<PAGE>
 
                            COMPREHENSIVE AMENDMENT
                            -----------------------

                                      TO
                                      --

                         RETIREMENT PLAN FOR EMPLOYEES
                         -----------------------------

                                      OF
                                      --

                     CERTIFIED GROCERS OF CALIFORNIA, LTD.
                     -------------------------------------
<PAGE>
 
                            COMPREHENSIVE AMENDMENT
                            -----------------------

                                      TO
                                      --

                         RETIREMENT PLAN FOR EMPLOYEES
                         -----------------------------

                                      OF
                                      --

                     CERTIFIED GROCERS OF CALIFORNIA, LTD.
                     -------------------------------------


                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>


ARTICLE                                                      Page
-------                                                      ----
<S>                                                          <C> 


INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . .    1

 
I    DEFINITIONS.............................................   1
 
     Section 1.01 -      Accrued Benefit......................  1
     Section 1.02 -      Actuarial Equivalent.................  2
     Section 1.03 -      Affiliated Company...................  2
     Section 1.04 -      Benefit Commencement Date............  2
     Section 1.05 -      Code.................................  3
     Section 1.06 -      Company..............................  3
     Section 1.07 -      Conversion Date......................  3
     Section 1.08 -      Early Retirement Age.................  3
     Section 1.09 -      Early Retirement Date................  3
     Section 1.10 -      Effective Date.......................  3
     Section 1.11 -      Employee.............................  3
     Section 1.12 -      Family Member........................  3
     Section 1.13 -      Gender...............................  3
     Section 1.14 -      Member...............................  4
     Section 1.15 -      Month of Service.....................  4
     Section 1.16 -      Normal Retirement Age................  4
     Section 1.17 -      Normal Retirement Date...............  4
     Section 1.18 -      Plan.................................  4
     Section 1.19 -      Plan Administrator...................  4
     Section 1.20 -      Plan Year............................  4
     Section 1.21 -      Restatement Date.....................  4
     Section 1.22 -      Retirement Date......................  4
</TABLE>

                                i
<PAGE>
 
<TABLE>
<CAPTION>
 
<S>                      <C>                                    <C>
     Section 1.23 -      Service.............................   5
     Section 1.24 -      Social Security Covered Compensation   5
     Section 1.25 -      Social Security Retirement Age......   5
     Section 1.26 -      Social Security Taxable Wage Base...   5
     Section 1.27 -      Spouse..............................   5
 
 
 
II   SERVICE.................................................   6
 
     Section 2.01 -      Hour of Service.....................   6
     Section 2.02 -      Benefit Accrual Service.............   6
</TABLE>
                                      ii
<PAGE>
 
                            COMPREHENSIVE AMENDMENT
                            -----------------------

                                      TO
                                      --

                         RETIREMENT PLAN FOR EMPLOYEES
                         -----------------------------

                                      OF
                                      --

                     CERTIFIED GROCERS OF CALIFORNIA, LTD.
                     -------------------------------------



                               TABLE OF CONTENTS
                               -----------------
<TABLE> 
<CAPTION> 

ARTICLE                                                      Page
-------                                                      ----
<S>                                                          <C> 
          (a)  For Service Prior to the Restatement Date
               (March 1, 1976).............................     6
          (b)  For Service on and After the Restatement
               Date (March 1, 1976) and Prior to Conversion
               Date (March 1, 1983)........................     7
          (c)  For Service on and After the Conversion
               Date March 1, 1983).........................     8
          (d)  Benefit Accrual Service for Certain Union
               Employees...................................     8
     Section 2.03 -      Vesting Service                        8
     Section 2.04 -      Break in Service                       9
          (a)  One Year Break in Service...................     9
          (b)  Effect of a One Year Break in Service ......     9
 
     Section 2.05 -      Eligibility Service...............    10
     Section 2.06 -      Years of Employment...............    10
 
 III MEMBERSHIP............................................    10
     Section 3.01 -      Eligibility to be a Member........    10
     Section 3.02 -      Employees Not Eligible to be a
                         Member and Entry Date.............    11
     Section 3.03 -      Employment by Affiliates..........    11
     Section 3.04 -      Acquisitions of Affiliates........    11
     Section 3.05 -      Reemployment of Member............    11
     Section 3.06 -      Reemployment of Member Following
                         Forfeiture........................    12
 
</TABLE> 
                                      iii
<PAGE>
 
IV   ELIGIBILITY FOR PLAN BENEFITS.........................    12
     Section 4.01 -      Normal Retirement Benefit.........    12
     Section 4.02 -      Deferred Retirement Benefit.......    12
     Section 4.03 -      Early Retirement Benefit..........    12
     Section 4.04 -      Vested Deferred Benefit...........    12
     Section 4.05 -      Pre-Retirement Death Benefit......    13
 
V    RETIREMENT BENEFIT....................................    13

                                      iv
<PAGE>
 
                            COMPREHENSIVE AMENDMENT
                            -----------------------

                                      TO
                                      --

                         RETIREMENT PLAN FOR EMPLOYEES
                         -----------------------------

                                      OF
                                      --

                     CERTIFIED GROCERS OF CALIFORNIA, LTD.
                     -------------------------------------



                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>


ARTICLE                                                      Page
-------                                                      ----


 
<S>                                                           <C>  
     Section 5.01 -      Normal Retirement Benefits..........  13
     Section 5.02 -      Early Retirement Benefits...........  16
     Section 5.03 -      Deferred Retirement Benefits........  18
 
     Section 5.04 -      Termination of Service before Early
                         or Normal Retirement Age............  18
     Section 5.05 -      Pre-Retirement Death Benefit........  19
     Section 5.06 -      Maximum Amount of Benefit...........  20
     Section 5.07 -      Small Benefit Payments..............  23
     Section 5.08 -      When Benefits Begin.................  24
     Section 5.09 -      Suspension of Benefits Upon
                         Reemployment or After Normal 
                         Retirement Date.....................  24
 
 VI  MANNER AND FORM OF PAYMENT..............................  25
     Section 6.01 -      Form of Retirement Benefit..........  25
     Section 6.02 -      Joint and Survivor Annuity for
                         Married Member......................  25
     Section 6.03 -      Life Annuity for Unmarried Members..  28
     Section 6.04 -      Joint and Survivor Annuity for Other
                         Members.............................  29
          (a)  50% Joint and Survivor Life Annuity...........  29
          (b)  100% Joint and Survivor Life Annuity..........  29
     Section 6.05 -      Period Certain Life Annuity Benefit.  29
     Section 6.06 -      Optional Temporary Annuity..........  29
     Section 6.07 -      Minimum Distribution of Benefits....  30
 
</TABLE> 
                                       v
<PAGE>

<TABLE> 

<S>                      <C> 
     Section 6.08 -      Minimum Distribution Following
                         Death...............................  30
 
 VII CONTRIBUTIONS AND FUNDING...............................  30
     Section 7.01 -      Funding of Plan.....................  30
     Section 7.02 -      Company Contributions...............  30
     Section 7.03 -      Contributions to Group Annuity
                         Contract............................  30
</TABLE> 
 
                                      vi
<PAGE>
 
                            COMPREHENSIVE AMENDMENT
                            -----------------------

                                      TO
                                      --

                         RETIREMENT PLAN FOR EMPLOYEES
                         -----------------------------

                                      OF
                                      --

                     CERTIFIED GROCERS OF CALIFORNIA, LTD.
                     -------------------------------------



                               TABLE OF CONTENTS
                               -----------------
<TABLE> 
<CAPTION> 

ARTICLE                                                      Page
-------                                                      ----
<S>                                                          <C> 
     Section 7.04 -      No Return of Company Contributions;
                         Exceptions..........................  31

VIII ADMINISTRATION..........................................  31

     Section 8.01 -      Named Fiduciary.....................  31
     Section 8.02 -      Benefits Committee as Plan
                         Administrator.......................  31
     Section 8.03 -      Additional Duties of Benefits
                         Committee...........................  32
     Section 8.04 -      Authority of Benefits Committee.....  33

 IX  AMENDMENT AND TERMINATION OF THE PLAN...................  33
     Section 9.01 -      Amendment of the Plan...............  33
     Section 9.02 -      Termination of the Plan.............  34
     Section 9.03 -      Allocation of Assets Upon Plan
                         Termination.........................  34
     Section 9.04 -      Merger or Consolidation.............  35

X    LIMITATION OF BENEFITS FOR HIGHLY PAID MEMBER...........  35
     Section 10.01 -     Limitation on Certain Distributions.  35

XI   TOP HEAVY PROVISIONS                                      37
     Section 11.01 -     Top Heavy Definitions...............  37
     Section 11.02 -     Special Top Heavy Rules.............  38
     Section 11.03 -     Top Heavy Benefits and Vesting......  39
 </TABLE> 
                                      vii
<PAGE>

<TABLE> 

     
<S>                                                           <C> 
XII  MISCELLANEOUS PROVISIONS..............................   40
     
     Section 12.01 -      Evidence of Survival.............   40
     Section 12.02 -      Non-Alienation of Benefits.......   40
     Section 12.03 -      Payments to Incompetents.........   41
     Section 12.04 -      Misstated Information............   41
     Section 12.05 -      Beneficiary......................   41
     Section 12.06 -      Forfeiture Upon Failure to Locate   41
     Section 12.07 -      Direct Transfer of Benefits......   42
</TABLE> 
                                     viii
<PAGE>
 
                            COMPREHENSIVE AMENDMENT
                            -----------------------

                                      TO
                                      --

                         RETIREMENT PLAN FOR EMPLOYEES
                         -----------------------------

                                      OF
                                      --

                     CERTIFIED GROCERS OF CALIFORNIA, LTD.
                     -------------------------------------



                               TABLE OF CONTENTS
                               -----------------

<TABLE> 
<CAPTION> 

ARTICLE                                                      Page
-------                                                      ----
<S>                                                          <C> 
     Section 12.08 -     Claims Procedure..................    43
     Section 12.09 -     Applicable Law....................    43

SIGNATURES.................................................    44
</TABLE> 
                                      ix
<PAGE>
 
                            COMPREHENSIVE AMENDMENT
                            -----------------------

                                      TO
                                      --

                         RETIREMENT PLAN FOR EMPLOYEES
                         -----------------------------

                                      OF
                                      --

                     CERTIFIED GROCERS OF CALIFORNIA, LTD.
                     -------------------------------------



          THIS AGREEMENT, executed by Certified Grocers of California, Ltd., a
California corporation (hereinafter called the "Company"), evidences the terms
of a Comprehensive Amendment to the Retirement Plan for Employees of Certified
Grocers of California, Ltd.  This agreement constitutes a Comprehensive
Amendment to those provisions of a pension plan originally adopted and made
effective on March 1, 1957, and subsequently amended from time to time
thereafter.  The most recent Comprehensive Amendment prior to this Comprehensive
Amendment was executed on March 4, 1985 and the Plan was amended on June 9,
1987.

          Unless otherwise indicated, this Comprehensive Amendment is effective
for the Plan Year beginning March 1, 1989.  The Company operates a fiscal period
which ends on the Saturday nearest August 31 of each year and begins on the
Sunday following such Saturday.

          Nothing contained in this Agreement shall be deemed to divest, or
accelerate the vesting of, the interest of any Member herein or to deprive any
Member of any rights which that Member had as of the execution date or the
effective date of this Agreement.  The rights and benefits of all employees of
the Company after the effective date of this Agreement shall be as set forth
herein.

                                 ARTICLE I
                                 ---------

                                DEFINITIONS
                                -----------
 
          The following words and phrases when used throughout this Plan and any
subsequent amendment thereof shall have the meanings

                                       1
<PAGE>
 
set forth below, whether or not capitalized, unless a different meaning is
clearly required by the context.

