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                               VARLEN CORPORATION
                              EXCESS BENEFITS PLAN
                     (As amended and restated May 14, 1999)

                                    ARTICLE I

                                  Establishment

      The Varlen Corporation Excess Benefits Plan, originally effective as of
January 1, 1988, is hereby amended and restated generally effective as of May
14, 1999. The purpose of the Plan is to provide selected persons with deferred
compensation which would have otherwise accrued under the Varlen Corporation
Profit Sharing and Retirement Savings Plan or any successor thereto (or, to the
extent provided herein, under a Subsidiary Plan) except for the application of
certain limits with respect to such plan as required by the Internal Revenue
Code of 1986. 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 basic 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 "Account" means the bookkeeping record established and maintained on
behalf of each Participant equal to the amount accrued pursuant to Section 4.1,
increased by any Account Earnings, and decreased by any distributions or
forfeitures pursuant to the terms of the Plan. The value of a Participant's
Account at any time during the Accounting Period, other than on a Valuation
Date, shall be the Account accrued as of the immediately preceding Valuation
Date, increased by the value of any additional amount accrued pursuant to
Section 4.1 and credited to the Account during the Accounting Period, and
reduced by the value of forfeitures or distributions to the Participant or his
Beneficiary during the Accounting Period. On the Valuation Date, the value shall
be that as determined under the preceding sentence increased by the value of any
Account Earnings for that Accounting Period. The Plan Committee may establish
one or more separate Accounts for any person for any reason the Plan Committee
may determine, and the Plan shall apply separately with respect to each Account.
The Account represents an unfunded commitment of the Employers to pay in the
future the amounts credited thereunder, subject to all the terms and conditions
of the Plan.

      2.2 "Accounting Period" means each and any calendar year ending on or
after December 31, 1988, or such other period(s) as may be designated by the
Plan Committee.


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      2.3 "Account Earnings" means the amount representing the growth or
decrease in a Participant's Account for any Accounting Period, relating to the
performance of the investment elections submitted by the Participant.

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

      2.5 "Affiliate" means 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.

      2.6 "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.

      2.7 "Beneficiary" means any person (including any trust, estate or other
entity) designated by a Participant in accordance with Section 5.2 to receive
any death benefits which shall be payable under the Plan.

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

      2.9 "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


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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;

            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.


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

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

      2.12 "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.

      2.13 "Earnings Factor" shall mean, with respect to any Plan Year, the
product of (a) the aggregate percent rate of growth (or decline) during the
calendar year in which the relevant Valuation Date occurs, in the funds elected
by a Participant pursuant to Section 4.3 herein, such percent to be calculated
at the sole discretion of the Plan Committee, and (b) a fraction, the numerator
of which is the number of full calendar months in the Accounting Period and the
denominator of which is 12. If the Accounting


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Period is other than one or more full calendar months, the Plan Committee shall
appropriately modify the fraction calculated under the preceding sentence.

      2.14 "Effective Date" means January 1, 1988, for the Company and any
entity which is an Employer on January 1, 1988. For all other Affiliates, it
shall mean the date the Affiliate becomes an Employer.

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

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

      2.17 "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;


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      (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:

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.

      2.18 "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.

      2.19 "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.

      2.20 "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.

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

      2.22 "Plan" means the Varlen Corporation Excess Benefits Plan as stated
herein, and as hereafter may be amended from time to time.

      2.23 "Plan Committee" means the committee appointed pursuant to Article VI
to administer the Plan.

      2.24 "Plan Year" means the 12 consecutive month period beginning January
1, 1988 and each successive calendar year thereafter.

      2.25 "Savings Plan" means the Varlen Corporation Profit Sharing and
Retirement Savings Plan, as may be amended from time to time, or any successor
thereto as designated by the Plan Committee.

      2.26 "Subsidiary Plan" means a plan sponsored by an Employer other than
the Company, where (i) a Participant in the Plan is an Employee of such
Employer, (ii) such plan includes a qualified cash or deferred arrangement
pursuant to Code ss. 401(k), (iii) the Participant makes elective deferrals and
has an account under that plan that is credited


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with such other contributions as are provided for under that plan, and (iv) the
plan is listed by the Committee on the attached Appendix I. The Committee shall
have discretion to amend Appendix I from time to time.

      2.27 "Termination of Employment" means the earliest of (a) 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.

      2.28 "Termination of Employment for Cause" or "Cause" means:

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

            (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.

      2.29 "Valuation Date" means the last day of each Accounting Period, and
such additional more frequent dates as the Plan Committee may from time to time
permit.

Except as otherwise indicated by the context, any masculine terminology herein
shall also include the feminine and neuter, and the definition of any term
herein in the singular may also include the plural.

