<PAGE>

                            FEDERAL-MOGUL CORPORATION

                     SUPPLEMENTAL KEY EXECUTIVE PENSION PLAN


                            EFFECTIVE JANUARY 1, 1999

















                                                                      July, 1999
<PAGE>

                                TABLE OF CONTENTS

ARTICLE                                                                     PAGE
-------                                                                     ----

Article I.         Definitions                                                1

Article II.        Eligibility and Participation                              3

Article III.       Retirement Benefits                                        4

Article IV.        Vesting                                                    5

Article V.         Payment of Benefits                                        6

Article VI.        Change of Control                                          7
Article VII.       Administration                                             9

Article VIII.      Miscellaneous                                             10

Appendix A                                                                  A-1

Appendix B                                                                  B-1



                                                                      July, 1999

                                       2
<PAGE>

                            FEDERAL-MOGUL CORPORATION
                     SUPPLEMENTAL KEY EXECUTIVE PENSION PLAN

     This is the  Federal-Mogul  Corporation  Supplemental Key Executive Pension
Plan (the "Plan"), as adopted effective January 1, 1999. The Plan is intended to
provide  selected  executives of Federal-Mogul  Corporation (the  "Corporation")
with target retirement  benefits based upon (1) the executive's average earnings
for the three  consecutive  years in his last five years of service during which
his  Compensation  was the highest,  and (2) the executive's  number of years of
service  with the  Corporation  (not in excess of 20) and, if  benefits  under a
qualified or  non-qualified  defined  benefit plan  maintained  by a predecessor
employer are taken into account under this Plan, with the predecessor  employer.
The target benefit is to be offset by other retirement  benefits provided by the
Corporation,  including the Corporation's  qualified and  non-qualified  defined
benefit retirement plans, and, if applicable, benefits provided by a predecessor
employer under a qualified or non-qualified defined benefit plan.

     This Plan is  intended  to qualify as an unfunded  plan  maintained  by the
Corporation  primarily for the purpose of providing deferred  compensation for a
select  group of  management  or highly  compensated  employees  as described in
sections 201(2),  301(3), and 401(1) of the Employee  Retirement Income Security
Act of 1974, as amended.


ARTICLE I.  DEFINITIONS

     The  following  terms shall have the  following  meanings when used in this
Plan, unless the context clearly requires otherwise:

          1.1 "Accrued  Benefit"  means the accrued  benefit of the  Participant
     expressed in terms of an annual  single life annuity  payable at his Normal
     Retirement  Date,  determined  under  Section  3.1 based  upon his Years of
     Service  and Final  Average  Compensation,  reduced by  certain  retirement
     benefits to which he is entitled.

          1.2  "Actuarial  Equivalent"  means  the  equivalent  actuarial  value
     calculated using the interest and mortality  assumptions in use by the Cash
     Balance Plan at the time  actuarial  equivalence  is  determined,  and such
     additional  actuarial  assumptions  as the  Committee  may establish in its
     discretion.

          1.3 "Annuity Starting Date" means the first day of the first month for
     which an amount is  payable  as an  annuity  or any other  form of  benefit
     payment.

          1.4 "Beneficiary" means the Participant's  lawful spouse as designated
     by the  Participant in the manner  prescribed by the Committee to receive a
     Participant's  benefits  under the Plan in the event of his death  prior to
     full payment of the benefits due him.

          1.5 "Board" means the board of directors of the Corporation. -----

          1.6 "Cash Balance Plan" means the Federal-Mogul  Corporation  Personal
     Retirement  Account Plan for  Salaried  Employees,  a qualified  plan under
     section 401(a) of the Code.

          1.7  "Change of  Control"  shall have the meaning set forth in Section
     6.2.1.

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


                                                                      July, 1999
<PAGE>

          1.9  "Committee"  means  the  Compensation  Committee  of the Board of
     Directors.

          1.10  "Compensation"  means the amount of the  Employee's  annual base
     salary as of January 1 of a Plan Year,  including any amounts that would be
     paid to the Employee but for the Employee's election under a qualified cash
     or deferred  arrangement under section 401(k) of the Code, a cafeteria plan
     under section 125 of the Code, or any non-qualified  deferred  compensation
     plan maintained by the Corporation,  plus any declared bonus payable to the
     Employee  under  the  Corporation's  annual  incentive  plan  for  services
     performed during the Plan Year,  regardless of whether paid to the Employee
     during such Plan Year or during a subsequent Plan Year. Except as otherwise
     provided  in the  preceding  sentence,  Compensation  shall not include any
     allocations  or  contributions  by the  Corporation  under this Plan or any
     other  plan or  plans  for the  benefit  of its  employees,  including  any
     severance plan or agreement,  incentive payments (other than declared bonus
     amounts paid or payable under the annual incentive  plan),  fringe benefits
     (whether or not a fringe  benefit  within the meaning of the Code),  or any
     amounts   identified   by  the   Corporation   as  expense   allowances  or
     reimbursements,  regardless  of whether  such  amounts are treated as wages
     under the Code.

          1.11  "Corporation"  means the Federal-Mogul  Corporation,  a Michigan
     corporation, and its successors.