Section 1.01 -    Accrued Benefit
------------      ---------------
 
          The "Accrued Benefit" of a Member, as of his termination of service,
means the greater of (a) or (b):

          (a) his normal retirement benefit determined under Section 5.01
calculated on the basis of his Years of Benefit Accrual as of his termination of
service; or

          (b) the actuarial equivalent based on a single life annuity of the
benefit accrued on the Conversion Date under the terms of the Plan, including
the normal form of benefit, in effect immediately preceding the Conversion Date.

Section 1.02 -    Actuarial Equivalent
------------      --------------------
 
          "Actuarial Equivalent" or "Actuarially Equivalent" means an amount of
equivalent value when computed on the basis of the 1971 Towers, Perrin, Forster
and Crosby Forecast Mortality Table with an interest rate assumption of 8% per
annum.

Section 1.03 -    Affiliated Company
------------      ------------------

          "Affiliated Company" means:

          (a) Any corporation which is included in a controlled group of
corporations, within the meaning of Section 414(b) of the Code, of which group
the Company is also a member,

          (b) Any trade or business which is under common control with the
Company within the meaning of Section 414(c) of the Code,

          (c) Any member of an affiliated service group, within the meaning of
Section 414(m) of the Code, that includes the Company, and

          (d) Any other entity required to be aggregated with the Company
pursuant to regulations under Section 414(o) of the Code.

                                       2
<PAGE>
 
          Notwithstanding the foregoing, an entity shall be deemed to be an
Affiliated Company only with respect to periods during which the test under Code
Section 414(b), (c), (m), or (o), as applicable, is met.

Section 1.04 -    Benefit Commencement Date
------------      -------------------------
 
          "Benefit Commencement Date" means the date on which a Member's benefit
commences under the Plan.  The Benefit Commencement Date for a Member who
continues employment after his Normal Retirement Date and who dies prior to
receiving benefits under the Plan shall be the first day of the month following
his date of death.

Section 1.05 -    Code
------------      ----
 
          "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

Section 1.06 -    Company
------------      -------
 


          "Company" means Certified Grocers of California, Ltd., and any
Affiliated Company which has adopted the Plan.


Section 1.07 -    Conversion Date
------------      ---------------
 


          "Conversion Date" means March 1, 1983.


Section 1.08 -    Early Retirement Age
------------      --------------------
 


          "Early Retirement Age" means either (a) or (b) below:



          (a) The date the Member has both attained his 55th birthday and
completed at least 5 Years of Vesting Service.



          (b) For any Member who on or before March 1, 1983 has both attained
his 40th birthday and completed at least 20 years of service, the date such
Member has both attained his 45th birthday and completed at least 25 years of
service.


Section 1.09 -    Early Retirement Date
------------      ---------------------

                                       3
<PAGE>
 
          "Early Retirement Date" means the first day of any month before his
Normal Retirement Age in which a Member elects to retire provided he has
attained his Early Retirement Age.


Section 1.10 -    Effective Date
------------      --------------
 


          "Effective Date" means March 1, 1957.


Section 1.11 -    Employee
------------      --------
 


          "Employee" means a person employed by the Company.


Section 1.12 -    Family Member
------------      -------------
 


     "Family Member" shall mean the spouse, lineal ascendants and descendants of
the Employee or former Employee and the spouse of such lineal ascendants or
descendants.


Section 1.13 -    Gender
------------      ------
 


          "Gender" means the masculine pronoun whenever used shall include the
feminine.



Section 1.14 -    Member
------------      ------
 


          "Member" means an Employee who satisfies the requirements for
membership pursuant to Article III, and whose membership shall not have
terminated pursuant to such Article.



Section 1.15 -    Month of Service
------------      ----------------
 


          "Month of Service" means the month, or a four or five week period,
regularly used by the Company for its payroll records during which a Member is
credited with an Hour of Service.



Section 1.16 -    Normal Retirement Age
------------      ---------------------
 


          "Normal Retirement Age" means the date a Member attains his 65th
birthday.


Section 1.17 -    Normal Retirement Date
------------      ----------------------
 

                                       4
<PAGE>
 
          "Normal Retirement Date" means the first day of the month next
following a Member's Normal Retirement Age.


Section 1.18 -    Plan
------------      ----
 


          "Plan" means the provisions of the Retirement Plan for Employees of
Certified Grocers of California, Ltd., as set forth herein and as may be amended
from time to time.


Section 1.19 -    Plan Administrator
------------      ------------------
 


          "Plan Administrator" or "Plan Administration Committee" means the
person or persons named pursuant to Article VIII who exercise discretionary
authority and control with respect to the administration and management of the
Plan.


Section 1.20 -    Plan Year
------------      ---------
 


          "Plan Year" means each twelve month period beginning on March 1 and
ending on the last day of February.


Section 1.21 -    Restatement Date
------------      ----------------
 


          "Restatement Date" means March 1, 1976.



Section 1.22 -    Retirement Date
------------      ---------------
 


          "Retirement Date" means the Member's Normal Retirement Date or, if
applicable, Early Retirement Date.



Section 1.23 -    Service
------------      -------
 


          "Service" means an Employee's period of employment with the Company
credited in accordance with Article II.



Section 1.24 -    Social Security Covered Compensation
------------      ------------------------------------
 


          "Social Security Covered Compensation" means for any Plan Year, the
average (without indexing) of the Social Security Taxable Wage Base in effect
for each calendar year during the thirty-five (35) year period ending with the
last day of the calendar year in which the Member attains (or will attain)
Social Security Retirement Age.  In determining a Member's Social Security
Covered

                                       5
<PAGE>
 
Compensation for a Plan Year, the Social Security Taxable Wage Base for
the current Plan Year and any subsequent Plan Year shall be assumed to be the
same as in effect for the Plan Year for which the determination is being made.
A Member's Covered Compensation for any Plan Year after the thirty-five (35)
year period is the Member's Social Security Covered Compensation for the Plan
Year in which the Member attained Social Security Retirement Age.


Section 1.25 -    Social Security Retirement Age
------------      ------------------------------
 


          "Social Security Retirement Age" means:



          (a) For a Member born prior to 1938, the first day of the calendar
month coincident with or next following his sixty-fifth birthday;



          (b) For a Member born after 1937 and before 1955, the first day of the
calendar month coincident with or next following his sixty-sixth birthday; and



          (c) For a Member born after 1954, the first day of the calendar month
coincident with or next following his sixty-seventh birthday.


Section 1.26 -    Social Security Taxable Wage Base
------------      ---------------------------------
 


          "Social Security Taxable Wage Base" means the contribution and benefit
limit in effect under Section 3121(a)(1) of the Code.


Section 1.27 -    Spouse
------------      ------
 


          "Spouse" means the person to whom a Member has been legally married
during the twelve month period immediately preceding the Member's date of death,
if such death is earlier than his Early, Normal or Deferred Retirement Date, or
the person to whom the Member is married commencing at his benefit commencement
date commencing at his Early, Normal or Deferred Retirement Date, if applicable.

                                 ARTICLE II
                                 ----------



                                 SERVICE
                                 -------
 

                                       6
<PAGE>
 
Section 2.01 -    Hour of Service
------------      ---------------
 


          An Employee shall receive credit for an Hour of Service for:



          (a) Each hour for which he is directly or indirectly paid or entitled
to payment by the Company for the performance of duties during the applicable
Computation Period.  These hours shall be credited to the Employee in the
Computation Period or periods in which the duties were performed; and



          (b) Each hour not credited in (a) for which back pay has been either
awarded or agreed to by the Company.  These hours shall be credited to the
Employee in the Computation Period or periods to which the award or agreement
pertains rather than the Computation Period in which the award, agreement, or
payment is made; and



          (c) Each hour not credited in (a) or (b) for which an Employee is
directly or indirectly paid, or entitled to such payment by the Company for
reasons other than the performance of duties during an applicable Computation
Period.  The completion of the non-work hours described in this paragraph shall
be computed in accordance with the provisions of Department of Labor Regulations
2530.200b-2.  These hours shall be credited in the Computation Period in which
either payment is actually made or amounts payable to the Employee become due.
These hours shall be determined by dividing the payments received or due by the
Employee's most recent hourly rate of Compensation for the performance of
duties; and



          (d) Each hour not credited in (a), (b) or (c) while an Employee is on
Authorized Leave of Absence.  These hours shall be credited for purposes of
Sections 2.02 and 2.03; and



          (e) Each hour not credited in (a), (b), (c) or (d) that is required to
be credited under federal law.  The nature and extent of such credit shall be
determined under such law.



Section 2.02 -    Benefit Accrual Service
------------      -----------------------
 


          (a)  For Service Prior to the Restatement Date (March 1, 1976)
               ---------------------------------------------------------
 

                                       7
<PAGE>
 
          A Member shall be credited with a Year of Benefit Accrual Service for
each full year of continuous service with the Company, except that an employee
of an Affiliated Company on the date of acquisition by Certified Grocers of
California, Ltd., shall be credited with a Year of Benefit Accrual Service for
each full year of membership in the Plan, as determined in accordance with the
provisions of the Plan as in effect prior to the Restatement Date.  Service
under any other plan and not a predecessor of this Plan shall not be considered
service hereunder.



          A Member shall also be credited with a fractional Year of Benefit
Accrual Service for the period measured from his last anniversary of employment
immediately preceding the Restatement Date to the Restatement Date, if such
period is less than twelve months.  The applicable fraction shall be determined
by dividing the number of completed months of employment during such period, by
12.



          For purposes of this subsection (a), an Authorized Leave of Absence as
described in 2.01(d) shall not be deemed to have interrupted the continuity of
employment.



          (b)  For Service on and After the Restatement Date (March 1, 1976) and
               -----------------------------------------------------------------
               Prior to Conversion Date (March 1, 1983)
               ----------------------------------------
--



          A Member who completes 1800 Hours of Service during an "Accrual
Computation Period" shall be credited with a Year of Benefit Accrual Service for
such "Accrual Computation Period".



          A Member who completes at least 1000 Hours of Service but less than
1800 Hours of Service during an "Accrual Computation Period" shall be credited
with a fractional Year of Benefit Accrual Service for such "Accrual Computation
Period" by dividing the number of Hours of Service credited to him by 1800.



          The "Accrual Computation Period" shall be the twelve month period
measured from March 1 commencing with the later of the Restatement Date and the
March 1 of (a) the Plan Year in which he is employed by the Company or (b) with
respect to an Employee of an Affiliated Company on the date of acquisition by
Certified Grocers of California, Ltd., the Plan Year in which he becomes a
Member of the Plan.

                                       8
<PAGE>
 
          Notwithstanding the above, if either (a) an Employee is employed by
the Company, (b) an Employee of an Affiliated Company becomes a Member of the
Plan or (c) an Employee terminates employment with the Company while a Member of
the Plan, on a date other than the first day of an Accrual Computation Period,
such Employee shall receive credit for a Year of Benefit Accrual Service or
fraction thereof during such Accrual Computation Period provided he completes
the "Minimum Hours of Service" requirement.  The "Minimum Hours of Service"
requirement is the product of 1000 and a fraction, the numerator being the
number of months of employment with the Company during such Accrual Computation
Period and the denominator being 12.



          A Member who completes the Minimum Hours of Service shall be credited
with a Year of Benefit Accrual Service, or fraction thereof, by dividing the
number of Hours of Service credited to him by 1800.



          (c)  For Service on and After the Conversion Date March 1, 1983)
               -----------------------------------------------------------
-



          A Member shall be credited with 1/12th of a Year of Benefit Accrual
Service for each Month of Service credited on or after the Conversion Date;
provided, however, a Year of Benefit Accrual Service for a Member who is not
actively performing services for the Company as an Employee because of a
disability shall be determined under paragraph (b).



          Years of Benefit Accrual Service shall be the sum of each year, and
fractional part thereof, of Benefit Accrual Service described in (a), (b) and
(c) above, not forfeited due to a Break in Service in accordance with Section
2.04.  Service under any other plan and not a predecessor of this Plan shall not
be considered service hereunder.



