EXHIBIT 10.18



                                 KEEBLER COMPANY




                           DEFERRED COMPENSATION PLAN




                           EFFECTIVE - JANUARY 1, 1999




                       


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                                 KEEBLER COMPANY

                           DEFERRED COMPENSATION PLAN
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                                                                                                         TABLE OF CONTENTS
<S>                                                                                                  <C>    

ARTICLE I............................................................................................1
         1.1 Statement of Purpose....................................................................1

ARTICLE II...........................................................................................2

DEFINITIONS..........................................................................................2
         2.1 Account.................................................................................2
         2.2 Base Salary.............................................................................2
         2.3 Beneficiary.............................................................................2
         2.4 Board...................................................................................2
         2.5 Bonus...................................................................................2
         2.6 Change in Control.......................................................................3
         2.7 Code....................................................................................3
         2.8 Committee...............................................................................3
         2.9 Company.................................................................................3
         2.10 Company Matching Account...............................................................4
         2.11 Company Matching Amount................................................................4
         2.12 Compensation...........................................................................4
         2.13 Credited Service.......................................................................4
         2.14 Deferral Account.......................................................................4
         2.15 Deferral Benefit.......................................................................4
         2.16 Deferral Election......................................................................4
         2.17 Disability.............................................................................4
         2.18 Early Retirement.......................................................................4
         2.19 Eligible Employee......................................................................5
         2.20 Employer...............................................................................5
         2.21 ERISA..................................................................................5
         2.22 Haircut Withdrawal.....................................................................5
         2.23 Investment Return Rate.................................................................5
         2.24 Participant............................................................................5
         2.25 Participation Agreement................................................................5
         2.26 Plan...................................................................................5
         2.27 Plan Year..............................................................................5
         2.28 Retirement.............................................................................6
         2.29 Savings Plan...........................................................................6
         2.30 Selected Affiliate.....................................................................6
         2.31 Valuation Date.........................................................................6
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<TABLE>
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<S>                                                                                                  <C>    
ARTICLE III..........................................................................................7

ELIGIBILITY AND PARTICIPATION........................................................................7
         3.1 Eligibility.............................................................................7
         3.2 Participation...........................................................................7
         3.3 Ineligible Participant..................................................................7
         3.4 Termination of Participation............................................................7

ARTICLE IV...........................................................................................8

DEFERRAL OF COMPENSATION.............................................................................8
         4.1 Amount of Deferral......................................................................8
         4.2 Change in Deferral Elections............................................................8
         4.3 Crediting Deferred Compensation.........................................................9
         4.4 Company Matching Amount.................................................................9

ARTICLE V............................................................................................10

BENEFIT ACCOUNTS.....................................................................................10
         5.1 Valuation of Account....................................................................10
         5.2 Crediting of Investment Return..........................................................10
         5.3 Statement of Account....................................................................10
         5.4 Vesting of Account......................................................................10
         5.5 Investment Vehicles.....................................................................11
         5.6 Transfers from Other Plan...............................................................11

ARTICLE VI...........................................................................................12

PAYMENT OF BENEFITS..................................................................................12
         6.1 Payment of Deferral Benefit upon Death, Disability or Retirement........................12
         6.2 Payment of Deferral Benefit upon Other Termination......................................12
         6.3 Payments to Beneficiaries...............................................................12
         6.4 Haircut Withdrawal......................................................................12
         6.5 Form of Payment.........................................................................13
         6.6 Commencement of Payments................................................................13
         6.7 Small Benefit...........................................................................13

ARTICLE VII..........................................................................................14

BENEFICIARY DESIGNATION..............................................................................14
         7.1 Beneficiary Designation.................................................................14
         7.2 Change of Beneficiary Designation.......................................................14
         7.3 No Designation..........................................................................14
         7.4 Effect of Payment.......................................................................14
</TABLE>


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<TABLE>
<CAPTION>

<S>                                                                                                  <C>    

ARTICLE VIII.........................................................................................15

ADMINISTRATION.......................................................................................15
         8.1 Committee...............................................................................15
         8.2 Delegation..............................................................................15
         8.3 Binding Effect of Decisions.............................................................15
         8.4 Indemnification of Committee............................................................15
         8.5 Election and Notice Procedures..........................................................16

ARTICLE IX...........................................................................................17

AMENDMENT AND TERMINATION OF PLAN....................................................................17
         9.1 Amendment...............................................................................17
         9.2 Termination.............................................................................17

ARTICLE X............................................................................................18

MISCELLANEOUS........................................................................................18
         10.1 Funding................................................................................18
         10.2 Nonassignability.......................................................................18
         10.3 Legal Fees and Expenses................................................................19
         10.4 Captions...............................................................................19
         10.5 Governing Law..........................................................................19
         10.6 Successors.............................................................................19
         10.7 No Implied Rights......................................................................20

EXHIBIT A............................................................................................21

EXHIBIT B............................................................................................22

EXHIBIT C............................................................................................23

</TABLE>

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                                    ARTICLE I

1.1 STATEMENT OF PURPOSE

Keebler Company establishes the Keebler Company Deferred  Compensation Plan (the
"Plan"),  a nonqualified  deferred  compensation plan for the benefit of certain
management or highly compensated employees of the Employers.  The purpose of the
Plan is to provide management and highly compensated  employees of the Employers
with the option to defer the receipt of portions of their  compensation  payable
for  services  rendered  to the  Employers  and to  provide  such  participating
employees with Employer contributions.  It is intended that the Plan will assist
in  attracting  and  retaining  qualified  individuals  to serve as officers and
managers  of the  Employer.  The Plan is  intended  to be subject to the tax-law
rules of Code  Section  451(a),  is  intended  to be treated as a "top hat" plan
within the meaning of ERISA  Section  201(2),  and is effective as of January 1,
1999.


