the
                           date on which the determination is being made; and

                  (B)      at the rate that would be used under the Plan under
                           Section 417(e)(3) of the Code (as of the
                           determination date) for the period beginning on the
                           determination date and ending on the date when the
                           Member would attain age 65.

(c)      If an Employee fails to elect that the contributions required in
         accordance with Subsection (a) be deducted from his or her pay when the
         Employee first becomes eligible to become an Active Member in
         accordance with Section 2.1, the Employee shall not become a Member of
         the Plan.

(d)      In the event an Active Member after previously electing to make the
         required contributions in accordance with Subsection (a) revokes his or
         her former election, the Member shall immediately become an Inactive
         Member in accordance with Section 2.3(a). Such Inactive Member may
         again become an Active Member as of the date set forth in Section
         2.1(c) by again electing to have the contributions required in
         accordance with Subsection (a) deducted from his or her pay.

3.2 MEMBER CONTRIBUTIONS - INSURANCE BENEFITS

Each Member who had insured death benefits coverage under the Predecessor Plan
in effect as of April 30, 1963, shall continue to make contributions, by way of
payroll deductions, under the Plan towards said coverage in the same amount as
was being contributed as of



                                       12
<PAGE>

April 30, 1963. These contributions shall not become part of the Trust Fund
assets for any purposes of the Plan. No other Member shall make contributions
towards this coverage.

3.3 REPAYMENT OF MEMBER CONTRIBUTIONS

Upon the reemployment of a Member who had terminated employment and who had
received a distribution equal to the Member's Contributions Account from the
Plan or the Predecessor Plan, the Member, if not precluded by the operation of
Section 1.26(b)(ii) or 1.26(c)(ii) from accruing Vesting Service prior to the
date of his or her termination of employment, shall for a period of five years
from the Member's reemployment date, be given the opportunity to repay the full
amount of the distribution, plus interest compounded annually to the date of
repayment at--

(a)      the rate of 2 percent per annum for the period prior to May 1, 1976;

(b)      the rate of 5 percent per annum for the period beginning on May 1, 1976
         and ending on April 30, 1988; and

(c)      the rate determined for purposes of Section 3.1(b)(iii) for the period
         beginning on May 1, 1988.

3.4 EMPLOYER CONTRIBUTIONS

(a)      The Employer intends to contribute to the Trust Fund such amounts as
         are actuarially required, together with Member contributions, to fund
         the benefits of the Plan. The valuation for actuarially determining
         these amounts shall be based on the method of funding, actuarial
         assumptions, and if applicable, the period of amortization of any
         unfunded actuarial liability, as adopted in accordance with Section
         9.3(e). Forfeitures arising from a Member's termination of employment
         prior to the completion of five years of Vesting Service (in accordance
         with Section 6.1) shall be used to reduce the Employer's contribution.
         The Employer does not, however, guarantee either the making of the
         contributions or the payment of the benefits under the Plan. The
         Employer reserves the right to reduce, suspend, or discontinue its
         contributions under the Plan for any reason at any time.

(b)      All contributions are made subject to current tax deductibility and
         continued qualification of the Plan and Trust Fund. Amounts contributed
         by the Employer:

         (1)      that are made as the result of a mistake in fact shall be
                  returned to the Employer within one year of the date of
                  contribution; and

         (2)      that are disallowed as a tax deduction by the Internal Revenue
                  Service shall be returned to the Employer within one year of
                  the date of disallowance.

3.5 PAYMENT OF EXPENSES

All expenses of the Plan and Trust Fund, unless paid by the Employer, will be
paid out of the assets of the Trust Fund.



                                       13
<PAGE>


ARTICLE 4. RETIREMENT DATES

4.1 RETIREMENT DATE

Wherever in the Plan reference is made to retirement or a retirement date, it
shall mean the Normal, Early, or Deferred Retirement Date, in accordance with
the provisions of this Article.

4.2 NORMAL RETIREMENT DATE

An Active or Inactive Member shall have the right to retire on the first day of
the month coincident with or next following the attainment of age 65, this date
being known as his or her Normal Retirement Date.

4.3 EARLY RETIREMENT DATE

An Active or Inactive Member may elect to retire on the first day of any month
coincident with or next following the completion of ten years of Vesting Service
and attainment of age 55, but before age 65, this date being known as his or her
Early Retirement Date.

4.4 DEFERRED RETIREMENT DATE

(a)      If an Active or Inactive Member continues employment after his or her
         Normal Retirement Date with the group of companies made up of the
         Employer, or any other business entity which is a member of a
         controlled group with the Employer as defined in Section 1563(a) of the
         Internal Revenue Code (determined without regard to Subsections (a)(4)
         and (e)(3)(C) thereof), the Member shall continue as an Active or
         Inactive Member until his or her actual retirement on the first day of
         any subsequent month, this date being known as his or her Deferred
         Retirement Date.

(b)      Notwithstanding Subsection (a), a Member's benefits under the Plan
         shall commence to be distributed no later than the April 1 following
         the calendar year in which the Member attains age 70-1/2, regardless of
         whether his or her employment with the Employer has terminated. Except
         in the case of a 5 percent owner (as described in Code Section 416(i)),
         the benefits payable to a Member who attains age 70-1/2 before January
         1, 1988 shall commence to be distributed no later than the April 1
         following the calendar year in which his or her termination of service
         occurs. For purposes of this Plan, a Member's latest allowable
         commencement date under this Subsection (b) shall also be his or her
         Annuity Starting Date. A Member whose benefits commence under this
         Subsection (b) shall not be permitted to change his or her form of
         distribution after the Annuity Starting Date.

         In the case of a Member whose benefits commence prior to his or her
         termination of employment pursuant to this Subsection (b), the Member's
         benefit will be adjusted, if appropriate, as of January 1 of each year
         beginning after the Member's benefit commencement date to reflect
         additional accruals under the Plan for the prior Plan Year.


                                       14
<PAGE>


ARTICLE 5. RETIREMENT BENEFITS FOR MEMBERS OF THE COLLECTIVE BARGAINING
ORGANIZATIONS SET FORTH ON SCHEDULE B

5.1 UPON NORMAL OR DEFERRED RETIREMENT

Upon retirement at his or her Normal or Deferred Retirement Date, an Active or
Inactive Member shall, subject to Article VIII, receive a monthly Normal Form of
Retirement Income equal to the amount set forth in Subsections (a) plus (b) plus
(c) less (d), subject to Subsection (e).

(a)      3/4 of 1 percent of a Member's Monthly Earnings as of January 1, 1963,
         multiplied by his or her years and completed months of Credited Service
         accrued prior to May 1, 1963, exclusive of the first five years of
         Credited Service and exclusive of Credited Service accrued prior to the
         Member's thirtieth birthday.

(b)      1 percent of the first $400 of the Member's Monthly Earnings plus 1-3/4
         percent of his or her Monthly Earnings in excess of $400 for each Year
         and completed months of Credited Service. For purposes of this
         Subsection, the term "Year" shall refer to the 12-month period
         beginning on May 1, 1963 and each May 1 thereafter, ending on April 30,
         1967.

(c)      1-1/4 percent of the first $550 of the Member's Monthly Earnings plus
         1-3/4 percent of his or her Monthly Earnings in excess of $550 for each
         Year and completed months of Credited Service. For purposes of this
         Subsection, the term "Year" shall refer to the 12-month period
         beginning on May 1, 1967 and each May 1 thereafter.

(d)      The benefit accrued as of October 30, 1987 payable under the Normal
         Form of Retirement Income under the Predecessor Plan.

(e)      Notwithstanding the foregoing Subsections, in no event shall a Member
         who retires on his or her Normal or Deferred Retirement Date be
         entitled to a benefit of less than the largest benefit the Member would
         have been entitled to receive had he or she retired on his or her Early
         Retirement Date and been entitled to a benefit in accordance with
         Section 5.2.

5.2 UPON EARLY RETIREMENT

(a)      Upon retirement at his or her Early Retirement Date, an Active or
         Inactive Member shall, subject to Article VIII, receive at his or her
         Normal Retirement Date, the Member's Accrued Benefit.

(b)      Notwithstanding Subsection (a), an Active or Inactive Member may elect
         that his or her early retirement benefit commence on the first day of
         any month prior to his or her Normal Retirement Date. In such event,
         the Member's early retirement benefit shall be reduced in accordance
         with the actuarial assumptions set forth in Exhibit I to


                                       15
<PAGE>


         reflect the commencement of the Member's benefit prior to his or her
         Normal Retirement Date.

         Notwithstanding the foregoing, if a Member's Early Retirement Date is
         not more than five years prior to the Member's Normal Retirement Date,
         the Member's early retirement benefit shall not be actuarially reduced,
         but shall be reduced by 1/4 of 1 percent for each month that the
         Member's benefit commencement date precedes his or her Normal
         Retirement Date.









                                       16
<PAGE>




ARTICLE 5.-II RETIREMENT BENEFITS FOR MEMBERS OF THE COLLECTIVE BARGAINING
ORGANIZATIONS SET FORTH ON SCHEDULE C

5.1 UPON NORMAL OR DEFERRED RETIREMENT

Upon retirement at his or her Normal or Deferred Retirement Date, an Active or
Inactive Member shall, subject to Article VIII, receive a monthly Normal Form of
Retirement Income equal to the amount set forth in Subsections (a) plus (b) plus
(c) less (d), subject to Subsection (e).

(a)      3/4 of 1 percent of a Member's Monthly Earnings as of January 1, 1963,
         multiplied by his or her years and completed months of Credited Service
         accrued prior to May 1, 1963, exclusive of the first five years of
         Credited Service and exclusive of Credited Service accrued prior to the
         Member's thirtieth birthday.