          (d)  Benefit Accrual Service for Certain Union Employees
               ---------------------------------------------------
 



          Notwithstanding any of the provisions contained herein to the
contrary, any Employee who is a Member prior to March 1, 1983 (and who was an
active employee of the Company on January 1, 1984), who became a Member between
March 1, 1976 and March 1, 1983 by no longer being excluded as a Member of the
Plan

                                       9
<PAGE>
 
under Section 3.02(a), shall be deemed to have received credit for a Year
of Benefit Accrual Service calculated from the first date of continuous
employment with the Company to becoming a Member, provided that the amount of
the normal retirement benefit calculated pursuant to Section 5.01 for such
Member shall be reduced by the amount, if any, of the retirement benefit earned
by the Member under any other retirement plan while employed by the Company, but
during which such Member was excluded as a Member under Section 3.02(a), at any
time from employment with the Company between March 1, 1976 and March 1, 1983.


Section 2.03 -    Vesting Service
------------      ---------------
 


          An Employee who completes 1000 Hours of Service during a "Vesting
Computation Period" shall be credited with a Year of Vesting Service.  The
"Vesting Computation Period" shall be the twelve consecutive month period
measured from the date of hire and each anniversary thereafter and including all
such similar periods of service with the Company or any Affiliated Company, but
not including any such periods with any Company prior to the time such Company
became a member of a controlled group with Certified Grocers of California, Ltd.



          Years of Vesting Service shall be the sum of each Year of Vesting
Service with the exception of the following:



          (a) Each Year of Vesting Service forfeited due to a Break in Service
in accordance with Section 2.04; and



          (b) Each Year of Vesting Service before January 1, 1971 unless the
Employee has had at least three Years of Vesting Service after December 31,
1970.


Section 2.04 -    Break in Service
------------      ----------------
 


          (a)  One Year Break in Service
               -------------------------
 



          On and after the Restatement Date and before the Conversion Date, an
Employee who completes less than 501 Hours of Service during a Vesting
Computation Period or an Eligibility Computation Period shall incur a One Year
Break in Service.  On and after the Conversion Date, an Employee who completes
less than three Months of Service during an Accrual Computation Period shall

                                       10
<PAGE>
 
incur a One Year Break in Service for purposes of determining Benefit Accrual
Service.  For purposes of determining whether a Break in Service Year has
occurred for participation and vesting purposes, an individual who is absent
from work for maternity or paternity reasons shall receive credit for the Hours
of Service which would otherwise have been credited to such individual but for
such absence, or in any case in which such hours cannot be determined, eight
Hours of Service per day of such absence.  For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence by reason
of the pregnancy of the individual, by reason of a birth of a child of the
individual, by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or for purposes
of caring for such child for a period beginning immediately following such birth
or placement.  The Hours of Service credited under this paragraph shall be
credited in the computation period in which the absence begins if the crediting
is necessary to prevent a Break in Service in that period, or in all other
cases, in the following computation period.



          (b) Effect of a One Year Break in Service
              -------------------------------------
 



          If an Employee incurs a One Year Break in Service during a Vesting
Computation Period and before he is eligible for a Vested Deferred Benefit and
the number of consecutive One Year Breaks in Service equals or exceeds the
greater of five or his Years of Vesting Service prior to such Break in Service,
he shall forfeit his Years of Vesting Service credited prior to his Break in
Service.



          If an Employee incurs a One Year Break in Service during an
Eligibility Computation Period and before he is eligible for a Vested Deferred
Benefit and the number of consecutive One Year Breaks in Service equals or
exceeds the greater of five or his Years of Eligibility Service credited prior
to such Break in Service, he shall forfeit the Years of Eligibility Service.



          If an Employee incurs a One Year Break in Service during an Accrual
Computation Period and before he is eligible for a Vested Deferred Benefit and
the number of consecutive One Year Breaks in Service equals or exceeds the
greater of five , he shall forfeit his Years of Benefit Accrual Service
previously credited to him.

                                       11
<PAGE>
 
Section 2.05 -    Eligibility Service
------------      -------------------
 


          An Employee who completes 1000 Hours of Service during an "Eligibility
Computation Period" shall be credited with a Year of Eligibility Service on the
last day of such Computation Period, whether or not he is an Employee as of such
date.



          The "Eligibility Computation Period" shall be each twelve month period
measured from the first day the Employee is credited with an Hour of Service or,
if he fails to complete 1000 Hours of Service during such period, the twelve
month period shall then be measured from the first day of each Plan Year
following such date of employment.



          Years of Eligibility Service shall be the sum of each Year of
Eligibility Service not forfeited due to a Break in Service in accordance with
Section 2.04.


Section 2.06 -    Years of Employment
------------      -------------------
 


          Years of Employment shall be the sum of each calendar year in which an
Employee completes at least one Hour of Service.



                                 ARTICLE III
                                 -----------



                                 MEMBERSHIP
                                 ----------
 


Section 3.01 -    Eligibility to be a Member
------------      --------------------------
 


          Each Employee who is a Member of the Plan as of the Restatement Date
or thereafter shall continue to participate in accordance with the provisions of
the Plan in effect on and after the Restatement Date, unless excluded under the
terms of Section 3.02.  Each other Employee, except any Employee who is not
eligible to become a Member as provided in Section 3.02, provided he has met the
minimum Hours of Service requirement under Section 2.05, shall become a Member
of the Plan on the later of:



               (i)  March 1, 1976; or

                                       12
<PAGE>
 
            (ii) The Entry Date which is March 1 occurring during the first
     eligibility computation period during which the Employee is credited with a
     year of eligibility service.



Section 3.02 -    Employees Not Eligible to be a Member and Entry Date
------------      ----------------------------------------------------
 



          The following persons shall not be eligible to be Members in the Plan:



          (a) Any Employee who is included in a collective bargaining unit
covered by a collective bargaining agreement, which agreement does not provide
for coverage of such Employee, provided, that the matter of retirement benefits
was the subject of good faith bargaining between the Company and the collective
bargaining unit of which the Employee is a part;



          (b) Directors, unless otherwise employed as Employees and otherwise
eligible; and



          (c) Any Employee on a retainer or fee basis or as an independent
contractor, as determined by the Employer (except an Employee of an Affiliated
Company).



Section 3.03 -    Employment by Affiliates
------------      ------------------------
 


          The Employees of any Affiliated Company shall be entitled to
participate in the Plan subject to the approval of the Board of Directors;
provided further, that only those Employees of an affiliate who otherwise meet
the requirements for membership as set forth in the Plan shall be entitled to
participate in the Plan, subject to the requirements of Section 3.04.



Section 3.04 -    Acquisitions of Affiliates
------------      --------------------------
 


          Each Employee of an Affiliated Company who was employed by such
Affiliated Company on the date of its acquisition shall be entitled to become a
Member in the Plan on March 1 coinciding with or next following the date on
which he or she completes six calendar months measured from date of employment.
In no event shall an Employee who completes one year of service fail to qualify.

                                       13
<PAGE>
 
Section 3.05 -    Reemployment of Member
------------      ----------------------
 


          In the event a Member who has previously terminated employment returns
to the employ of the Company as an Employee covered under the Plan, he shall
resume his membership in the Plan immediately unless, prior to his reemployment,
he forfeited his Years of Eligibility Service and Years of Benefit Accrual
Service due to a Break in Service in accordance with Section 2.04, in which case
the provisions of 3.06 shall apply.

Section 3.06 -    Reemployment of Member Following Forfeiture
------------      -------------------------------------------
 


          A Member of the Plan who forfeits his Years of Eligibility Service and
Years of Benefit Accrual Service due to a Break in Service in accordance with
Section 2.04 shall cease to be entitled to any benefits under the Plan with
respect to such Service.  He may reenter the Plan as a new Member by again
satisfying the membership requirements in accordance with Section 3.02.



                                 ARTICLE IV
                                 ----------



                                 ELIGIBILITY FOR PLAN BENEFITS
                                 -----------------------------
 


Section 4.01 -    Normal Retirement Benefit
------------      -------------------------
 


          Except as provided in Section 4.02, a Member shall be eligible for a
Normal Retirement Benefit if his employment is terminated on or after he attains
his Normal Retirement Age.



Section 4.02 -    Deferred Retirement Benefit
------------      ---------------------------
 


          A Member who continues employment after his Normal Retirement Date
shall be eligible for a Deferred Retirement Benefit when he terminates
employment.



Section 4.03 -    Early Retirement Benefit
------------      ------------------------
 


          A Member shall be eligible for an Early Retirement Benefit if his
employment is terminated before he attains his Normal Retirement Age but on or
after he attains his Early Retirement Age.  A terminated Member who is entitled
to a Vested Deferred Benefit shall be eligible for an Early Retirement Benefit
on or after he attains his Early Retirement Age.

                                       14
<PAGE>
 
Section 4.04 -    Vested Deferred Benefit
------------      -----------------------
 


          A Member who has completed at least five Years of Vesting Service
shall be eligible for a Vested Deferred Benefit if his employment with the
Company is terminated on or after March 1, 1987, for any reason other than death
and before he is eligible for a retirement benefit.  If employment with the
Company is terminated for any reason other than death and before the Member's
retirement



          (a) prior to March 1, 1987 but on or after March 1, 1976, then ten
Years of Vesting Service is required; and



          (b) prior to March 1, 1976, then fifteen Years of Vesting Service is
required.



Section 4.05 -    Pre-Retirement Death Benefit
------------      ----------------------------
 


          If a Member dies after Early Retirement Age and while employed by the
Company, then the surviving Spouse of the Member shall be entitled to a
survivor's benefit as set forth in Section 5.05 of the Plan.



                                 ARTICLE V
                                 ---------



                                 RETIREMENT BENEFIT
                                 ------------------
 


Section 5.01 -    Normal Retirement Benefits
------------      --------------------------
 


          For the Plan Year commencing March 1, 1989, upon the termination of
service of any Member on his Normal Retirement Date, such Member shall be
entitled to receive a monthly annuity for life equal to the greater of either
his accrued benefit or the greater of (a) or (b) below plus (c) as follows:



          (a)  An amount equal to the sum of:



               (i) .95% of his Average Monthly Earnings not in excess of his
     Social Security Covered Compensation multiplied by his Years of Benefit
     Accrual Service (up to 33-1/3 years); plus

                                       15
<PAGE>
 
            (ii) .0145% of his Average Monthly Earnings in excess of his Social
     Security Covered Compensation multiplied by his Benefit Accrual Service (up
     to 33-1/3 years).



          (b) An amount equal to $22.50 multiplied by his Years of Benefit
Accrual Service subject to a maximum of $750.00.



          (c) An amount equal to the Member's annualized gross base rate of pay
from the Company in effect on November 1, 1986, multiplied by the fraction
2/280, multiplied by a fraction (not greater than 1), the numerator of which is
the Member's Benefit Accrual Service in the Plan and the denominator of which is
10, or if greater, the Member's Benefit Accrual Service under the Plan if the
Member would have continued to participate in the Plan until the Member became
age 55; provided, however, for purposes of this subparagraph, any Member who is
an officer of the Company on November 1, 1986, shall be limited to annualized
gross base rate of pay from the Company of no greater than $50,000.00, and shall
use a fraction of 1/280 instead of 2/280 mentioned above.



          (d) For purposes of this Plan, the following additional definitions
shall be as follows:



               (i) "Earnings" before March 1, 1976, means gross compensation
     received by the Company.