                                       1
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                                   ARTICLE II

DEFINITIONS

When  used in this  Plan and  initially  capitalized,  the  following  words and
phrases shall have the meanings indicated:

2.1 ACCOUNT.

"Account" means the sum of a Participant's Deferral Account and Company Matching
Account.

2.2 BASE SALARY.

"Base  Salary"  means a  Participant's  base  earnings  paid by an Employer to a
Participant  without  regard to any increases or decreases in base earnings as a
result of (i) an  election  to defer  base  earnings  under this Plan or (ii) an
election  between  benefits  or  cash  provided  under  a  Plan  of an  Employer
maintained  pursuant  to  Section  125 or 401(k) of the Code and as  limited  in
Exhibit B attached hereto.

2.3 BENEFICIARY.

"Beneficiary"  means the person or persons designated or deemed to be designated
by the Participant pursuant to Article VII to receive benefits payable under the
Plan in the event of the Participant's death.

2.4 BOARD.

"Board" means the Board of Directors of the Company.

2.5 BONUS.

"Bonus" means a Participant's  bonus or sales commission paid by the Employer to
a  Participant  under the plans  listed in Exhibit B attached  hereto and to the
degree limited in Exhibit B, as applicable, without regard to any decreases as a
result of (i) an election to defer all or any portion of a Bonus under this Plan
or (ii) an  election  between  benefits  or  cash  provided  under a plan of the
Employer  maintained  pursuant  to  Section  401(k) of the Code  (including  the
Savings Plan).

                                       2
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2.6 CHANGE IN CONTROL.

For purposes of this Plan, a "Change in Control" shall be deemed to occur on the
earliest of:

         (i)      The   effective   time   of  any   purchase,   sale,   merger,
                  consolidation  or other  transaction  after  which any person,
                  corporation,  partnership  or other  entity  OTHER THAN Flower
                  Industries,  Inc.  ("Flowers")  or its  Affiliates,  the  then
                  current  management  of Keebler Foods Company or of Flowers or
                  any member of the immediate family of said management,  or any
                  employee  benefit plan of Keebler  Foods Company or of Flowers
                  ("Permitted  Owners")  shall own more than fifty percent (50%)
                  of the  outstanding  capital  stock of Keebler  Foods  Company
                  which stock is entitled to vote for the election of directors.

         (ii)     If it occurs prior to February 3, 2001,  the effective time of
                  any purchase, sale, merger, consolidation or other transaction
                  after which any  person,  corporation,  partnership  or entity
                  OTHER  THAN the  then  current  management  of  Keebler  Foods
                  Company or Flowers  or any member of the  immediate  family of
                  said management, or any employee benefit plan of Keebler Foods
                  Company or of Flowers ("Permitted Owners") shall own more than
                  fifty  percent  (50%)  of the  outstanding  capital  stock  of
                  Flowers  which stock is  entitled to vote for the  election of
                  directors.

         (iii)    The  effective  time of a transfer  to an entity  other than a
                  Permitted  Owner  of  substantially  all  of the  property  of
                  Keebler Foods Company.

         (iv)     Continuing Directors at any time fail to constitute a majority
                  of  the  Board  of   Directors  of  Keebler   Foods   Company.
                  "Continuing  Directors" shall mean the members of the Board of
                  Directors as of the date hereof,  plus any new directors whose
                  nominations  were  approved  by at  least  a  majority  of the
                  Continuing  Directors in office at the time of the election of
                  any such new directors.

For the purposes of this  Agreement,  the term  "Affiliate"  shall be defined in
Rule 405 of the General Rules and Regulations  under the Securities Act of 1933,
as amended.

2.7 CODE.

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

2.8 COMMITTEE.

"Committee" has the meaning set forth in Section 8.1.

2.9 COMPANY.

"Company" means Keebler Company and any successor(s) thereto.


                                       3
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2.10 COMPANY MATCHING ACCOUNT.

"Company  Matching  Account"  means the account  maintained  on the books of the
Employer for the purpose of accounting for the Company  Matching  Amount and for
the amount of investment  return credited thereto for each Participant  pursuant
to Article V.

2.11 COMPANY MATCHING AMOUNT.

"Company  Matching Amount" means the amount credited to a Participant's  Company
Matching Account under Section 4.4.

2.12 COMPENSATION.

"Compensation"  means the Base  Salary and  Bonus,  payable  with  respect to an
Eligible Employee for each Plan Year.

2.13 CREDITED SERVICE.

"Credited Service" means the sum of all periods of a Participant's employment by
the Company or a Selected  Affiliate for which service credit is given under the
Savings Plan.