                                   ARTICLE III

                                  Participation

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

      3.2 Duration of Participation. Subject to Article IX, a person shall cease
to be a Participant on the date the balance of his Account is reduced to zero;
provided that with respect to a Participant who incurs a Termination of
Employment or who is employed by an Affiliate that is not an Employer during the
Plan Year, the Plan Committee may


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determine for that Plan Year whether the Participant shall be a Participant for
the Plan Year (or portion thereof) and whether the Participant shall accrue any
amount pursuant to Section 4.1 for that Plan Year (or portion thereof). A
Participant shall not be entitled to an accrual under Section 4.1 with respect
to any Plan Year in which the Participant does not contribute to the Savings
Plan (or a Subsidiary Plan) the lesser of 6% of the Participant's compensation
(as defined in the Savings Plan or Subsidiary Plan) and the maximum permitted to
be contributed by the Participant as a salary reduction contribution as provided
in the Savings Plan or Subsidiary Plan.

      3.3 Reemployment. If a Participant incurs a Termination of Employment and
is reemployed, such Participant shall not have credited to his Account an
accrual under Section 4. 1 unless and until the individual again becomes a
Participant in accordance with Section 3.1.

      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

                     Establishment and Crediting of Account

      4.1 Accrual.

            (a) Amount. Subject to Section 3.2 and Article IX, the Account of
      each Participant who is an Employee of an Employer shall be credited each
      Plan Year with an amount equal to the sum of (1), (2) and (3), as follows:

            (1)   the amount of the matching contribution (as determined in the
                  Savings Plan) which would have been allocated to the
                  Participant during the plan year of the Savings Plan ending
                  with or within the Plan Year, absent the limitation on
                  deferrals described in Sections 401(a)(17), 401(k), 401(m),
                  402(g) or Section 415 of the Code, (or comparable limitations
                  as determined by the Plan Committee) (and in the case of a
                  Participant who benefited during such time period under a
                  Subsidiary Plan, the amount which would have been so allocated
                  under the terms of that Subsidiary Plan) reduced by the amount
                  of matching contribution actually allocated to the Participant
                  for the same period under the Savings Plan (and the Subsidiary
                  Plan);

            (2)   the amount of discretionary contribution (as determined in the
                  Savings Plan) which would have been allocated to the
                  Participant during the Plan Year of the Savings Plan ending
                  with or within the Plan Year, absent the limitation of
                  Sections 401(a)(17) and 415 of


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                  the Code, (or comparable limitations as determined by the Plan
                  Committee) (and in the case of a Participant who benefited
                  during such time period under a Subsidiary Plan, the amount
                  which would have been so allocated under the terms of that
                  Subsidiary Plan) reduced by the amount of such contributions
                  actually allocated to the Participant for the same period
                  under the Savings Plan (and the Subsidiary Plan); and

            (3)   the amount of "Forfeitures" (as defined in the Savings Plan,
                  including any comparable or successor definition and any
                  forfeitures under or with respect to any plan merged into or
                  with the Savings Plan) which would have been allocated to the
                  Participant during the plan year of the Savings Plan ending
                  with or within the Plan Year, absent the limitation of
                  Sections 401(a)(17) and 415 of the Code (or comparable
                  limitations as determined by the Plan Committee) (and in the
                  case of a Participant who benefited during such time period
                  under a Subsidiary Plan, the amount which would have been so
                  allocated under the terms of that Subsidiary Plan), reduced by
                  the amount of Forfeitures actually allocated to the
                  Participant for the same period under the Savings Plan (and
                  the Subsidiary Plan.)

            (b) Account. The Plan Committee shall create and maintain an Account
      for each Participant, to which shall be credited all amounts accrued
      pursuant to Section 4.1(a) and any Account Earnings thereon, and shall be
      charged with any distributions and forfeitures, pursuant to the terms of
      the Plan.

      4.2 Crediting and Charging Account. Subject to Section 3.2 and Article IX,
any amount accrued pursuant to Section 4.1 shall be credited to the
Participant's Account on the date such amount would have been credited to the
Participant pursuant to the Savings Plan or the Subsidiary Plan, as applicable,
if such amount would have been permitted as a contribution under the Savings
Plan or the Subsidiary Plan, as applicable, for the Plan Year. Any amounts
distributed or forfeited with respect to the Account shall be charged as of the
date of such distribution or forfeiture.

      4.3 Earnings on Account Balances. Participants shall be given the
discretion to make quarterly elections with respect to the accrual rates to be
applied to earnings on their Account balances. The alternatives with respect to
such elections shall be communicated periodically by the Plan Committee. Each
such election must be delivered to the appropriate officer of the Company at
least fifteen (15) days prior to the beginning of the calendar quarter in which
such election is to be effective.