            (ii) "Earnings" on and after March 1, 1976, means 1/12th of a
     Member's annual gross compensation derived from employment by the Company,
     plus such additional amounts as may be reduced from the Member's
     compensation and contributed by the Company under the Certified Grocers of
     California, Ltd. Employees' Sheltered Savings Plan and the Spending Account
     Plan, but excluding any retiree unused sick leave payoff and severance pay;
     provided, however, Earnings shall not include any amounts in excess of
     $200,000 (and as adjusted by the Secretary of the Treasury in the same
     manner and time as provided under Section 415(d) of the Code) for the Plan
     Year commencing March 1, 1989 through the Plan  Year ending February 28,
     1994, and for Plan Years commencing on or after March 1, 1994, Earnings
     shall not include amounts in excess of $150,000, as adjusted by the
     Secretary of the Treasury for increases in the cost of living in accordance
     with Section 401(a)(17)(B) of the Code.  For a Member who completed less

                                       16
<PAGE>
 
     than 1800 Hours of Service during any calendar year, Earnings shall be such
     Member's actual monthly earnings.

           (iii)  Effective January 1, 1980, "Average Monthly Earnings" means
     the average of the Member's monthly "Earnings" during any three calendar
     Years within the last ten calendar Years in which Earnings were highest.
     If a Member has Earnings for a period of less than three calendar Years,
     his "Average Monthly Earnings" shall be the average of his monthly
     "Earnings" for the total period worked.

          (e) Notwithstanding anything contained in this section to the
contrary, with respect to each Member, the monthly retirement Benefit shall be
the greater of either the amount of the retirement Benefit that accrued through
February 29, 1992, for all Employees (except Employees who are highly
compensated employees described in Section 414(q)(1)(A) or (B) of the Code
(hereinafter "Super Highly Compensated Employee") limited to the retirement
benefit that accrued through February 28, 1989), as determined under the
provisions (including the definition of Credited Service) in the Plan in effect
for the Plan Year ending February 28, 1989, or the amount determined hereunder.
A Member who is a Super Highly Compensated Employee for the Plan Years
commencing on or after March 1, 1990 (but not for the 1989 Plan Year), will be
limited to the greater of the retirement Benefit that accrued through February
28, 1989, as determined under the provisions (including the definition of
Credited Service) in the Plan in effect for the Plan Year ending February 28,
1989, or the amount determined hereunder.

          (f) Effective March 1, 1989 through February 28, 1994, for purposes of
providing a transition for the implementation of the limitation on Earnings in
excess of $200,000 (as adjusted) as provided in paragraph (d)(ii) (hereinafter
the "$200,000 Compensation Limitation"), the Participant's Accrued Benefit shall
be the greater of (i) or (ii), but in no event greater than (iii), as follows:

            (i) the Participant's Accrued Benefit as of November 30, 1989,
     determined without regard to the Compensation Limitation, plus the
     Participant's Accrued $200,000 Benefit accrued from December 1, 1989, with
     regard to the $200,000 Compensation Limitation,


                                       17
<PAGE>

            (ii) the Participant's Accrued Benefit determined on the basis of
     the total Years of Benefit Accrual Service and by applying the $200,000
     Compensation Limitation to all such Years of Benefit Accrual Service,

            (iii) the Participant's Accrued Benefit determined on the basis of
     total Years of Benefit Accrual Service without regard to the $200,000
     Compensation Limitation.

          (g) Effective March 1, 1994, for purposes of providing a transition
     for the implementation of the limitation on Earnings in excess of $150,000
     (as adjusted) as provided in paragraph (d)(ii) (hereinafter "$150,000
     Compensation Limitation"), the Participant's Accrued Benefit shall be the
     greater of (i) or (ii), but in no event greater than (iii), as follows:

            (i) the Participant's Accrued Benefit as of February 28, 1994, in
     accordance with subsection (f), plus the Participant's Accrued Benefit
     accrued from March 1, 1994, with regard to the $150,000 Compensation
     Limitation,
 
            (ii) the Participant's Accrued Benefit determined on the basis of
     the total Years of Benefit Accrual Service and by applying the $150,000
     Compensation Limitation to all such Years of Benefit Accrual Service,

            (iii) the Participant's Accrued Benefit determined on the basis of
     total Years of Benefit Accrual Service without regard to the $150,000
     Compensation Limitation.

          (h) For purposes of this section, an Employee who received the
compensation as an Employee from more than one of the Companies participating in
this Plan shall have his average monthly compensation from all Companies used to
determine his total credit hereunder, for each Year in which he was employed by
all such Companies.  The retirement Benefits to be provided by each such Company
shall be determined by prorating such credit by the ratio of the average monthly
compensation received from such Company over the total average monthly
compensation received from all Companies.

          (i) Monthly Benefits, if any, accrued to an Employee of such an
Affiliated Company under a Plan in effect prior to the date of acquisition of
such affiliate by Certified Grocers of 

                                       18
<PAGE>
 
California, Ltd., shall be in accordance with the terms of the prior Plan, if
any, of that affiliate which was in existence prior the date of acquisition and
shall be in addition to benefits provided under this Plan.

          (j) In determining the Earnings of an Employee for purposes of the
Compensation limitation under paragraphs (f) or (g), as adjusted, the rules of
Section 414(q)(6) of the Code shall apply, except that in applying such rules,
the term "family" shall include only the spouse of the Employee and any lineal
descendants of the Employee who have not attained age 19 before the close of the
Plan Year.  If the Compensation limitation under paragraphs (f) or (g), as
adjusted, applies to the combined Earnings of the Employee or one or more Family
Members, the benefit provisions of this Article will be applied by prorating the
Compensation limitation under paragraphs (f) or (g), as adjusted, among the
Employee and his Family Members in proportion that each such individual's
Compensation determined prior to the application of this limitation bears to the
total Earnings of all such individuals determined prior to the application of
this limitation.

          (k) The number of years of Benefit Accrual Service taken into account
under paragraph a(i) for any Member will not exceed the Member's cumulative
permitted disparity limit.  The Member's cumulative permitted disparity limit is
equal to 35 minus the number of years credited to the Member for purposes of the
benefit formula or the accrual method under the Plan under one or more qualified
plans or simplified employee pensions (whether or not terminated) ever
maintained by the Company, other than years for which a Member earned a year of
Service under the benefit formula in paragraph (a)(i).  For purposes of
determining the Member's cumulative permitted disparity limit, all years ending
in the same calendar year are treated as the same year.  If the Member's
cumulative permitted disparity limit is less than the period of years specified
in paragraph (a)(i), then for years after the Member reaches the cumulative
permitted disparity limit and through the end of the period specified in
paragraph (a)(i), the Member's benefit will be equal to the excess benefit
percentage.

Section 5.02 -    Early Retirement Benefits
------------      -------------------------

          (a) Except as provided in Section 5.02(c), a Member who elects to
retire at an Early Retirement Date shall receive a 

                                       19
<PAGE>
 
monthly benefit equal to the amount determined in Section 5.01(a) multiplied by
the appropriate percentage in accordance with the following schedule.

                     Schedule of Early Retirement Factors
                     ------------------------------------
<TABLE>
<CAPTION>
                     Years Prior to Normal
                        Retirement Date       Percentage
                     ---------------------    ----------
<S>                  <C>                      <C> 
                               0                 100
                               1                  95
                               2                  90
                               3                  85
                               4                  80
                               5                  75
                               6                  70
                               7                  65
                               8                  60
                               9                  55
                               10 or more         50
</TABLE>                   

Straight line interpolation of these percentages will be employed where
fractional completed years prior to Normal Retirement Date are involved.
                           
                           
          (b) Notwithstanding the foregoing, a Member who on March 1, 1983 is
both age 40 or older and has 20 or more years of service, will be eligible to
retire at any time after reaching age 45 or older and having 25 or more years of
service, and will receive a monthly benefit equal to the amount determined in
Section 5.01(a) multiplied by the appropriate percentage in accordance with the
following schedule:

<TABLE> 
<CAPTION> 
                           Age at Early        Benefit Reduction   
                            Retirement               Factor        
                           ------------        -----------------   
                           <S>                 <C> 
                                54                     48%                 
                                53                     46%                 
                                52                     44%                 
                                51                     42%                 
                                50                     40%                 
                                49                     38%                 
                                48                     36%                 

</TABLE> 

                                       20
<PAGE>
<TABLE> 
                                 
                               <S>                     <C> 
                                47                     34%                 
                                46                     32%                 
                                45                     30%                  
</TABLE> 

          (c) A Member who elects to retire at an Early Retirement Date shall
receive a monthly benefit equal to the amount determined in Section 5.01(c)
multiplied by the appropriate percentage in accordance with the following
schedule:

<TABLE>
<CAPTION>
                     Schedule of Early Retirement Factors
                     ------------------------------------

                     Years Prior to Normal
                        Retirement Date       Percentage
                     ---------------------    ----------
                     <S>                      <C>
                                0 through 5      100
                                6                 95
                                7                 90
                                8                 85
                                9                 80
                                10                75
                                11                73
                                12                71
                                13                69
                                14                67
                                15                65
                                16                63
                                17                61
                                18                59
                                19                57
                                20                55 
 
</TABLE>
Section 5.03 -    Deferred Retirement Benefits
------------      ----------------------------

          If a Member continues to be employed by the Company after his Normal
Retirement Date and after March 1, 1988, an additional retirement benefit will
accrue to the Member for Credited Service with the Company after his Normal
Retirement Date and for such subsequent service as provided in Section 5.01(a).
Upon retirement at a Deferred Retirement Date, the Member shall receive the
retirement benefit.

                                       21
<PAGE>
 
Section 5.04 -    Termination of Service before Early or Normal Retirement Age
------------      ------------------------------------------------------------

          In the event of the termination of service of a Member on or after
March 1, 1987, for any reason other than death or disability prior to the
attainment of Early Retirement Date or Normal Retirement Date, a Member's vested
retirement benefit commencing at his Normal Retirement Date shall be equal to a
percentage of the amount determined in (a) or (b) below, in accordance with the
following schedule:

<TABLE> 
<CAPTION> 

          Years of Vesting Service    Percentage
          ------------------------    ----------
          <S>                            <C> 
                  0 - 4                   0%
                  5 or more             100%

</TABLE> 
               On attainment of Normal Retirement Age, a Member's Normal
Retirement Benefit shall be non-forfeitable.

          (a) The monthly amount payable on a single life annuity form shall be
equal to his accrued benefit at his date of termination of service.

          (b) The monthly amount on a form other than the single life annuity
shall be the actuarial equivalent of the amount equal to his accrued benefit at
his date of termination of service.

          If a Member elects to receive his Vested Deferred Benefit at an Early
Retirement Date, this benefit shall be equal to the amount determined in this
Section 5.04 multiplied by the appropriate percentages in accordance with the
"Schedule of Early Retirement Factors" in Section 5.02.

Section 5.05 -    Pre-Retirement Death Benefit
------------      ----------------------------
 
          (a) If a Member with a vested benefit dies while employed by the
Company, or if a Member with a vested benefit terminates employment with the
Company after his Early Retirement Age and dies prior to his Benefit
Commencement Date, then the surviving Spouse of such Member, shall be entitled
to a survivor's benefit, provided that such Member and surviving Spouse have
been married to each other throughout the one year period preceding such
Member's death.

                                       22
<PAGE>
 
          (b) For a Member who dies after attaining Early Retirement Age, the
survivor's benefit payable hereunder shall be in an amount equal to the monthly
benefit which such Spouse would have received under Section 5.04(a) of the Plan
had the Member retired immediately prior to his death and elected to receive
benefits under Section 5.04(a) of the Plan, provided that such Member and
surviving Spouse have been married to each other throughout the one year period
preceding such Member's death.  Upon the death of the Spouse, no other benefit
shall be payable under the Plan.  If the Member dies prior to his earliest
retirement age, the survivor's benefit hereunder shall be in a monthly payment
commencing on the first day of the calendar month following the month in which
the Member would have attained his earliest retirement age and ending with the
calendar month in which the spouse dies, equal to 50% of the monthly amount the
Member would have received if he retired electing a joint and survivor annuity
under Section 5.04(a), and if such Member had:

             (i) a Separation from Service on or prior to the date of death,

            (ii) survived to the earliest retirement age,

           (iii)  retired with an immediate qualified Joint and Survivor Annuity
     at the earliest retirement age, and

            (iv) died on the day after the day on which such Member would have
     attained the earliest retirement age.