          1.12 "Early Retirement Date" means the date a Participant  reaches age
     55,  provided that he has completed at least five Years of Service,  or any
     date  thereafter  on which a  Participant  who has  completed at least five
     Years of Service  elects to retire before he reaches his Normal  Retirement
     Date.

          1.13 "Effective Date" means January 1, 1999.

          1.14 "Employee"  means an officer or other  executive  employee of the
     Corporation.

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

          1.16 "Excess SERP" means the  Federal-Mogul  Corporation  Supplemental
     Executive Retirement Agreement,  a non-qualified deferred compensation plan
     maintained by the Corporation effective as of January 1, 1989.

          1.17 "Final  Average  Compensation"  means the  Participant's  average
     Compensation during the three consecutive Plan Years that he has earned the
     highest  Compensation in his last five Years of Service or his total period
     of employment, if shorter.

          1.18 "Good Cause" means the commission of any of the following acts by
     an Employee:  (1) fraud in  connection  with the  Employee's  service;  (2)
     embezzlement  or  theft of  Corporation  funds or  property;  or (3)  other
     criminal activity in connection with the Employee's service.

          1.19 "Good Reason" shall have the meaning set forth in Section 6.2.2.

          1.20 "Normal Retirement Date" means the date a Participant reaches age
     62.

          1.21  "Participant"  means an Employee  who becomes a  Participant  as
     provided in Section 2.1.

          1.22 "Plan"  means this  Federal-Mogul  Corporation  Supplemental  Key
     Executive Pension Plan, as it may be amended from time to time.


                                                                      July, 1999

                                       2
<PAGE>

          1.23 "Plan Year" means the calendar year. The initial Plan Year is the
     1999 calendar year.

          1.24   "Predecessor   Employer"   means  an  entity  that  employed  a
     Participant  prior to such  Participant's  employment with the Corporation,
     provided that either (i)  substantially  all of the stock or assets of such
     entity were  acquired by the  Corporation  or (ii) such entity is otherwise
     designated by the Board as a Predecessor Employer, as set forth on Appendix
     A.

          1.25  "Predecessor  Employer Plan" means a qualified or  non-qualified
     defined  benefit plan or retirement  agreement  maintained by a Predecessor
     Employer.

          1.26 "Severance Plan" means the  Federal-Mogul  Corporation  Severance
     Plan for Salaried Employees, an employee welfare benefit plan as defined in
     section 3(1) of ERISA, or any other severance arrangement maintained by the
     Corporation for the benefit of the Employee.

          1.27  "Total and  Permanent  Disability"  means a  physical  or mental
     disability  that  entitles  the  Participant  to receive  benefits  under a
     long-term   disability  plan  or  other   arrangement   maintained  by  the
     Corporation.

          1.28 "Year of Service" means:

          a)   each Plan Year or, for years  before  the  Effective  Date,  each
               calendar year,  during which an Employee is employed for at least
               one hour in each month of that year by the Corporation;

          b)   each full  Plan  Year  during  which  the  Participant  is deemed
               pursuant  to  Section   6.1.1  to  have  been   employed  by  the
               Corporation; and

          c)   each  calendar  year during  which the Employee was employed by a
               Predecessor  Employer,  as set  forth on  Appendix  A,  provided,
               however,  that, except as otherwise set forth on Appendix A, such
               years shall not be taken into account for purposes of the vesting
               of the  Participant's  Accrued Benefit in accordance with Section
               4.1.

     Notwithstanding  the  foregoing,  no Years of  Service  shall be taken into
     account  more  than  once.  Credit  for  one-twelfth  (1/12) of one Year of
     Service shall be given for each month of service  during which the Employee
     is employed for at least one hour in any year for which the  Employee  does
     not receive credit for a full Year of Service.


ARTICLE II.  ELIGIBILITY AND PARTICIPATION

     2.1  Participation.  An  Employee  shall  become  a  Participant  upon  his
nomination by the Chief  Executive  Officer of the  Corporation and his approval
for  participation  by the Committee.  An Employee shall begin to participate in
the Plan as of the latest of the following  dates:  (a) the Effective  Date; (b)
the first day of the month  following his date of hire; or (c) the date approved
by the  Committee  for his  participation.  Employees  who have been approved as
Participants are listed on Appendix A.


                                                                      July, 1999


                                       3
<PAGE>

     2.2  Cessation  of  Participation.  A  Participant  shall  cease  to  be  a
Participant on the earlier of the date of his  termination of employment for any
reason  or the date the  Committee  determines  that he  shall  no  longer  be a
Participant. No such determination shall be made by the Board following a Change
of Control.  A Participant whose  participation is terminated shall nevertheless
continue to vest in his Accrued  Benefit under Article IV and to remain entitled
to receive the vested portion of his Accrued  Benefit in accordance with Article
V.