2.14 DEFERRAL ACCOUNT.

"Deferral Account" means the account maintained on the books of the Employer for
the purpose of  accounting  for the amount of  Compensation  that a  Participant
elects to defer under the Plan and for the amount of investment  return credited
thereto for the Participant pursuant to Article V.

2.15 DEFERRAL BENEFIT.

"Deferral  Benefit"  means the benefit  payable to a  Participant  or his or her
Beneficiary pursuant to Article VI.

2.16 DEFERRAL ELECTION.

"Deferral  Election"  means the written  election made by a Participant to defer
Compensation pursuant to Article IV.

2.17 DISABILITY.

"Disability" means a Participant's Disability as defined under the Savings Plan.

2.18 EARLY RETIREMENT.

"Early Retirement" will be as granted by the Committee at its sole discretion.


                                       4
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2.19 ELIGIBLE EMPLOYEE.

"Eligible  Employee"  means a highly  compensated or management  employee of the
Company who is designated by the Committee, by name or group or description,  in
accordance with Section 3.1 as eligible to participate in the Plan.

2.20 EMPLOYER.

"Employer"  means,  with respect to a  Participant,  the Company or the Selected
Affiliate which is the employer of that Participant and pays such  Participant's
Compensation.

2.21 ERISA.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

2.22 HAIRCUT WITHDRAWAL.

"Haircut Withdrawal" has the meaning set forth in Section 6.4.

2.23 INVESTMENT RETURN RATE.

"Investment Return Rate" means:

         (a)  In the case of an investment  named in Exhibit C of a fixed income
              nature, the interest deemed to be credited,

         (b)  In the case of an  investment  named  in  Exhibit  C of an  equity
              investment  nature,  the increase and decrease in deemed value and
              dividends deemed to be credited.

2.24 PARTICIPANT.

"Participant"  means any Eligible Employee who elects to participate by filing a
Participation Agreement.

2.25 PARTICIPATION AGREEMENT.

"Participation  Agreement"  means the agreement  filed by a Participant,  in the
form prescribed by the Committee, pursuant to Section 3.2.

2.26 PLAN.

"Plan" means this Keebler Company Deferred  Compensation  Plan effective January
1, 1999, as amended from time to time.

2.27 PLAN YEAR.

"Plan  Year" means a  twelve-month  period  commencing  January 1 and ending the
following December 31.

                                       5
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2.28 RETIREMENT.

"Retirement"  means the  termination  of  employment  of a  Participant  who has
reached age 65.

2.29 SAVINGS PLAN.

"Savings Plan" means the Keebler Company  Salaried Savings Plan, as amended from
time to time, or its successor.

2.30 SELECTED AFFILIATE.

"Selected  Affiliate"  means (1) any company in an unbroken  chain of  companies
beginning with Keebler Foods Company,  except for Keebler Foods Company  itself,
if each of the  companies  other  than the last  company  in the  chain  owns or
controls,  directly or indirectly,  stock possessing not less than 50 percent of
the total  combined  voting  power of all  classes  of stock in one of the other
companies,  or (2) any partnership or joint venture in which one or more of such
companies  is a partner or  venturer,  each of which  shall be  selected  by the
Committee.

2.31 VALUATION DATE.

"Valuation Date" means a date on which the amount of a Participant's  Account is
valued as  provided  in Article V. The  Valuation  Date shall be the last day of
each  calendar  quarter and any other date  specified by the  Committee for this
purpose.

                                       6
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                                   ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.1 ELIGIBILITY.

Eligibility to participate  in the Plan is limited to Eligible  Employees.  From
time to time and subject to Section 3.4, the Committee shall prepare, and attach
to the  Plan as  Exhibit  A, a  complete  list  of the  Eligible  Employees,  by
individual  name or by  reference  to an  identifiable  group of  persons  or by
descriptions  of the  components of  compensation  of an individual  which would
qualify  individuals who are eligible to participate.  It is expressly  intended
that the Eligible  Employees  will  comprise a "select  group of  management  or
highly  compensated  employees"  within the meaning of ERISA Section 201(2).  No
employee of the Company or a Selected Affiliate has a right to be selected as an
Eligible Employee under this Plan.

3.2 PARTICIPATION.

Participation  in the Plan shall be limited to Eligible  Employees  who elect to
participate in the Plan by filing a Participation  Agreement with the Committee.
An Eligible Employee shall commence participation in the Plan upon the first day
of  his  or  her  first  payroll  period  following  the  receipt  of his or her
Participation Agreement by the Committee.

3.3 INELIGIBLE PARTICIPANT.

Notwithstanding  any  other  provisions  of this  Plan to the  contrary,  if the
Committee  determines  that any  Participant  may not  qualify  as a member of a
"select group of management or highly compensated  employees" within the meaning
of ERISA Section 201(2),  the Committee may determine,  in its sole  discretion,
that such  Participant  shall cease to be eligible to  participate in this Plan.
Upon  such  determination,  the  Employer  shall  make  a  sum  payment  to  the
Participant  equal to the  vested  amount  credited  to his  Account  as soon as
administratively  practicable. Upon such payment, no benefit shall thereafter be
payable  under this Plan either to the  Participant  or any  Beneficiary  of the
Participant, and all of the Participant's elections as to the time and manner of
payment of his  Account  will be deemed to be  canceled,  until such time as the
Participant again is specified by the Committee as being eligible to participate
in the Plan.