          (c) The provisions of this Section shall apply only if:

            (i) a Member has at least one Hour of Service with the Company on
     or after August 23, 1984; or

            (ii) a Member has at least one Hour of Service on or after January
     1, 1976, and when such Member incurred a Separation from Service he had ten
     (10) or more Years of Vesting Schedule Service; or
  
            (iii) a Member who has one Hour of Service on or after September 2,
     1974, was employed by the Company after the 

                                       23
<PAGE>
 
     earliest date on which such Member was eligible for early retirement
benefits under the Plan; and

            (iv) such Member dies after August 23, 1984, prior to reaching his
     Annuity Starting Date.

Section 5.06 -    Maximum Amount of Benefit
------------      -------------------------

          (a) The amount of annual benefit payable to a Member shall not exceed
the lesser of:
               (i) the defined benefit limitation in effect at the beginning of
     each Plan Year (which, effective for the Plan Year commencing March 1,
     1991, is $115,641, and for each Plan Year thereafter shall be adjusted
     automatically as provided by the Secretary of the Treasury as provided by
     Section 415(d) of the Code); or

               (ii) 100% of the Member's average Compensation for the three
     consecutive calendar years while a Member of the Plan in which his
     Compensation was highest.

          (b) If the annual benefit of the Member commences before the Member's
social security retirement age, but on or after age 62, the defined benefit
dollar limitation as reduced above, if necessary, shall be determined as
follows:

               (i) If a Member's social security retirement age is 65, the
     dollar limitation for benefits commencing on or after age 62 is determined
     by reducing the defined benefit dollar limitation by 5/9 of one percent for
     each month by which benefits commence before the month in which the Member
     attains age 65.

              (ii) If a Member's social security retirement age is greater than
     65, the dollar limitation for benefits commencing on or after age 62 is
     determined by reducing the defined benefit dollar limitation by 5/9 of one
     percent for each of the first 36 months and 5/12 of one percent for each of
     the additional months (up to 24 months) by which benefit commence before
     the month of the Member's social security retirement age.

                                       24
<PAGE>
 
          If the annual benefit of a Member commences prior to age 62, the
defined benefit dollar limitation shall be the actuarial equivalent of an annual
benefit beginning at age 62, as determined above, reduced for each month by
which benefits commence before the month in which the Member attains age 62.  To
determine actuarial equivalence, the interest rate assumption is the greater of
the rate specified in Section 1.02 of the plan or 5 percent.  Any decrease in
the defined benefit dollar limitation determined in accordance with this
provision shall not reflect the mortality decrement to the extent that benefits
will not be forfeited upon the death of the Member.

          If the annual benefit of a Member commences after the Member's social
security retirement age, the defined benefit dollar limitation as reduced in (a)
above, if necessary, shall be adjusted so that it is the actuarial equivalent of
an annual benefit of such dollar limitation beginning at the Member's social
security retirement age.  To determine actuarial equivalence, the interest rate
assumption used is the lesser of the rate specified in Section 1.02 of the plan
or 5 percent.

          (c) If the Member has less than 10 years of participation with the
Company, the defined benefit dollar limitation is reduced by one-tenth for each
year of participation (or part thereof) less than ten.  If the Member has less
than ten years of service with the Company, the compensation limitation is
reduced by one-tenth for each year of service (or part thereof) less than ten.
The adjustments of this section (c) shall be applied in the denominator of the
defined benefit fraction based upon years of service.  Years of service shall
include future years occurring before the Member's normal retirement age.  Such
future years shall include the year which contains the date the Member reaches
normal retirement age, only if it can be reasonably anticipated that the Member
will receive a year of service for such year.

          (d) If the Member's benefit payable under this Plan is payable in a
form other than a benefit payable on a Life Annuity or a Qualified Joint and
Survivor Life Annuity, the determination as to whether the limitations described
in this Section have been satisfied shall be made in accordance with Regulations
prescribed by the Secretary of the Treasury or his delegate by adjusting such

                                       25
<PAGE>
 
benefit so that it is equivalent to a benefit in the form of a Life Annuity.

          (e) If the Company maintains, or at any time maintained, another
defined benefit plan from which the Member is entitled to receive benefits, the
sum of any Member's benefits from all such plans may not exceed the maximum
benefit described in paragraph (a).

          (f) In the case of any Employee who is a Member in this Plan and any
defined contribution plan of the Company, the sum of the defined benefit plan
fraction and the defined contribution plan fraction for any year shall not
exceed 1.0.  In the event the sum of such fractions exceeds 1.0 the Committee
shall prescribe the manner in which the annual benefits to this Plan or the
annual addition under any of the other of the Company's defined contribution
plans shall be reduced in order that no plans shall be disqualified under
applicable sections of the Code.

          (g) For purposes of applying the limitations of (b), the following
rules shall prevail:

               (i) The term "defined benefit plan fraction" shall mean a
     fraction the numerator of which is the projected annual benefit payable
     under this Plan or any other defined benefit plan of the Company,
     (determined as of the close of the year) and the denominator of which is
     the lesser of (a) the product of 1.25 multiplied by the dollar limitation
     in effect under Section 415(b)(l)(A) of the Code for such year, or (b) the
     amount which may be taken into account under Section 415(b)(l)(B) of the
     Code with respect to such Employee under the defined benefit plan for such
     year multiplied by 1.4.

              (ii) The term "defined contribution plan fraction" shall mean the
     aggregate annual additions to all defined contribution plans of the
     Company, if any, determined as of the close of the year without regard to
     limitations on contributions over the sum of the lesser of the following
     amounts determined for such year and for each prior Year of Service with
     the Company: (a) the dollar limitation in effect under Section 415(c)(l)(a)
     of the Code for such year (determined without regard to Section 415(c)(6)
     of the Code) multiplied by 1.25, or (b) the amount which may be taken into

                                       26
<PAGE>
 
     account under Section 415(c)(l)(B) (or Section 415(c)(7) or (8), if
     applicable) of the Code with respect to such Employee under such plan for
     such year multiplied by 1.4.

          (h) For purposes of (a) (ii), "Compensation" means a Member's earned
income, wages, salaries, and fees for professional services, and other amounts
received for personal services actually rendered in the course of employment
with the Company (including, but not limited to, commissions paid salesmen,
Compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips and bonuses), and excluding the following:

               (i) Company contributions to a plan of Deferred Compensation
     which are not included in the Member's gross income for the taxable year in
     which contributed or Company contributions under a simplified Employee
     pension plan to the extent such contributions are deductible by the Member,
     or any distributions from a plan of Deferred Compensation;

              (ii) Amounts realized from the exercise of a non-qualified stock
     option, or when restricted stock (or property) held by the Member either
     becomes freely transferable or is no longer subject to a substantial risk
     of forfeiture;

              (iii) Amounts realized from the sale, exchange or other
     disposition of stock acquired under a qualified stock option; and

              (iv) Other amounts which received special tax benefits, or
     contributions made by the Company (whether or not under a salary reduction
     agreement) towards the purchase of an annuity described in Section 403(b)
     of the Code (whether or not the amounts are actually excludable from the
     gross income of the Member).

          Compensation for any limitation year is the Compensation actually paid
or includable in gross income during such year.  The limitation year shall be
the Plan Year.

Section 5.07 -    Small Benefit Payments
------------      ----------------------
 

                                       27
<PAGE>
 
          If the monthly payments to a Member are less than $25.00, a lump sum
cash payment shall be paid in lieu of such annuity, provided such vested lump
sum cash payment does not exceed $3,500.00 at the time of distribution (or any
prior distribution) or other such maximum amount which may hereinafter be
prescribed in future governmental regulations.  The vested lump sum cash payment
shall be an amount equal to the Actuarial value of the vested monthly benefit
which would otherwise be payable at the Member's Normal Retirement Date on the
Single Life Annuity form.  The Actuarial value for each dollar or monthly
benefit otherwise payable shall be determined on the mortality tables as
provided in Section 1.02 and interest rate basis which either would be used (as
of the first day of the plan year which contains the annuity starting date) by
the Pension Benefit Guaranty Corporation for a trusteed single-employer plan to
value a benefit upon termination of an insufficient plan, or as provided under
Section 1.02, which ever produces the larger benefit.  If the actuarial value of
the Member's vested accrued benefit is zero, the member shall be deemed to have
received a distribution hereunder of such vested accrued benefit.
Notwithstanding the foregoing, a partial or total distribution may not be made
after the Benefit Commencement Date, regardless of the present value of the non-
forfeitable accrued benefit, without appropriate consent of the Member and the
Member's Spouse.

Section 5.08 -    When Benefits Begin
------------      -------------------

          Unless the Member elects otherwise, benefit payments must begin not
later than the sixtieth day after the close of the Plan Year in which the latest
of the following events occurs:

          (a) The Member attains age 65 or earlier normal retirement age; or

          (b) The tenth anniversary of the time when the Member commenced
participation in the Plan; or

          (c) The Member terminates his service with the Company.

                                       28
<PAGE>
 
Section 5.09 -    Suspension of Benefits Upon Reemployment or After Normal
------------      --------------------------------------------------------
                  Retirement Date
                  ---------------
 
          (a) If any Member again becomes an Employee and completes at least
forty (40) Hours of Service in any month (hereinafter "Section 203(a)(3)(B)
Service") after his Early, Normal or Late Retirement Date, all Benefit payments
under this Article shall cease.  Similarly, for a Member who continues to be
employed in Section 203(a)(3)(B) Service after his Normal Retirement Date, the
actuarial value of Benefits which commence later than Normal Retirement Date
will be computed without regard to the deferred commencement date and without
regard to amounts which would have been suspended under the preceding sentence
had the Member been receiving Benefits since his Normal Retirement Date.

          (b) If Benefit payments have been suspended, payments shall resume no
later than the first day of the third calendar month after the calendar month in
which the Member ceases to be employed in Section 203(a)(3)(B) Service.  The
initial payment upon resumption shall include the payment scheduled to occur in
the calendar month when payments resume.  Such Member or his Beneficiary shall
be entitled to the Benefits provided under this Article, reduced by the
Actuarial Equivalent of Benefits or payments paid under this Article before such
re-employment.

          (c) For a Member who has commenced receipt of benefit payments, no
Benefit payment shall be withheld by the Plan pursuant to this section unless
the Plan notifies the Employee by personal delivery or first class mail during
the first calendar month or payroll period in which the Plan withholds payments
that his Benefits are suspended.  Such notifications shall contain a description
of the specific reasons why Benefit payments are being suspended, a general
description of the Plan provision relating to the suspension of payments, a copy
of such provisions, and a statement to the effect that applicable Department of
Labor regulations may be found in section 2530.203-3 of the Code of Federal
Regulations.  In addition, the notice shall inform the Member of the Plan's
procedures for affording a review of the suspension of benefits in accordance
with the claims procedure under Section 12.06.

                                       29
<PAGE>
 
                                 ARTICLE VI
                                 ----------

                          MANNER AND FORM OF PAYMENT
                          --------------------------

Section 6.01 -    Form of Retirement Benefit
------------      --------------------------

          A Member's retirement benefit or Vested Deferred Benefit shall, except
as provided under Section 5.07, be payable as an annuity commencing on the first
day of the month next following the Member's Retirement Date.  The annuity shall
be paid either as a single life annuity payable monthly during the lifetime of
the Member (hereinafter "Single Life Annuity"), or as one of the other forms
described in the following paragraphs of this Article.  If the Member selects
the Single Life Annuity, no benefit shall be payable after the Member's death.

Section 6.02 -    Joint and Survivor Annuity for Married Member
------------      ---------------------------------------------
 
          (a) A Member's retirement benefit shall, except as provided under
Section 5.07, be payable as an annuity commencing on the Member's Retirement
Date or as of the first day of the month coinciding with or next following his
termination of employment, if later.  The annuity shall be paid either as a
Single Life Annuity payable monthly during the lifetime of the Member, or as one
of the other forms described in the following paragraphs of this Article.  If
the Member selects the Single Life Annuity, no benefit shall be payable after
the Member's death.  All alternative forms of benefit described in Sections
6.03, 6.04, 6.05 and 6.06 shall be the Actuarial Equivalent of the Single Life
Annuity.

