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                               VARLEN CORPORATION
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                     (As amended and restated May 14, 1999)

                                    ARTICLE I

                                  Establishment

       The Varlen Corporation Supplemental Executive Retirement Plan originally
effective January 1, 1989, is hereby amended and restated effective generally as
of May 14, 1999, for the purpose of providing supplemental retirement benefits
for one or more selected Employees. The Plan is intended as an unfunded deferred
compensation plan maintained primarily for a select group of management or
highly compensated employees and shall be construed and administered in
accordance with such intention.

                                   ARTICLE II

                                   Definitions

       The following Sections of this Article II provide definitions of terms
used throughout this Plan, and whenever used herein in a capitalized form,
except as may be expressly provided, the terms shall be deemed to have the
following meanings:

      2.1 "Accrued Benefit" means the benefit to which a Participant may be
entitled hereunder. The Accrued Benefit shall be an amount payable according to
the terms and provisions of Article VI herein. A person's Accrued Benefit, as of
any determination date prior to his Normal Retirement Date, is computed as if
the person were to incur a Termination of Employment on the determination date,
considering Years of Service, Employer Plan Benefits and Average Monthly
Compensation as of the determination date. The Accrued Benefit of a Participant
is equal to:

            (a) fifty percent (50%) of the Participant's Average Monthly
      Compensation multiplied by a fraction, not to exceed one, the numerator of
      which is the Participant's Years of Service (not to exceed 15) and the
      denominator of which is fifteen (15); reduced by

            (b) the monthly benefit payable to the Participant in the form of a
      Single Life Annuity for a Ten-Year Term Certain commencing at Normal
      Retirement Date, the value of which is the Actuarial Equivalent of the
      Participant's Employer Plan Benefits (as defined in Section 2.20).

The amount determined under this Section 2.1 shall be determined at any point in
time for a Participant who is an Employee. For a Participant who is not an
Employee, the final calculation of the Accrued Benefit shall occur as of the
date he was last an Employee.


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Each and any calculation shall be subject to the rules of the Plan Committee
respecting such calculation. The Accrued Benefit represents an unfunded
obligation of the Employers, the payment of which is subject to all the terms
and conditions of this Plan.

      2.2 "Act" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.

      2.3 "Actuarial Equivalent" means, for purposes of computing the value of
Employer Plan Benefits and optional forms of benefit payments and any
adjustments called for under the terms of the Plan for benefits commencing other
than at Normal Retirement Date, when such interest rate assumptions and
mortality assumptions are not otherwise provided for in this Plan, the benefit
having the same value as the benefit which it replaces, based upon such interest
rates and mortality assumptions as the Plan Committee may determine, provided
that in the event of a Change of Control or the termination of the Plan the Plan
Committee shall establish the interest rates and mortality assumptions which
shall be set forth in an Appendix and shall be and become a part of the Accrued
Benefit.

      2.4 "Affiliate" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated association or other
entity (other than the Company) that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with
the Company.

      2.5 "Appendix" means a written supplement attached to this Plan and made a
part hereof which has been added in accordance with the provisions of the Plan.

      2.6 "Authorized Leave of Absence" means an absence, with or without
compensation, authorized by the Employer or the Affiliate under its standard
personnel practices, provided the Employee returns to employment with the
Employer or the Affiliate within the period specified for the absence.

      2.7 "Average Monthly Compensation" means the average obtained by dividing
the sum of the person's Compensation for the 60 consecutive month period of
employment within the 120 consecutive month period of employment preceding the
earlier of the date of the Participant's obtaining age 62 or the Participant's
Termination of Employment (but taking into account any period for which
Compensation is determined under Section 2.12) (excluding any first and last
partial month of employment), which produces the largest sum, by sixty (60). If
a person has less than a 120 consecutive month period of Compensation, Average
Monthly Compensation shall mean the sum of the person's Compensation earned for
all complete months which produces the largest sum, but not to exceed sixty
(60), divided by the number of months, but not to exceed sixty (60), during this
period for which he received Compensation. For purposes of this Section 2.7, the
calendar month which ends coincident with or immediately preceding the calendar
month in which occurs a Termination of Employment or the date the Participant
attains age 62 and the calendar month commencing coincident with or immediately


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following a Participant's return to employment shall be considered consecutive.
If a Participant is employed on less than a full time basis at any time during
the 120 consecutive month period preceding the Termination of Employment or the
date the Participant attains age 62, whichever is earlier, compensation for any
period during which he is not employed on a full time basis shall be adjusted by
the Plan Committee in its discretion to be the Compensation which would have
been paid had the Participant been employed on a full time basis.

      2.8 "Beneficiary" means any person (including any trust, estate or other
entity) entitled to receive a Participant's death benefits hereunder in
accordance with a form of payment under Article VI.

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

      2.10 "Change of Control" means the occurrence of one of the following
events:

            (a) if any "person" or "group" as those terms are used in Sections
13(d) or 14(d) of the Exchange Act, other than a Exempt Person, is or becomes
the "beneficial owner" (as defined in rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities; or

            (b) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board and any new directors whose
election by the Board or nomination for election by the Company's stockholders
was approved by at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election was
previously so approved, cease for any reason to constitute a majority thereof;
or

            (c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation (A) which would result in all or a portion of the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (B) following which the
Company's chief executive officer and directors retain their positions with the
surviving entity (and constitute at least a majority of the surviving entity's
board of directors); or

            (d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or other disposition by
the Company of all or substantially all the Company's assets, other than a sale
to an Exempt Person;


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            provided, however, that if the approval specified in clause (c) or
      clause (d) above is obtained but such transaction is terminated or
      abandoned by the parties thereto prior to its effectuation, then, from and
      after the date of such termination or abandonment, no Change of Control
      shall be deemed to have occurred by reason of such approval; and provided
      further, that no Change of Control shall be deemed to have occurred by
      reason of any event involving or arising out of a proceeding under Title
      11 of the United States Code (or the provisions of any future United
      States bankruptcy law), an assignment for the benefit of creditors or an
      insolvency proceeding under state or local law.

      2.11 "Company" means Varlen Corporation or, except in the event of
determining whether there is or has been a Change of Control, any successor
company by merger, consolidation, purchase or otherwise.

      2.12 "Compensation" means the total compensation paid by all Employers to
a Participant for personal services rendered as an Employee, including regular
salary, wages, bonuses, commissions, vacation pay, short-term disability pay,
amounts deferred pursuant to any cash or deferred arrangement or amounts
deferred pursuant to Section 125 of the Code, but specifically excluding any
amount paid or accrued under this Plan or an Employer's excess benefit plan or
contingent stock award plan, living allowances, expense allowances, overtime
pay, amounts paid for an extended work week, reimbursement for relocation,
education or business expenses, imputed income under any employee benefit plan,
non-cash awards and any employer contributions made to or benefits paid under
any tax-qualified plan (other than amounts deferred under a cash or deferred
arrangement), payments made pursuant to any accident or health insurance plan,
stock options, any value received pursuant to a stock option or stock
appreciation rights plan, any other distributions which receive special tax
benefits and all other extraordinary cash payments or compensation. For purposes
of this Section 2.12, compensation paid in arrears, including without
limitation, bonuses, commissions and accrued but unused vacation pay shall be
attributed to the last day of the period for which it was earned regardless of
when paid, except that to the extent any portion of the Participant's
Compensation will not be determinable as of the Participant's Payment Date, the
Plan Committee may, in its discretion, elect to estimate the remaining portion
of the Participant's Compensation (based on information known to the Plan
Committee at that time), in which case the estimated amount will be treated as
compensation in lieu of all amounts that may subsequently be paid or accrued
after the determination date. For the avoidance of doubt, Compensation shall be
measured from the date the Participant became an Employee of an Employer, and
compensation accrued with an entity, other than an Employer, including
compensation paid prior to the date the entity became an Affiliate, shall be
credited for purposes of Average Monthly Compensation only to the extent
provided in an Appendix adopted by the Company or the Plan Committee.