      Neither the Plan Committee nor any administrator of any funding vehicle
which may be established under the Plan shall be required to actually invest the
funds in Participants' accounts in the manner(s) elected by the Participants.
Rather, such Account


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balance accruals shall be tracked by the Plan Committee by means of bookkeeping
accounts, according to such methods and procedures as the Plan Committee, in its
sole discretion, deems appropriate. Account Earnings shall be distributed to a
Participant or his or her Beneficiary as part of the value of the Participant's
Account and shall be subject to all the terms and conditions of this Plan.

                                    ARTICLE V

                                  Distribution

      5.1 Payment of Accrued Benefits Upon Termination Other Than Death. If a
Participant has a Termination of Employment other than due to death, due to
Cause or due to Good Reason, there shall be distributed to the Participant
within 90 days of such Termination of Employment an amount equal to the
nonforfeitable portion of the value of his Account in a single sum. The
nonforfeitable portion of the Participant's Account shall be the sum of (1) all
amounts attributable to Section 4.1(a)(1) and (3), including Account Earnings
attributable thereto, and (2) the nonforfeitable portion of the Account
attributable to Section 4.1(a)(2) which portion shall be determined by
multiplying the Account attributable to Section 4.1(a)(2) by a percentage, which
percentage shall be the same percentage as the percentage of the Participant's
account under the Savings Plan (or Subsidiary Plan, to the extent of
contributions made based on the Subsidiary Plan) attributable to discretionary
contributions which the Participant is entitled to receive under the Savings
Plan (or a Subsidiary Plan as applicable) as of the date of the Termination of
Employment. Notwithstanding anything herein to the contrary, the Participant's
Account shall be fully vested and nonforfeitable: (a) in the event the
Termination of Employment is due to Disability; or (b) with respect to Old
Participants, as of the date of any Change of Control. In the event a
Participant's Termination of Employment is for Cause, the Account shall be
forfeited and the Participant and any Beneficiary of the Participant shall have
no right to any amount hereunder. In the event a Participant has incurred a
Termination of Employment and it is thereafter discovered the Participant
committed an act described in Section 2.24(a), any amount previously distributed
to the Participant pursuant to the Plan shall be returned to the Company within
90 days of the date the Company demands such payment.

      5.2 Payment Upon Death. In the event the Participant incurs a Termination
of Employment due to death and has not previously received a distribution of his
Account, an amount equal to the total value of the Participant's Account shall
be distributed as soon as administratively possible to the Participant's
Beneficiary determined hereunder. The Beneficiary or Beneficiaries entitled to
any payments under this Section 5.2 shall be designated by the Participant on a
form provided or approved by the Plan Committee. The Participant may change such
designation from time to 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. If more than one Beneficiary
shall be designated, the Beneficiaries shall share any distribution on a pro
rata basis unless provided otherwise by the Beneficiaries (and approved by the
Plan


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Committee) or in the beneficiary designation form. If a Participant shall fail
to file a valid beneficiary designation form, or if all persons designated shall
have predeceased the Participant, the Employer shall distribute such
Participant's Account to the Participant's estate or such other person or entity
which the Plan Committee determines is entitled to such Account. Unless and
until a Participant shall file a beneficiary designation form with the Plan
Committee, the beneficiary designated under the Savings Plan shall be the
Beneficiary under this Plan.

      5.3 Deduction of Taxes from Amount Payable. The Employer may deduct from
the amount to be distributed 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 Participant's Beneficiary, as the case may
be.

      5.4 Board Discretion. Notwithstanding anything to the contrary in Section
5.1, the Board or the Compensation Committee may, at any time and in its sole
discretion, increase the nonforfeitable percentage of a New Participant's
Account.

                                   ARTICLE VI

                                 Administration

      6.1 Authority and Responsibility of the Board of Directors and the
Compensation Committee. The Board of Directors shall have overall responsibility
for the establishment, amendment, termination, administration and operation of
the Plan; provided as of the effective date, 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.

      6.2 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 and chief financial officers, 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.

      6.3 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


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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.

      6.4 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.

      6.5 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 and Beneficiaries, to the entitlement to payment of the
      Account value 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 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;


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            (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 and
      Beneficiaries in claiming benefits;

            (1) To develop and make available forms for use by Participants and
      Beneficiaries 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.

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

      6.7 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.

      6.8   Plan Committee Allocations and Delegations of Responsibility.

            (a) Delegation. The Board of Directors, the Compensation Committee
      and the 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 it may deem advisable (and may
      authorize such person to delegate such responsibilities to such other
      person or persons as the Board of Directors, Compensation Committee or
      Plan Committee shall authorize); and in the same manner the Board of
      Directors, Compensation Committee and Plan Committee shall have the
      authority to revoke any such delegation of its 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


                                       12
<PAGE>

      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 Compenstion Committee or 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 or 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.

      6.9 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.