          (b) The provisions of this section shall take precedence over any
conflicting provisions in the Plan and shall apply to any Member who is credited
with at least one Hour of Service with the Company on or after August 23, 1984,
and such other Members as are covered by subsection (e) of this section. Unless
an optional form of benefit is selected within the Applicable Election period
pursuant to a Qualified Election, a Member's benefit shall be paid as follows:

               (i) In the form of a Qualified Joint and Survivor Annuity
     providing for an annuity for the life of the Member and a survivor annuity
     for the life of the Member's Spouse following the Member's death, at a rate
     of 50% of the amount 

                                       30
<PAGE>
 
     payable during the joint lives of the Member and the Member's Spouse, or

            (ii) If the Member dies after the Earliest Retirement Age, in the
     form of a 50% Qualified Pre-Retirement Survivor Annuity providing for an
     immediate annuity for the life of the surviving Spouse at a rate at least
     equal to the survivor annuity described in subsection (i).

            (iii)  If the Member dies on or before the Earliest Retirement Age,
     in the form of a 50% Qualified Pre-Retirement Survivor Annuity providing
     for a deferred annuity for the life of the Spouse at a rate equal to the
     survivor annuity which would have been payable under subsection (i) if the
     Member had separated from Service on his or her date of death, survived to
     the Earliest Retirement Age, retired with an immediate 50% Qualified Joint
     and Survivor Annuity at the Earliest Retirement Age, and died on the day
     after the Earliest Retirement Age.  The annuity payable under this
     subsection shall begin at the Earliest Retirement Age unless the surviving
     Spouse elects a later date, in which case the payments shall be actuarially
     adjusted on a reasonable basis to reflect the delayed commencement of
     payments.

          (c) Whenever any of the following terms is used in the Plan it shall
have the meaning specified below unless the context clearly indicates to the
contrary.

               (i) "Annuity Starting Date" means the first day of the first
     period for which an amount is paid as an annuity or any other form.

               (ii) "Applicable Election Period" shall mean with respect to the
     Qualified Joint and Survivor Annuity described in subsection (b)(i), the
     ninety day period ending on the date benefit payments are to commence; and,
     with respect to the Qualified Pre-Retirement Survivor Annuities described
     in subsections (b)(ii) and (b)(iii), the period which begins on the first
     day of the Plan Year in which the Member attains age 35 or, if earlier, the
     date of his or her Termination of Service and ends on the date of the
     Member's death.

                                       31
<PAGE>
 
            (iii)  "Earliest Retirement Age" means the earliest date on which,
     under the Plan, the Member could elect to receive retirement benefits.

            (iv) "Qualified Election" means a written election of a form of
     benefit other than a Qualified Joint and Survivor Annuity or a Qualified
     Pre-Retirement Survivor Annuity.  An election shall be a Qualified Election
     only if the Member's Spouse consents to the election in writing and his or
     her consent is witnessed by a Plan representative or notary public.  Any
     waiver of a Qualified Joint and Survivor Annuity or a Qualified
     Preretirement Survivor Annuity shall not be effective unless:  (a) the
                                                                     -     
     Member's spouse consents in writing to the election; (b) the election
                                                           -              
     designates a specific alternate beneficiary, including any class of
     beneficiaries or any contingent beneficiaries, which may not be changed
     without spousal consent (or the Spouse expressly permits designations by
     the Member without any further spousal consent); (c) the spouse's consent
                                                       -                      
     acknowledges the effect of the election; and (d) the spouse's consent is
                                                   -                         
     witnessed by a plan representative or notary public.  Additionally, a
     Member's waiver of the qualified joint and survivor annuity will not be
     effective unless the election designates a form of benefit payment which
     may not be changed without spousal consent (or the spouse expressly permits
     designations by the Member without any further spousal consent).  If it is
     established to the satisfaction of a Plan Administrator that such written
     consent may not be obtained because there is no spouse or the spouse cannot
     be located, a waiver will be deemed a Qualified Election.

               Any consent by a spouse obtained under this provision (or
     establishment that the consent of a spouse may not be obtained) shall be
     effective only with respect to such spouse.  A consent that permits
     designations by the Member without any requirement of further consent by
     such Spouse must acknowledge that the spouse has the right to limit consent
     to a specific beneficiary, and a specific form of benefit where applicable,
     and that the Spouse voluntarily elects to relinquish either or both of such
     rights.  A revocation of a prior waiver may be made by a Member without the
     consent of the Spouse at any time prior to the commencement of benefits.
     The number of revocations shall not be limited.  No consent 
 

                                       32
<PAGE>
 
     obtained under this provisions shall be valid unless the Member has
     received a notice as provided in paragraph (d). Notwithstanding this
     consent requirement, if the Member establishes to the satisfaction of the
     Company that such written consent cannot be obtained because the Member has
     no Spouse, or because the Spouse cannot be located, the election shall be
     deemed a Qualified Election.

            (v) "Spouse" means Spouse or surviving Spouse of the Member provided
     that a former Spouse will be treated as the Spouse to the extent provided
     under a qualified domestic relations order as described in Section 414(p)
     of the Code, and with respect to benefits provided under subsection (b)
     (ii) and (b)(iii) such Spouse and Member were married throughout the one
     year period ending on the Member's death.

          (d) Within no less than 30 days and no more than 90 days prior to the
Annuity Starting Date, the Company shall provide the Member with a written
explanation of the following:

            (i) The terms and conditions of the Qualified Joint and Survivor
     Annuity or a Qualified Pre-Retirement Survivor Annuity, as applicable;

            (ii) The Member's right to elect a benefit other than a Qualified
     Joint and Survivor Annuity or a Qualified Pre-Retirement Survivor Annuity,
     as applicable, and the effect of such an election;

            (iii)  The rights of the Member's Spouse with respect to the
     Qualified Joint and Survivor Annuity or a Qualified Pre-Retirement Survivor
     Annuity, as applicable;

            (iv) The right of the Member to revoke a previous election and the
     effect of such revocation; and

            (v) With respect to the Qualified Joint and Survivor Annuity, the
     relative values of the various optional forms of benefit under the Plan.

          (e)  (i)  If the present value of a Member's vested benefit exceeds
(or at the time of any prior distribution exceeded) $3,500, and the benefit is
immediately distributable, the Member 

                                       33
<PAGE>
 
and the Member's Spouse (or where either the Member or the Spouse has died, the
survivor) must consent to any distribution of such benefit. The consent of the
Member and the Member's Spouse shall be obtained in writing in accordance with
subsection (c)(ii).

            (ii) Notwithstanding the foregoing, only the Member need consent to
     the commencement of a distribution in the form of a qualified Joint and
     Survivor Annuity while the benefit is immediately distributable.  Neither
     the consent of the Member nor the Member's Spouse shall be required to the
     extent that a distribution is required to satisfy section 401(a)(9) or
     section 415 of the Code.

           (iii)  A benefit is immediately distributable if any part of the
     benefit could be distributed to the Member (or surviving Spouse) before the
     participant attains (or would have attained if not deceased) the later of
     Normal Retirement Age or age 62.

Section 6.03 -    Life Annuity for Unmarried Members
------------      ----------------------------------

          A Member who does not have an Eligible Spouse at his Benefit
Commencement Date shall have his benefit paid on the Single Life Annuity form
under Section 6.01 unless he elects to have his benefit paid in another form as
provided herein.

Section 6.04 -    Joint and Survivor Annuity for Other Members
------------      --------------------------------------------
 
          Benefits may be paid in one of the following forms:

          (a) 50% Joint and Survivor Life Annuity
              -----------------------------------

          A monthly benefit payable during the lifetime of the Member and upon
his death 50% of such monthly benefit payable to his Eligible Spouse for the
Eligible Spouse's lifetime.  No benefit shall be payable after the death of the
Member and his Eligible Spouse.

          (b) 100% Joint and Survivor Life Annuity
              ------------------------------------

          A monthly benefit payable during the lifetime of the Member and upon
his death 100% of such monthly benefit payable to his Eligible Spouse for
Eligible Spouse's lifetime.  No benefit 

                                       34
<PAGE>
 
shall be payable after the death of the Member and his Eligible Spouse.


Section 6.05 -    Period Certain Life Annuity Benefit
------------      -----------------------------------

          This form of benefit provides for monthly payments continuing to the
first day of the month in which the Member's death occurs or the end of the
certain period of 120 months, whichever is later.  If the Member dies before the
end of the certain period, payments in the same amount shall be continued to his
designated beneficiary to the end of such period.



Section 6.06 -    Optional Temporary Annuity
------------      --------------------------

          A Member whose retirement benefit or Vested Deferred Benefit commences
under the Plan before the earliest date on which his primary insurance benefit
begins under the Social Security Act may elect to receive an adjusted benefit
prior to the first date on which he becomes eligible to receive such primary
insurance benefit and a reduced benefit thereafter.  The adjusted benefit shall
be calculated so that his retirement benefit or Vested Deferred Benefit payable
to the Member prior to the date on which he becomes eligible to receive his
primary insurance benefit shall be equal as nearly as possible to the sum of (a)
the reduced amount payable after such date and (b) the estimated primary
insurance benefit payable to the Member beginning on such date.


          A Member may elect this Optional Temporary Annuity by filing a written
request with the Plan Administrator prior to his Retirement Date.


Section 6.07 -    Minimum Distribution of Benefits
------------      --------------------------------

          Notwithstanding any other provision contained herein to the contrary,
the entire interest of the Member will be distributed either:


          (a) not later than April 1st of the year following the year in which
the Member attains age 70-1/2 or, in the case of an employee who is not a Key
Employee and who attained age 70 prior to 1988, in the taxable year in which
the Member retires, whichever is later; or

                                       35
<PAGE>
 
          (b) commencing not later than the taxable year described in paragraph
(a) and payable over the life of the Member or over the lives of the Member and
the Member's Spouse, or over a period not exceeding the life expectancy of the
Member or over the joint life expectancies of the Member and the Member's
Spouse.



Section 6.08 -    Minimum Distribution Following Death
------------      ------------------------------------
 
          If a Member dies after his Benefit Commencement Date and before his
entire interest has been distributed to him, then the remaining portion of such
interest, if any, will continue to be distributed at least as rapidly as
provided under the form of distributions in effect prior to death.

          If a Member with a vested benefit dies prior to his Benefit
Commencement Date, the only benefit payable shall be as provided in Section
5.05.

                                 ARTICLE VII
                                 -----------

                           CONTRIBUTIONS AND FUNDING
                           -------------------------
 


Section 7.01 -    Funding of Plan
------------      ---------------
 
          The Plan shall be funded for the exclusive purpose of providing
benefits to Members and their beneficiaries and for defraying reasonable
expenses in administering the Plan.


Section 7.02 -    Company Contributions
------------      ---------------------
 
          The Company shall bear the total costs of the Plan.  Such costs will
include the amounts necessary to provide benefit payments to Plan Members and
their beneficiaries and the payment of administrative expenses including the
payment of premiums for Plan termination insurance to the Pension Benefit
Guaranty Corporation.


Section 7.03 -    Contributions to Group Annuity Contract
------------      ---------------------------------------
 
          Contributions to the Plan and benefit payments from the Plan may be
made under one or more group annuity contracts issued by Equitable Life
Assurance Society of the United States, or any other insurance company, or may
be made under a trust established for that purpose.

                                       36
<PAGE>
 
Section 7.04 -    No Return of Company Contributions; Exceptions
------------      ----------------------------------------------

          Contributions to the Plan may not be returned to the Company, except
in the following instances



          (a) If the amount of a contribution is incorrect, such as an amount
based on an arithmetical error or a mistake in fact, the amount in excess of the
correct amount may be returned to the Company within one year after the payment
of the contribution.