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


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      2.14 "Death Benefits" means the benefits provided under Article V of the
Plan.

      2.15 "Disability" means a mental or physical condition which entitles the
Participant to benefits under the long-term disability plan (including any
insurance policy) of the Employer, provided that if there is no such plan or the
Participant is an Employee but not covered by such plan, then "Disability" shall
mean a mental or physical condition which renders the Participant permanently
and continuously unable or incompetent to engage in any substantial gainful
activity of the same type or at the same level as that in which the Participant
has been employed at the time he incurred the Disability. Such determination
shall be made by one or more physicians appointed by the Plan Committee, on the
basis of such medical and other competent evidence as the Plan Committee shall
deem relevant.

      2.16 "Early Retirement Date" means the date on which the Participant
attains an age of not less than 55 and accrues not less than 15 Years of
Service.

      2.17 "Effective Date" means January 1, 1989 for the Company and any entity
which is an Employer on January 1, 1989. For all other Affiliates, it shall mean
the date the Affiliate becomes an Employer.

      2.18 "Employee" means any person who is a common-law employee of an
Employer and renders services to an Employer on or after the Effective Date.

      2.19 "Employer" means the Company and any wholly owned, directly or
indirectly, subsidiary of the Company.

      2.20 "Employer Plan Benefits" means the sum of the benefits payable to the
Participant or with respect to the Participant determined as a monthly benefit
payable in the form of a Single Life Annuity for a Ten-Year Term Certain and
further determined as follows:

            (a) any and all benefits attributable to Employer contributions,
      including any benefits previously distributed or for which an annuity
      contract has been purchased, which the Participant has accrued under any
      and all defined benefit pension plans (as defined in section 414 (j) of
      the Code) maintained, sponsored or contributed to by an Employer or an
      Affiliate (including any such plan maintained, sponsored or contributed to
      by an entity prior to its becoming an Affiliate except to the extent
      provided in an Appendix), which for purposes of this Plan shall be
      calculated as an amount payable in the Actuarial Equivalent form of Single
      Life Annuity with a Ten-Year Term Certain; provided that any amount of
      employee contribution described in Section 401(m) of the Code or which is
      a rollover contribution shall be excluded from the benefit hereunder;


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            (b) any and all benefits attributable to Employer contributions,
      including any benefits previously distributed or for which an annuity
      contract has been purchased, which the Participant has accrued under any
      and all defined contribution plans (as defined in Section 414(i) of the
      Code) of an Employer or an Affiliate (including any such plan maintained,
      sponsored or contributed to by an entity prior to, its becoming an
      Affiliate, except to the extent provided in an Appendix), which for
      purposes of this Plan shall be calculated as an amount payable in the
      Actuarial Equivalent form of a Single Life Annuity with a Ten-Year Term
      Certain; provided that any amount deferred and contributed to any defined
      contribution plan the taxation of which is deferred pursuant to Section
      401(k) of the Code or is an amount of employee contribution described in
      Section 401(m) of the Code or which is a rollover contribution, shall be
      excluded from the benefit hereunder;

            (c) any and all benefits attributable to Employer contributions,
      including any benefits previously distributed or for which an annuity
      contract has been purchased, which the Participant has accrued under any
      and all plans of deferred compensation of an Employer or an Affiliate
      (including any such plan maintained, sponsored or contributed to by an
      entity prior to its becoming an Affiliate, except to the extent provided
      in an Appendix, and further including, without limitation, the Varlen
      Corporation Excess Benefit Plan), which for purposes of this Plan shall be
      calculated as an amount payable in the Actuarial Equivalent form of a
      Single Life Annuity with a Ten-Year Term Certain; provided that any amount
      of employee contribution described in Section 401(m) of the Code, and any
      amount which is a rollover contribution;shall be excluded from the benefit
      hereunder;

            (d) fifty percent (50%) of the Participant's primary social security
      benefit which for purposes of the Plan shall be calculated as an amount
      payable in the Actuarial Equivalent form of a Single Life Annuity with a
      Ten-Year Term Certain and shall be determined as the estimated monthly
      amount available to the Participant under the provisions of Title II of
      the Social Security Act;

            (e) The amount of the Employer Plan Benefit and each component
      portion shall be determined in the sole discretion of the Plan Committee,
      which discretion shall be applied reasonably and consistently with respect
      to Participants and Beneficiaries who are similarly situated. The Plan
      Committee shall adopt rules governing the computation of such amount,
      including, without limitation, rules regarding calculation of the benefit
      under any defined benefit pension plan and the primary social security
      benefit, and the fact that an Employee does not actually receive such
      amount because of failure to apply or continuance of work, or for any
      other reason, shall be disregarded.

For purposes of this Section 2.20, and for the avoidance of doubt, employee Plan
Benefits shall not include benefits attributable to Employer contributions under
the Varlen


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Corporation 1998 Contingent Stock Award Plan. Furthermore, for an Employer that
became an Affiliate in connection with a merger, acquisition, corporate
combination or other corporate transaction, all benefits attributable to
contributions made by the Employer (or a predecessor entity to the Employer)
prior to the date the Employer became an Affiliate shall be treated as "benefits
attributable to Employer contributions" to the extent otherwise provided in this
Section 2.20.

      2.21 "Good Reason" means the occurrence of any of the following events
after a Change of Control, unless (i) such event occurs with the Participant's
express written consent; or (ii) the event occurs in connection with termination
of the Participant's employment for Cause, disability or death:

            (a) any reduction in the nature or scope of the authorities, powers,
      functions, responsibilities or duties of the Participant that materially
      diminishes the Participant's position, authority, duties or
      responsibilities;

            (b) the assignment by the Company to the Participant of duties or
      responsibilities (other than isolated and incidental duties or
      responsibilities that do not affect the Participant's position or
      authority) inconsistent with an executive-level position;

            (c) the requirement by the Company that the Participant be based at
      any office or location more than 35 miles from the offices of the Company
      where the Participant was employed immediately prior to the Change of
      Control;

            (d) any reduction by the Company in the Executive's rate of annual
       base salary, or any material and adverse change in the Executive's
       eligibility for performance bonuses;

            (e) any material reduction in the Participant's benefits under the
      employee benefit plans in which he participates immediately prior to the
      Change of Control; provided, however, that reasonable increases in
      insurance co-payment requirements or deductibles, if imposed upon all plan
      participants generally, shall not constitute a material reduction for this
      purpose; and further provided, that an amendment to or termination of an
      employee benefit plan or practice shall not constitute a material
      reduction in the Participant's benefits for this purpose if substitute or
      additional payments or benefits to the Participant substantially offset
      the financial impact to the Participant of such amendment or termination;

            (f) any failure by the Company to pay compensation and benefits when
      and as due to the Participant (exclusive of any amounts then the subject
      of a bona fide dispute between the Company and the Participant); or

            (g) failure of any successor to the Company to assume the
      obligations of the Company under this Plan:


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provided, however, that in each case the foregoing event shall not constitute
"Good Reason" until the Participant has given written notice to the Board that
such event has occurred and may constitute "Good Reason," and such event is not
cured within thirty (30) days after the date of such notice.

      2.22 "Internal Revenue Code" or "Code" means the Internal Revenue Code of
1986, as amended, and any subsequent Internal Revenue Code. If there is a
subsequent Internal Revenue Code, any references herein to Internal Revenue Code
sections shall be deemed to refer to comparable sections of any subsequent
Internal Revenue Code.