(b)      1 percent of the first $400 of the Member's Monthly Earnings plus 1-3/4
         percent of his or her Monthly Earnings in excess of $400 for each Year
         and completed months of Credited Service. For purposes of this
         Subsection, the term "Year" shall refer to the 12-month period
         beginning on May 1, 1963 and each May 1 thereafter, ending on April 30,
         1967.

(c)      1-1/4 percent of the first $550 of the Member's Monthly Earnings plus
         1-3/4 percent of his or her Monthly Earnings in excess of $550 for each
         Year and completed months of Credited Service. For purposes of this
         Subsection, the term "Year" shall refer to the 12-month period
         beginning on May 1, 1967 and each May 1 thereafter.

(d)      The benefits accrued as of October 30, 1987 payable under the Normal
         Form of Retirement Income under the Predecessor Plan.

(e)      Notwithstanding the foregoing Subsections, in no event shall a Member
         who retires on his or her Normal or Deferred Retirement Date be
         entitled to a benefit of less than the largest benefit the Member would
         have been entitled to receive had he or she retired on his or her Early
         Retirement Date and been entitled to a benefit in accordance with
         Section 5.2.

(f)      Notwithstanding the provisions of Article III, the contribution
         required from each Member covered by this Article V-II shall be 1-3/4
         percent of the portion of his or her Monthly Earnings in excess of
         $550.

5.2 UPON EARLY RETIREMENT

(a)      Upon retirement at his or her Early Retirement Date, an Active or
         Inactive Member shall, subject to Article VIII, receive at his or her
         Normal Retirement Date, the Member's Accrued Benefit.


                                       17
<PAGE>


(b)      Notwithstanding Subsection (a), an Active or Inactive Member may elect
         that his or her early retirement benefit commence on the first day of
         any month prior to his or her Normal Retirement Date. In such event,
         the Member's early retirement benefit shall be reduced in accordance
         with the actuarial assumptions set forth in Exhibit I to reflect the
         commencement of the Member's benefit prior to his or her Normal
         Retirement Date.

Notwithstanding the foregoing, if a Member's Early Retirement Date is not more
than five years prior to the Member's Normal Retirement Date, the Member's early
retirement benefit shall not be actuarially reduced, but shall be reduced by 1/4
of 1 percent for each month that the Member's benefit commencement date precedes
his or her Normal Retirement Date.




                                       18
<PAGE>




ARTICLE 5.-III RETIREMENT BENEFITS FOR MEMBERS OF THE COLLECTIVE BARGAINING
ORGANIZATIONS SET FORTH IN SCHEDULE D

5.1 UPON NORMAL OR DEFERRED RETIREMENT

Upon retirement at his or her Normal or Deferred Retirement Date, an Active or
Inactive Member shall, subject to Article VIII, receive a monthly Normal Form of
Retirement Income equal to the greater of the amount set forth in Subsection (a)
less (c), or in Subsection (b) less (c), in either case subject to Subsection
(d).

(a)      (1)      1-1/2 percent of the Member's Average Monthly Compensation,
                  multiplied by his or her Credited Service to a maximum of 40
                  years; less

         (1)      1-1/4 percent of the Member's Primary Social Security Benefit
                  multiplied by his or her Credited Service to a maximum of 40
                  years.

(b)      Notwithstanding the foregoing Subsection, in no event shall a Member
         who was a member of UFWA-Local No. 262 at San Leandro, California be
         entitled to a benefit of less than the benefit he or she would have
         been entitled to under this Section if he or she was not a member of
         UFWA-Local No. 262 at San Leandro, California.

(c)      The benefits accrued as of October 30, 1987 payable under the Normal
         Form of Retirement Income under the Predecessor Plan.

(d)      Notwithstanding the foregoing Subsections, in no event shall a Member
         who retires on his or her Normal or Deferred Retirement Date be
         entitled to a benefit of less than the largest benefit the Member would
         have been entitled to receive had he or she retired on his or her Early
         Retirement Date and been entitled to a benefit in accordance with
         Section 5.2.

5.2 UPON EARLY RETIREMENT

(a)      Upon retirement at his or her Early Retirement Date, an Active or
         Inactive Member shall, subject to Article VIII, receive at his or her
         Normal Retirement Date, the Member's Accrued Benefit.

(b)      Notwithstanding Subsection (a), an Active or Inactive Member may elect
         that his or her early retirement benefit commence on the first day of
         any month prior to his or her Normal Retirement Date. In such event,
         the Member's early retirement benefit shall be reduced in accordance
         with the actuarial assumptions set forth in Exhibit I to reflect the
         commencement of the Member's benefit prior to his or her Normal
         Retirement Date.

         Notwithstanding the foregoing, if a Member's Early Retirement Date is
         not more than five years prior to the Member's Normal Retirement Date,
         the Member's early retirement benefit shall not be actuarially reduced,
         but shall be reduced by 1/4 of 1



                                       19
<PAGE>


         percent for each month that the Member's benefit commencement date
         precedes his or her Normal Retirement Date.








                                       20
<PAGE>

ARTICLE 6. TERMINATION BENEFITS

6.1 UPON TERMINATION OF EMPLOYMENT

(a)      If an Active or Inactive Member's employment is terminated from the
         group of companies made up of the Employer, or any other business
         entity that is a member of a controlled group with the Employer as
         defined in Section 1563(a) of the Internal Revenue Code (determined
         without regard to Subsections (a)(4) and (e)(3)(c) thereof) prior to
         qualifying for any other benefits under the Plan, the Member shall
         become a Vested Member. Subject to Article VIII, the Member shall
         become a Retired Member at his or her Normal Retirement Date and shall
         be entitled to receive the Member's Accrued Benefit determined on the
         date his or her employment terminated with the Employer.

(b)      If, however, an Active or Inactive Member's employment is so terminated
         prior to the completion of five years of Vesting Service or the
         attainment of age 65, the Member shall be entitled to receive the
         portion of his or her Accrued Benefit attributable to the Member's own
         contributions.

6.2 EARLY PAYMENT OF VESTED BENEFIT

A Vested Member may elect to commence payment of the benefit payable in
accordance with Section 6.1 on the first day of any month coincident with or
following the completion of ten years of Vesting Service and attainment of age
55 by filing a written request with the Pension Committee. In this event, the
Vested Member's benefit shall be actuarially reduced, in accordance with the
actuarial equivalent assumptions adopted by the Pension Committee as set forth
in Exhibit I, to reflect the commencement of the Member's benefit prior to his
or her Normal Retirement Date.




                                       21
<PAGE>


ARTICLE 7. BENEFITS PAYABLE UPON DEATH

7.1 DEATH PRIOR TO ATTAINMENT OF AGE 65 AND COMPLETION OF FIVE YEARS OF VESTING
SERVICE

Upon the death of an Active or Inactive Member prior to attainment of age 65 and
completion of five years of Vesting Service, the Member's Beneficiary shall be
entitled to receive the portion of the Member's Accrued Benefit attributable to
the Member's own contributions.

7.2 DEATH SUBSEQUENT TO ATTAINMENT OF AGE 65 OR COMPLETION OF FIVE YEARS OF
VESTING SERVICE AND PRIOR TO ACTUAL RETIREMENT

Upon the death of:

(a)      an Active or Inactive Member (including a Member on a leave of absence
         approved by the Employer) subsequent to completion of five years of
         Vesting Service or attainment of age 65 and prior to his or her actual
         retirement;

(b)      a Vested Member who had not elected an early commencement of his or her
         benefit in accordance with Section 6.2 prior to his or her Normal
         Retirement Date; or

(c)      a Member who retired on his or her Early Retirement Date, but had not
         elected an early commencement of his or her benefit in accordance with
         Section 5.2(b) prior to his or her Normal Retirement Date;

         There shall be no benefits payable under the Plan, other than the
         payment to the Member's Beneficiary of the portion of the Member's
         Accrued Benefit attributable to the Member's own contributions, unless
         the Member had been legally married at the time of death to his or her
         present spouse for at least one year. In this event, the Member's
         spouse shall be entitled to a monthly survivorship benefit payable on
         the later of the first of the month following the Member's death or
         following the month in which the Member would have attained age 55 but
         for the Member's death determined as follows.

         (1)      If the Member dies after attaining age 55, the amount of the
                  benefit shall be the amount payable as a survivor annuity as
                  if the Member had retired on the day before his or her death
                  with immediate commencement of the Normal Form of Retirement
                  Income.

         (2)      If the Member dies on or before attaining age 55, the amount
                  of the benefit payable shall be the amount payable as a
                  survivor annuity as if the Member had--

                  (A)      terminated employment on the date of his or her death
                           (if employment had not yet terminated);



                                       22
<PAGE>

                  (B)      survived to age 55;

                  (C)      retired at age 55 with immediate commencement of the
                           Normal Form of Retirement Income; and

                  (D)      died on the day after he or she would have attained
                           age 55.

         Notwithstanding the foregoing, the surviving spouse may elect, in
         writing, to defer commencement of the survivorship benefit until the
         first day of any calendar month preceding or coinciding with the date
         on which the Member would have attained age 65, but in no event later
         than that date. The monthly amount of any survivorship benefit that is
         deferred in accordance with this paragraph shall be increased (as if
         the Member had deferred commencement of the benefit) to reflect this
         deferral.

         Upon the death of the surviving spouse of a deceased Member who had not
         received a benefit equal to the Member's Contributions Account, the
         Member's Beneficiary shall receive a lump sum payment equal to the
         excess of the Member's Contribution Account over the benefit paid to
         the Member's surviving spouse.

