<PAGE>   1


                                                                 EXHIBIT 10(iii)




                             COOPER INDUSTRIES, INC.
                    SUPPLEMENTAL EXCESS DEFINED BENEFIT PLAN
                          (AUGUST 1, 1998 RESTATEMENT)












<PAGE>   2


                             COOPER INDUSTRIES, INC.
                    SUPPLEMENTAL EXCESS DEFINED BENEFIT PLAN
                          (AUGUST 1, 1998 RESTATEMENT)


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
         SECTION                                                                                                PAGE
         -------                                                                                                ----
                                                     ARTICLE I
                                                    DEFINITIONS

<S>                                                                                                              <C>
         1.1      Definitions.............................................................................        2
         1.2      Construction............................................................................        5

                                                    ARTICLE II
                                        ELIGIBILITY FOR PLAN PARTICIPATION

         2.1      Eligibility of Active Employees.........................................................        6
         2.2      Participation of Certain Employees......................................................        6
         2.3      Termination of Participation............................................................        6

                                                    ARTICLE III
                                              AMOUNT OF PLAN BENEFITS

         3.1      Benefit Payable to Active Participants..................................................        9
         3.2      Benefit Payable to Participants Formerly Covered
                    By Another Nonqualified Plan..........................................................       10
         3.3      Cessation of Benefits to Certain Participants...........................................       10

                                                    ARTICLE IV
                                            PAYMENT OF PLAN BENEFITS                                             12

                                                     ARTICLE V
                                                   BENEFICIARIES                                                 13

                                                    ARTICLE VI
                                             ADMINISTRATIVE PROVISIONS

         6.1      Administration..........................................................................       14
         6.2      Powers and Authorities of the Committee.................................................       14
         6.3      Indemnification.........................................................................       14
</TABLE>





                                       i
<PAGE>   3

<TABLE>

<S>                                                                                                              <C>
                                                    ARTICLE VII
                                             AMENDMENT AND TERMINATION                                          16

                                                   ARTICLE VIII
                                             ADOPTION BY SUBSIDIARIES                                           17
  

                                                    ARTICLE IX
                                                   MISCELLANEOUS

         9.1      Non-Alienation of Retirement Rights or Benefits.........................................       18
         9.2      Payment of Benefits to Others...........................................................       18
         9.3      Plan Non-Contractual....................................................................       18
         9.4      Funding  ...............................................................................       19
         9.5      Controlling Status......................................................................       19
         9.6      Claims of Other Persons.................................................................       19
         9.7      Severability............................................................................       19
         9.8      Governing Law...........................................................................       20
</TABLE>



                                       ii
<PAGE>   4


                             COOPER INDUSTRIES, INC.
                    SUPPLEMENTAL EXCESS DEFINED BENEFIT PLAN
                          (AUGUST 1, 1998 RESTATEMENT)

                  WHEREAS, Cooper Industries, Inc. (hereinafter referred to as
the "Company") established the Cooper Industries, Inc. Supplemental Excess
Defined Benefit Plan (hereinafter referred to as the "Plan"), for the benefit of
a select group of management employees of the Company and its subsidiaries; and

         WHEREAS, effective as of the close of business on July 31, 1990, the
Excess Benefit Plan for Participants in the Champion Spark Plug Company Salaried
Employees' Retirement Income Plan, the Champion Spark Plug Company Supplemental
Benefit Plan, and effective as of the close of business on August 31, 1990, the
Restoration of Retirement Income Plan for Certain Participants in the Cameron
Iron Works, Inc. Retirement Plan for Salaried Employees were merged into the
Plan and the Plan was restated; and

         WHEREAS, the Plan was amended subsequently on six occasions; and

         WHEREAS, the Company desires to amend and restate the Plan again;

         NOW, THEREFORE, effective as of August 1, 1998, unless specifically
provided otherwise, the Plan is hereby amended and restated as hereinafter set
forth with respect to Participants employed on and after such date.


<PAGE>   5



                                    ARTICLE I

                                   DEFINITIONS


         1.1 DEFINITIONS. Except as otherwise required by the context, the terms
used in the Plan shall have the meaning hereinafter set forth.