3.4 TERMINATION OF PARTICIPATION.

A Participant may elect to terminate his or her active participation in the Plan
at any  time by  filing a  written  notice  thereof  with  the  Committee.  Such
termination of active  participation  shall become effective as of the beginning
of the next full  payroll  period  following  receipt  of such  election  by the
Committee.  Amounts credited to the  Participant's  Account before the effective
date of such termination of active  participation  shall continue to be payable,
receive  investment  credits,  and otherwise be governed in accordance  with the
terms of the Plan as applied to all Participants.  If such a Participant  wishes
to resume his or her active  participation in the Plan,  provided that he or she
remains an Eligible  Employee,  the Committee  shall  determine if and when such
active participation shall resume.


                                       7
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                                   ARTICLE IV

DEFERRAL OF COMPENSATION

4.1 AMOUNT OF DEFERRAL.

With  respect to each Plan Year,  a  Participant  may elect to defer a specified
percentage  of his or her  Compensation  up to the  percentage  of  compensation
defined and the terms described in Exhibit B attached hereto, in accordance with
the following provisions:

         (a)  The  deferral  election  under this Plan shall be made at the same
              time, and in the same manner, as the deferral election made by the
              Participant under the Savings Plan.  However,  with respect to the
              Plan  Year in which  the  Plan  becomes  effective  or in which an
              Eligible Employee is specified by the Committee as such, whichever
              is  later,  the  Eligible  Employee  may make his or her  deferral
              election  under the Plan for that Plan Year  within 30 days  after
              such  effective  date of the  Plan or  initial  eligibility.  Such
              deferral  election shall apply  prospectively  to payroll  periods
              beginning after the date on which the election is submitted to the
              Committee.

         (b)  The amount of the deferral under this Section is the percentage of
              Compensation  specified by the Participant  (within the guidelines
              described in Exhibit B), reduced by the amount that is effectively
              deferred  under the Savings Plan for that Plan Year.  Accordingly,
              any amount that would have been returned to the Participant  under
              Section 5.2 of the Savings  Plan due to the failure of the Savings
              Plan to comply with the  nondiscrimination  rules of Code  Section
              401(k)  (i.e.,  the  "average   deferral   percentage"  test  also
              described in Section 5.2 of the Savings Plan) shall  automatically
              be subject to the  deferral  election,  and included in the amount
              deferred, under this Plan.

         (c)  If a  participant  makes an  election  under  subsection  (a) that
              applies to less than an entire Plan Year  (i.e.,  because the Plan
              became  effective,  or the  Participant  was named as an  Eligible
              Employee, after January 1 of that Plan Year), the Participant  may
              specify  in  the  election  that  the  deferral  amount  shall  be
              determined  with  respect  to the  entire  amount of  Compensation
              received  in  that  Plan  Year.   Notwithstanding   the  foregoing
              calculation of the amount of the deferral,  the deferral  election
              shall then be applied to Base Salary otherwise  payable in payroll
              periods  beginning  after  the  date  on  which  the  election  is
              submitted to the Committee. In other words, such a Participant may
              make a full Plan Year deferral  election,  but such election shall
              be applied  prospectively to Base Salary in all subsequent payroll
              periods.

4.2 CHANGE IN DEFERRAL ELECTIONS.

A  Participant  may change a previously  elected  percentage of deferral of Base
Salary  at any time by  filing a  written  notice  thereof  with the  Committee.
Changes will only become  effective as of the beginning of the next full payroll
period  following  receipt  of  the  change  in  election  by the  Committee.  A
Participant may change a previously  elected percentage of deferral of Bonus, or
elect to terminate  future Bonus  deferrals,  by filing a written notice thereof
with the Committee prior to December 31 of the year preceding the actual payment
or deferral date of the Bonus.

                                       8
<PAGE>



4.3 CREDITING DEFERRED COMPENSATION.

The amount of  Compensation  that a  Participant  elects to defer under the Plan
shall  be  credited  by the  Employer  to  the  Participant's  Deferral  Account
periodically, the frequency of which will be determined by the Committee. To the
extent that the Employer is required to withhold any taxes or other amounts from
a Participant's  Deferred  Compensation  pursuant to any state, federal or local
law,  such amounts shall be withheld  only from the  Participant's  compensation
before such amounts are credited.

4.4 COMPANY MATCHING AMOUNT.

The Company Matching Amount with respect to each Participant shall be determined
generally  in  the  same  manner  as  the  matching  contribution  made  by  the
Participant's  employer under the Savings Plan for the same Plan Year.  However,
such determination shall be subject to the following provisions:

         (a)      No Company  Matching Amount shall be credited in or during the
                  1999 Plan Year.

         (b)      No Company  Matching Amount shall be credited for a particular
                  Plan Year for a Participant whose employment terminated before
                  the last day of the Plan Year, unless such termination was due
                  to Retirement,  Disability or death. The foregoing  exceptions
                  shall be  determined in the same manner for this Plan as under
                  the Savings Plan.