7.3 DEATH OF A RETIRED MEMBER

Upon the death of a Retired Member, the terms of the benefit form under which
the Member was receiving his or her benefit shall apply.




                                       23
<PAGE>


ARTICLE 8. BENEFIT LIMITATIONS AND PAYMENT

8.1 DUPLICATION OF BENEFITS

Notwithstanding any provisions of the Plan,

(a)      If a Member is entitled to any retirement income or other benefits
         attributable to Employer contributions from any other retirement plan
         or annuity or under any State statute on account of disability or their
         equivalent (excluding Worker's Compensation payments), the benefits to
         which the Member may be entitled under this Plan shall be reduced. This
         reduction shall be in an amount equal to the portion of the other
         retirement income or benefit attributable to concurrent service with
         the Employer for which the Member is receiving a benefit under the
         Plan.

(b)      In the determination of any benefit to which a Member will be entitled
         under the Plan, actuarial adjustments shall be made to reflect any
         amounts previously paid to the Member under the Plan.

8.2 BENEFIT REDUCTION FOR COST OF INSURANCE COVERAGE

Each Retired Member who had elected death benefits coverage under the
Predecessor Plan shall have the retirement income payable to the Member reduced
by the cost of group insurance premiums.

8.3 MAXIMUM BENEFIT LIMITATION

Notwithstanding any provisions of the Plan to the contrary, in no event shall a
Member's monthly retirement income exceed the lesser of

(a)      $7,500 (the "Dollar Limitation"), or

(b)      (b) 100 percent of the Member's average monthly compensation, as
         defined in Section 1.415-2(d) of the Internal Revenue Service
         regulations, during the three consecutive calendar years of the
         Member's highest earnings (which effective May 1, 1998 shall include
         amounts contributed by the Employer pursuant to a salary reduction
         agreement which are not includible in the gross income of a Member
         under Internal Revenue Code Sections 125, 132(f), 402(e)(3),
         402(h)(1)(B), 403(b), or 457) (the "Compensation Limitation"), subject
         to the following provisions:

         (1)      The above limitations shall apply to a benefit payable to the
                  Member either as a life annuity or as a joint and survivor
                  option described in Section 8.6(d). If, however, the benefit
                  is payable in a form other than a joint and survivor option
                  described in Section 8.6(d) or other than as a life annuity,
                  the limitations shall apply to the single life annuity that is
                  the Actuarial Equivalent of such benefit, as determined
                  pursuant to this Section.



                                       24
<PAGE>


                  Solely for the purposes of this Subsection (1), the interest
                  rate assumption for the purpose of computing the Actuarial
                  Equivalent of a form of benefit shall be 7.5 percent.
                  Notwithstanding the foregoing, and effective May 1, 1995, the
                  interest rate assumption for the purpose of computing the
                  Actuarial Equivalent of any form of benefit subject to Section
                  417(e)(3) of the Internal Revenue Code shall not be less than
                  the greater of 7.5 percent or the applicable interest rate
                  under Section 417(e)(3) of the Code.

         (2)      If a benefit is payable prior to a Member's Social Security
                  Retirement Age (as defined in Section 415(b)(8) of the
                  Internal Revenue Code), the Dollar Limitation applicable to
                  such benefit shall be equal to the Actuarial Equivalent using
                  the Dollar Limitation where the Dollar Limitation is deemed to
                  be a benefit commencing at the Member's Social Security
                  Retirement Age. The Dollar Limitation will be reduced for
                  retirement between ages 62 and 67 by the factors used by the
                  Social Security Administration for the purposes of determining
                  Social Security benefits. In the case of retirement prior to
                  age 62, the Dollar Limitation will be further reduced to the
                  Actuarial Equivalent of the amount determined for benefits
                  commencing at age 62, based on an interest rate assumption of
                  7.5 percent.

                  If a benefit commences after a Member's Social Security
                  Retirement Age, the maximum Dollar Limitation applicable to
                  such benefit shall be the Actuarial Equivalent of the Dollar
                  Limitation where the Dollar Limitation is deemed to be a
                  benefit commencing at Social Security Retirement Age. Solely
                  for the purposes of this paragraph, the interest rate
                  assumption for the purpose of computing this Actuarially
                  Equivalent amount shall be 5 percent.

         (3)      Effective May 1, 1995, the Actuarially Equivalent benefit
                  determined under Subsections (i) and (ii) above shall be based
                  on the 1983 Group Annuity Mortality Table, with male mortality
                  factors weighted 50 percent and female factors weighted 50
                  percent. Nothing in this Subsection (iii) or in Subsection (i)
                  shall limit or prohibit the payment of any benefit
                  attributable to a Member's years of participation prior to May
                  1, 1995, to the extent that the benefit would have been
                  permitted under the terms of Section 415 of the Code and this
                  Plan as in effect prior to May 1, 1995.

         (4)      If the Member has fewer than ten years of participation in the
                  Plan, the applicable Dollar Limitation shall be multiplied by
                  a fraction, the numerator of which equals the Member's years
                  of participation in the Plan and the denominator of which is
                  ten. In no event will an adjustment for years of participation
                  reduce the Dollar Limitation to an amount less than 1/10 of
                  such limitation determined without such adjustment.


                                       25
<PAGE>


                  If the Member has fewer than ten years of service with the
                  Employer, the limitations described in Section 415(b)(1)(B)
                  and 415(b)(4) of the Code shall be multiplied by a fraction,
                  the numerator of which equals the Member's years of service
                  and the denominator of which is ten. In no event will such
                  adjustment for years of service reduce the limitations of
                  Section 415(b)(1)(B) and 415(b)(4) to amounts less than 1/10
                  of such limitations determined without such adjustments.

         (5)      The maximum Dollar Limitation of $7,500 shall be automatically
                  adjusted as permitted by Internal Revenue Service regulations
                  to reflect increases in the cost of living. As a result of
                  such an adjustment, a benefit that had previously been limited
                  by the provisions of this Section may be increased with
                  respect to future payments to the lesser of the new adjusted
                  Dollar Limitation amount or the amount of benefit which would
                  have been payable under this Plan in accordance with Article
                  V.

         (6)      In no event shall a Member be limited to an annual life
                  annuity under this Section of less than $1,000 for each year
                  of service up to a maximum of $10,000, provided such Member
                  never participated in a tax qualified defined contribution
                  plan maintained by the Employer and the total life annuity for
                  all defined benefit plans of the Employer does not exceed
                  $10,000 for any Plan Year.

         (7)      (For Limitation Years ending prior to May 1, 2000) Where a
                  Member is also a participant of a tax qualified defined
                  contribution plan maintained by the Employer, the sum of the
                  Defined Benefit Fraction and the Defined Contribution Fraction
                  may not exceed 1.0. Where such fraction is exceeded, the
                  Pension Committee in conjunction with the administrative
                  committee of the defined contribution plan shall limit the
                  benefit payable under this Plan so that the total of the
                  Defined Benefit Fraction and the Defined Contribution Fraction
                  would not exceed 1.0.

                  As used herein, "Defined Benefit Plan Fraction" for any Plan
                  Year is a fraction, the numerator of which is the Member's
                  projected annual benefit under the Plan (determined at the
                  close of the Plan Year) and the denominator of which is the
                  lesser of (A) 1.25 multiplied by the Dollar Limitation for the
                  Plan Year, or (B) 1.4 multiplied by the Compensation
                  Limitation for the Plan Year.

                  As used herein, "Defined Contribution Plan Fraction" for any
                  Plan Year is a fraction, the numerator of which equals the
                  Annual Additions to the Member's account under the Employer's
                  defined contribution plan during such Plan Year and for all
                  prior Plan Years and the denominator of which is the lesser of
                  (A) 1.25 multiplied by the "dollar limitation" (as defined in
                  the defined contribution


                                       26
<PAGE>


                  plan) for such plan year or (B) 1.4 multiplied by the
                  "compensation limitation" (as defined in the defined
                  contribution plan) for such Plan Year.

                  An Annual Addition is the amount that is allocated to a
                  Member's account during the Plan Year that constitutes
                  employer contributions, employee contributions, and
                  forfeitures. The maximum Annual Addition that may be
                  contributed or allocated to a Member's account for any Plan
                  Year shall not exceed the lesser of (A) $30,000 or, if
                  greater, one-fourth of the Dollar Limitation described in this
                  Section, or (B) 25 percent of the Member's compensation within
                  the meaning of Section 415(c)(3) of the Internal Revenue Code.
                  In no event shall the Annual Addition for any Plan Year prior
                  to January 1, 1987 be recomputed to treat all employee
                  contributions as an Annual Addition.

         For purposes of this Section, if the Accrued Benefit of an individual
         who is a Member as of the first day of the calendar year beginning on
         or after January 1, 1987, exceeds the benefits limitations under
         Section 415(b) of the Internal Revenue Code, then for purposes of
         Section 415(b) and (e)(2) of the Internal Revenue Code, the Dollar
         Limitation with respect to such individual shall be equal to such
         Accrued Benefit.

         All tax qualified defined benefit plans of the Employer, whether or not
         terminated, are to be treated as one defined benefit plan, and all tax
         qualified defined contribution plans of the Employer, whether or not
         terminated, are to be treated as one defined contribution plan. In
         applying the limitations under this Section, the qualified plans of any
         business entity that is not an Employer shall be aggregated with the
         Plan or any other plan of the Employer if that entity would be a member
         of a controlled group with the Employer as defined in Section 1563(a)
         of the Internal Revenue Code (determined without regard to Subsections
         (a)(4) and (e)(3)(C) thereof) if the phrase "at least 80 percent" in
         Section 1563(a)(1) was replaced with "more than 50 percent."