ARTICLE III.  RETIREMENT BENEFITS

     3.1 Normal  Retirement  Benefit.  Upon retirement at his Normal  Retirement
Date, a Participant shall be entitled to an Accrued Benefit equal to:

          3.1.1  Fifty  percent   (50%)  of  his  Final  Average   Compensation,
          multiplied  by a fraction  (not to exceed 1.0 in  decimal  form),  the
          numerator  of which is the  number  of his Years of  Service,  and the
          denominator of which is twenty (20), reduced by:

          3.1.2 the sum of "A" plus "B" plus "C", where:

               "A" equals the Actuarial Equivalent of the Participant's  accrued
          benefit under the Cash Balance  Plan,  expressed in terms of an annual
          single life annuity as of his Normal Retirement Date;

               "B" equals the Actuarial Equivalent of the Participant's  account
          balance under the Excess SERP,  expressed in terms of an annual single
          life annuity as of his Normal Retirement Date; and

               "C" equals the Actuarial Equivalent of the Participant's  accrued
          benefit under a Predecessor  Employer  Plan,  expressed in terms of an
          annual single life annuity as of his Normal Retirement Date.

     3.2  Early  Retirement  Benefit.  If a  Participant  retires  on  an  Early
Retirement  Date  with  the  consent  of  the  Chief  Executive  Officer  of the
Corporation,  he shall be  entitled  to receive a benefit  equal to his  Accrued
Benefit,  based  upon his  Years  of  Service  and  Final  Average  Compensation
determined as of his actual retirement date,  reduced by one-half percent (0.5%)
for each month by which his Annuity Starting Date precedes his Normal Retirement
Date.  The consent of the Chief  Executive  Officer of the  Corporation  to such
retirement  shall not be required  with respect to (i) a retirement by the Chief
Executive  Officer of the  Corporation  or (ii) a retirement by any  Participant
after a Change of Control.

     3.3 Late  Retirement  Benefit.  If a  Participant  retires after his Normal
Retirement Date, he shall be entitled to receive his Accrued Benefit  determined
under  Section  3.1,   based  upon  his  Years  of  Service  and  Final  Average
Compensation  determined  as of his actual  retirement  date.  The amounts to be
offset under  Section  3.1.2 shall be the dollar  amounts  determined  as of his
Normal Retirement Date.


                                                                      July, 1999



                                       4
<PAGE>

     3.4 Disability  Benefit.  If the  Participant  incurs a Total and Permanent
Disability,  he shall be  entitled  to  receive a benefit  equal to his  Accrued
Benefit,  based  upon his  Years  of  Service  and  Final  Average  Compensation
determined  as of the  date he  terminates  employment  due to such  disability,
reduced as  described in Section 3.2,  and, if  distribution  is made before the
Participant  attains age 55, further reduced using the assumptions  described in
Section 1.2. In no case will the benefit be reduced by greater than 50%.

     3.5  Death  Benefit.   If  the  Participant  dies  while  employed  by  the
Corporation, his Beneficiary shall be entitled to receive a benefit equal to his
Accrued Benefit,  based upon his Years of Service and Final Average Compensation
determined as of his date of death,  reduced as described in Section 3.2 and, if
distribution is made before the Participant  would have attained age 55, further
reduced using the assumptions described in Section 1.2.

     3.6 Vested Termination  Benefit. If a Participant's  employment  terminates
with the  consent  of the Chief  Executive  Officer of the  Corporation  for any
reason other than  termination due to retirement on or after his Early or Normal
Retirement  Date,  termination  due  to  death,  termination  due to  Total  and
Permanent Disability, or termination by the Corporation for Good Cause, and such
Participant's  Accrued  Benefit  is  vested on the date of such  termination  of
employment  pursuant  to Section  4.1 or 6.1,  he shall be entitled to receive a
benefit equal to his Accrued Benefit,  based upon his Years of Service and Final
Average Compensation as of the date of his termination of employment, reduced as
described  in Section  3.2.  The consent of the Chief  Executive  Officer of the
Corporation  to such  termination  shall not be required  with  respect to (i) a
termination of employment by the Chief  Executive  Officer of the Corporation or
(ii) a termination of employment by any participant after a Change of Control.

     3.7 Other Termination of Employment.  Notwithstanding anything else in this
Article III to the contrary, if the Participant's  employment terminates for any
reason other than  retirement on or after his Early or Normal  Retirement  Date,
death or Total and  Permanent  Disability  prior to the  vesting of his  Accrued
Benefit under Article IV or VI, or if the Participant's employment is terminated
by the Corporation for Good Cause, his Accrued Benefit shall be forfeited.


ARTICLE IV.  VESTING

     4.1 Vesting at Normal Retirement Date or Based on Age and Years of Service.
Subject to Sections 4.3 and 6.1, a Participant's interest in his Accrued Benefit
shall become 100% vested when the Participant reaches his Normal Retirement Date
while employed by the Corporation, or, in the alternative,  when the Participant
has  completed at least five Years of Service with the  Corporation  and reached
age 55. For purposes of vesting, years of employment with a previous employer do
not count, except as otherwise set forth on Appendix A.

     4.2  Vesting  Based  on  Total  and  Permanent   Disability  or  Death.   A
Participant's  interest  in his  Accrued  Benefit  shall in any case become 100%
vested if, while employed by the Corporation,  he sustains a Total and Permanent
Disability or he dies.

     4.3 Forfeitures. Notwithstanding Section 4.1, if a Participant's employment
is terminated by the  Corporation  for Good Cause,  he shall forfeit his Accrued
Benefit.  In  addition,  subject to Section 6.1, if a  Participant's  employment
terminates other than on account of death or Total and Permanent


                                                                      July, 1999



                                       5
<PAGE>

Disability  before he has completed  five Years of Service and reached age 55 or
reached his Normal Retirement Date, he shall forfeit his Accrued Benefit.