         (c)      The Company  Matching  Amount for a particular Plan Year shall
                  be determined by the Committee  after the Plan Year has ended,
                  and shall be credited to eligible  Participants  for such Plan
                  Year  at  the  time   determined   by  the  Committee  in  its
                  discretion.

         (d)      The  Company  Matching  Amount  with  respect to a  particular
                  Participant   shall  be   determined   on  the  basis  of  the
                  Participant's  total salary  deferrals  under the Savings Plan
                  and  this   Plan,   and  shall  be  offset  by  the   matching
                  contributions  made on  behalf  of the  Participant  under the
                  Savings Plan.


                                       9
<PAGE>


                                    ARTICLE V

BENEFIT ACCOUNTS

5.1 VALUATION OF ACCOUNT.

As of each Valuation Date, a Participant's  Account shall consist of the balance
of the  Participant's  Account as of the immediately  preceding  Valuation Date,
plus  the  Participant's  Deferred  Compensation  and  Company  Matching  Amount
credited pursuant to Section 4.4 since the immediately preceding Valuation Date,
plus  investment  return  credited as of such Valuation Date pursuant to Section
5.2, minus the aggregate amount of distributions, if any, made from such Account
since the immediately preceding Valuation Date.

5.2 CREDITING OF INVESTMENT RETURN.

As of each  Valuation  Date,  the account value of each  Participant's  Deferral
Account  and  Company  Matching  Account  shall be  increased  by the  amount of
investment  return since the immediately  preceding  Valuation Date.  Investment
return  with  respect to the portion of an Account  invested  on a deemed  basis
(under Section 5.5) in a particular  investment vehicle shall be credited at the
Investment  Return Rate (for that investment  vehicle) as of such Valuation Date
based on the  average  balance  of the  relevant  portion  of the  Participant's
Deferral  Account  and  Company  Matching  Account,   respectively,   since  the
immediately preceding Valuation Date, but after such Accounts have been adjusted
for any  contributions  or  distributions  to be credited  or deducted  for such
period.  Investment  return for the  period  prior to the first  Valuation  Date
applicable to a Deferral  Account or a Company  Matching Account shall be deemed
earned ratably over such period.  Until a Participant or his or her  Beneficiary
receives his or her entire Account, the unpaid balance thereof shall be credited
with an investment return as provided in this Section 5.2.

5.3 STATEMENT OF ACCOUNT.

The Committee shall provide to each Participant,  within 30 days after the close
of each  calendar  quarter,  a  statement  setting  forth  the  balance  of such
Participant's  Account as of the last day of the preceding  calendar quarter and
showing all adjustments made thereto during such calendar quarter.

5.4 VESTING OF ACCOUNT.

A Participant  shall be 100% vested in his or her Deferral Account at all times.
A  Participant's  interest in his or her Company  Matching  Account becomes 100%
vested as of a Change in Control,  his or her death,  Disability or  Retirement.
Prior to this event,  a  Participant's  interest in his or her Company  Matching
Account shall vest at the same rate, and in accordance with the same rules, that
apply(ies) to the vesting of the matching contribution account under the Savings
Plan.

Any non-vested  portion of a  Participant's  Company  Matching  Account shall be
forfeited at termination of Participant's employment with Company (provided that
the  termination  does not otherwise  cause the  acceleration  of full vesting).
Forfeitures  under the Plan shall be for the benefit of the  Employer  and shall
not be credited to other Participants.


                                       10
<PAGE>



5.5 INVESTMENT VEHICLES.

The  Company  may select  investment  vehicles  that will serve as the basis for
determining  deemed  investment  credits to  Participants'  Accounts (i.e.,  for
determining the Investment  Return Rate). If and when a trust is established and
funded in accordance with Section 10.1, the investment vehicle shares,  units or
other evidences of ownership shall be considered assets of the trust and general
assets of the relevant  Employers.  The deemed investment vehicles are set forth
in  Exhibit  C,  which  the  Company  may  amend  from  time to time in its sole
discretion.

A Participant  may request the Company to make deemed  investments of the credit
balance of his Account in one or more of such investment vehicles. A Participant
may change the deemed  investment of his Account or change the deemed investment
of future  credits to his  Account,  and the deemed  investment  of his existing
Account balance may differ from the deemed investment of future amounts credited
to the Account.  Such changes shall be made in accordance with procedures as the
Committee  may establish  from time to time.  Such  procedures  may regulate the
frequency of such changes and the form of notice  required to make such election
or changes.  The Committee may also  establish a deemed  investment  which shall
apply if the Participant makes no election.

The  effective  date of any change  shall be the date for which the  appropriate
direction  to  the  Company  or its  designee  has  been  properly  received  in
accordance with the procedures established by the Committee. The Committee shall
have  the  right to  refuse  to  honor  any  Participant  direction  related  to
investments or withdrawals, including transfers among investment options, to the
extent  reasonably  necessary to assure compliance with applicable law including
U.S. and other securities laws.  However,  neither the Company nor the Committee
assumes any  responsibility  for  compliance by officers or others with any such
laws,  and any failure by the Company or the  Committee to delay or dishonor any
such direction shall not be deemed to increase the Company's  legal  obligations
to the Participant or third parties.