8.4 APPLICATION FOR BENEFITS

A Member may be required to complete and file with the Pension Committee an
application for his or her retirement benefit or other benefit payable under the
Plan, and to furnish all information requested by the Committee necessary for
the determination of the benefit. The failure of the Member to complete and file
the application or to supply the requested information will result in a delay in
the payment of the Member's benefit until the application has been completed and
filed, and the required information received.

8.5 BENEFIT PAYMENT PERIOD

(a)      Subject to Section 8.6, all benefits shall be payable monthly
         commencing as of the first day of the month coincident with or next
         following the Member's Retirement Date, or the benefit commencement
         date elected by a Member in accordance with Section 5.2 or 6.2.



                                       27
<PAGE>


(b)      All benefits will be suspended during any month following the Member's
         reemployment by the Employer or any of its subsidiaries or affiliates
         for at least 40 Hours of Service, or following a Member's continued
         employment subsequent to his or her Normal Retirement Date where the
         Member is employed for at least 40 Hours of Service.

         In the case of a Member whose benefits are to be suspended after his or
         her Normal Retirement Date, the Pension Committee shall notify him or
         her of the suspension. This notice shall be by personal delivery or
         first class mail during the first calendar month for which payments are
         withheld. This notice shall contain:

         (1)      a general description of the reasons why payments are
                  suspended;

         (2)      a general description of the Plan provisions relating to the
                  suspension of benefits;

         (3)      a copy of these Plan provisions;

         (4)      a statement that applicable Department of Labor regulations
                  may be found in Section 2530.203-3 of Title 29 of the Code of
                  Federal Regulations; and

         (5)      a statement that a review of the suspension may be requested
                  under the appeals procedure in Section 9.8.

          If the summary plan description for the Plan contains information that
          is substantially the same as the information required by this
          Subsection, the notice may refer the Member to the relevant pages of
          the summary, provided that the Member is informed how to obtain a copy
          of the summary or the relevant pages and that requests for information
          are honored within 30 days.

(c)      All benefits shall cease with the last monthly payment prior to the
         death of the last payee.

8.6 FORM OF BENEFIT PAYMENT

(a)      A Vested Member entitled to a benefit in accordance with Section 6.2
         may elect, on a form filed with the Pension Committee, to receive a
         lump sum payment equal to the Member's Contributions Account. An
         election by a married Member must comply with the requirements of
         Subsection (e).

(b)      A Member who is not legally married on the date his or her pension
         benefit is to commence shall receive the benefit, less any distribution
         elected in accordance with Subsection (a), payable under Section
         1.15(a) as a Normal Form of Retirement Income, unless the Member elects
         an optional form available under Subsection (d). Any such election
         shall be valid only if the Member is furnished with an explanation



                                       28
<PAGE>


         of the material features of the optional forms of payment between 30
         and 90 days before the Member's Annuity Starting Date.

(c)      A Member who is legally married on the date his or her pension benefit
         is to commence shall receive the benefit, less any distribution elected
         in accordance with Subsection (a), payable under Section 1.15(b) as a
         Normal Form of Retirement Income, unless the Member elects an optional
         form available under Subsection (d). Any such election must comply with
         the requirements of Subsection (e).

(d)      A Member may elect, on a form supplied by and filed with the Pension
         Committee prior to the date the Member's pension benefit is to
         commence, to receive the Actuarial Equivalent of his or her Normal Form
         of Retirement Income payable under one of the optional forms set forth
         in this Subsection.

         OPTIONAL FORMS:

         OPTION 1.        66-2/3 PERCENT JOINT AND SURVIVOR BENEFIT

          A retirement benefit payable during the life of the Retired Member
          with the provision that after his or her death the benefit shall
          continue at 66-2/3 percent of such rate during the life of, and shall
          be paid to, the Beneficiary designated by the Retired Member in
          writing to the Pension Committee, if such Beneficiary survives the
          Retired Member.

          OPTION 2.       50 PERCENT JOINT AND SURVIVOR BENEFIT

          A retirement benefit payable during the life of the Retired Member
          with the provision that after his or her death the benefit shall
          continue at 50 percent of such rate during the life of, and shall be
          paid, to the Beneficiary designated by the Retired Member in writing
          to the Pension Committee, if the Beneficiary survives the Retired
          Member.

          OPTION 3.       60 MONTH PERIOD CERTAIN BENEFIT

          A retirement benefit payable during the life of the Retired Member,
          with the provision that in the event of the Member's death prior to
          receipt of 60 monthly payments, the same benefit shall continue and be
          paid to the Beneficiary designated in writing to the Pension Committee
          by the Retired Member until all such 60 monthly payments have been
          made.

          OPTION 4.       120 MONTH PERIOD CERTAIN BENEFIT

          A retirement benefit payable during the life of the Retired Member,
          with the provision that in the event of the Member's death prior to
          receipt of 120 monthly payments, the same benefit shall continue and
          be paid to the Beneficiary designated


                                       29
<PAGE>


         in writing to the Pension Committee by the Retired Member until all
         such 120 monthly payments have been made.

         Notwithstanding the foregoing, no payment option shall be permitted
         which would provide benefit payments extending beyond the lives of the
         Retired Member and his or her Beneficiary, or the life expectancy of
         the Retired Member and his or her Beneficiary. All distributions shall
         be made in accordance with Section 8.10.

(e)      (1)      An election by a married Member to waive the Normal Form of
                  Retirement Income must be filed with the Pension Committee
                  within the 90-day period ending on the Member's Annuity
                  Starting Date. For this election to be effective--

                  (A)      the Member's spouse must consent in writing to the
                           election;

                  (B)      the election and the consent must specify the
                           optional form of benefit elected;

                  (C)      the election and the consent must designate a
                           Beneficiary (if applicable);

                  (D)      the Member's spouse must acknowledge the financial
                           consequences of the consent; and

                  (E)      the spouse's consent must be witnessed by a person
                           designated by the Pension Committee or a notary
                           public.

         (2)      Notwithstanding the foregoing provisions, the consent of a
                  Member's spouse shall not be required where--

                  (A)      the Member elects a joint and survivor benefit under
                           Option 1 in Subsection (d) with his or her spouse as
                           Beneficiary;

                  (B)      the Pension Committee determines that the required
                           consent cannot be obtained because there is no spouse
                           or the Member's spouse cannot be located;

                  (C)      the Pension Committee determines that the Member is
                           legally separated;

                  (D)      the Pension Committee determines that the Member has
                           been abandoned within the meaning of local law and
                           there is a court order to that effect; or

                  (E)      there exists any other circumstance (as determined by
                           the Pension Committee) prescribed by law as an
                           exception to the consent requirement.



                                       30
<PAGE>


         (3)      An election by a married Member to waive the Normal Form of
                  Retirement Benefit may be revoked by the Member in writing
                  without the consent of his or her spouse at any time during
                  the election period. Any subsequent election by a Member to
                  waive the Normal Form of Retirement Benefit, or any subsequent
                  modification of a prior election (other than a revocation of a
                  waiver of the Normal Form of Retirement Benefit or a change in
                  the form of payment or designation of Beneficiary where there
                  is in effect a valid general consent), must comply with the
                  requirements in Subsection (e)(i). A spouse's consent shall be
                  considered a "general consent" if the following requirements
                  are satisfied:

                  (A)      the consent permits the Member to waive the Normal
                           Form of Retirement Benefit;

                  (B)      the consent permits the Member to change the optional
                           form of benefit payment and the Beneficiary (as
                           applicable) without any requirement of further
                           consent by the spouse; and

                  (C)      the spouse acknowledges in the consent that he or she
                           has the right to limit consent to a specific optional
                           form of benefit and Beneficiary (as applicable) and
                           that he or she voluntarily relinquishes either or
                           both of these rights (as applicable).

         (4)      The Pension Committee shall provide to each Member by mail or
                  personal delivery between 30 and 90 days before the Member's
                  Annuity Starting Date a written explanation of the Normal Form
                  of Retirement Benefit. This explanation shall describe the
                  terms and conditions of the benefit, the material features and
                  relative values of other optional forms of benefit available
                  under the Plan, the Member's right to make (and the effect of)
                  an election to waive the benefit, the right of the Member's
                  spouse to consent in writing to the waiver, and the right to
                  make (and the effect of) a revocation of an election to waive
                  the benefit.

(f)      Notwithstanding anything in the Plan to the contrary, a Participant may
         elect (with the applicable spousal consent) to waive any requirement
         that the written explanation described above be provided at least 90
         days before the date benefits commence (or to waive the 90 day
         requirement described above) if the distribution commences more than 7
         days after such explanation is provided

(g)      Notwithstanding Subsections (b), (c), and (d), in no event shall any
         benefit payable to a Member and the spouse or Beneficiary be less than
         the Member's Contributions Account.

(h)      Notwithstanding the foregoing Subsections:



                                       31
<PAGE>


         (1)      if the amount of any retirement income payable is less than
                  $50 per month, the Pension Committee may determine to pay this
                  benefit quarterly, semiannually, or annually.

         (2)      if the value of a Participant's vested Accrued Benefit is less
                  than (or at the time of any prior distribution (i) in Plan
                  Years beginning August 6, 1997, is less than $3,500 or (ii) in
                  Plan Years beginning after August 5, 1997, is less than
                  $5,000, and the Accrued Benefit is immediately distributable
                  the Pension Committee shall distribute this benefit in the
                  form of a lump sum payment as soon as practicable following
                  the Member's Annuity Starting Date or death (whichever is
                  applicable).