      2.23 "Joint and 50% Survivor Annuity" means a monthly benefit payable
during the lifetime of the Participant with the provision that 50% of such
monthly benefit shall be payable to such Participant's Spouse in monthly
installments commencing on the first day of the month in which the Participant
dies and continuing thereafter during the remaining lifetime of the Spouse
through the last monthly payment on or prior to such Spouse's death. In
determining the Actuarial Equivalent value of the Joint and 50% Survivor
Annuity, the age of the Spouse shall be increased by the lesser of 10 or the
number of years by which the Participant's age exceeds the Spouse's age.

      2.24 "Lump Sum" means a single sum payment of cash which is Actuarially
Equivalent to the replaced Retirement Benefit or Death Benefit.

      2.25 "New Participant" means a person who: (a) became a Participant on or
after May 14, 1999; or (b) became a Participant prior to such date but has
agreed in writing to be considered a New Participant.

      2.26 "Normal Retirement Date" means the date the Participant attains age
62.

      2.27 "Old Participant" means a person who: (a) was a Participant prior to
May 14, 1999; and (b) who has not agreed in writing to be considered a New
Participant.

      2.28 "Participant" means an Employee participating in the Plan as provided
in Article III.

      2.29  "Payment Date" means the following:

             (a) In the case of a Retirement Benefit payable under Section 4.1,
      the first day of the month coinciding with or next following a
      Participant's Termination of Employment.

             (b) In the case of a Retirement Benefit payable under Section 4.2,
      the first day of the month coinciding with or next following the
      Participant's Normal Retirement Date, or if earlier, the date established
      under Section 4.2 by the Plan


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      Committee as the Participant's Payment Date in response to the
      Participant's request for early payment.

             (c) In the case of a Death Benefit payable under Section 5.1, the
      later of (1) the first day of the month coincident with or next following
      the Participant's date of death, or (2) the date established by the Plan
      Committee in response to a Beneficiary's request.

             If a Participant is reemployed by the Company or an Affiliate prior
      to his Normal Retirement Date, any Payment Date determined under Paragraph
      (b) shall be disregarded.

      2.30 "Plan" means the Varlen Corporation Supplemental Executive Retirement
Plan, as stated herein, and as hereafter may be amended from time to time.

      2.31 "Plan Committee" means the Plan Committee appointed pursuant to
Article VII to administer the Plan.

      2.32 "Plan Year" means the 12 consecutive month period beginning January
1, 1989, and each successive calendar year thereafter.

      2.33 "Retirement Benefit" means the benefit payable to a Participant under
the provisions of Section 4.1 or 4.2.

      2.34 "Single Life Annuity" means a benefit payable monthly during the
lifetime of the Participant through the last monthly payment on or prior to such
Participant's death.

      2.35 "Single Life Annuity for a Ten-Year Term Certain" means a benefit
payable during the lifetime of the Participant through the last month on or
prior to such Participant's death, provided that if the Participant shall die
prior to receiving 120 monthly payments (or the Actuarial Equivalent thereof)
the Participant's Beneficiary shall receive the same monthly payment until the
Participant and the Beneficiary have received in total 120 monthly payments.

      2.36 "Spouse" means the person who is living and has been married at least
one year as of date of the Participant's death to the Participant within the
meaning of the laws of the State of the Participant's residence or evidenced by
a valid marriage certificate or other proof acceptable to the Plan Committee.

      2.37 "Termination of Employment for Cause" or "Cause" means the occurrence
of one of the following events::

            (a) Conviction of, or express admission of the commission of, a
      felony or any crime or offense lesser than a felony involving the property
      of the Company or a Subsidiary; or


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             (b) Conduct that has caused demonstrable and serious injury to the
      Company or a Subsidiary, monetary or otherwise; or

            (c) Willful refusal to perform, or substantial disregard of, duties
      properly assigned, as determined by the Company; or

            (d) Breach of duty of loyalty to the Company or a Subsidiary or
      other act of fraud or dishonesty with respect to the Company or a
      Subsidiary.

      2.38 "Termination of Employment" means the earliest of (a) resignation by
the Employee for any reason, including Good Reason, (b) a dismissal of the
Employee for any reason, (c) the disability of the Employee, (d) death of the
Employee or (e) the retirement of the Employee from an Employer or an Affiliate.
The transfer of an Employee from employment by one Employer or Affiliate to
employment by another Employer or an Affiliate shall not be regarded as a
Termination of Employment.

      2.39 "Years of Service" means the sum of:

            (a) the years of credited service accrued under and as defined in
      the Executive Benefit Plan of Varlen Corporation and its Participating
      Subsidiaries as of January 1, 1989 (which amount is set forth in an
      Appendix hereto); and

            (b) the Participant's whole, completed twelve month periods,
      including the fractional parts thereof measured in whole, completed
      months, of continuous, uninterrupted employment by an Employer on and
      after January 1, 1989 including Authorized Leaves of Absence, measured
      from the date the Participant becomes an Employee of an Employer to the
      earlier of the date of his Termination of Employment or the date he
      attains age 62. Years of Service accrued with an entity other than an
      Employer, including service prior to the date the entity becomes an
      Affiliate, shall be credited on and after January 1, 1989 for purposes of
      this Section only to the extent provided in an Appendix adopted by the
      Board, the Compensation Committee or the Plan Committee.

       Except as otherwise indicated by the context, any masculine terminology
herein shall also include the feminine and neuter, the definition of any term
herein in the singular may also include the plural, and the terms "herein",
"hereunder", "hereof" or similar terminology shall refer to this Plan.

                                   ARTICLE III

                                  Participation


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      3.1 Eligibility. The Board or the Compensation Committee, in its sole
discretion, shall designate the Employee or Employees who shall participate in
this Plan as Participants and shall designate the effective date of such
participation.

      3.2 Termination of Participation. A person will cease to be a Participant
on the earliest of the date he receives the total distribution of his Accrued
Benefit, the date of his death and the date he forfeits his Accrued Benefit in
accordance with this Plan.

      3.3 Reemployment. If a Participant incurs a Termination of Employment and
is reemployed, such Participant shall not accrue Years of Service subsequent to
such reemployment nor shall such Participant's Compensation be taken into
account under the Plan unless and until the individual again becomes a
Participant in accordance with Section 3.1. Any Years of Service accrued or
Compensation earned prior to the Termination of Employment shall be considered
upon reemployment only upon terms established by the Board, the Compensation
Committee or the Plan Committee.

      3.4 Transfer of Employment. A Participant who transfers from employment
with an Employer to employment with another Employer or Affiliate shall remain a
Participant, subject to Section 3.2.

                                   ARTICLE IV

                                    Benefits

      4.1 Normal or Late Retirement. A Participant who has a Termination of
Employment on or after attaining his Normal Retirement Date and who does not
receive a benefit under Section 4.2 shall be entitled to his Accrued Benefit
commencing on the Payment Date. The payment of the Retirement Benefit determined
hereunder shall be governed by the provisions of Article VI as in effect on his
Termination of Employment.

      4.2 Early Retirement. A Participant who incurs a Termination of Employment
on or after attaining his Early Retirement Date but who has not attained his
Normal Retirement Date, and who does not receive a Retirement Benefit under
Section 4.1 shall be entitled to his Accrued Benefit determined as of his
Termination of Employment. Retirement Benefit payment timing and form shall be
governed by the terms and provisions of Article VI herein; provided that the
amount of the Retirement Benefit shall be reduced by .25% for each of the first
24 months by which the Payment Date precedes the Normal Retirement Date, and
further reduced .5% for each of the next 60 months by which the Payment Date
precedes the Normal Retirement Date, except that such reduction shall not apply
to an Old Participant if the Termination of Employment occurs subsequent to a
Change of Control or in the case of the Termination of Employment of Richard L.
Wellek. The payment of the Retirement Benefit determined hereunder shall be
governed by the provisions of Article VI as in effect on his Termination of
Employment.