5.6 TRANSFERS FROM OTHER PLAN.

The Plan may accept the transfer of amounts or assets  deferred by a Participant
under any nonqualified  deferred compensation plan or other deferral arrangement
sponsored by the Company,  including without  limitation,  any shares of Company
Common Stock (whether or not restricted) which, but for such deferral,  would be
vested and  nonforfeitable.  Any amount so transferred  shall be credited to the
Participant's  Deferred Account as of the date of the transfer. A transfer under
this  Section  may  have  significant  legal  and  administrative   consequences
(including  but  not  limited  to tax  and  securities  law  consequences)  and,
accordingly, the determination as to whether the Plan may accept such a transfer
shall be made by the Committee in its sole discretion.


                                       11
<PAGE>



                                   ARTICLE VI

PAYMENT OF BENEFITS

6.1 PAYMENT OF DEFERRAL BENEFIT UPON DEATH, DISABILITY OR RETIREMENT.

Upon the death,  Disability,  Early Retirement,  or Retirement of a Participant,
the Employer shall pay to the Participant or his Beneficiary a Deferral  Benefit
equal to the balance of his or her vested Account determined pursuant to Article
V, less any amounts previously distributed, based on his or her written election
pursuant to Section 6.5.

6.2 PAYMENT OF DEFERRAL BENEFIT UPON OTHER TERMINATION.

Upon the  termination  of  service  of the  Participant  as an  employee  of the
Employer and all Selected  Affiliates for reasons other than death,  Disability,
or Retirement, the Employer shall pay to the Participant a Deferral Benefit in a
lump sum equal to the balance of his or her vested Account  determined  pursuant
to   Article  V,  less  any   amounts   previously   distributed,   as  soon  as
administratively practical.

6.3 PAYMENTS TO BENEFICIARIES.

In the  event of the  Participant's  death  prior to his or her  receipt  of all
elected annual  installments,  his or her Beneficiary will receive the remaining
annual  installments  at such  times  as such  installments  would  have  become
distributable to the Participant.

6.4 HAIRCUT WITHDRAWAL

Notwithstanding any other provision of the Plan, a Participant at any time shall
be  entitled to  receive,  upon  written  request to the  Committee,  a lump sum
distribution equal to the entire vested amount owed to the Participant under the
Plan at that time, subject to penalties as set forth below:

         (a)      The lump-sum  will be equal to 90% of the  Participant's  then
                  current vested Deferral Account and Matching Account balances,
                  and;

         (b)      The remaining  balance shall be forfeited by the  Participant,
                  and;

         (c)      The  Participant  will not be  eligible to  recommence  income
                  deferrals  until the first of the January  following a one (1)
                  year period  commencing  on the date of  withdrawal,  and then
                  only if otherwise  eligible to participate  under the terms of
                  the Plan.

The amount  payable  under this  section of the Plan shall be paid within  sixty
(60) days following receipt of written notice by the Committee.


                                       12
<PAGE>



6.5 FORM OF PAYMENT.

The Deferral Benefit payable pursuant to Section 6.1 shall be paid in one of the
following  forms,  as  elected  by the  Participant  in  his or her  Participant
Agreement  on file as of one (1)  year  and  one (1) day  prior  to the  date of
Retirement, Death or Disability:

         (a)      Annual  payments of a fixed  amount  which shall  amortize the
                  vested  Account  balance as of the payment  commencement  date
                  over a period not to exceed three (3) years (together,  in the
                  case of each unpaid  annual  payment,  with deemed  investment
                  earnings thereon credited after the payment  commencement date
                  pursuant to Section 5.2).

         (b)      A lump sum as soon as administratively practical.

In the event a Participant  fails to make a  distribution  election,  his or her
vested Account  Balance shall be distributed as a lump sum  distribution as soon
as administratively practical after his or her Retirement, Death or Disability.

6.6 COMMENCEMENT OF PAYMENTS.

Commencement  of payments  under  Section 6.1 of the Plan shall begin  within 60
days  following  receipt of written  notice by the  Committee  of an event which
entitles a Participant (or a Beneficiary) to payments in lump sum under the Plan
or in the January following the event for annual payment.

6.7 SMALL BENEFIT.

In the  event the  Committee  determines  that the  balance  of a  Participant's
Account is less than  $5,000 at the time of  commencement  of  payments,  or the
portion of the balance of the  Participant's  Account payable to any Beneficiary
is less than $5,000 at the time of commencement  of payments,  the Committee may
inform the Employer and the Employer,  in its discretion,  may choose to pay the
benefit in the form of a lump sum payment,  notwithstanding any provision of the
Plan or a Participant  election to the contrary.  Such lump sum payment shall be
equal to the balance of the Participant's Account or the portion thereof payable
to a Beneficiary.


                                       13
<PAGE>



                                   ARTICLE VII

BENEFICIARY DESIGNATION

7.1 BENEFICIARY DESIGNATION.

Each Participant shall have the sole right, at any time, to designate any person
or persons as his  Beneficiary  to whom payment  under the Plan shall be made in
the event of his or her death prior to complete  distribution to the Participant
of his or her Account.  Any Beneficiary  designation  shall be made in a written
instrument provided by the Committee. All Beneficiary designations must be filed
with the Committee  and shall be effective  only when received in writing by the
Committee.