      6.10 Records. The regularly kept records of the Plan Committee and any
Employer shall be conclusive evidence of the Account the Participant's accrual
under Section 4.1, the Participant's vested interest under the Savings Plan, his
status as an Employee, and all other matters applicable to this Plan.

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

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


                                       13
<PAGE>

      6.13 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, Beneficiary, and every other
person or party interested or concerned.

                                   ARTICLE VII

                                Claims Procedure

      7.1 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 delineated under Section
7.2.

      7.2 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. 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 VIII

                         Maintenance of Plan by Employer

      8. 1 Maintenance of Plan. An Affiliate which is a wholly-owned, directly
or indirectly, subsidiary of the Company shall become an Employer for purposes
of this Plan. Each Employer shall execute such documents and take such other
actions as may


                                       14
<PAGE>

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.

      8.2 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 IX

                            Amendment and Termination

      9.1 Amendments. The Board or the Compensation Committee may amend, modify,
change, revise or discontinue this Plan at any time, provided, however, that no
action shall, without the written consent of the affected person, entity,
Participant or Beneficiary (a) materially increase the duties or liabilities of
any person or entity; (b) materially reduce the Participant's Account value; (c)
change the portion of the Account which is vested or the right to such Account
as provided in Article V; or (d) affect in any way the provisions of Section 9.2
or 10.1

      9.2 Termination of the Plan. This Plan may be terminated and 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 is 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) 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 in (a) of the preceding sentence, by the delivery of
notice by the Board or the Compensation Committee to the Participant, or if such
termination is the occurrence of an event described in (b), (c), (d),


                                       15
<PAGE>

(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 value of the Participant's Account and the Participant's Account
shall be fully vested and nonforfeitable as of the date the Plan is terminated,
and the Employer shall pay, subject to Section 10.10, and to the extent
permitted by law, as soon as administratively possible in a single sum to each
Participant or Beneficiary an amount equal to the value of his Account on the
date of the termination of the Plan. In the event of a termination of the Plan
for any reason listed in (b), (c), (d), or (e), the value of the Account shall
be fully vested and nonforfeitable, and paid in a single sum as soon as
administratively possible but consistent with the disposition of the event
listed in (b), (c), (d) or (e).

                                    ARTICLE X

                            Miscellaneous Provisions

      10.1 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.

      10.2 Indemnification. Each Employer shall indemnify and hold harmless each
member of the Board of Directors, the Compensation Committee, 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.

      10.3 Nonalienation of Payment. This Plan shall be binding upon and inure
to the benefit of the Employer, its successors and assigns and the Employee and
the Employee's 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


                                       16
<PAGE>

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.

      10.4 Allocation to Employer. The Plan Committee shall, if necessary,
determine each Employer's allocation of the obligation with respect to a
Participant's Account, with respect to such criteria and factors as the Plan
Committee may determine. In the event of allocation, the Employer will pay such
portion of the benefits payable hereunder as may be allocated to it. Such
determination shall be binding on all Participants, Beneficiaries and the
Employer. 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 Account of the Participant.

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

      10.6 Appointment of Guardian. 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 each Participant, Beneficiary and every other interested or
concerned person or party. None of the Company, an Employer nor the Plan
Committee shall be under any duty to see to the proper application of such
payments.

      10.7 Facility of Payment. All benefits under the Plan shall be paid to the
Participant or Beneficiary 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.


                                       17
<PAGE>

      10.8 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 check 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.

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

      10.10 Source of Payment. All amounts deferred under the Plan, all property
and rights purchased with such amounts, all income attributable to such amounts,
property or rights, and all payments under this Plan shall remain (until paid)
solely the property and rights of the Employer and shall be paid from the
general assets or 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. All amounts accrued under the Plan shall remain, until distributed
pursuant to the terms hereof solely the property and rights of the Employers. 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.

      10.11 Mitigation of Excise Tax. If any amount payable under this Plan
(without the application of this Section 10.11), 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 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
10.11 shall apply with respect to any person only the payment to such person
under this Plan without regard to this Section 10.11 ("Required Payment"), minus
the reduction described in this Section 10.11 ("Required Reduction"), and minus
the federal income tax on the difference between the Required Payment and the
Required Reduction, equals an amount greater than the


                                       18
<PAGE>

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.

      10.12 Limitation on Liability. No Employer, or its shareholders 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 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.

      10.13 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 in 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.

      10.14 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


                                       19
<PAGE>

      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
      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.

      10.15 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.

      10.16 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.

      10.17 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 Employee Retirement Income Security Act of
1974, as amended.

Executed this _____ day of _______,1999.

                                    VARLEN CORPORATION

                                    By:_____________________________


                                       20
<PAGE>

                                   Appendix I

1.     Brenco Supplemental Pension Plan


                                       21