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      4.3 Forfeiture. A Participant who incurs a Termination of Employment prior
to the satisfaction of the requirements of Section 4.1 or 4.2, or who incurs a
Termination of Employment for Cause or who violates the provisions of Article XI
shall forfeit forever the Accrued Benefit and neither the Participant nor any
Beneficiary of such Participant shall have any right to receive any payment
under this Plan. A Participant who commits an act described in Section 2.37 or
who violates the provisions of Article XI shall return any amount previously
paid within 90 days after the Company notifies the Participant of such
violation.

      4.4 Plan Committee Discretion. The payment elections of Participants shall
be subject to the approval of the Plan Committee, which may be exercised without
regard to similarly situated Participants.

      4.5 Board Discretion. Notwithstanding anything to the contrary in the
Plan, the Board or the Compensation Committee may, at any time and in its sole
discretion, and with respect to one or more New Participants: (a) deem the
Participant to have attained age 62; (b) increase the Participant's Years of
Service for purposes of Section 2.1; (c) decrease or eliminate the early
retirement reduction set forth in Section 4.2; (d) modify the forfeiture
provision set forth in Section 4.3; or (e) permit a lump sum payment pursuant to
Section 6.2, or any or all of these; provided that no modification to the
provisions of Section 4.3 may impair a Participant's rights with respect to his
Accrued Benefit as of the date of the modification, unless he has consented in
writing to such modification.

                                    ARTICLE V

                                 Death Benefits

      5.1 Entitlement to Death Benefits

            (a) Amount and Conditions of Spouse's Death Benefit. If a
      Participant who has attained his Normal or Early Retirement Date is
      deceased prior to his Payment Date the Spouse of such Participant shall be
      entitled to a Death Benefit. The Death Benefit provided shall commence on
      the Payment Date provided in Section 2.29(c) and shall be an amount equal
      to 50% of the Retirement Benefit the Participant would have received under
      the following circumstances:

                  (i) In the case of a Participant who is an Employee on or
            after his Normal Retirement Date, the Retirement Benefit the
            Participant would have received under Section 4.1 had the
            Participant incurred a Termination of Employment and commenced to
            receive Retirement Benefits in the form of a Joint and 50% Survivor
            Annuity on the first day of the month following the date of death.


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<PAGE>

                  (ii) In the case of a Participant who is an Employee on or
            after his Early Retirement Date, but not his Normal Retirement Date
            at the time of his death, the Retirement Benefit the Participant
            would have received under Section 4.2, had the Participant incurred
            a Termination of Employment and commenced to receive Retirement
            Benefits in the form of a Joint and 50% Survivor Annuity on the date
            of death based upon the Participant's Average Monthly Compensation,
            Years of Service, and Employer Plan Benefits, determined as of the
            date of death.

            (b) Single Sum Payment. Notwithstanding anything herein to the
      contrary, a Spouse entitled to a Death Benefit under Section 5.1, may
      elect in writing, subject to the Plan Committee's approval, after the
      death of the Participant to receive payment of the Death Benefit in a Lump
      Sum.

            (c) No Death Benefit. If a Death Benefit is not paid in accordance
       with Section 5.1(a) or (b), or if the Spouse dies before the Payment Date
       of such Death Benefit, no Death Benefit shall be paid from the Plan.

      5.2 Request for Distribution. Payment of any Death Benefits to which a
Spouse may be entitled under this Article V shall not begin until the Spouse has
submitted to the Plan Committee a distribution request form provided for that
purpose and the Plan Committee has approved in its sole discretion the
commencement of the payment at the time and in the form requested, which
discretion may be exercised without regard to similarly situated Spouses.
Thereafter, the Plan Committee shall instruct the Employer to make payment. In
the event payment of a Death Benefit does not commence or is not made until
after a Spouse's Payment Date, the Plan will pay to such Spouse all amounts due
and unpaid since the Payment Date in accordance with the form of payment
automatically in effect on the Payment Date. Notwithstanding the request or
election of a Spouse to the contrary, the Plan Committee shall direct an
immediate distribution of a single sum payment if the value of the Beneficiary's
Death Benefit payable as of the Payment Date does not exceed $10,000.

                                   ARTICLE VI

                     Form and Payment of Retirement Benefits

      6.1 Normal Form of Payment. Subject to Section 6.2, a Participant's
Accrued Benefit payable in accordance with Article IV shall be paid commencing
on the Payment Date in the form of a Single Life Annuity for a Ten-Year Term
Certain.

      6.2 Optional Forms of Payout. Subject to the limitations expressed herein,
a Participant who is entitled to receive a Retirement Benefit may elect by
written application to the Plan Committee to receive such benefit in one of the
optional forms of payment set forth in Subsections 6.2(a) through 6.2(e) herein.
All elections must be made no later than December 28, 1994, for those who were
Participants as of November 28,


                                       13
<PAGE>

1994. The Plan Committee, shall at its sole discretion, approve or disapprove of
each election submitted by each Participant; provided, however, that any
election to receive a lump sum payout pursuant to Subsection 6.2(a) herein,
where such payout occurs between a Participant's Early Retirement Date and
Normal Retirement Date, shall be automatically approved by the Plan Committee.
All optional forms of payment shall be Actuarially Equivalent as determined
under Section 2.2 of the Plan. The Plan Committee's exercise of discretion under
this Section 6.2 may be without regard to other Participants who are similarly
situated.

            (a) Lump Sum Payment, which is a single sum payment equal in value
      to the Actuarial Equivalent of the Participant's Accrued Benefit, provided
      such Lump Sum is not payable earlier than the Participant's Early
      Retirement Date or in the case of an Old Participant, unless there has
      been a Change of Control; and

            (b) Joint and Survivor Annuity, which is a reduced Retirement
      Benefit payable monthly during the lifetime of the Participant with the
      provision that a percentage, which percentage shall be chosen by the
      Participant but shall not exceed one hundred percent, with the consent of
      the Plan Committee not later than December 28, 1994, for those who were
      Participants as of November 28, 1994, of such monthly benefit shall be
      payable to the Participant's Beneficiary in monthly installments
      commencing on the first day of the month following the month in which the
      Participant dies and continuing thereafter on the first day of the month
      during the remaining lifetime of the Beneficiary; and

            (c) Single Life Annuity for a Term Certain, which is a reduced
      Retirement Benefit payable during the lifetime of the Participant with
      payments certain for a number of years, not to exceed 20, as shall be
      selected by the Participant, subject to the approval of the Plan
      Committee; provided that should the Participant predecease his or her
      Beneficiary prior to receiving payments for the full Term Certain, the
      Beneficiary shall receive the monthly payments remaining in the
      Participant's Term Certain; and further provided, that in the event the
      Participant and his or her Beneficiary shall both die before the Term
      Certain shall expire, the Actuarial Equivalent of the remaining payments
      for the Term Certain shall be paid to the estate of the last to die of the
      Participant and the Beneficiary; and

            (d) Insurance Annuity Held in the Company's Name, which shall be
      equivalent to a reduced Retirement Benefit payable during the lifetime of
      the Participant, upon such terms and provisions as are available to the
      Company through one or more insurance carriers selected at the sole
      discretion of the Plan Committee. Any such insurance annuity shall be
      purchased by the Company, and the Company shall be the sole owner of the
      insurance annuity. In the event that the Participant and any Beneficiary
      named under such insurance annuity shall decease before the full payment
      of the reduced Retirement Benefit, the Actuarial


                                       14
<PAGE>

      Equivalent of the remaining payments for the Term Certain shall be paid to
      the estate of the last to die of the Participant and the Beneficiary; and

            (e) Alternate Payment Schedule. A Participant may submit an
      alternate payment schedule to the Plan Committee for approval; provided,
      however, that no such alternate payment schedule shall be permitted unless
      approved by the Plan Committee, at its sole discretion.