         In the event the lump sum value distributed to the Retired Member in
         accordance with Paragraph (ii) is equal to the present value of the
         Retired Member's Accrued Benefit, the Retired Member's Credited Service
         prior to the date of distribution shall not be counted for any purposes
         of the Plan in the event of the subsequent reemployment of the Retired
         Member by the Employer.

         In the event the lump sum value distributed to the Retired Member in
         accordance with Paragraph (ii) is less than the present value of the
         Member's Accrued Benefit, the Retired Member may upon return to the
         employ of the Employer, repay the amount calculated under Section 3.3.
         In the absence of the repayment, the Retired Member's Credited Service
         prior to the date of distribution shall not be counted for any purposes
         of the Plan.

(i)      Subsequent to the later of the commencement of a Member's benefit under
         the Plan, or 90 days following receipt by the Member of information
         concerning his or her options under the Plan, no change in the form in
         which the benefit is being paid, or in the Beneficiary or joint
         annuitant chosen by the Member will be permitted, except that upon the
         death of a Beneficiary where Option 3 or Option 4 of Subsection (d) had
         been elected by the Member, the Member may choose an alternative
         Beneficiary.

(j)      The Pension Committee may promulgate rules and regulations governing
         all aspects of this Article.

8.7 REEMPLOYMENT

(a)      If a Retired Member is reemployed by the Employer prior to his or her
         Normal Retirement Date and retirement benefit payments are suspended in
         accordance with Section 8.5(b), any election of an optional benefit in
         accordance with Section 8.6 shall become void, and the provisions of
         Section 7.2 hereof shall again become effective. An amount equal to the
         actuarial reserve attributable to the part of the Member's Accrued
         Benefit provided by his or her own contributions shall be credited with
         interest at the rate set forth in Section 3.1(b). Any Vesting Service
         and Credited Service to which the Member was entitled when he or she
         retired shall be restored to


                                       32
<PAGE>


         the Member, and upon subsequent retirement, retirement benefits shall
         be based on Monthly Earnings (or Average Monthly Compensation, as
         applicable) and Credited Service before and after the period of prior
         retirement.

(b)      If a Retired Member is reemployed by the Employer after his or her
         Normal Retirement Date and the Member's retirement benefit payments are
         suspended in accordance with Section 8.5(b), in the event of death
         during this period any payments under an optional benefit in accordance
         with Section 8.6 (if one has been elected and has become effective)
         shall commence, or if no such election has been made, the provisions of
         Section 7.2 hereof shall become effective.

8.8 SUBSTITUTE PAYEE

If the Pension Committee finds that a Member or Beneficiary entitled to receive
any benefits hereunder is a minor, or in the judgment of the Pension Committee
is unable to care for his or her affairs because of a physical or mental
condition, the Pension Committee may pay the benefit due the payee to his or her
spouse, child, parent, brother, or sister, or such other persons or institutions
as, in the judgment of the Pension Committee, are then maintaining or have
custody of the payee, unless a prior claim has been made by a legally appointed
guardian, committee, or other legal representative of the payee.

8.9 UNCLAIMED BENEFITS

Notwithstanding any other provisions of the Plan, in the event that all
consecutive checks in payment of benefits under the Plan remain outstanding at
the expiration of six months from the date of mailing of the first check to the
last known address of the payee, the Trustee shall stop payment of all
outstanding checks and shall suspend the issuance of any further checks to the
payee until the current address of the payee is ascertained.

8.10 DISTRIBUTION

All distributions shall comply with the required minimum distribution
requirements under the proposed regulations under Section 401(a)(9) of the Code
released in July 1987 for distributions made for taxable years commencing before
January 1, 2002, and the proposed regulations under Section 401(a)(9) of the
Code released in January 2001 for distributions made for taxable years
commencing January 1, 2002.

If the Member dies before benefits commence, the Member's entire interest must
be distributed over a period not extending beyond five years from the Member's
death, unless (a) the distribution is to a designated Beneficiary, in which
event the benefit must commence no later than one year or a later date as the
Secretary of the Treasury may designate in regulations, and may be paid over the
life or life expectancy of the designated Beneficiary in substantially equal
installments; or (b) the designated Beneficiary is the Member's spouse, in which
event the distribution of the benefit must commence when the Member would have
attained age 70-1/2 and be distributed in substantially equal installments over
a period not extending beyond the life or life expectancy of the spouse. If
distributions have commenced



                                       33
<PAGE>


to a Member and the Member dies before receiving his or her entire interest
under the Plan, the remaining portion of this interest shall be distributed to
his or her Beneficiary at least as rapidly as under the method of distribution
selected by the Member.

8.11 TOP-HEAVY PLAN ADJUSTMENTS

(a)      DEFINITIONS:

         "Top-Heavy Plan" shall mean any plan (or group of plans) that provides
         more than 60 percent of the present value of its Accrued Benefits to
         Key Employees, as determined on the last day of the preceding plan year
         for existing plans, and the last day of the first plan year for new
         plans; or that this Plan is part of a Required Aggregation Group and
         the Required Aggregation Group is top-heavy.

         The Accrued Benefit of an individual who has not been an Employee with
         respect to any plan of the Employer for the five-year period ending on
         the determination date is to be disregarded for the purpose of
         determining whether the Plan is top-heavy.

         Notwithstanding anything in this paragraph to the contrary, this Plan
         shall not be a Top-Heavy Plan in any Plan Year in which this Plan is
         part of a Required or Permissive Aggregation Group that is not
         top-heavy. This Plan shall also not be a Top-Heavy Plan if it is part
         of a Permissive Aggregation Group that is top-heavy, but this Plan is
         not required to be part of a Required Aggregation Group.

         "Key Employee" shall mean an Employee, Member, and Beneficiary who, at
         any time in the current Plan Year or the four preceding Plan Years, is
         or was--

         (1)      an officer having annual compensation greater than 50 percent
                  of the limit in effect under Section 415(b)(1)(A) of the
                  Internal Revenue Code for that year;

         (2)      an Employee having annual compensation of more than the limit
                  in effect under Section 415(c)(1)(A) of the Internal Revenue
                  Code and owning one of the ten largest interests in the
                  Employer;

         (3)      a 5 percent owner of the Employer; or

         (4)      a 1 percent owner of the Employer having annual compensation
                  of more than $150,000.

         The number of Members deemed to be officers of the Employer for this
         purpose shall be the greater of 10 percent of the number of Employees
         or three Employees. In no event, however, shall the number of Members
         deemed to be officers of the Employer for this purpose exceed 50. For
         purposes of determining which individuals are Key Employees,
         "compensation" shall mean compensation as defined in Section 414(a)(7)
         of the Internal Revenue Code.


                                       34
<PAGE>


         "Non-Key Employee" shall mean any Employee who is not a Key Employee.
         Non-Key Employees include Employees who are former Key Employees.

         "Required Aggregation Group" shall include each plan of the Employer in
         which a Key Employee is a Member and each other plan of the Employer
         which enables any plan described herein to meet the requirements of
         Section 401(a)(4) or 410 of the Internal Revenue Code. The Employer, at
         its election, may treat any plan of the Employer not required to be
         included in the Aggregation Group as part of such group provided that
         after inclusion of such plan, the Aggregation Group would continue to
         meet the requirements of Sections 401(a)(4) and 410 of the Internal
         Revenue Code.

         Solely for the purpose of determining if the Plan, or any other plan
         included in a Required Aggregation Group of which this Plan may become
         a part, is top-heavy, the Accrued Benefit of an Employee other than a
         Key Employee shall be determined under the method, if any, that
         uniformly applies for accrual purposes under all plans maintained by
         the Employer, or, if there is no such method, as if the benefit accrued
         not more rapidly than the slowest accrual rate permitted under the
         fractional accrual rule of Section 411(b)(1)(C) of the Internal Revenue
         Code.

         "Permissive Aggregation Group" shall include plans of the Employer that
         are required to be aggregated, plus one or more plans of the Employer
         that are not part of the Required Aggregation Group but that satisfy
         the requirements of Sections 401(a)(4) and 410 when considered together
         with the Required Aggregation Group.

(b)      For any Plan Year that this Plan is deemed top-heavy, the following
         provisions will automatically take effect.

         INCLUDIBLE COMPENSATION

         The amount of an Employee's compensation that may be taken into account
         in determining benefits under the Plan shall not exceed:

         (a)      $200,000 (or other amount determined by the Secretary of the
                  Treasury under Section 401(a)(17) of the Internal Revenue
                  Code) for any Plan Year beginning prior to May 1, 1994; or

         (b)      $150,000 (or other amount determined by the Secretary of the
                  Treasury under Section 401(a)(17) of the Internal Revenue
                  Code) for any Plan Year beginning on or after May 1, 1994.

         VESTING


                                       35
<PAGE>


         Once this Plan becomes Top-Heavy and during the time that it is
         Top-Heavy, notwithstanding any other vesting provision of this Plan to
         the contrary, the Member shall be entitled to a vested interest in his
         or her Accrued Benefit as follows:

<TABLE>
<CAPTION>
         -------------------------------------------------------
         YEARS OF SERVICE                 VESTING PERCENTAGE
         -------------------------------------------------------

<S>                                                  <C>
         Less than 2 years                             0%

         After 2 years                                20%

         After 3 years                                40%

         After 4 years                                60%

         After 5 years                               100%
         -------------------------------------------------------
</TABLE>

         MINIMUM BENEFITS

         A benefit on behalf of a Member who is not a Key Employee when
         expressed as a life annuity, shall be not less than 2 percent of the
         Member's highest average compensation as defined in Section 1.415-2(d)
         of the Internal Revenue Service regulations for the five consecutive
         years for which the Member had the highest compensation multiplied by
         each of the first ten years of his or her Credited Service in which the
         Plan is top-heavy. Amounts paid by the Employer for the year to provide
         social security benefits for the Employee are disregarded. Thus, the
         required minimum benefit for a Non-Key Employee may not be eliminated
         or reduced on account of benefits attributable to taxes paid by the
         Employer under social security.