                  (1) The term "AFFILIATE" shall have the meaning set forth in
         Rule 12b-2 under Section 12 of the Exchange Act.

                  (2) The term "BENEFICIAL OWNER" shall have the meaning set
         forth in Rule 13d-3 under the Exchange Act, except that a Person shall
         not be deemed to be the Beneficial Owner of any securities which are
         properly filed on a Form 13-G.

                  (3) The term "BENEFICIARY" shall mean the person who, in
         accordance with the provisions of Article V, shall be entitled to
         receive distribution hereunder in the event a Participant dies before
         his interest under the Plan has been distributed to him in full.

                  (4) The term "CAMERON EXCESS PLAN" shall mean the Restoration
         of Retirement Income Plan for Certain Participants in the Cameron Iron
         Works, Inc. Retirement Plan for Salaried Employees as in effect on
         August 31, 1990.

                  (5) The term "CHAMPION EXCESS PLAN" shall mean the Excess
         Benefit Plan for Participants in the Champion Spark Plug Company
         Salaried Employees' Retirement Income Plan as in effect on July 31,
         1990.

                  (6) The term "CHAMPION SALARIED PLAN" shall mean the Champion
         Spark Plug Company Salaried Employees' Retirement Income Plan which was
         merged with the Cooper Salaried Plan effective July 31, 1990.

                  (7) The term "CHAMPION SUPPLEMENTAL PLAN" shall mean the
         Champion Spark Plug Company Supplemental Benefit Plan.

                  (8) The term "CHAMPION EXCESS DB PLAN" shall mean the Champion
         Spark Plug Company Supplemental Excess Defined Benefit Plan.

                  (9) A "CHANGE IN CONTROL" shall be deemed to have occurred if
         an event described below occurs:

                      (a) Any Person is or becomes the Beneficial Owner,
                  directly or indirectly, of securities of the Company (not
                  including in the securities beneficially owned by such Person
                  any securities acquired directly from the Company or its
                  affiliates) representing 20% or more of the combined voting
                  power of the Company's then outstanding securities, excluding
                  any Person who becomes such a Beneficial Owner in connection
                  with a transaction described in clause (i) of paragraph (c)
                  below; or


                                       2
<PAGE>   6


                      (b) The following individuals cease for any reason to
                  constitute a majority of the number of directors then serving:
                  individuals who on the date hereof, constitute the Board and
                  any new director (other than a director whose initial
                  assumption of office is in connection with an actual or
                  threatened election contest, including but not limited to a
                  consent solicitation, relating to the election of directors of
                  the Company) whose appointment or election by the Board or
                  nomination for election by the Company's shareholders was
                  approved or recommended by a vote of at least two-thirds (2/3)
                  of the directors then still in office who either were
                  directors on the date hereof or whose appointment, election or
                  nomination for election was previously so approved or
                  recommended; or

                      (c) There is consummated a merger or consolidation of the
                  Company or any direct or indirect subsidiary of the Company
                  with any other corporation, other than (i) a merger or
                  consolidation which would result in the voting securities of
                  the Company outstanding immediately prior to such merger or
                  consolidation continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the surviving entity or any parent thereof), at least 60% of
                  the combined voting power of the securities of the Company or
                  such surviving entity or any parent thereof outstanding
                  immediately after such merger or consolidation, or (ii) a
                  merger or consolidation effected to implement a
                  recapitalization of the Company (or similar transaction) in
                  which no Person is or becomes the Beneficial Owner, directly
                  or indirectly, of securities of the Company (not including in
                  the securities Beneficially Owned by such Person any
                  securities acquired directly from the Company or its
                  Affiliates) representing 20% or more of the combined voting
                  power of the Company's then outstanding securities; or

                      (d) The shareholders of the Company approve a plan of
                  complete liquidation or dissolution of the Company or there is
                  consummated an agreement for the sale or disposition by the
                  Company of all or substantially all of the Company's assets,
                  other than a sale or disposition by the Company of all or
                  substantially all of the Company's assets to an entity, at
                  least 60% of the combined voting power of the voting
                  securities of which are owned by shareholders of the Company
                  in substantially the same proportions as their ownership of
                  the Company immediately prior to such sale.