      6.3 Designation of Beneficiary. A Participant to whom the provisions
regarding an optional form of payment applies shall designate a Beneficiary on a
beneficiary designation form provided by the Plan Committee. The person may
change such designation of Beneficiary at any time by filing a new beneficiary
designation form with the Plan Committee. No designation of Beneficiary or
change of Beneficiary shall be effective until filed with the Plan Committee.
Subject to the Participant's appointing a contingent Beneficiary, if a
Beneficiary commences to receive payments under an optional form of payment
before distribution of all Term Certain payments to that Beneficiary has been
completed, any payment to which the Beneficiary would have been entitled had he
survived shall be paid to the Beneficiary's estate in such amount and at such
times as it would have been paid had the Beneficiary survived to receive the
payments.

      6.4 Effect of Participant Resuming Employment or Receiving a Lump Sum. If
a Participant has ceased to be an Employee, has commenced to receive Retirement
Benefits in a form other than a Lump Sum, and again becomes an Employee,
Retirement Benefit payments, if any, shall not be made during the period of such
reemployment. Upon a subsequent Termination of Employment by such Participant,
the Participant shall be entitled to receive a Retirement Benefit equal to the
greater of (a) the monthly benefit to which he was entitled from the Plan upon
such date of reemployment, if any, or (b) an amount determined under the Plan,
payable in the same form as (a), if applicable, as of such Termination of
Employment, reduced however, by the Actuarial Equivalent of Retirement Benefits
paid to the Participant prior to his reemployment. If a Participant has received
a Lump Sum distribution with respect to all or any portion of his Accrued
Benefit, the Accrued Benefit shall be determined as provided in Section 2.1
except that it shall be reduced by the Actuarial Equivalent value of such prior
Lump Sum.

                                   ARTICLE VII

                                 Administration

      7.1 Authority and Responsibility of the Board of Directors and
Compensation Committee. The Board of Directors shall have overall responsibility
for the establishment, amendment, termination, administration and operation of
the Plan; provided as of May 14,1999, such authority shall be delegated to the
Compensation Committee; and further provided that the responsibility for
administration and operation of the Plan shall be delegated to the Plan
Committee.


                                       15
<PAGE>

      7.2 Plan Committee Membership. The Plan Committee shall consist of three
members, one of whom shall be the chief executive officer of the Company, one of
whom shall be the chief financial officer of the Company and a third member who
shall be chosen by the two previously named members. The members of the Plan
Committee shall remain as such until they resign their respective offices with
the Company, and in the case of the member of the Plan Committee, named to serve
on the Plan Committee by the chief executive officer and chief financial
officer, until removed by such two members of the Plan Committee. The Plan
Committee shall have the general responsibility for the administration of the
Plan and for carrying out its provisions. In the event the previously named
three persons shall not be the Plan Committee, the Board of Directors or the
Compensation Committee will constitute the Plan Committee.

      7.3 Plan Committee Structure. If requested to do so, each member of the
Plan Committee, upon becoming a member of the Plan Committee, shall file an
acceptance thereof in writing with the secretary of the Company and the
secretary of the Plan Committee. Any member of the Plan Committee may resign by
delivering his written resignation to the secretary of the Company and the
secretary of the Plan Committee, and such resignation shall become effective
upon the date specified therein. In the event of a vacancy in membership, the
remaining members shall constitute the Plan Committee with full power to act
until said vacancy is filled.

      7.4 Plan Committee Actions. The action of the Plan Committee shall be
determined by the vote or other affirmative expression of a majority of its
members. The Plan Committee shall choose a chairman who shall be a member of the
Plan Committee and a secretary who may (but need not) be a member of the Plan
Committee. The secretary shall keep a record of all meetings and acts of the
Plan Committee and shall have custody of all records and documents pertaining to
its operations. Either the chairman or the secretary may execute any certificate
or other written direction on behalf of the Plan Committee. A Plan Committee
member shall not exercise any discretion under this Plan with respect to
himself.

      7.5 Plan Committee Duties. The Plan Committee shall administer and enforce
the Plan in accordance with the terms of the Plan and shall have all powers
necessary to accomplish that purpose, including but not by way of limitation,
the following:

            (a) To issue rules and regulations necessary for the proper conduct
      and administration of the Plan and to change, alter, or amend such rules
      and regulations;

            (b) To construe the Plan;

            (c) To determine all questions arising in its administration,
      including those relating to the rights of Participants, former
      Participants, Spouses and Beneficiaries to the entitlement to payment of
      Retirement Benefits and Death


                                       16
<PAGE>

      Benefits; and its decision thereon shall be final and binding upon all
      persons hereunder;

            (d) To compute the amount and kind of benefits payable to
      Participants, Spouses or Beneficiaries under the Plan;

            (e) To authorize all disbursements in accordance with the provisions
      of the Plan;

            (f) To employ and suitably compensate such accountants, attorneys
      (who may but need not be the accountants or attorneys of the Company),
      clerical employees and other persons to render advice as may be deemed
      necessary to the performance of its duties;

            (g) To communicate the Plan and its eligibility requirements to
      certain Employees and to notify Employees when they become eligible to
      participate;

            (h) To make available to Participants upon request, for examination
      during business hours, such records as pertain exclusively to the
      examining Participant;

            (i) To keep records relating to Participants and other matters
      applicable to this Plan;

            (j) To appoint an agent for service of legal process;

            (k) To prescribe procedures to be followed by Participants, Spouses
      and Beneficiaries in claiming benefits;

            (1) To develop and make available forms for use by Participants and
      Spouses for making elections provided by the Plan;

            (m) To make available for inspection and to provide upon request at
      such charge as may be permitted and determined by the Plan Committee,
      documents and instruments required to be disclosed by law;

            (n) To withhold any and all taxes as may be required by law to be
      withheld from any payment; and

            (o) To file all reports as required by law with governmental
agencies.

      7.6 Plan Liability. The Board of Directors, the Compensation Committee,
the Plan Committee and the respective members hereunder shall be free from all
liability, joint or several, for their acts or failure to act hereunder.


                                       17
<PAGE>

      7.7 Plan Bonding. The Board of Directors, the Compensation Committee and
the Plan Committee shall serve without bond (except as otherwise required by
law) and without compensation for their service as such; but all expenses of the
Plan Committee shall be paid by the Employers.

      7.8   Plan Committee Allocations and Delegations of Responsibility.

            (a) Delegation. The Board of Directors, the Compensation Committee
      and Plan Committee shall have the authority to delegate from time to time,
      by instrument in writing, all or any part of their responsibilities under
      the Plan to such person or persons as they may deem advisable (and may
      authorize such person to delegate such responsibilities to such other
      person or persons as the Board of Directors, the Compensation Committee or
      the Plan Committee shall authorize); and in the same manner the Board of
      Directors, the Compensation Committee and the Plan Committee shall have
      the authority to revoke any such delegation of their responsibility. Any
      action of the delegate in the exercise of such delegated responsibilities
      shall have the same force and effect for all purposes hereunder as if such
      action had been taken by the Board of Directors, the Compensation
      Committee or the Plan Committee whichever is appropriate. Neither any
      Employer, nor the Board of Directors, the Compensation Committee , the
      Plan Committee or the respective members of each shall be liable for any
      acts or omissions of any such delegate. The delegate shall report
      periodically to the Board of Directors, the Compensation Committee or the
      Plan Committee, whichever is appropriate, concerning the discharge of the
      delegated responsibilities.

            (b) Allocation. The Board of Directors, the Compensation Committee
      and the Plan Committee shall have the authority to allocate from time to
      time, by instrument in writing, all or any part of their responsibilities
      under the Plan to one or more of their members as they may deem advisable,
      and in the same manner to revoke such allocation of responsibilities. Any
      action of the member to whom responsibilities are allocated in the
      exercise of such allocated responsibilities shall have the same force and
      effect for all purposes hereunder as if such action had been taken by the
      Board of Directors, the Compensation Committee or the Plan Committee,
      whichever is appropriate. Neither any Employer nor the Board of Directors,
      the Compensation Committee, the Plan Committee or the respective members
      of each shall be liable for any acts or omissions of such member. The
      member to whom responsibilities have been allocated shall report
      periodically to the Board of Directors, the Compensation Committee or the
      Plan Committee concerning the, discharge of the allocated
      responsibilities.