7.2 CHANGE OF BENEFICIARY DESIGNATION.

Any  Beneficiary  designation may be changed by a Participant by the filing of a
new  Beneficiary  designation,  which will cancel all  Beneficiary  designations
previously filed. The designation of a Beneficiary may be made or changed at any
time without the consent of any person.

7.3 NO DESIGNATION.

If a Participant  fails to designate a Beneficiary as provided  above, or if all
designated  Beneficiaries  predecease the  Participant,  then the  Participant's
designated Beneficiary shall be deemed to be the Participant's estate.

7.4 EFFECT OF PAYMENT.

Payment  to a  Participant's  Beneficiary  (or,  upon  the  death  of a  primary
Beneficiary,  to the contingent  Beneficiary  or, if none, to the  Participant's
estate) shall completely discharge the Employer's obligations under the Plan.


                                       14
<PAGE>



                                  ARTICLE VIII

ADMINISTRATION

8.1 COMMITTEE.

The administrative committee for the Plan (the "Committee") shall be the Keebler
Retirement  Committee,  as it is comprised  from time to time. The Committee (a)
shall have complete  discretion to supervise the administration and operation of
the Plan and to adopt rules and procedures governing the Plan from time to time,
and, (b) shall have authority to give  interpretive  rulings with respect to the
Plan.  If and when any  members  of the  Committee  are also  Participants,  the
Committee  shall adopt and adhere to a conflicts of interest  policy designed to
prevent a  Participant  from acting in his or her own  interest.  If, due to the
application of such a conflicts of interest  policy,  the Committee is unable to
act on a  particular  matter  under this Plan,  the  Committee  shall bring such
matter to the  Personnel and  Compensation  Committee of the Board for action or
approval.

8.2 DELEGATION.

The Committee may appoint one or more individuals, who may be an employee of the
Company,  to be the  Committee's  agent with respect to the  administration  and
operation  of the Plan.  The  Committee  may  delegate all or any portion of its
duties  to such  individual(s),  provided  that the  Committee  may  cease  such
delegation at any time and provided  further that any  individual to whom duties
are so delegated shall not be Participants. In addition, the Committee may, from
time to time,  employ  other  agents and  delegate  to them such  administrative
duties as it sees fit, and may from time to time consult with counsel who may be
counsel to the Company.

8.3 BINDING EFFECT OF DECISIONS.

Any decision or action of the Committee with respect to any question arising out
of or in connection with the  administration,  interpretation and application of
the Plan shall be final and binding upon all persons  having any interest in the
Plan.

8.4 INDEMNIFICATION OF COMMITTEE.

The Company  shall  indemnify and hold harmless the members of the Committee and
their duly  appointed  agents under  Section 8.2 (to the extent that such agents
are employees of the Company) against any and all claims, loss, damage,  expense
or liability  (including  reasonable  attorney  fees) arising from any action or
failure to act with respect to the Plan,  except in the case of gross negligence
or willful misconduct by any such member or agent of the Committee.


                                       15
<PAGE>



8.5 ELECTION AND NOTICE PROCEDURES.

Except as otherwise  expressly stated in the Plan or required by applicable law,
all elections and notices by Eligible  Employees and Participants under the Plan
shall  be made at the time  and in the  manner  specified  by the  Committee  in
accordance with its administrative procedures. The Committee may choose for this
purpose to use all or any of the administrative  procedures that apply under the
Savings Plan.


                                       16
<PAGE>



                                   ARTICLE IX

AMENDMENT AND TERMINATION OF PLAN

9.1 AMENDMENT.

The Board of Directors of the Company,  on behalf of itself and of each Selected
Affiliate,  may  at any  time  amend,  suspend  or  reinstate  any or all of the
provisions  of  the  Plan,   except  that  no  such  amendment,   suspension  or
reinstatement may adversely affect any Participant's  Account,  as it existed as
of  the  day  before  the  effective  date  of  such  amendment,  suspension  or
reinstatement,  without such Participant's prior written consent. Written notice
of any amendment or other action with respect to the Plan shall be given to each
Participant.

9.2 TERMINATION.

The Board of Directors of the Company,  on behalf of itself and of each Selected
Affiliate,  in its sole discretion,  may terminate this Plan at any time and for
any reason  whatsoever.  Upon  termination of the Plan, the Committee shall take
those  actions  necessary  to  administer  any  Accounts  existing  prior to the
effective date of such termination; provided, however, that a termination of the
Plan shall not  adversely  affect the value of a  Participant's  Account,  as it
existed as of the day  before the  effective  date of such  termination,  or the
timing  or  method of  distribution  of a  Participant's  Account,  without  the
Participant's   prior  written  consent.   Notwithstanding   the  foregoing,   a
termination of the Plan shall not give rise to accelerated or automatic  vesting
of any Participant's Account.