ARTICLE V.  PAYMENT OF BENEFITS

     5.1 Payment of Accrued Benefit upon Retirement. Upon retirement on or after
his Early or Normal  Retirement Date, a Participant shall be entitled to receive
his Accrued Benefit, as adjusted under Section 3.2, if applicable.  Such benefit
shall begin to be paid as soon as  administratively  practicable  following  the
Participant's retirement, unless, if the Participant elects to retire before his
Normal  Retirement  Date, he makes an election in writing to defer payment until
his  Normal  Retirement  Date at the same time that he elects a form of  benefit
payment under Section 5.2.

     5.2  Election of Benefit  Form.  A  Participant  shall  receive his Accrued
Benefit in the form of a single life annuity  unless,  not later than six months
before the  Participant's  anticipated  Annuity  Starting Date, the  Participant
selects a form of payment for his Accrued  Benefit (as  adjusted  under  Section
3.2, if  applicable)  in any  Actuarial  Equivalent  annuity form from among the
Actuarial Equivalent annuity forms made available by the Committee. The election
shall be in writing and made on the form  prescribed by the  Committee.  Payment
shall be made in  accordance  with the  Participant's  election or as  otherwise
provided in this Section. Such election shall be irrevocable.

     5.3 Disability Benefit. As soon as administratively  practicable  following
the  Committee's  determination  that the  Participant  has suffered a Total and
Permanent  Disability,  the  Participant  shall receive the  disability  benefit
described in Section 3.4 in the form of a single life annuity.

     5.4 Death  Benefit.  Unless an  alternative  annuity form was elected under
Section 5.2, in the event of a  Participant's  death while he is employed by the
Corporation,  the  Participant's  Beneficiary  shall  receive the death  benefit
described in Section 3.5 in the form of a single life annuity.  If a Participant
dies after his Annuity  Starting Date and the Participant had elected,  pursuant
to Section 5.2, an annuity  providing for a survivor  benefit,  his  Beneficiary
shall receive such survivor  benefit in accordance  with such election.  Payment
shall be made as soon as administratively practicable following the death of the
Participant.

     5.5 Deferred Vested Benefit. If a Participant's  employment  terminates for
any reason other than  termination  due to  retirement  on or after his Early or
Normal Retirement Date,  termination due to death,  termination due to Total and
Permanent  Disability or termination by the Corporation for Good Cause, and such
Participant's  Accrued  Benefit  is  vested on the date of such  termination  of
employment  pursuant  to  Section  4.1 or  6.1,  he  shall  receive  the  vested
termination  benefit  described  in  Section  3.6 in the form of a  single  life
annuity as soon as  administratively  practicable  following his  termination of
employment.   Notwithstanding   the  preceding   sentence,   in  the  event  the
Participant's  employment is terminated by the  Corporation  other than for Good
Cause,  he shall be entitled to receive the  termination  benefit  described  in
Section  3.6 in the form of a single  life  annuity as soon as  administratively
practicable  following  the  date  payments  to him  under  the  Severance  Plan
terminate or, if he has elected to receive  payment from the  Severance  Plan in
the form of a single lump sum, the date payments  from the Severance  Plan would
have  terminated had they been made in an installment  form. The Participant may
elect to defer the payment of such benefit pursuant to Section 5.1 and may elect
an optional form of payment pursuant to Section 5.2.


                                                                      July, 1999


                                       6
<PAGE>

ARTICLE VI.  CHANGE OF CONTROL

     6.1 Change of Control  Benefit.  If,  following  a Change of  Control,  the
Participant's  employment is terminated by the  Corporation  other than for Good
Cause or by the Participant for Good Reason, then the provisions of this Section
6.1 shall apply.

     6.1.1 Deemed  Employment.  If the Participant has completed fewer than five
Years of Service  with the  Corporation  as of the date of such  termination  of
employment,  the  Participant  will be deemed  for all  purposes  of this  Plan,
including the calculation of his Accrued  Benefit,  his eligibility for an early
retirement  benefit  pursuant  to Section  3.2 and the  vesting  of his  Accrued
Benefit  pursuant to Section 4.1, to have been employed by the  Corporation  for
five full Plan Years and thus to have completed five Years of Service.

     6.1.2 Deemed Attainment of Age 55 for Vesting Purposes.  If the Participant
has  not  attained  55  years  of age as of the  date  of  such  termination  of
employment,  the  Participant  will be deemed for purposes of the vesting of his
Accrued Benefit  pursuant to Section 4.1 to have attained age 55. The payment of
such  Participant's  Accrued  Benefit will commence as soon as  administratively
practicable following the date on which the Participant actually attains age 55,
and will be subject to  adjustment  in  accordance  with  Section 3.2 to reflect
payment prior to the date the Participant attains age 62, unless the Participant
makes an election in writing to defer payment until his Normal  Retirement  Date
at the same time that he elects a form of benefit payment under Section 5.2.