          (b) If the Plan fails to qualify under Section 401(a) of the Internal
Revenue Code, contributions made to the Plan may be returned to the Company
within one year after the date of denial of qualification of the Plan.



          (c) If a contribution is disallowed as a federal tax deduction under
Section 404(a)(2) of the Internal Revenue Code, then to the extent the deduction
is disallowed the contribution may be returned to the Company within one year
after the disallowance of the contribution.



          (d) If the Plan is terminated, contributions may be returned to the
Company as provided under the provisions of Article IX.



                                 ARTICLE VIII
                                 ------------

                                ADMINISTRATION
                                --------------


Section 8.01 -    Named Fiduciary
------------      ---------------

          The Company has the overall responsibility and authority as the named
fiduciary to manage and control the operation and administration of the Plan and
may designate one or more persons or committees to carry out its fiduciary
responsibilities and authority under the Plan and its duties as the Plan
Administrator.


Section 8.02 -    Benefits Committee as Plan Administrator
------------      ----------------------------------------
 
          The Benefits Committee, whose membership is to be determined by the
Company, is the named fiduciary to act on behalf of the Company in the
management and control of the Plan assets and 

                                       37
<PAGE>
 
to establish and carry out a funding policy consistent with the Plan objectives
and with the requirements of any applicable law. The Benefits Committee shall
carry out the Company's responsibility and authority:

          (a) To appoint one or more persons to serve as investment manager with
respect to all or part of the Plan assets, including assets maintained under
separate accounts of an insurance company;

          (b) To allocate the responsibilities and authority being carried out
by the Benefits Committee among the Members of the Committee;

          (c) To take any action appropriate to assure that the Plan assets are
invested for the exclusive purpose of providing benefits to Members and their
beneficiaries in accordance with the Plan and defraying reasonable expenses of
administering the Plan, subject to the requirements of any applicable law; and

          (d) To employ one or more persons to render advice with respect to any
responsibility or authority being carried out by the Benefits Committee.


Section 8.03 -    Additional Duties of Benefits Committee
------------      ---------------------------------------

          The Company has also designated the Benefits Committee, whose
membership is to be determined by the Company, to carry out its fiduciary
responsibilities and authority under the Plan and its duties as the Plan
Administrator.

          (a) To determine and advise the Company as to the amounts of Company
contributions to the Plan, based on appropriate information, and in a manner
consistent with the funding policy established by the Benefits Committee;

          (b) To determine the amounts and time of payment of benefits and the
rights of Members and beneficiaries to Plan benefits, to take any actions
necessary to assure timely payment of benefits to any Member or beneficiary
eligible to receive benefits under this Plan, and to assure a full and fair
review for any person who is denied a claim to any benefit under the plan;

                                       38
<PAGE>
 
          (c) To maintain Plan records, to communicate appropriate information
to the Board of Directors, to communicate to Members and their beneficiaries,
and to submit required reports to appropriate authorities;


          (d) To employ other persons to render advice with respect to any
responsibility or authority being carried out by the Benefits Committee,
including the employment of counsel, and to assist in the administration of the
Plan;

          (e) To employ, on behalf of Plan Members, an enrolled actuary and an
independent qualified public accountant;

          (f) To take any action necessary or appropriate to assure that the
Plan is administered for the exclusive purpose of providing benefits to Members
and their beneficiaries in accordance with the Plan and defraying reasonable
expenses of administering the Plan, subject to the requirements of any
applicable law; and

          (g) Generally, to operate and administer the Plan in all matters other
than those for which the Benefits Committee has been designated.


Section 8.04 -    Authority of Benefits Committee
------------      -------------------------------
 
          The Benefits Committee shall have absolute discretion in carrying out
its responsibilities under Section 8.01 and 8.02, and any decision by the
Benefits Committee shall be final and binding on all Members and beneficiaries.
Without limiting the authority or responsibilities of the Benefits Committee
contained in this Article, the Benefits Committee shall have the discretionary
authority to determine eligibility for benefits and to construe the terms of the
Plan.

                                       39
<PAGE>
 
                                  ARTICLE IX
                                  ----------

                     AMENDMENT AND TERMINATION OF THE PLAN
                     -------------------------------------


Section 9.01 -    Amendment of the Plan
------------      ---------------------
 
          The Company reserves the right to modify or amend this Plan from time
to time and to any extent that it may deem advisable including any amendment
deemed necessary to insure the continued qualification of this Plan under the
provisions of the Internal Revenue Code.  Any amendment shall be made pursuant
to a resolution duly adopted by the Company's Board of Directors.  No amendment
shall have the effect of re-vesting in the Company the whole or any part of the
assets of this Plan or of diverting any part of the assets of this Plan to
purposes other than for the exclusive benefit of the Members and their
beneficiaries at any time prior to the satisfaction of all the liabilities under
this Plan with respect to such persons.  If such amendment reduces the accrued
benefit of any Member, such amendment shall not be valid unless approved by the
Secretary of Labor or unless he fails to take action disapproving such amendment
within 90 days after receiving notice of it.  No amendment shall adversely
affect the Vested Deferred Benefit of a Member.

          A Plan amendment that changes the Plan's vesting schedule shall not be
effective with respect to any Member with three Years of Vesting Service who
makes an irrevocable election during the election period to have such benefit
determined without regard to such amendment.

          For purposes of the preceding paragraph, the election period shall
begin on the date the Plan amendment is adopted and end on the latest of the
following dates:

          (a) The date which is 60 days after the Plan amendment is adopted;

          (b) The date which is 60 days after the Plan amendment is effective;
or

          (c) The date which is 60 days after the day the Member is issued
written notice of the Plan amendment by the Plan Administrator.

                                       40
<PAGE>
 
Section 9.02 -    Termination of the Plan
------------      -----------------------

          The Company reserves the right to terminate the Plan at any time.
Upon termination of the Plan by the Company or upon partial termination of the
Plan, the rights of all affected Members to their accrued benefits to the date
of termination or date of partial termination shall be non-forfeitable as of
such date except as provided under the provisions of Article X.


Section 9.03 -    Allocation of Assets Upon Plan Termination
------------      ------------------------------------------
 
          Upon termination of the Plan in accordance with the provisions of
Section 9.02 but subject to the provisions of Section 10.02, the Plan's assets
shall be allocated in accordance with the following order:

          (a) Benefits payable as an annuity to

               (i) Members and their beneficiaries who began receiving benefits
     at least three years prior to the termination date of the Plan, and

            (ii) Members and their beneficiaries who could have been receiving
     benefits as of three years prior to the termination date of the Plan if
     they had retired prior to the beginning of the three year period and if
     their benefits had commenced (on the single life annuity form under this
     Plan) as of the beginning of such period, based on the provisions of the
     Plan (as in effect during the five year period ending on such termination
     date) under which benefits would be least.

          (b) All other benefits, which are insured by the Pension Benefit
Guaranty Corporation, determined without regard to Section 4022(b)(5) of the
Employee Retirement Income Security Act of 1974 or would have been so insured if
Section 4022(b)(6) of such Act did not apply.

          (c) All other non-forfeitable benefits under the Plan
          (d) All other benefits under the Plan.

          If the assets of the Plan available for allocation under (a) or (b)
are insufficient to satisfy in full the benefits which 

                                       41
<PAGE>
 
are described, the assets shall be allocated pro rata among such individuals on
the basis of the present value (as of the Plan's date of termination) of their
respective benefits.

          Any residual assets of the Plan remaining after the satisfaction of
all liabilities of the Plan shall be distributed to the Company.


Section 9.04 -    Merger or Consolidation
------------      -----------------------
 
          No merger or consolidation with, or transfer of assets or liabilities
to, any other Plan shall be made unless, in the event the Plan is terminated
immediately after such merger, consolidation or transfer, each Member in this
Plan would receive a benefit equal to or greater than the benefit he would have
been entitled to receive if this Plan terminated immediately before the merger,
consolidation or transfer.

                                       42
<PAGE>
 
                                 ARTICLE X
                                 ---------

                 LIMITATION OF BENEFITS FOR HIGHLY PAID MEMBER
                 ---------------------------------------------
 

Section 10.01 -  Limitation on Certain Distributions
-------------    -----------------------------------
 
          (a)  For Plan Years beginning before March 1, 1994.

               (i) Notwithstanding any other provision of the Plan, if within
     ten (10) years of establishing the Plan, a Company terminates the Plan or
     discontinues contributions or if the full current costs of the Plan have
     not been met for its first ten (10) years of operation, or if at any time
     after establishing the Plan full current costs of the Plan have not been
     met (unless such costs have been met on said date or have been subsequently
     funded for the first time), and if within the ten (10) year period
     commencing with establishing the Plan there has been an amendment which
     substantially increases the extent of possible discrimination under the
     Plan, none of the twenty-five (25) highest paid Members of such Company on
     termination of the Plan whose anticipated annual payments under the Normal
     Retirement Benefit will total more than $1,500.00 shall be entitled to
     Benefits, including any Benefits unrestricted by this Section theretofore
     received, the cost of which is attributable to contributions of such
     Company and exceeds the largest of:

                    a.  The Companies' contributions (or funds attributable
                    -                                                      
          thereto) which would have been applied to Benefits for such Member had
          the Plan as in effect on December 31, 1975, been continued without
          change.

                    b.  $20,000.00 or
                    -                

                    c.  20% of the first $50,000.00 of such Member's average
                    -                                                       
          annual Compensation paid to him between the establishment of the Plan
          (or the date of an amendment that substantially increases the extent
          of possible discrimination) and the date of termination of the Plan or
          discontinuance of contributions, or on which full current costs of the
          Plan as to such Company have not been met, whichever is earlier,
          multiplied by the number of full years between such dates; or

                                       43
<PAGE>
 
                    d.  An amount equal to the present value of the maximum
                    -                                                      
          benefit for such Member described in Section 4022(b)(3)(B) of ERISA,
          or in the case of a Member who is a substantial owner (as that term is
          defined in Section 4022(b)5(a) of ERISA), an amount equal to the
          present value of the maximum benefit guaranteed such Member under
          Section 4022(b)(5) of ERISA, all determined on the date of Plan
          termination or the date benefits commence, whichever is earlier.

     provided, however, that this Section shall not restrict the full payment of
     Benefits under the Plan to any Member or beneficiary while the Plan
     continues in full effect and its full current costs continue to be met.

            (ii) If and when the contributions of the Company are sufficient at
     a later date to meet its full current costs, under the Plan, the excess of
     the benefits, otherwise payable, over the actual benefits paid to a retired
     Member during the period that such full current costs had not been met,
     shall be paid in a lump sum to such Member or, if such Member has died in
     the meantime, to such Member's spouse, if any, and otherwise to such
     Member's estate.

           (iii)  Any funds becoming available by reason of the application of
     this Section to the Members restricted hereby shall, in the event of
     termination of the Plan or discontinuance of contributions, be applied to
     increase proportionately the benefits of all other Members then in the
     Plan.  If funds so becoming available exceed the amount necessary to
     provide full benefits accrued to the date in question for such other
     Members, the excess shall be applied for the benefit of the Members
     restricted hereunder.

          (b) For Plan Years beginning on or after March 1, 1994, in the event
of Plan termination, the benefit of any highly compensated Member or highly
compensated former Member is limited to a benefit that is nondiscriminatory
under Section 401(a)(4) of the Code, as follows:


               (i) Benefits distributed to any of the twenty-five (25) most
     highly compensated Members and highly compensated 

                                       44
<PAGE>
 
     former Members are restricted such that the annual payments are no greater
     than the amount equal to the payment that would be made on behalf of the
     Member under a single life annuity that is the Actuarial Equivalent of the
     sum of the Member's Accrued Benefit and the Member's other benefits under
     the Plan.