                                       17
<PAGE>



                                    ARTICLE X

MISCELLANEOUS

10.1 FUNDING.

Participants,  their  Beneficiaries,  and their heirs,  successors  and assigns,
shall  have no  secured  interest  or claim in any  property  or  assets  of the
Employers.  Each Employer's obligation under the Plan shall be merely that of an
unfunded  and  unsecured  promise of the  Employer  to pay money in the  future.
Notwithstanding  the  foregoing,  the Company shall create a rabbi trust to hold
funds to be used in payment of the  obligations of the Employers under the Plan,
which trust shall not be funded except as provided in the following sentence. In
the event of a Change in Control (or prior thereto in the sole discretion of the
Employers),  the Employers  shall fund such trust in an amount equal to not less
than the  total  value of the  Participants'  Accounts  under the Plan as of the
Valuation Date  immediately  preceding the Change in Control,  provided that any
funds  contained  therein shall remain liable for the claims of each  respective
Employer's general creditors.  In addition,  upon a Change in Control, the trust
by its terms shall become irrevocable.

10.2 NONASSIGNABILITY.

No right or interest under the Plan of a Participant  or his or her  Beneficiary
(or any person  claiming  through or under any of them) shall be  assignable  or
transferable  in any  manner or be subject to  alienation,  anticipation,  sale,
pledge,  encumbrance  or other  legal  process or in any manner be liable for or
subject to the debts or liabilities of any such  Participant or Beneficiary.  If
any  Participant  or  Beneficiary  shall attempt to or shall  transfer,  assign,
alienate,  anticipate,  sell,  pledge or otherwise  encumber his or her benefits
hereunder or any part thereof, or if by reason of his or her bankruptcy or other
event  happening  at any time such  benefits  would  devolve upon anyone else or
would not be enjoyed by him or her, then the Committee,  in its discretion,  may
terminate  his or her  interest  in any such  benefit  (including  the  Deferral
Account) to the extent the Committee considers necessary or advisable to prevent
or limit the effects of such  occurrence.  Termination  shall be effected by the
delivery of a written "termination declaration" to the last known address of the
Participant or Beneficiary whose interest is adversely affected (the "terminated
participant").


                                       18
<PAGE>



10.3 LEGAL FEES AND EXPENSES.

It is the intent of the Company  and each  Selected  Affiliate  that no Eligible
Employee  or  former  Eligible  Employee  be  required  to  incur  the  expenses
associated  with  the  enforcement  of his or her  rights  under  this  Plan  by
litigation  or other legal  action  because the cost and expense  thereof  would
substantially  detract from the benefits  intended to be extended to an Eligible
Employee hereunder.  Accordingly,  if after a Change in Control it should appear
that the  Employer has failed to comply with any of its  obligations  under this
Plan or in the event that the  Employer or any other  person takes any action to
declare this Plan void or unenforceable,  or institutes any litigation  designed
to deny, or to recover from, the Eligible  Employee the benefits  intended to be
provided to such  Eligible  Employee  hereunder  (although  such  actions do not
include the valid exercise by the Company of its right to amend or terminate the
Plan under  Article IX),  the  Employer  irrevocably  authorizes  such  Eligible
Employee  from  time to time to  retain  counsel  of his or her  choice,  at the
expense of the  Employer as  hereafter  provided,  to  represent  such  Eligible
Employee in connection with the initiation or defense of any litigation or other
legal  action,  whether by or against  the  Employer or any  director,  officer,
stockholder or other person  affiliated  with the Employer in any  jurisdiction.
The  Employer  shall pay and be solely  responsible  for any and all  reasonable
attorneys' and related fees and expenses incurred by such Eligible Employee as a
result of the  Employer's  failure to perform  under this Plan or any  provision
thereof; or as a result of the Employer or any person contesting the validity or
enforceability of this Plan or any provision thereof.

10.4 CAPTIONS.

The captions  contained herein are for convenience only and shall not control or
affect the meaning or construction hereof.

10.5 GOVERNING LAW.

The provisions of the Plan shall be construed and  interpreted  according to the
laws of the state of Illinois (other than those conflict of law rules that could
lead to the application of another state's laws).

10.6 SUCCESSORS.

The  provisions  of the Plan shall bind and inure to the benefit of the Company,
its Selected Affiliates,  and their respective  successors and assigns. The term
successors as used herein shall include any corporate or other  business  entity
which shall, whether by merger,  consolidation,  purchase or otherwise,  acquire
all or substantially all of the business and assets of the Company or a Selected
Affiliate and successors of any such Company or other business entity.


                                       19
<PAGE>



10.7 NO IMPLIED RIGHTS.

Nothing contained herein shall be construed to confer upon any Eligible Employee
the right to continue to serve as an Eligible Employee of the Employer or in any
other  capacity.  In addition,  nothing  contained  herein shall be construed to
limit  either the right of the  Employer  to  terminate  the  employment  of any
Eligible Employee, or the right of an Eligible Employee to terminate employment.

Executed this 29th day of January, 1999.





                                 KEEBLER COMPANY

                                 By: /s/ SAM K. REED
                                    --------------------------------
                                    Sam K. Reed
                                       
                                 Title:  President and CEO
                                       -----------------------------





                                       20
<PAGE>

The following  schedules to the Keebler Company Deferred  Compensation Plan have
been omitted.  Keebler hereby undertakes to furnish supplementally a copy of any
such omitted schedules to the Commission upon request.


SCHEDULE                                TITLE

Exhibit A                               Eligible Employees

Exhibit B                               Amount of Deferral

Exhibit C                               Investment Return Rate