     6.2 Definitions.

     6.2.1 "Change of Control."  For purposes of this Plan,  "Change of Control"
means:

          a) The  acquisition  by any  individual,  entity or group  (within the
     meaning of Section  13(d)(3) or 14(d)(2) of the Securities  Exchange Act of
     1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
     (within the meaning of Rule 13d-3  promulgated  under the Exchange  Act) of
     20% or more of either (i) the then  outstanding  shares of common  stock of
     the  Corporation  (the  "Outstanding  Company  Common  Stock")  or (ii) the
     combined  voting power of the then  outstanding  voting  securities  of the
     Corporation  entitled to vote  generally in the election of directors  (the
     "Outstanding  Company  Voting  Securities");  provided,  however,  that for
     purposes of this  subsection  (a),  the  following  acquisitions  shall not
     constitute  a Change of  Control:  (i) any  acquisition  directly  from the
     Corporation, (ii) any acquisition by the Corporation, (iii) any acquisition
     by any employee  benefit plan (or related trust) sponsored or maintained by
     the  Corporation or any  corporation  controlled by the Corporation or (iv)
     any acquisition by any corporation pursuant to a transaction which complies
     with clauses (i), (ii) and (iii) of subsection  (c) of this Section  6.2.1;
     or

          b)  Individuals  who, as of the Effective  Date,  constitute the Board
     (the  "Incumbent  Board")  cease for any  reason to  constitute  at least a
     majority of the Board; provided,


                                                                      July, 1999



                                       7
<PAGE>

     however,  that any  individual  becoming a director  subsequent to the date
     hereof whose  election,  or  nomination  for election by the  Corporation's
     shareholders,  was  approved  by a  vote  of at  least  a  majority  of the
     directors then comprising the Incumbent Board shall be considered as though
     such individual were a member of the Incumbent  Board,  but excluding,  for
     this purpose, any such individual whose initial assumption of office occurs
     as a result of an actual or threatened election contest with respect to the
     election or removal of directors or other actual or threatened solicitation
     of proxies or consents by or on behalf of a Person other than the Board; or

          c) Consummation of a  reorganization,  merger or consolidation or sale
     or other  disposition  of all or  substantially  all of the  assets  of the
     Corporation (a "Business  Combination"),  in each case,  unless,  following
     such Business Combination,  (i) all or substantially all of the individuals
     and  entities  who  were  the  beneficial  owners,  respectively,   of  the
     Outstanding  Company Common Stock and Outstanding Company Voting Securities
     immediately prior to such Business  Combination  beneficially own, directly
     or indirectly, more than 50% of, respectively,  the then outstanding shares
     of  common  stock and the  combined  voting  power of the then  outstanding
     voting securities  entitled to vote generally in the election of directors,
     as the  case  may be,  of the  corporation  resulting  from  such  Business
     Combination (including, without limitation, a corporation which as a result
     of such transaction owns the Corporation or all or substantially all of the
     Corporation's  assets either directly or through one or more  subsidiaries)
     in substantially the same proportions as their ownership, immediately prior
     to such Business  Combination of the  Outstanding  Company Common Stock and
     Outstanding  Company Voting Securities,  as the case may be, (ii) no Person
     (excluding any corporation  resulting from such Business Combination or any
     employee  benefit  plan  (or  related  trust)  of the  Corporation  or such
     corporation  resulting from such Business  Combination)  beneficially owns,
     directly or indirectly, 20% or more of, respectively,  the then outstanding
     shares of common  stock of the  corporation  resulting  from such  Business
     Combination  or the combined  voting power of the then  outstanding  voting
     securities  of such  corporation  except to the extent that such  ownership
     existed prior to the Business  Combination and (iii) at least a majority of
     the members of the board of directors  of the  corporation  resulting  from
     such Business  Combination  were members of the Incumbent Board at the time
     of the execution of the initial  agreement,  or of the action of the Board,
     providing for such Business Combination; or

          d)  Approval  by the  shareholders  of the  Corporation  of a complete
     liquidation or dissolution of the Corporation.

     6.2.2 "Good Reason." For purposes of this Plan, "Good Reason" means:

          a) the assignment to the Participant of any duties inconsistent in any
     material  respect  with  the  Participant's   position  (including  status,
     offices,  titles  and  reporting   requirements),   authority,   duties  or
     responsibilities held, exercised or assigned at any time during the 120-day
     period immediately prior to a Change of Control, or any other action by the
     Corporation  which  results in a diminution  in such  position,  authority,
     duties  or  responsibilities,  excluding  for  this  purpose  an  isolated,
     insubstantial  and  inadvertent  action not taken in bad faith and which is
     remedied by the Corporation  promptly after receipt of notice thereof given
     by the Participant;


                                                                      July, 1999



                                       8
<PAGE>

          b) any failure by the Corporation to provide the Participant  with the
     compensation  and benefits  described  in Appendix B hereto,  other than an
     isolated,  insubstantial or inadvertent  failure not occurring in bad faith
     and which is remedied by the  Corporation  promptly after receipt of notice
     thereof given by the Participant;

          c) the  Corporation's  requiring  the  Participant  to be based  atany
     office  or  location  other  than (i) the  office  or  location  where  the
     Participant  was based  immediately  prior to the Change of Control or (ii)
     any  office or  location  less than 35 miles  from  such  location,  or the
     Corporation's  requiring the Participant to travel on Corporation  business
     to a substantially  greater extent than required  immediately  prior to the
     Change of Control;

          d) any purported  termination by the Corporation of the  Participant's
     employment   otherwise  than  as  expressly  permitted  by  the  employment
     agreement, if any, between the Participant and the Corporation; or

          e) any failure by the  Corporation to comply with and satisfy  Section
     8.10 of this Plan.