            (c) Limitation on Liability. Fiduciary duties and responsibilities
      which have been allocated or delegated pursuant to the terms of (a) or (b)
      of this section are intended to limit the liability of the Employer, the
      Board of Directors, the Compensation Committee or the Plan Committee, as
      appropriate.


                                       18
<PAGE>

      7.9 Information to be Supplied by Employers. Employers shall provide the
Plan Committee or its delegate with such information as it shall from time to
time need in the discharge of its duties.

      7.10 Records. The regularly kept records of the Plan Committee and any
Employer shall be conclusive evidence of the Accrued Benefit, the Retirement
Benefit, the Years of Service of a person, his Compensation and Average Monthly
Compensation, his age and the age of any Spouse or Beneficiary, his status as an
Employee, and all other matters applicable to this Plan; provided that a person
may request a correction in the record of his age at any time prior to his
Payment Date, and such correction shall be made if within 90 days after such
request he furnishes in support thereof a birth certificate, baptismal
certificate, or other documentary proof of age satisfactory to the Plan
Committee.

      7.11 Capacity. Any person or group of persons may serve in more than one
capacity with respect to the Plan.

      7.12 Employer's Agent. The Company and/or the Plan Committee shall act as
agent for each Employer in the administration of the Plan.

      7.13 Plan Committee Decisions Final. The decision of the Plan Committee in
matters within its jurisdiction shall be final, binding, and conclusive upon the
Employers and upon each Employee, Participant, Spouse, Beneficiary, and every
other person or party interested or concerned.

                                  ARTICLE VIII

                                Claims Procedure

      8.1 Initial Claim for Payment. Each Participant or Beneficiary shall
submit a claim for payment to the Plan Committee (or to such other person as may
be designated by the Plan Committee) in such manner as is prescribed by the Plan
Committee. When a claim for benefits is filed, the Plan Committee shall
undertake to dispose of such claim in a reasonable time, and inform the
Participant or Beneficiary of such disposition and the reason for it. A
Participant shall have no right to seek review of a denial of payment or to
bring any action in any court to enforce a claim for payment prior to filing a
claim for payment and exhausting the rights to review as delineated under
Section 8.2.

      8.2 Review of Claim Denial. If a claim is denied, in whole or in part, the
claimant shall have the right to request that the Plan Committee review the
denial, provided that the claimant files a written request for review with the
Plan Committee within sixty (60) days after the date on which the claimant
received written notification of the denial. A claimant (or a claimant's duly
authorized representative) may review pertinent documents and submit issues and
comments in writing to the Plan Committee.


                                       19
<PAGE>

Within sixty (60) days after a request for review is received, the review shall
be made and the claimant shall be advised in writing of the decision on review,
unless special circumstances require an extension of time for processing the
review, in which case the claimant shall be given a written notification within
such initial sixty (60) day period specifying the reasons for the extension and
when such review shall be completed (provided that such review shall be
completed within one hundred and twenty (120) days after the date on which the
request for review was filed). The decision on review shall be forwarded to the
claimant in writing and shall include specific reasons for the decision and
references to Plan provisions upon which the decision is based. A decision on
review shall be final and binding on all persons for all purposes. If a claimant
shall fail to file a request for review in accordance with the procedures herein
outlined, such claimant shall have no rights to review and shall have no right
to bring action in any court and the denial of the claim shall become final and
binding on all persons for all purposes.

                                   ARTICLE IX

                        Maintenance of Plan by Employers

      9.1 Maintenance of Plan. An Affiliate which is a wholly-owned, directly or
indirectly, subsidiary of the Company shall be an Employer for purposes of this
Plan. Each Employer shall execute such documents and take such other actions as
may be required or directed by the Board, the Compensation Committee or the Plan
Committee to implement or effect the Plan. If the Board, or the Compensation
Committee desires to amend this Plan as to its application to the employees of
any Employer, it may do so by use of an Appendix. Notwithstanding any term or
provision of this Plan, the terms and provisions as may be imposed by the Board
or the Compensation Committee and attached hereto in an Appendix shall govern.

      9.2 Procedure for Withdrawal. Any Employer (other than the Company) may by
resolution of the Board or the Compensation Committee, subject to such
conditions as may be imposed by the Board or the Compensation Committee, cease
to be an Employer for purposes of this Plan.

                                    ARTICLE X

                            Amendment and Termination

      10.1 Amendments. The Board or the Compensation Committee may amend,
modify, change, revise or discontinue this Plan by amendment at any, time;
provided, however, no action shall, without the written consent of the affected
person, entity, Participant, Spouse or Beneficiary (a) increase the duties or
liabilities of any person or entity, (b) reduce the Participant's Accrued
Benefit as of the date of the amendment; or (c) change the method of determining
the Participant's Accrued Benefit or the right thereto, including the right to
such Accrued Benefit as provided in Section 10.2; or (d) amend, in any way, the
provisions of Article X or Section 12.1


                                       20
<PAGE>

      10.2 Termination of the Plan. This Plan shall terminate: (a) at such time
as the Board or the Compensation Committee, in their discretion, may determine;
(b) if a petition under any section or chapter of the Bankruptcy Reform Act of
1978 or any similar law or regulation shall be filed by the Company or if the
Company shall make an assignment for the benefit of its creditors or if any case
or proceeding is filed by the Company for its dissolution or liquidation; (c) if
the Company is enjoined, restrained or in any way prevented by court order from
conducting all or any material part of its business affairs or if a petition
under any section or chapter of the Bankruptcy Reform Act of 1978 or any similar
law or regulation is filed against the Company or if any case or proceeding in
filed against the Company for its dissolution or liquidation and such
injunction, restraint or petition is not dismissed or stayed within 45 days
after the entry or filing thereof; (d) if an application is made by the Company
for the appointment of a receiver, trustee or custodian of the Company's assets;
(e) if an application is made by any person other than the Company for the
appointment of a receiver, trustee, or custodian for the Company's assets and
the same is not dismissed within 45 days after the application therefor; or (f)
if the Company is dissolved and its business operations are not continued by or
under the control of substantially the same person or persons as control the
Company or no successor entity assumes the liability of the Plan. Such
termination shall become effective, in the case of the occurrence of the event
described in (a) of the preceding sentence, by the delivery of notice by the
Board or the Compensation Committee to the Participant, or in the case of the
occurrence of an event described in (b), (c), (d), (e) or (f) upon the
occurrence of the event. In the event of a termination of the Plan for the
reasons listed in (a) or (f), the termination of the Plan shall not reduce the
Participant's Accrued Benefit, which shall be fully vested and nonforfeitable as
of the date the Plan is terminated, and the Employer shall pay as soon as
administratively possible in a Lump Sum to each Participant or Beneficiary an
amount equal to the value of his unpaid Accrued Benefit (based upon Average
Monthly Compensation and Years of Service to the date of Plan termination) on
the date of the Plan's termination. In the event of a termination of the Plan
for any reason listed in (b), (c), (d), or (e), the Accrued Benefit shall be
fully vested and nonforfeitable, and paid consistently with the disposition of
the event listed in (b), (c), (d) or (e).