         For purposes of the minimum benefit, notwithstanding Hours of Service,
         any Member employed at the end of the Plan Year will accrue a minimum
         benefit.

         IMPACT ON MAXIMUM BENEFITS

         For any Plan Year in which the Plan is a Top-Heavy Plan, Section 8.3
         shall be read by substituting the number 1.0 for the number 1.25.

(c)      The requirements of this Section shall not apply with respect to any
         Employee included in a unit of Employees covered by a collective
         bargaining agreement between Employee representatives and an Employer
         if retirement benefits were the subject of good faith bargaining
         between the Employee representatives and the Employer.

8.12 ELIGIBLE ROLLOVER DISTRIBUTIONS

This section applies to distributions made on or after January 1, 1993.

(a)      GENERAL RULE.


                                       36
<PAGE>


         Notwithstanding any provision of the Plan to the contrary that would
         otherwise limit a distributee's election under this Section, a
         distributee may elect, at the time and in the manner prescribed by the
         Pension Committee, to have any portion of an eligible rollover
         distribution paid directly to an eligible retirement plan specified by
         the distributee in a direct rollover.

(b)      DEFINITIONS.

         (1)      ELIGIBLE ROLLOVER DISTRIBUTION. An eligible rollover
                  distribution is any distribution of all or any portion of the
                  balance to the credit of the distributee, except that an
                  eligible rollover distribution does not include: any
                  distribution that is one of a series of substantially equal
                  periodic payments (not less frequently than annually) made for
                  the life (or life expectancy) of the distributee or the joint
                  lives (or joint life expectancies) of the distributee and the
                  distributee's designated beneficiary, or for a specified
                  period of ten years or more; any distribution to the extent
                  such distribution is required under Section 401(a)(9) of the
                  Internal Revenue 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).

         (2)      ELIGIBLE RETIREMENT PLAN. An eligible retirement plan is an
                  individual retirement account described in Section 408(a) of
                  the Internal Revenue 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.

         (3)      DISTRIBUTEE. A distributee includes an Employee or former
                  Employee. In addition, the Employee's or former Employee's
                  surviving spouse and the Employee's or former Employee's
                  spouse or former spouse who is the alternate payee under a
                  qualified domestic relations order, as defined in Section
                  414(p) of the Code, are distributees with regard to the
                  interest of the spouse or former spouse.

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



                                       37
<PAGE>



ARTICLE 9. ADMINISTRATION OF THE PLAN

9.1 APPOINTMENT OF PENSION COMMITTEE

(a)      The Board of Directors shall appoint a Pension Committee, consisting of
         no more than five members, to serve at its pleasure in administering
         the Plan.

(b)      Any person appointed as a member of the Pension Committee shall signify
         his or her willingness to serve as such member by the filing of a
         written acceptance with the Board of Directors and the Pension
         Committee. Any member of the Pension Committee may resign by delivering
         his or her written resignation to the Board of Directors and the
         Pension Committee, and such resignation shall become effective upon the
         date the resignation is received by the Board of Directors or such
         other date as may be agreeable between the Board of Directors and the
         resigning member.

(c)      Vacancies in the Pension Committee arising by resignation, death,
         removal, or otherwise shall be filled by the Board of Directors. If no
         members of the Committee are in office, the Board of Directors shall be
         deemed the Pension Committee.

9.2 ORGANIZATION AND OPERATION OF THE PENSION COMMITTEE

(a)      The Pension Committee shall endeavor to act, in carrying out its duties
         and responsibilities, in the interest of the Members and Beneficiaries
         with the care, skill, prudence, and diligence under the prevailing
         circumstances that a prudent man, acting in a like capacity and
         familiar with such matters, would use in the conduct of an enterprise
         of like character and aims.

(b)      The Pension Committee shall act by a majority of its members or by
         unanimous approval of its members if there are two or fewer members in
         office at the time, and any action may be taken either by a vote taken
         in a meeting or by action taken in writing without the formality of
         convening a meeting. In the event of a deadlock, the Pension Committee
         shall determine the method for resolving such deadlock.

         If there are two or more Pension Committee members, no member shall act
         upon any question pertaining solely to that member, and the other
         members shall alone make any determination required by the Plan in
         respect thereof.

(c)      The Pension Committee may authorize any one or more of its members to
         execute any document on behalf of the Pension Committee.

(d)      The Pension Committee may by written majority decision delegate
         specific duties and powers to one or more of its members. Such
         delegation shall remain in effect until rescinded in writing by a
         majority of the members of the Pension Committee. The member or members
         so designated shall be solely liable, jointly and severally, for their
         acts or omissions with respect to such delegated responsibilities. All
         other



                                       38
<PAGE>


         members shall be relieved of responsibility and liability for duties
         and powers properly delegated to any other member of the Pension
         Committee.

(e)      The Pension Committee shall endeavor not to directly or indirectly
         engage in any prohibited transactions, as set forth in the Employee
         Retirement Income Security Act of 1974 ("ERISA").

9.3 DUTIES AND RESPONSIBILITIES OF THE PENSION COMMITTEE

The Pension Committee, except for such investment and other responsibilities
vested in the Trustee or an investment manager in accordance with the provisions
of the Trust Agreement, shall have full discretionary authority and
responsibility for administering the Plan in accordance with its provisions and
under applicable law.

The duties and responsibilities of the Pension Committee shall include, but
shall not be limited to, the following:

(a)      To appoint such "enrolled actuaries" (as defined in ERISA),
         accountants, consultants, administrators, counsel, or such other
         persons it deems necessary for the administration of the Plan.

         Members of the Pension Committee shall not be precluded from serving
         the Pension Committee in one or more of such individual capacities.

(b)      To determine all benefits and resolution of all questions arising from
         the administration, interpretation, and application of Plan provisions,
         either by general rules or by particular decisions so as not to
         discriminate in favor of or against any person and so as to treat all
         persons in similar circumstances in a uniform manner.

(c)      To advise the Trustee with respect to all benefits that become payable
         under the Plan and to direct the Trustee as to the manner in which such
         benefits are to be paid.

(d)      To adopt such forms and regulations it deems advisable for the
         administration of the Plan and the conduct of its affairs.

(e)      To adopt actuarial assumptions deemed reasonable in the aggregate by an
         "enrolled actuary," a funding policy, and the schedule for amortization
         of any unfunded accrued liability.

(f)      To take such steps as it considers necessary and appropriate to remedy
         any inequity resulting from incorrect information received or
         communicated or as a consequence of administrative error.

(g)      To assure that its members, the Trustee, and every other person who
         handles funds or other property of the Plan are bonded as required by
         law.



                                       39
<PAGE>

(h)      To settle or compromise any claims or debts arising from the operation
         of the Plan and to defend any claims in any legal or administrative
         proceeding.

         To the extent permitted by law, all findings of fact, determinations,
         interpretations, and decisions of the Pension Committee shall be
         conclusive and binding upon all persons having or claiming to have any
         interest or right under the Plan.

9.4 RECORDS AND REPORTING

(a)      The Pension Committee shall keep a record of its proceedings and acts
         and shall keep books of account, records, and other data as may be
         necessary for the proper administration of the Plan.

(b)      The Pension Committee shall make its records available to the Employer,
         or any Member or Beneficiary for examination during regular business
         hours, except that a Member or Beneficiary shall examine only such
         records as pertain exclusively to himself or herself and such other
         material as may be required by law.

(c)      The Pension Committee shall furnish to each Member or Beneficiary any
         copies of documents and such other material as may be required by law.
         The Pension Committee shall also provide upon written request of a
         Member or Beneficiary copies of required material it deems appropriate
         or as may be required by law, in which case the Member or Beneficiary
         may be required to pay the reasonable cost of preparing and furnishing
         such material as the Pension Committee shall determine, or as
         prescribed and limited by law.

9.5 REQUIRED INFORMATION

The Employer, Members, and Beneficiaries shall furnish to the Pension Committee
any information or proof requested by the Pension Committee and required for the
proper administration of the Plan. Failure on the part of any Member or
Beneficiary to comply with such request shall be sufficient grounds for the
delay in payment of benefits under the Plan until the requested information or
proof is received.

9.6 PAYMENT OF EXPENSES

Members of the Pension Committee shall serve the Pension Committee without
compensation. The expenses of the Pension Committee, as may be agreed upon in
writing between the Employer and the Committee, shall be payable in accordance
with Section 3.5.

9.7 INDEMNIFICATION

The Employer agrees to indemnify and hold the Pension Committee harmless against
liability incurred in the administration of the Plan, except that each member of
the Committee shall solely be liable for his or her own gross negligence or
willful misconduct.


                                       40
<PAGE>


9.8 PROCEDURE FOR APPEAL OF DENIAL OF BENEFITS

(a)      The Pension Committee shall provide notice in writing to any Member or
         Beneficiary where a claim for benefits under the Plan has been denied
         in whole or in part. Such notice shall be made within 90 days of the
         receipt by the Committee of the Member's claim or, if special
         circumstances require, and the Member is so notified in writing, within
         180 days of the receipt by the Committee of the Member's claim. The
         notice shall (i) set forth the specific reasons for the denial of
         benefits, (ii) contain specific references to Plan provisions relevant
         to the denial, (iii) describe any material and information, if any,
         necessary for the claim for benefits to be allowed, that had been
         requested, but not received by the Pension Committee, and (iv) advise
         the Member or Beneficiary that any appeal of the Pension Committee's
         adverse determination must be made in writing to the Pension Committee,
         within 60 days after receipt of this notification, setting forth the
         facts upon which the appeal is based.