For  purposes  of this  Section  6.2.2,  any good faith  determination  of "Good
Reason" made by the Participant shall be conclusive.


ARTICLE VII.  ADMINISTRATION

     7.1  Plan  Interpretation.  The  Committee  shall  have  the  authority  to
interpret  the Plan and to determine  the amount,  time,  and form of payment of
benefits  and other  issues  arising  in the  administration  of the  Plan.  Any
construction  or  interpretation  of the Plan and any  determination  of fact in
administering  the Plan made in good faith by the  Committee  shall be final and
conclusive for all Plan purposes.

     7.2 Claims Procedure.

          7.2.1 Initial  Determination.  Upon presentation to the Committee of a
     claim  for  benefits  under  the Plan  within  180 days  after the date the
     claimant believes payment should have commenced, the Committee shall make a
     determination of the validity  thereof.  If the determination is adverse to
     the claimant,  the Committee  shall furnish to the claimant  within 90 days
     after  the  receipt  of the  claim  a  written  notice  setting  forth  the
     following:

          a)   the specific reason or reasons for the denial;

          b)   specific references to pertinent  provisions of the Plan on which
               the denial is based;

          c)   a description of any additional material or information necessary
               for the claimant to perfect the claim and an  explanation  of why
               such material or information is necessary; and


                                                                      July, 1999



                                       9
<PAGE>

          d)   appropriate  information  as to  the  steps  to be  taken  if the
               claimant wishes to submit his claim for review.

          7.2.2  Appeal  Procedure.  In the  event of a denial  of a claim,  the
     claimant or his duly  authorized  representative  may appeal such denial to
     the Committee for a full and fair review of the adverse determination.  The
     claimant's  request for review must be in writing and made to the Committee
     within 90 days after  receipt by the  claimant of the written  notification
     described in Section  7.2.1;  provided,  however,  that such 90-day  period
     shall be extended if  circumstances  so warrant.  The  claimant or his duly
     authorized  representative  may submit issues and comments in writing which
     shall be given full  consideration  by the  Committee  in its  review.  The
     Committee may, in its sole discretion,  conduct a hearing.  A request for a
     hearing  made by the  claimant  will be given full  consideration.  At such
     hearing,  the claimant shall be entitled to appear and present evidence and
     be represented by counsel.

          7.2.3 Decision on Appeal.  A decision on a request for review shall be
     made by the  Committee not later than 60 days after receipt of the request;
     provided,   however,   in  the  event  of  a  hearing   or  other   special
     circumstances,  such  decision  shall be made not later than 120 days after
     receipt of such  request.  If it is  necessary to extend the period of time
     for making a decision beyond 60 days after the receipt of the request,  the
     claimant shall be notified in writing of the extension of time prior to the
     beginning of such extension. The Committee's decision on review shall state
     in writing the specific  reasons and  references to the Plan  provisions on
     which  it is  based.  Such  decision  shall  be  promptly  provided  to the
     claimant.


ARTICLE VIII.  MISCELLANEOUS

     8.1 No Effect on Employment  Rights.  Nothing  contained herein will confer
upon any  Participant the right to be retained in the service of the Corporation
nor limit the right of the Corporation to discharge any Participant.

     8.2 Funding.  The Corporation may establish a grantor trust for the purpose
of funding  benefits  under this Plan. Any trust so created shall conform to the
terms of the model trust provided by the Internal  Revenue  Service as described
in Revenue Procedure 92-64.  Notwithstanding the establishment of such trust, it
is the intention of the Corporation and the Participants  that the Plan shall be
unfunded  for tax  purposes  and for  purposes  of  Title I of  ERISA.  The Plan
constitutes a mere promise by the Corporation to make payments in the future. To
the extent that any  Participant or any other person acquires a right to receive
a payment under this Plan,  such right shall be no greater than the right of any
unsecured general creditor of the Corporation.

     8.3  Spendthrift  Provisions.  No benefit  payable  under the Plan shall be
subject in any manner to anticipation,  alienation, sale, transfer,  assignment,
pledge, encumbrance,  domestic relations order or charge prior to actual receipt
thereof  by the  payee;  and  any  attempt  so to  anticipate,  alienate,  sell,
transfer,  assign,  pledge,  encumber or charge prior to such  receipt  shall be
void;  and the  Corporation  shall not be liable in any manner for or subject to
the debts, contracts,  liabilities,  engagements or torts of any person entitled
to any benefit under the Plan.


                                                                      July, 1999



                                       10
<PAGE>

     8.4  Governing  Law.  The Plan is  established  under and will be construed
according to the law of the State of Michigan, without regard to its conflict of
laws  provisions,  to the extent that such laws are not  preempted  by ERISA and
valid regulations promulgated thereunder.

     8.5 Integrated  Agreement.  This Plan  constitutes the entire agreement and
understanding  between the Corporation and the Participants  with respect to the
provision of non-qualified  retirement benefits to the Participants in excess of
those available to the  Participants  under the Excess SERP or any other written
agreement between the Participant and the Corporation as to retirement  benefits
that preceded the Participant's participation in the Plan.