                                   ARTICLE XI

                   Exclusivity of Services and Confidential Information

      11.1 Non-Competition. As a condition of participation in the Plan or the
payment or accrual of any benefit hereunder on or after the Effective Date, each
Participant agrees to execute when presented, but generally on or about the
Payment Date a written agreement whereby the Participant shall obligate himself
and be obligated:

            (a) not to compete on or after the Payment Date, whether as
      employer, employee, agent, proprietor, owner, partner, contractor,
      stockholder (other than as the holder of less than five percent (5%) of
      the stock of a corporation the


                                       21
<PAGE>

      securities of which are traded in the United States of America or in
      another country on a national securities exchange or in the
      over-the-counter or another comparable market), director or otherwise,
      with an Employer or an entity controlled by the Employer on or after the
      Payment Date or in which an Employer or an entity controlled by the
      Employer is substantially engaged at any time on or after the Payment
      Date; provided that this covenant shall not require the Participant to
      divest himself of any interest or involvement in an enterprise held by the
      Participant or existing prior to such time as the Employer or an entity
      controlled by an Employer shall have begun, or begun active consideration
      of, engaging in the same or similar businesses as those conducted by such
      enterprise; and

            (b) not to induce or attempt to persuade any employee of an Employer
      or an entity controlled by an Employer to terminate such person's
      employment relationship in order to enter into employment competitive with
      an Employer or an entity controlled by an Employer.

      11.2 Nondisclosure. As a condition of participation in the Plan and
accrual of any benefit hereunder, each Participant acknowledges and agrees that
any and all information ("Information") that may be obtained by him at any time
during his employment with an Employer or an entity controlled by an Employer
with respect to the conduct and details of the business of an Employer or an
entity controlled by an Employer shall be deemed to be confidential information
("Confidential Information"). For purposes of this Agreement, "Information"
shall mean all materials and information about customers or clients of an
Employer or an entity controlled by an Employer, all materials and information
about sources or supply of property (real or otherwise), materials, equipment or
financing, price, and cost related to the business of an Employer or an entity
controlled by an Employer, and trade secrets, ideas, and all other tangible and
intangible items related to the business of an Employer or an entity controlled
by an Employer, which may be disclosed to the Participant by an Employer or an
entity controlled by an Employer or developed or acquired by the Participant;
provided that such information is maintained by an Employer or an entity
controlled by an Employer in a reasonably confidential manner and that such
information is not generally available to the public other than as a result of a
disclosure or other action by the Participant. The Participant also agrees that
Confidential Information shall not be used by the Participant, directly or
indirectly disclosed by the Participant, or used by the Participant for the
benefit of any third party during the Participant's employment with an Employer
or an entity controlled by an Employer and thereafter without the prior written
consent of the Board of Directors of the Company. The Participant further agrees
that upon Termination of Employment he will surrender to the Company any books,
lists, records, documents, and other similar property obtained by him or
entrusted to him during his employment with an Employer or an entity controlled
by an Employer or which were paid for by an Employer or an entity controlled by
an Employer, it being explicitly understood and agreed that all such books,
records, lists, documents, and other similar property are and shall remain the
property of an Employer or an entity controlled by an Employer.


                                       22
<PAGE>

      11.3 Remedies. The following provisions shall apply to the provisions set
forth in Section 11.1 or 11.2:

            (a) In the event of a violation by the Participant of any covenant
      contained in this Article XI or entered into pursuant to this Plan, the
      Participant shall forfeit his right to the Accrued Benefit, and the amount
      of any previous payments of the Accrued Benefit shall be paid to the
      Company within 90 days of the Company's issuing a notice of the violation.

            (b) Without limiting the right of the Company to pursue all other
      legal and equitable remedies available for violation by the Participant of
      the covenants contained in this Article XI or an agreement entered into
      pursuant hereto it is expressly agreed that such other remedies cannot
      fully compensate the Employers for such a violation and that the Employers
      shall be entitled to injunctive relief (including temporary restraining
      orders after reasonable notice prior to application therefor) to prevent
      any such violation or continuing violation thereof, and the Participant
      hereby consents to the granting of such relief (including temporary
      restraining orders after reasonable notice prior to application therefor)
      by any court of competent jurisdiction.

            (c) It is the intent and understanding of the Company and the
      Participant that if in any action before any court or agency legally
      empowered to enforce the covenants contained in this Article XI or an
      agreement entered into pursuant hereto any term, restriction, covenant, or
      promise contained therein is found to be unreasonable and accordingly
      unenforceable, then such term, restriction, covenant, or promise shall be
      deemed modified to the extent necessary to make it enforceable by such
      court or agency.

            (d) The covenants contained in this Article XI or an agreement
      entered into pursuant hereto shall continue in effect pursuant to, and to
      the extent consistent with, their terms notwithstanding the termination of
      the Participant's employment with the Employer or other termination of
      this Plan.

      11.4 Limitation of Application. This Article shall not apply and shall be
null and void upon a Change of Control or in the event of a Termination of
Employment for Good Reason. For purposes of this Article XI, the Employer or the
entity controlled by the Employer shall be limited to those entities for which
the Participant was a common law Employee.

                                   ARTICLE XII

                            Miscellaneous Provisions


                                       23
<PAGE>

      12.1 Successor Entity. Any successor entity to the Company by merger,
consolidation, purchase or otherwise, shall be substituted hereunder for the
Company and the Plan shall be binding upon all successors to and assigns of the
Company, and the Company will require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form
satisfactory to the Compensation Committee, expressly, absolutely and
unconditionally to assume and agree to perform the obligations under this Plan
in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place.

      12.2 Indemnification. Each Employer shall indemnify and hold harmless each
member of the Board of Directors, the Compensation Committee and the Plan
Committee and each officer and employee of an Employer to whom are delegated
duties, responsibilities, and authority with respect to the Plan against all
claims, liabilities, fines and penalties, and all expenses reasonably incurred
by or imposed upon such delegate or agent (including but not limited to
reasonable attorney fees) which arise as a result of actions or failure to act
in connection with the operation and administration of the Plan to the extent
lawfully allowable and to the extent that such claim, liability, fine, penalty,
or expense is not otherwise paid for by liability insurance. Notwithstanding the
foregoing, an Employer shall not indemnify any person for any such amount
incurred through any settlement or compromise of any action unless the Employer
consents in writing to such settlement or compromise.

      12.3 Nonalienation of Payment. This Plan shall be binding upon and inure
to the benefit of the Employer, its successors and assigns and the Participant
and the Participant's Spouse's, Beneficiaries, heirs, executors, administrators
and legal representatives. Except as permitted by the preceding sentence,
benefits payable under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or
involuntary, including any such liability which is for alimony or other payments
for the support of a spouse, former spouse or children of the Participant, or
for any other relative of a Participant prior to actually being received by the
person entitled to the benefit under the terms of the Plan; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, garnish,
execute or levy upon, or otherwise dispose of any right to benefits payable
hereunder, shall be void. No Employer shall in any manner be liable for, or
subject to the debts, contracts, liabilities, engagements or torts of any person
entitled to benefits hereunder.

      12.4 Taxation Prior to Receipt. If the Participant or Beneficiary is
subject to taxation with respect to all or any portion of the Accrued Benefit
prior to the calendar year in which the Participant or Beneficiary otherwise
receives such portion, the Employer shall, at the written request of the
Participant or Beneficiary accompanied by evidence satisfactory to the Employer
of the correct determination of such tax liability, distribute the amount of the
Accrued Benefit determined to be taxable to the Participant or a Beneficiary as
soon as practicable.


                                       24
<PAGE>

      12.5 Allocation to Employer. The Plan Committee shall, if necessary,
determine each Employer's allocation of the Retirement or Death Benefit to which
the Participant is entitled pursuant to this Plan. If allocation is necessary,
the Employer shall pay such portion of the benefit payable hereunder as may be
allocated to it. Such determination shall be binding on all Participants,
Spouses, Beneficiaries and the Employers. Under no circumstances shall any
Participant or Beneficiary have any right to examine the books and records of
any Employer other than those records of the Plan Committee relating only to the
benefit of the Participant.