            (ii) Paragraph (i) shall not apply if:

                    a.  after payment of the benefit to a Member described in
                    -                                                        
          paragraph (i), the value of Plan assets equals or exceeds 110% of the
          value of current liabilities, as defined in Section 412(l)(7) of the
          Code,


                    b.  the value of the benefit for a Member described in
                    -                                                     
          paragraph (i) is less than 1% of the value of current liabilities, or


           (iii)  for purposes of this Section, benefit includes any periodic
     income, any withdrawal values payable to a living Member, and any death
     benefits not provided for by insurance on the Member's life.



                                  ARTICLE XI
                                  ----------
  
                             TOP HEAVY PROVISIONS
                             --------------------
  


Section 11.01 -  Top Heavy Definitions
-------------    ---------------------
 
          Whenever any of the following terms is used in the Plan with the first
letter or letters capitalized, it shall have the meaning specified below unless
the context clearly indicates to the contrary.

          (a) "Aggregation Group" means each Plan of the Company in which a Key
Employee is a Member and each other plan of the Company which enables the Plan
or Plans containing a Key Employee to meet the antidiscrimination requirements
of Sections 401(a)(4) or 410 of the internal Revenue Code.  In addition, the
Administrator may include in the Aggregation Group any other Plan of the Company
that satisfies the requirements of Sections 401(a)(4) and 410 of the Code when
considered together with the other Plans in the Aggregation Group.

                                       45
<PAGE>
 
          (b) "Determination Date" means with respect to any Plan Year the last
day of the preceding Plan Year, or in the case of the first plan year of the
Plan, the last day of such plan year.

          (c) "Key Employee" means a Member who, at any time during the Plan
Year or any of the four preceding Plan Years, is:


             (i) An officer of the Company.


            (ii) One of the ten Employees owning (or considering as owning
     within the meaning of Section 318 of the Code) the largest interest in the
     Company.


           (iii) A five percent owner of the Company, or


            (iv) A one percent owner of the Company having an annual
     Compensation from the Company or more than $150,000.


     For purposes of paragraph (i), no more than fifty Employees (or, if lesser,
     the greater of three Employees or ten percent of the Employees) shall be
     treated as officers.  In addition, a "Non-Key Employee" means an Employee
     who is not a Key Employee. The beneficiaries of an Employee acquire the
     character of such Employee.


          (d) "Top Heavy Group" means any Aggregation Group if the sum of the
Actuarial Equivalent of cumulative accrued benefits for Key Employees under all
defined benefit pension plans included in the Aggregation Group (using the
provisions of Section 1.02 as the actuarial assumptions for all such defined
benefit plans), and the sum of the accounts of Key Employees under all defined
contribution plans included in the Aggregation Group, exceeds 60% of such
amounts determined for all employees.

          (e) "Top Heavy Plan" means each Plan of the Company or Companies
required to be included in an Aggregation Group, if the Aggregation Group is a
Top Heavy Group.


Section 11.02 -  Special Top Heavy Rules
-------------    -----------------------

          For purposes of determining whether a Top Heavy Group exists, the
following special rules shall apply:

                                       46
<PAGE>
 
          (a) Benefits derived from voluntary or mandatory Member contributions
and Company contributions shall be taken into account.



          (b) The Aggregate of distributions made to any Member from the Plan or
any plans in the Aggregation Group, during the five year period ending on the
Determination Date shall be taken into account in determining the Actuarial
Equivalent of cumulative accrued benefit of any Member or the account of any
Member under any such plan.



          (c) If a Member who was a Key Employee ceases to be a Key Employee for
a Plan Year, the cumulative accrued benefit or account of such Member will not
be taken into account for determining whether a Top Heavy Group exists for such
Plan Year.



          (d) Solely for the purpose of determining if the Plan, or any other
plan included in a Top Heavy Group of which this Plan is a part, is top heavy,
the accrued benefit of a Member other than a Key Employee shall be determined
under (i) the method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Member or by other members of an Affiliated Company
of which the Company is a member and any other entity required to be aggregated
with the Company pursuant to regulations under Section 414 of the Code, or (ii)
if there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Code.



Section 11.03 -  Top Heavy Benefits and Vesting
-------------    ------------------------------
 


          If the Plan is a Top Heavy Plan for any Plan Year beginning after
December 31, 1983, then with respect to such Plan Year the following provisions
shall apply:



          (a) Each Member who has completed three or more Years of Service with
the Company shall be fully Vested in his or her accrued benefit derived from
Company contributions.



          (b) Notwithstanding any other provision in this plan except subsection
(c) or (d) below, each Member who is not a Key Employee and has completed 1,000
hours of service will accrue a benefit (to be provided solely by employer
contributions and 

                                       47
<PAGE>
 
expressed as a life annuity commencing at Normal Retirement Age) of not less
than two percent of his or her highest average Compensation for the five
consecutive years for which the Member had the highest Compensation. The minimum
accrual is determined without regard to any Social Security contribution. The
minimum accrual applies even though under other plan provisions, the Member
would not otherwise be entitled to receive an accrual, or would have received a
lesser accrual for the year because

               (i) the non-key employee fails to make mandatory contributions to
     the Plan,


              (ii) the non-key employee's Compensation is less than a stated
     amount,


             (iii) the non-key employee is not employed on the last day of the
     accrual computation period, or



            (iv) the plan is integrated with Social Security.



          (c) No additional benefit accruals shall be provided pursuant to
subsection (b) above to the extent that the total accruals on behalf of the
Member attributable to employer contributions will provide a benefit expressed
as a life annuity commencing at Normal Retirement Age that equals or exceeds 20
percent of the Member's highest average Compensation for the five consecutive
years for which the Member had the highest Compensation.

          (d) The provisions in (b) above shall not apply to any Member to the
extent that the Member is covered under any other plan or plans of the Company
and the Company has provided the minimum allocation or benefit requirement
applicable to this top-heavy plan in the other plan or plans.

          (e) The limitation of 1.25 contained in Section 5.06(c) shall be
replaced by 1.0.

                                       48
<PAGE>
 
                                  ARTICLE XII
                                  -----------

                           MISCELLANEOUS PROVISIONS
                           ------------------------
 


Section 12.01 -  Evidence of Survival
-------------    --------------------

          Where a benefit payment is contingent upon the survival of any person,
evidence of such person's survival must be furnished either by personal
endorsement of the check drawn for such payment or by other evidence
satisfactory to the Plan Administrator.


Section 12.02 -  Non-Alienation of Benefits
-------------    --------------------------
 
          Neither the Company nor the Trustee shall recognize any transfer,
mortgage, pledge, hypothecation, order or assignment by any Member or
beneficiary of all or part of his interest hereunder, and such interest shall
not be subject in any manner to transfer by operation of law, and shall be
exempt from the claims of creditors or other claimants from all orders, decrees,
levies, garnishment and/or executions and other legal or equitable process or
proceedings against such Member or beneficiary to the fullest extent which may
be permitted by law.  The preceding sentence shall apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Member pursuant to a domestic relations order, unless such order is determined
to be a qualified domestic relations order as defined in Section 414(p) of the
Code, or upon approval of the committee in its sole discretion any domestic
relations order entered before January 1, 1985.  Notwithstanding any other
provisions contained in the Plan that limit the right of a Member to commence to
receive a distribution from the Plan, payment of benefits from the Plan to an
alternate payee under a qualified domestic relations order shall commence at
such time as provided in the qualified domestic relations order or as soon
thereafter as administratively feasible.

                                       49
<PAGE>
 
Section 12.03 -  Payments to Incompetents
-------------    ------------------------
 
          If the Company receives evidence satisfactory to it that (a) a payee
entitled to receive any payment under the Plan is physically or mentally
incompetent to receive such payment or is a minor, (b) another person or an
institution is then maintaining or has custody of such payee and (c) no
guardian, Committee or other representative of the estate of such payee has been
appointed, the Plan Administrator may direct that payments be made (in the case
of a minor at a rate not exceeding $50.00 a month) to such other person or
institution.


Section 12.04 -  Misstated Information
-------------    ---------------------

          If any information has been misstated on which a benefit under the
Plan with respect to a person was based, such benefit shall not be invalidated
but the amount of the benefit shall be adjusted to the proper amount as
determined on the basis of the correct information.  Overpayments, if any, with
interest as determined by the Plan Administrator shall be charged against any
payments accruing with respect to the person.  The Plan Administrator reserves
the right to require proof of age of any person entitled to a benefit under this
Plan.

                                       50
<PAGE>
 
Section 12.05 -  Beneficiary
-------------    -----------

          Subject to the consent of the member's spouse as provided in Section
6.02, a Member shall designate, with the right to change such designation, a
beneficiary to receive any payment or payments to which a beneficiary may become
entitled under the Plan in the event retirement benefits are distributed in
accordance with Section 6.05.  Any other person to whom periodic payments are
payable under this Plan may designate, with the right to change such
designation, a beneficiary to receive any remaining periodic payments becoming
due upon the death of such person, provided that no prior conflicting
designation by a Member is then in effect with respect thereto.  If no
designated beneficiary is surviving when a payment is to be made to a
beneficiary, the commuted value of any remaining periodic payments shall be made
to the person or persons in the first surviving class of the following classes
of successive preference beneficiaries:  (a) the Member's widow or widower, (b)
the Member's surviving children, or (c) the executors or administrators of the
person upon whose death the payments become due.


Section 12.06 -  Forfeiture Upon Failure to Locate
-------------    ---------------------------------
 
          The Committee shall declare a forfeiture of any Account of any Member
or beneficiary under the Plan who cannot be found within one year after the
benefit would have otherwise been payable under the Plan.  Neither the Company,
the Committee or the Trustee shall be obligated to search for the whereabouts of
any person.  Any amounts forfeited shall be used to reduce Company
contributions.  In the event such Member or beneficiary is thereafter located,
such previously forfeited benefit shall be restored.


Section 12.07 -  Direct Transfer of Benefits
-------------    ---------------------------
 
          (a)  This paragraph applies to distributions made on or after January
1, 1993.  Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this paragraph, a Distributee may
elect, at the time and in the manner prescribed by the Administrator, to have
any portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct Rollover.

                                       51
<PAGE>
 
          (b)  The following definitions apply to paragraph (a):


               (i) 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 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).


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


           (iii)  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.


            (iv) A Direct Rollover is a payment by the Plan to the Eligible
     Retirement Plan specified by the Distributee.


Section 12.08 -  Claims Procedure
-------------    ----------------

          All claims for benefits under the Plan shall be directed to the
attention of the Benefits Committee.  If the Committee 

                                       52
<PAGE>
 
determines that any individual who has claimed a right to receive benefits under
the Plan is not entitled to receive all or any of the benefits claimed, the
claimant shall be informed in writing of the reasons for the denial, with
specific reference to pertinent Plan provisions and with a description of the
review procedures set forth below.

          The claimant may within 60 days thereafter submit to the Committee by
certified or registered mail such further information as will, in the claimant's
opinion, establish his rights to such benefits.  If upon receipt of this further
information, the Committee determines that the claimant is not entitled to the
benefits claimed, it shall afford the claimant or his representative reasonable
opportunity to submit issues and comments in writing and to review pertinent
documents.  The Committee shall render its final decision with the specific
reasons therefor in writing and shall transmit it to the claimant by certified
mail within 60 days of any such review.

Section 12.09 -  Applicable Law
-------------    --------------

          The law of the State of California shall be the controlling state law
in all matters relating to the Plan and shall apply to the extent it is not
preempted by the laws of the United States of America.

                                       53
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned has executed this instrument on the ___
day of _________________, 1995.



                         CERTIFIED GROCERS OF CALIFORNIA, LTD.



                         By -------------------------------------------

                                                            , President



                         By --------------------------------------------

                                                            , Secretary


(SEAL)

APPROVED BY:

FARMER & RIDLEY



By___________________________________
     Attorneys for Company,
Certified Grocers of California, Ltd.

                                       54