     8.6  Incapacity  of  Recipient.  In the  event a  Participant  is  declared
incompetent  and a conservator or other person legally  charged with the care of
the person or the estate of such  Participant  is appointed,  any benefits under
the Plan to which the  Participant is entitled shall be paid to the  conservator
or other person  legally  charged with the care of such  Participant.  Except as
provided in the preceding  sentence,  should the Committee,  in its  discretion,
determine  that a  Participant  is unable to manage his  personal  affairs,  the
Committee  may  make  distributions  to  any  person  for  the  benefit  of  the
Participant,  provided the Committee makes a reasonable good faith judgment that
such  person  shall  expend  the funds so  distributed  for the  benefit  of the
Participant.  Any such  payment  shall  constitute  a  discharge  of the  Plan's
obligation to the Participant to the extent of such payment.

     8.7  Taxes.  Any  taxes  imposed  upon a  Participant  shall  be  the  sole
responsibility  of the  Participant.  The  Corporation  shall  have the right to
deduct from the Participant's  Compensation or any payment made pursuant to this
Plan any  federal,  state,  local or other  taxes  required  to be  deducted  or
withheld from such  Compensation  or payment,  as the Committee may determine in
its sole discretion.

     8.8  Severability.  In the event any provision of this Plan is invalid,  in
whole or in part, the remaining  provisions of this Plan are unaffected and will
remain in full force and effect.

     8.9  Amendment  or  Termination.  The Board  reserves the right to amend or
terminate this Plan by or pursuant to action of the Board or the Committee when,
in the sole opinion of the Board, or the Committee,  an amendment or termination
is  advisable.  Any  amendment  or  termination  shall  be  made  pursuant  to a
resolution of the Board and shall be effective as of the date of the resolution.
No  amendment  or  termination  (i) shall  directly  or  indirectly  deprive the
Participant  of  all  or  any  portion  of  the  Participant's  Accrued  Benefit
considered  to be accrued  under the Plan before the date of such  amendment  or
termination,  or (ii)  shall be  effected  following  a Change of Control to the
extent that such amendment or termination  would adversely  affect any rights to
which a Participant may become entitled under Section 6.1 if such  Participant's
employment were thereafter terminated.

     8.10  Successors.  This Plan shall be binding upon the  Corporation and its
successors  and assigns.  The  Corporation  will require any successor  (whether
direct or indirect, by purchase,  merger,  consolidation or otherwise) to all or
substantially  all of the business  and/or assets of the  Corporation  to assume
expressly and agree to perform the  Corporation's  obligations set forth in this
Plan in the same  manner  and to the same  extent  as the  Corporation  would be
required to perform such obligations if no such succession had taken place.


                                                                      July, 1999



                                       11
<PAGE>

     8.11  Construction.  The  masculine  shall  indicate  the  feminine and the
singular the plural, unless the context clearly requires otherwise.

     To record its adoption of the Plan,  Federal-Mogul  Corporation  has caused
its   authorized   officers   to  affix  its  name  and  seal  this  __  day  of
_________________, 1999.


[CORPORATE SEAL]                    FEDERAL-MOGUL
                                    CORPORATION

                                    By: ________________________

                                    Title:

                                    Attest: ______________________

                                    Title:


                                                                      July, 1999

                                       12
<PAGE>

                                   Appendix A


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                                                                       Years of Service for
                                             Years of Service for       Purposes of Benefit
                        Participation        Purposes of Vesting        Calculation as of
    Participant             Date           as of Participation Date     Participation Date
-------------------------------------------------------------------------------------------
<S>                        <C>                        <C>                       <C>
Richard A. Snell           1/1/99                     --                        --
-------------------------------------------------------------------------------------------
Gordon A. Ulsh             1/1/99                     --                        14
-------------------------------------------------------------------------------------------
Alan C. Johnson            1/1/99                     --                        29
-------------------------------------------------------------------------------------------
Wilhelm A. Schmelzer       1/1/99                     --                        29
-------------------------------------------------------------------------------------------
Thomas W. Ryan             1/1/99                     --                        --
-------------------------------------------------------------------------------------------
Richard P. Randazzo        1/1/99                     --                        --
-------------------------------------------------------------------------------------------
James J. Zamoyski          1/1/99                     --                        22
-------------------------------------------------------------------------------------------
</TABLE>


----------
*    Years of Service include service with a Predecessor Employer as follows:


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                                                                      Years of Service with
                                             Years of Service with    Predecessor Employer
                        Predecessor          Predecessor Employer       for Purposes of
    Participant          Employer          for Purposes of Vesting     Benefit Calculation
-------------------------------------------------------------------------------------------
<S>                        <C>                        <C>                       <C>

-------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------
</TABLE>


                                                                      April 1999


                                      A-1
<PAGE>

                                   Appendix B

                    DESCRIPTION OF COMPENSATION AND BENEFITS
                 SOLELY FOR PURPOSES OF DETERMINING GOOD REASON


     (i) Base  Salary.  Annual  base salary  ("Annual  Base  Salary")  paid at a
monthly rate at least equal to twelve times the highest monthly base salary paid
or payable, including any base salary which has been earned but deferred, to the
Participant by the  Corporation  and its affiliated  companies in respect of the
twelve-month  period  immediately  preceding  the month in which  the  Change of
Control occurs, as such Annual Base Salary may be increased following the Change
of Control.