(b)      If the Member or Beneficiary fails to appeal the Pension Committee's
         denial of benefits in writing and within 90 days, the Pension
         Committee's determination shall become final and conclusive.

(c)      If the Member or Beneficiary timely appeals the Pension Committee's
         denial of benefits, the Pension Committee shall reexamine all issues
         relevant to the original denial of benefits. The Pension Committee may
         in addition, upon at least ten days written notice, request the
         claimant or his or her representative to personally appear before it to
         make an oral presentation or answer questions that may have been
         raised, or the Member or his or her representative may make a request
         to personally appear before the Committee.

(d)      The Pension Committee shall advise the Member or Beneficiary in writing
         of its decision and the specific reasons on which such decision was
         based within 60 days of receipt of the written appeal, or personal
         appearance of the Member or his or her representative, unless special
         circumstances require an extension of such 60 day period for not more
         than an additional 60 days. Where such extension is necessary the
         Member shall be given written notice of the delay.




                                       41
<PAGE>



ARTICLE 10. AMENDMENT, MERGER, AND TERMINATION OF THE PLAN

10.1 AMENDMENT

The Plan may be wholly or partially amended by written resolution of the Board
of Directors or, to the extent permissible, by a written instrument signed by
the appropriate officers of Simmons Company, provided that--

(a)      prior to the satisfaction of all expenses of the Trust Fund and all
         liabilities under the Plan with respect to all Members or their
         Beneficiaries, no amendment may be made that would permit any part of
         the Trust Fund to be used for or diverted to purposes other than for
         (i) the exclusive benefit of the Members or their Beneficiaries, and
         (ii) payment of expenses of the Plan and Trust Fund; and

(b)      no amendment shall deprive any Member or Beneficiary of any benefit
         already accrued and payable, unless such amendment is approved by the
         Secretary of Labor in accordance with provisions of ERISA.

         Notwithstanding the foregoing provisions, any amendment may be
         retroactive to conform the Plan to governmental regulations or
         requirements so as to establish or maintain the Plan's qualification
         and the Trust Fund's tax-exempt status.

10.2 MERGER OF PLANS

Upon the merger or consolidation of this Plan with any other plan or the
transfer of assets or liabilities from the Trust Fund to another trust, all
Members shall be entitled to a benefit at least equal to the benefit they would
have been entitled to receive had the Plan been terminated in accordance with
Section 10.3 immediately prior to such merger, consolidation, or transfer of
assets or liabilities.

10.3 TERMINATION

While the Plan and Trust Fund are intended to be permanent, they may be
terminated by any time by the Board of Directors, provided that prior to the
satisfaction of all expenses (including any expenses incurred in effectuating
the termination of the Plan and Trust Fund) and all liabilities with respect to
Members or their Beneficiaries, no part of the Trust Fund is to be used for or
diverted to purposes other than for the payment of the expenses of the Trust
Fund except as provided in the last paragraph of Section 10.4.

A partial termination of the Plan may occur when there is such a reduction in
the number of participants under the Plan as to constitute a "partial
termination" under the Internal Revenue Code and its applicable regulations.

Written notification of such termination or partial termination shall be given
to each participating Employer, the Trustee, the Pension Committee, and each
Member and Beneficiary entitled to or receiving benefits. In addition, notice of
the proposed termination


                                       42
<PAGE>


shall be filed with the Pension Benefit Guaranty Corporation and the Internal
Revenue Service.

Upon the complete or partial termination of the Plan, the rights of the affected
Members to benefits accrued to the date of such complete or partial termination,
to the extent funded based on the order of allocation set forth in Section 10.4,
shall be nonforfeitable, and such Members shall have further recourse to the
Pension Benefit Guaranty Corporation.

10.4 MANNER AND ORDER OF ALLOCATION OF TRUST FUND

In the event of the termination of the Plan and Trust Fund in accordance with
Section 10.3, the Trustee, after reserving an amount from the Trust Fund
sufficient to pay expenses, including expenses resulting from such termination,
shall allocate the Trust Fund in accordance with the directions of the Pension
Committee in the following manner and order to the extent of its sufficiency to
provide:

(a)      FIRST, an amount equal to a Member's Contributions Account, or if
         retirement income payments are being made to the Member or his or her
         joint annuitant or Beneficiary at the date of termination of the Plan
         and Trust Fund or discontinuance of contributions of an Employer, an
         amount shall be allocated equal to such Member's Contributions Account,
         less the benefit payments made from the Trust Fund to the Member and
         his or her Beneficiary prior to such termination of the Plan and Trust
         Fund or discontinuance of contributions of an Employer;

(b)      SECOND, the benefits of Members or Beneficiaries that were in pay
         status as of the beginning of the three-year period ending on the
         termination date of the Plan, or that would have been in pay status as
         of such date if the Member had retired in accordance with Article IV,
         based on the provisions of the Plan in effect during the five-year
         period ending on such date, under which such benefits would be the
         least;

(c)      THIRD, all other benefits under the Plan, if any, guaranteed by the
         Pension Benefit Guaranty Corporation in accordance with Section 4022 of
         ERISA determined without regard to Section 4022(b)(5) and 4022(b)(6) of
         such Act;

(d)      FOURTH, all other nonforfeitable benefits under the Plan. If the
         balance of the Trust Fund assets for allocation under this Subsection
         is not sufficient to satisfy these benefits in full, the following
         Paragraphs shall be applicable with respect to the order of allocation
         under this Subsection:

         (1)      Except as provided in Paragraph (ii), first the remaining
                  Trust Fund assets shall be allocated on the basis of the
                  benefits which would have been described in this Subsection
                  under the Plan as in effect at the beginning of the five-year
                  period ending on the date of the Plan's termination.



                                       43
<PAGE>


         (2)      If the Trust Fund assets available for allocation under
                  Paragraph (i) are sufficient to satisfy in full the benefits
                  described in such Paragraph (without regard to this
                  Paragraph), then for purposes of Paragraph (i), benefits
                  described shall be determined on the basis of the Plan as
                  amended by the most recent Plan amendment effective during
                  such five-year period under which the remaining Trust Fund
                  assets available for allocation are sufficient to satisfy in
                  full the benefits described in Paragraph (i) on the basis of
                  the Plan as amended by the next succeeding Plan amendment in
                  effect during such period.

(e)      FIFTH, all other benefits under the Plan.

The amount allocated under any Subsection of this Section with respect to any
benefit shall be properly adjusted for any allocation of assets with respect to
that benefit previously made under a prior Subsection.

If the balance of the Trust Fund assets available for allocation under this
Section (other than Subsections (d) and (e)) are insufficient to satisfy the
full benefits of the Members or Beneficiaries, the remaining assets shall be
allocated pro rata among such persons on the basis of the present value, as of
the termination date, of their respective benefits described in that Subsection.

If the Internal Revenue Service determines that the allocation under Subsections
(d) and (e) would result in discrimination prohibited by Section 401(a)(4) of
the Internal Revenue Code, a reallocation shall be made to the extent deemed
necessary by the Internal Revenue Service to avoid such discrimination.

Any excess balance remaining in the Trust Fund, after all liabilities to Members
and their Beneficiaries have been satisfied and after all expenses of the Plan
and Trust Fund have been satisfied, shall, at the direction of the Pension
Committee, be paid to the Employer.

10.5 DISTRIBUTION METHODS AND SATISFACTION OF LIABILITY

As soon as administratively feasible following (a) notification by the Pension
Benefit Guaranty Corporation that the Trust Fund is sufficient to discharge when
due all obligations of the Plan with respect to guaranteed benefits, and (b)
receipt of a favorable letter of determination from the Internal Revenue Service
with regard to the termination of the Plan and Trust Fund, the Trustee shall
distribute or set aside to or for the benefit of each Member or Beneficiary, the
respective amounts allocated, in accordance with Section 10.4, in such manner,
through such trust funds, annuity contracts, or other means as the Pension
Committee shall direct.

If the amount allocated is less than the full purchase price of an annuity to
provide an equivalent benefit and if the Pension Committee has directed that an
annuity be purchased, such amount as so allocated shall be applied to the
purchase of the annuity, and anything herein to the contrary notwithstanding,
any and all liability of the Trust Fund to the Member



                                       44
<PAGE>


or his or her Beneficiary shall be fully discharged by such application and
purchase, even though the benefit may be reduced thereby.

Any annuity contract purchased and distributed under the Plan shall be subject
to the provisions of Section 8.6 of the Plan.






                                       45
<PAGE>



ARTICLE 11. PARTICIPATING EMPLOYERS

11.1 ADOPTION OF PLAN

Any corporation, division, plant, or other entity may, with the approval of the
Board of Directors and upon the execution of an adoption agreement, adopt the
Plan and thereby become an Employer.

11.2 ALTERNATIVE PROVISIONS

Each Employer may, in lieu of the provisions of the Plan, adopt such alternative
provisions as to itself as shall be acceptable to the Board of Directors.

11.3 DISCONTINUANCE OF CONTRIBUTIONS, WITHDRAWAL, OR TERMINATION BY
PARTICIPATING EMPLOYERS

Each Employer having adopted the Plan shall have the right at any time to
discontinue future accruals with respect to its Employees, withdraw from the
Plan, or terminate the Plan as to itself.

11.4 MERGER OF TWO EMPLOYERS

A transfer of Members and Employees between Employers as the result of a sale of
assets or merger shall be considered as a merger of the interest in the Plan and
Trust Fund as attributable to the Members of both such Employers and shall not
be deemed a termination of the Plan or Trust Agreement. In addition, the
transfer of such Employees shall not be deemed a termination of employment for
any purposes of the Plan and Trust Agreement.