                  (10) The term "CHAMPION CLOSING" shall mean the completion of
         the sale of the stock of Champion Spark Plug Company and Moog
         Automotive Products, Inc. to Federal-Mogul Corporation by the Company
         pursuant to a certain purchase and sale agreement dated August 17, 1998
         between the Company and Federal-Mogul Corporation.


                                       3
<PAGE>   7


                  (11) The term "CODE" shall mean the Internal Revenue Code of
         1986, as amended from time to time. Reference to a section of the Code
         shall include such section and any comparable section or sections of
         any future legislation that amends, supplements, or supersedes such
         section.

                  (12) The term "COMPANY" shall mean Cooper Industries, Inc., an
         Ohio corporation, its corporate successors, and the surviving
         corporation resulting from any merger of Cooper Industries, Inc.
         with any other corporation or corporations.

                  (13) The term "COOPER SALARIED PLAN" shall mean the Salaried
         Employees' Retirement Plan of Cooper Industries, Inc., as amended from
         time to time.

                  (14) The term "EMPLOYER" shall mean the Company, McGraw-Edison
         Company and, prior to the Champion Closing, Champion Spark Plug Company
         and Moog Automotive Products, Inc., as well as any subsidiary of the
         Company which may adopt the Plan in accordance with the provisions of
         Article VIII.

                  (15) The term "EXCHANGE ACT" shall mean the Securities
         Exchange Act of 1934, as amended from time to time.

                  (16) The term "LOCAL ADMINISTRATIVE COMMITTEE" shall mean the
         administrative committee that administers the Plan as set forth in
         Article VI.

                  (17) The term "MCGRAW DEFERRAL PLAN" shall mean the
         McGraw-Edison Supplemental Executive Benefits Plan.

                  (18) The term "MOOG SERP" shall mean the Moog Automotive, Inc.
         Executive Supplemental Plan.

                  (19) The term "PARTICIPANT" shall mean any employee of an
         Employer who is eligible to participate in the Plan pursuant to Article
         II of the Plan.

                  (20) The term "PERSON" shall have the meaning given in Section
         3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
         14(d) thereof, except that such term shall not include (i) the Company
         or any of its Affiliates, (ii) a trustee or other fiduciary holding
         securities under an employee benefit plan of the Company or any of its
         subsidiaries, (iii) an underwriter temporarily holding securities
         pursuant to an offering of such securities, or (iv) a corporation
         owned, directly or indirectly, by the shareholders of the Company in
         substantially the same proportions as their ownership of stock of the
         Company.

                  (21) The term "PLAN" shall mean the Cooper Industries, Inc.
         Supplemental Excess Defined Benefit Plan as set forth herein and as
         amended hereafter from time to time.


                                       4
<PAGE>   8


                  (22) The term "PLANS ADMINISTRATION COMMITTEE" shall mean the
         Cooper Industries Plans Administration Committee established pursuant
         to the Plans Management Procedure adopted by the Board of Directors of
         the Company to administer the Company's employee benefit plans.

         1.2 CONSTRUCTION. Where necessary or appropriate to the meaning hereof,
the singular shall be deemed to include the plural, the plural to include the
singular, the masculine to include the feminine, and the feminine to include the
masculine.

                                       5
<PAGE>   9



                                   ARTICLE II

                       ELIGIBILITY FOR PLAN PARTICIPATION

         2.1 ELIGIBILITY OF ACTIVE EMPLOYEES. Any select management and highly
compensated employee of an Employer:

          (i)   whose retirement benefits under the Cooper Salaried Plan are
                limited by the provisions of Section 415 or Section 401(a)(17)
                of the Code; or

         (ii)   who participates in the Cooper Salaried Plan as well as in the
                Cooper Deferral Plan.

shall become a Participant in the Plan automatically upon such limitation or
participation.