     (ii) Annual Bonus. For each fiscal year ending after the Change of Control,
an annual bonus (the "Annual Bonus") in cash at least equal to the Participant's
highest bonus,  including any bonus or portion thereof which has been earned but
deferred,  under the  Corporation's  1977  Supplemental  Compensation  Plan,  as
amended and restated, or any comparable bonus under any predecessor or successor
plan,  for the last  three  full  fiscal  years  prior to the  Change of Control
(annualized  in  the  event  that  the  Participant  was  not  employed  by  the
Corporation  for  the  whole  of  such  fiscal  year);  provided,  that  if  the
Participant's  highest  bonus for one or more of such fiscal years is determined
pursuant to the terms of the Corporation's  Economic Value Added (EVA) Plan (the
"EVA Plan"),  and the Participant's  bonus declared pursuant to the EVA Plan for
such fiscal year is higher than the Participant's bonus paid pursuant to the EVA
Plan for such fiscal year, the Participant's  highest bonus for such fiscal year
shall be the  Participant's  bonus declared for such fiscal year; and,  provided
further,  that each such Annual Bonus shall be paid no later than the end of the
third  month of the fiscal  year next  following  the fiscal  year for which the
Annual Bonus is awarded, unless the Participant shall elect to defer the receipt
of such Annual Bonus.

     (iii)  Incentive,  Savings  and  Retirement  Plans.  Participation  in  all
incentive,  savings and  retirement  plans,  practices,  policies  and  programs
applicable  generally  to other peer  Participants  of the  Corporation  and its
affiliated companies, which plans, practices,  policies and programs provide the
Participant with incentive  opportunities (measured with respect to both regular
and  special  incentive  opportunities,   to  the  extent,  if  any,  that  such
distinction  is  applicable),   savings  opportunities  and  retirement  benefit
opportunities,  in each case, no less favorable, in the aggregate, than the most
favorable of those provided by the Corporation and its affiliated  companies for
the Participant under such plans, practices,  policies and programs as in effect
at any time  during  the  120-day  period  immediately  preceding  the Change of
Control or if more favorable to the Participant, those provided generally at any
time after the Change of Control to other peer executives of the Corporation and
its affiliated companies.


                                                                       July 1999


                                      B-1
<PAGE>

     (iv) Welfare Benefit Plans.  Participation  by the  Participant  and/or the
Participant's family, as the case may be, in, and receipt of, all benefits under
welfare  benefit  plans,  practices,  policies  and  programs  provided  by  the
Corporation  and  its  affiliated  companies  (including,   without  limitation,
medical, prescription, dental, disability, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent applicable
generally  to  other  peer  executives  of the  Corporation  and its  affiliated
companies, which plans, practices, policies and programs provide the Participant
with  benefits  which are no less  favorable,  in the  aggregate,  than the most
favorable  of such plans,  practices,  policies  and  programs in effect for the
Participant  at any time during the 120-day  period  immediately  preceding  the
Change of Control  or, if more  favorable  to the  Participant,  those  provided
generally  at any time after the Change of Control to other peer  executives  of
the Corporation and its affiliated companies.

     (v) Expenses.  Prompt reimbursement for all reasonable expenses incurred by
the  Participant in accordance with the most favorable  policies,  practices and
procedures of the  Corporation  and its  affiliated  companies in effect for the
Participant  at any time during the 120-day  period  immediately  preceding  the
Change  of  Control  or,  if more  favorable  to the  Participant,  as in effect
generally at any time  thereafter  with respect to other peer  executives of the
Corporation and its affiliated companies.

     (vi) Fringe Benefits. Fringe benefits,  including,  without limitation, tax
and financial planning services,  payment of club dues, and, if applicable,  use
of an automobile and payment of related  expenses,  in accordance  with the most
favorable  plans,  practices,  programs and policies of the  Corporation and its
affiliated  companies  in effect  for the  Participant  at any time  during  the
120-day period immediately preceding the Change of Control or, if more favorable
to the  Participant,  as in effect generally at any time thereafter with respect
to other peer executives of the Corporation and its affiliated companies.

     (vii)  Office and  Support  Staff.  An office or offices of a size and with
furnishings and other appointments, and exclusive personal secretarial and other
assistance,  at least equal to the most  favorable of the foregoing  provided to
the  Participant by the  Corporation  and its  affiliated  companies at any time
during the 120-day  period  immediately  preceding  the Change of Control or, if
more favorable to the Participant,  as provided generally at any time thereafter
with respect to other peer  executives  of the  Corporation  and its  affiliated
companies.

     (viii) Vacation. Paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Corporation and its affiliated companies
as in  effect  for  the  Participant  at any  time  during  the  120-day  period
immediately  preceding  the  Change  of  Control  or, if more  favorable  to the
Participant, as in effect generally at any time thereafter with respect to other
peer executives of the Corporation and its affiliated companies.


F-M Supplemental Key Executive Pension Plan

                                                                       July 1999


                                      B-2