      12.6 Prior Benefits. This Plan amends and restates the Executive Benefit
Plan of Varlen Corporation and its Participating Subsidiaries ("Former Plan"),
with respect to any person who is a Participant, and any person who is a
Participant herein or the Beneficiary of a Participant shall have no rights
under or with respect to such Former Plan.

      12.7 Deduction of Taxes from Amounts Payable. The Employer may deduct from
the benefit such amount as the Employer, in its sole discretion, deems proper to
protect against liability for the payment of death, succession, inheritance,
income, employment or other taxes, and out of the money so deducted the Employer
may discharge any such liability and pay the amount remaining to the Participant
or the Beneficiary, as the case may be.

      12.8 Facility of Payment. If a Participant or Beneficiary is declared an
incompetent or is a minor and if a conservator, guardian or other person legally
charged with the Participant's care has been appointed, any benefits to which
such Participant or Beneficiary is entitled shall be payable to such
conservator, guardian or other person legally charged with the Participant's
care. The decision of the Plan Committee in such matters shall be final, binding
and conclusive upon the Employer and upon each Employee, Participant, Spouse,
Beneficiary, and every other interested or concerned person or party. Neither an
Employer nor the Plan Committee shall be under any duty to see to the proper
application of such payments. All benefits under the Plan shall be paid to the
person entitled thereto ("Payee") either by a check which shall be endorsed
personally by the Payee or, if the Payee makes a written request on a form
approved by the Plan Committee, by a deposit in the personal savings or checking
account of the Payee; provided that if any such deposit shall be made in error
or in excess of the amount due, the Payee shall be liable to return any such
payment or excessive portion of any payment.

      12.9 Mitigation of Excise Tax. If any amount payable under this Plan
(without the application of this Section 12.9), either alone or together with
other payments to the Participant from the Company or an Affiliate, would
constitute a "parachute payment" (as defined in Section 280G of the Code and
regulations thereunder), such payment shall be reduced to the largest amount
that will result in no portion of the amount payable under this Plan being
subject to excise tax under Section 4999 of the Code or being disallowed


                                       25
<PAGE>

as a deduction under Section 280G of the Code. The determination of whether any
reduction in the amount payable is to apply shall be made by the Company in good
faith after consultation with the Participant, and such determination shall be
conclusive and binding on the Participant. The Participant shall cooperate in
good faith with the Company in making such determination and in providing the
necessary information for this purpose. The foregoing provisions of this Section
12.9 shall apply with respect to any person only if the payment to such person
under this Plan without regard to this Section 12.9 ("Required Payment"), minus
the reduction described in this Section 12.9 ("Required Reduction"), and minus
thefederal income tax on the difference between the Required Payment and the
Required Reduction, equals an amount greater than the Required Payment minus the
excise tax under Section 4999 of the Code on such Required Payment and, minus
the federal income tax on such Required Payment.

      12.10 Effect of Return of Benefit Checks. Each person entitled to benefits
under this Plan shall furnish the Plan Committee with the address to which his
benefit checks shall be mailed. If any benefit check mailed by regular United
States mail to the last address appearing on the Plan Committee's records is
returned because the addressee is not found at that address, the mailing of
benefit checks shall stop. Thereafter, if the Plan Committee receives written
notice of the proper address of the person entitled to receive such benefit
checks and is furnished with evidence satisfactory to the Plan Committee that
such person is living, all amounts then due shall be forwarded to such person.

      12.11 Small Pensions. Notwithstanding any other provision of this Plan, if
the Lump Sum value of a Retirement Benefit or Death Benefit does not exceed
$10,000, the Plan Committee, in its discretion, may immediately make full
payment of such amount in a Lump Sum.

      12.12 Contract of Employment. Nothing contained herein shall be construed
to constitute a contract of employment between an Employer and any Employee or
Participant.

      12.13 Source of Payment. All payments under this Plan shall be from the
general funds of the Employers, and no special or separate, fund shall be
established and no other segregation of assets shall be made to assure payment.
No Participant shall have any right, title, or interest whatever in or to any
investments which the Employer may make to aid the Employer in meeting its
obligations hereunder. Nothing contained in this Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship, between an Employer and any Participant.
To the extent that any person acquires a right to receive payments from the
Employer hereunder, such right shall be no greater than the right of an
unsecured creditor of the Employer.

      12.14 Limitation on Liability. No Employer nor any agent or representative
of any Employer who is an employee, officer, or director of an Employer in any
manner guarantees the payments to be made under this Plan against loss or
depreciation, and to


                                       26
<PAGE>

the extent not prohibited by federal law, none of them shall be liable (except
for his own gross negligence or willful and material misconduct), for any act or
failure to act, done or omitted in good faith, with respect to the Plan. No
Employer shall be responsible for any act or failure to act of any agent
appointed to administer the Plan.

      12.15 Enforcement of Plan. It is the intent of the Company that the
Participant not be required to incur the expenses associated with the
enforcement of his rights under this Plan by litigation or other legal action,
or be bound to negotiate any settlement of his rights hereunder, because the
cost and expense of such legal action or settlement would substantially detract
from the benefits intended to be extended to the Participant hereunder.
Accordingly, if it is finally determined by a court or other entity of competent
jurisdiction that the Company has failed to comply with any of its obligations
under this Plan or in the event that the Company or any other person takes any
action to declare this Plan void or unenforceable, or institutes any litigation,
arbitration or other legal account designed to deny, diminish or to recover from
the Participant the benefits entitled to be provided to the Participant
hereunder, and that Participant has complied with all of his obligations under
this Plan, the Company irrevocably authorizes the Participant from time to time
to retain counsel of his choice, at the expense of the Company, but only to the
extent such expense is reasonable and it is determined by the court or arbiter
before whom the matter is pending that the Participant is as likely as not to
prevail on the merits, to represent the Participant in connection with the
initiation or defense of any litigation, arbitration, or other legal action,
whether such action is by or against the Company or any director, officer,
shareholder or other person affiliated with the Company, in any jurisdiction.
The reasonable fees and expenses of counsel selected from time to time by the
Participant, as hereinabove provided, shall be paid or reimbursed to the
Participant by the Company on a regular, periodic basis upon presentation by
such counsel in accordance with its customary practices. Any legal expenses
incurred by the Company by reason of any dispute between the parties as to the
enforceability of or the terms contained in this Plan, notwithstanding the
outcome of any such dispute, shall be the sole responsibility of the Company,
and the Company shall not take any action to seek reimbursement from the
Participant for such expenses. The rights extended hereunder which would apply
to a Participant shall be equally applicable to a Beneficiary.

      12.16 No Obligations To Mitigate Damages; No Effect on Other Contractual
Rights.

            (a) The Participant shall not be required to mitigate damages or the
      amount of any payment provided for under this Plan by seeking other
      employment or otherwise, nor shall the amount of any payment provided for
      under this Plan be reduced by any compensation earned by the Participant
      as the result of employment by another employer after the termination of
      the Participant's employment, or otherwise.

            (b) The provisions of this Plan, and any payment provided for
      hereunder, shall not reduce any amounts otherwise payable, or in any way


                                       27
<PAGE>

      diminish the Participant's existing rights, or rights which would accrue
      solely as a result of the passage of time, under any benefit plan,
      incentive plan or securities plan, employment agreement or other contract,
      plan or arrangement of the Company or an Affiliate.

      12.17 Headings. The headings of Articles and Sections are included solely
for convenience of reference, and if there is any conflict between such headings
and the text of this Plan, the text shall control.

      12.18 Invalidity of Certain Provisions. If any provision of this Plan
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions hereof and the Plan shall be construed and
enforced as if such provisions, to the extent invalid or unenforceable, had not
been included.

      12.19 Law Governing. The Plan shall be construed and enforced according to
the laws of the State of Illinois (other than its laws respecting choice of law)
to the extent not preempted by the Act.

            Executed this ______ day of ______, 1999.

                                          VARLEN CORPORATION

                                          By:  ___________________________


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