                                       46
<PAGE>


ARTICLE 12. RESTRICTIONS ON BENEFITS

12.1 RESTRICTIONS PRIOR TO MAY 14, 1990

Notwithstanding any other provisions in the Plan to the contrary, for periods
prior to May 14, 1990, the benefits provided under this Plan for Employees
(including retired Employees) who are among the 25 most highly compensated
Employees as of the date the initial adoption of this Plan became effective or
as of any later date as of which any amendment of the Plan increases the
retirement benefits hereunder for such Employees (each of which dates shall
hereinafter be referred to as a "Restricted Date"), and whose anticipated annual
benefits from Employer contributions exceed $1,500, shall be subject to the
following restrictions:

(a)      If on any date prior to ten years after a Restricted Date the Plan is
         terminated, the benefits from Employer contributions payable to any
         Employee in this group shall not exceed the benefit that can be
         provided from the greater of the following:

         (1)      the Employer contributions (or funds attributable thereto)
                  that would have been applied to provide benefits for the
                  Employee under the Plan as in effect on the day before such
                  applicable Restricted Date had it continued in effect
                  unchanged to such date of termination of the Plan;

         (2)      $20,000;

         (3)      the sum of--

                  (A)      the Employer contributions (or funds attributable
                           thereto) that would have been applied to provide
                           benefits for the Employee under the Plan as in effect
                           on the day before such applicable Restricted Date, if
                           it had been terminated on the day before such
                           applicable Restricted Date; and

                  (B)      an amount computed by multiplying $10,000 or 20
                           percent of the Employee's average annual compensation
                           for the last five years of his or her Vesting
                           Service, whichever is the lesser, by the number of
                           years elapsing between the applicable Restricted Date
                           and such date of termination of the Plan; or

         (4)      the present value of the benefit guaranteed for such
                  Participant under Section 4022 of ERISA.

(b)      If any Member in this group leaves the employ of the Employer when the
         full current costs have not been met, the funds or benefits from
         Employer contributions that any Member in such group may receive
         (including any funds or benefits from Employer contributions he or she
         has already received) shall not, at any time prior to ten years after
         an applicable Restricted Date, exceed the funds or benefits from
         Employer contributions that he or she could receive in accordance with
         Subsection (a) above if



                                       47
<PAGE>


         the Plan were terminated at the time he or she receives such funds or
         benefits; provided, however, that neither Subsection (b) nor Subsection
         (a) of this Section 12.1 shall restrict the current payment of the full
         monthly retirement benefits called for by the Plan for any Member in
         such group while the Plan is in full effect and its full current costs
         have been met.

12.2 RESTRICTIONS ON BENEFITS

Notwithstanding any other provisions in this Plan to the contrary, for the
period beginning on May 14, 1990, the Plan must observe the restrictions
described in Subsections (a) and (b).

(a)       In the event of a plan termination, the benefit payable to any Member
          who is a highly compensated Employee (including a former Employee) as
          defined in Section 414(q) of the Internal Revenue Code must be
          nondiscriminatory under Section 401(a)(4) of the Code.

(b)       Annual benefits payable to Members described in Subsection (a) who are
          also among the 25 most highly compensated Employees or former
          Employees are limited to the amount that could be paid out as a single
          life annuity that is the Actuarial Equivalent of the Employee's
          Accrued Benefit and other benefits to which the Employee is entitled
          under the Plan unless--

         (1)      after the payment of such benefit, the value of Plan assets
                  equals or exceeds 110 percent of the value of the Plan's
                  "current liabilities" (as defined in Section 412(l)(7) of the
                  Code);

         (2)      the value of such benefit is less than 1 percent of the value
                  of the Plan's "current liabilities" (as defined in Section
                  412(l)(7) of the Code); or

         (3)      the value of such benefit does not exceed $3,500.




                                       48
<PAGE>


ARTICLE 13. GENERAL PROVISIONS

13.1 EXCLUSIVENESS OF BENEFITS

(a)       The Plan has been created for the exclusive benefit of the Members and
          their Beneficiaries. No part of the Trust Fund shall ever revert to
          the Employer nor shall such Trust Fund ever be used other than for the
          exclusive benefit of the Members and their Beneficiaries, except as
          provided in accordance with Sections 3.4(b), 10.4, and 13.9, and
          Subsection (b) below. No Member or Beneficiary shall have any interest
          in or right to any part of the Trust Fund, or any equitable right
          under the Trust Agreement except to the extent expressly provided in
          the Plan or Trust Agreement.

(b)       Notwithstanding Subsection (a), the Pension Committee and the Trustee
          shall comply with a qualified domestic relations order as such term is
          defined under Section 206(d) of ERISA. The Pension Committee shall
          develop procedures to determine whether a domestic relations order is
          qualified under Section 206(d) of ERISA.

(c)       Notwithstanding subsection (a), the Plan shall honor a judgment,
          order, decree or settlement providing for the offset of all or part of
          a Participant's benefits under the Plan to the extent permitted under
          Internal Revenue Code Section 401(a)(13)(C); provided that the
          requirements of Internal Revenue Code Section 401(a)(13)(C)(iii)
          relating to the protection of the Participant's spouse (if any) are
          satisfied.

13.2 LIMITATION OF RIGHTS

The establishment of this Plan shall not be considered as giving to any Member
or other employee of the Employer the right to be retained in the employ of the
Employer, and all Members and other employees shall remain subject to discharge
to the same extent as if the Plan had never been adopted.

13.3 NONASSIGNABILITY

No benefit under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any
such action shall be void for purposes of the Plan. No benefit shall in any
manner be subject to the debts, contracts, liabilities, engagements, or torts of
any person, nor shall it be subject to attachment or other legal process for or
against any person, except to such extent as may be required by law and except
with respect to debts of a Member to the Employer, but such debts to the
Employer which may be subject to attachment shall not exceed 10 percent of the
benefits payable to the Member under the Plan.

If any payee or representative of a payee under the Plan becomes bankrupt or
attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge any benefit, the Pension Committee shall hold or apply the benefit or any
part thereof to or for such persons,



                                       49
<PAGE>


the spouse, the children, other dependents, or any of them in such manner and in
such proportions as the Pension Committee shall determine in its sole
discretion.

Notwithstanding the foregoing, the Pension Committee and the Trustee shall
comply with a qualified domestic relations order as such term is defined under
Section 206(d) of ERISA.

13.4 MILITARY SERVICE

Notwithstanding any provisions of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code. "Qualified military
service" means any service in the uniformed services (as defined in chapter 43
of Title 38 of the United States Code) by any individual if such individual is
entitled to re-employment rights under such chapter with respect to such
service.

13.5 CONSTRUCTION OF AGREEMENT

The Plan shall be construed according to the laws of the State of New York and
all provisions hereof shall be administered according to, and its validity shall
be determined under, the laws of such State, except where preempted by Federal
law.

13.6 SEVERABILITY

Should any provision of the Plan be deemed or held to be illegal or invalid for
any reason, such invalidity shall not adversely affect any other Plan provision
and in such case, the appropriate parties shall immediately adopt a new
provision or regulation to take the place of the one deemed or held to be
illegal or invalid.

If the invalidity inhibits the proper operation of this Plan, a new provision
shall be adopted to take the place of the one deemed or held to be illegal or
invalid.

13.7 TITLES AND HEADINGS

The titles and heading of the Sections in this instrument are for convenience of
reference only. In the event of any conflict between the text of this instrument
and the titles or headings, the text rather than such titles or headings shall
control.

13.8 COUNTERPARTS AS ORIGINAL

The Plan has been prepared in counterparts, each of which so prepared shall be
construed as an original.

13.9 CONSTRUCTION

The singular, where appearing in the Plan, shall include the plural, and the
plural shall include the singular.

13.10 INTERNAL REVENUE SERVICE APPROVAL

If the Plan is not initially approved and qualified by the Internal Revenue
Service as meeting the requirements of the Internal Revenue Code so as to permit
the Employer to deduct for



                                       50
<PAGE>


income tax purposes its contributions to the Trustee, all of the Employer's
contributions shall be returned to the Employer within one year of such
determination, and the Plan shall be null and void.











                                       51
<PAGE>





IN WITNESS WHEREOF, the Company has caused this instrument to be executed in its
name and on its behalf and its corporate seal to be hereunto affixed by its duly
authorized officer, this _____ day of April, 2002 effective as of May 1, 1997.


                                             SIMMONS COMPANY



                                             By  /s/
                                                     William S. Creekmuir
                                             Its  Executive Vice President & CFO







                                       52
<PAGE>





SCHEDULE A. PARTICIPATING EMPLOYERS

Simmons Company









                                      A-1
<PAGE>




SCHEDULE B. COLLECTIVE BARGAINING UNITS RECOGNIZED BY EMPLOYER - AS OF MAY 1,
2002

ILWU Local 142 of Honolulu, Hawaii

IAM Local 55 of Columbus, Ohio








                                      B-1
<PAGE>



SCHEDULE C.  - AS OF MAY 1, 2002

IAM Local 315 of Piscataway, New Jersey










                                      C-1

<PAGE>





SCHEDULE D. - AS OF MAY 1, 2002

UFWA Local 262 of San Leandro, California











                                      D-1

<PAGE>



EXHIBIT I. ACTUARIAL EQUIVALENTS

Actuarial Equivalent shall be based on the following:

Interest:           7-1/2 percent.

Mortality:          1983 Group Annuity Mortality Table for males, set back one
                    year for retirees and five years for beneficiaries




                                      I-1