         2.2    PARTICIPATION OF CERTAIN EMPLOYEES. Notwithstanding the 
provisions of Section 2.1, but subject to the provisions of Section 2.3,
individuals who were participants in a plan set forth below as of the applicable
effective date shall become a Participant in the Plan as of the applicable
participation date set forth below; provided, however, that as of the Champion
Closing, Participants who were participants in the Champion Excess Plan and Moog
SERP shall no longer be Participants under the Plan, but shall participate in
the Champion Spark Plug Company Supplemental Excess Defined Benefit Plan. 

<TABLE>
<CAPTION>

           Plan                        Effective Date            Plan Participation Date
           ----                        --------------            -----------------------      
<S>                                    <C>                       <C>    
Champion Supplemental Plan             July 31, 1990             August 1, 1990
Cameron Excess Plan                    August 31, 1990           September 1, 1990
Moog SERP                              December 31, 1993         January 1, 1994
</TABLE>

         2.3 TERMINATION OF PARTICIPATION. Notwithstanding the provisions of
Sections 2.1 and 2.2 effective as of the applicable date hereinafter set forth,
Participants last employed at the following facilities shall cease to be covered
by the Plan.



                                       6
<PAGE>   10

<TABLE>
<CAPTION>

                  Employer                    Facility                   Effective Date
                  --------                    --------                   --------------

<S>               <C>                         <C>                        <C>    
                  1.  Belden Wire & Cable     Richmond, Indiana          August 1, 1993
                           Company            Clinton, Arkansas
                                              Essex Junction, Vermont
                                              Franklin, North Carolina
                                              Monticello, Kentucky
                                              Tompkinsville, Kentucky
                                              Related Sales Offices

                  2.  Gardner Denver          Quincy, Illinois           January 1, 1994
                           Machinery Inc.     LaGrange, Missouri
                                              Compton, California
                                              Related Sales Offices

                  3.  Cooper Cameron          Houston, Texas             January 1, 1995
                           Corporation        Berwick, Louisiana
                                              Katy, Texas
                                              Liberty, Texas
                                              Missouri City, Texas
                                              Oklahoma City, Oklahoma
                                              Patterson, Louisiana
                                              Richmond, Texas
                                              Ville Platte, Louisiana
                                              Related Sales and Service
                                                Facilities

                  4.  Cooper Energy Service   Mount Vernon, Ohio         January 1, 1995
                           Operations         Grove City, Pennsylvania
                                              Springfield, Ohio
                                              Oklahoma City, Oklahoma
                                              Wheat Ridge, Colorado
                                              Alameda, California
                                              Tulsa, Oklahoma
                                              Related Sales Offices

                  5.  Cooper Turbocompressor  Buffalo, New York          January 1, 1995
                           Division           Sales Offices

                  6.  Wheeling Machine        Pine Bluff, Arkansas       January 1, 1995
                           Products Company

                  7.  Champion Spark Plug     Boaz, Alabama              Date of the Champion
                           Company            Manila, Arkansas                Closing
                                              Commerce, California
                                              Hayward, California
</TABLE>


                                       7
<PAGE>   11

<TABLE>
<S>                                           <C>
                                              Ontario, California
                                              Burlington, Iowa
                                              Chicago, Illinois 
                                              Michigan City, Indiana 
                                              Glasgow, Kentucky
                                              Brighton, Massachusetts
                                              Detroit, Michigan 
                                              Troy, Michigan 
                                              Berkeley, Missouri
                                              Chesterfield, Missouri
                                              Kansas City, Missouri 
                                              St. Louis, Missouri 
                                              Batesville, Mississippi 
                                              Pontotoc, Mississippi 
                                              Mahwah, New Jersey
                                              Toms River, New Jersey
                                              Auburn, New York
                                              Salisbury, North Carolina
                                              Cambridge, Ohio
                                              Cleveland/Solon, Ohio
                                              Hilliard, Ohio 
                                              Toledo, Ohio
                                              Burns Flat, Oklahoma
                                              Portland, Oregon 
                                              Weatherly, Pennsylvania 
                                              Greenville, South Carolina
                                              Liberty, South Carolina 
                                              Memphis, Tennessee
                                              Tullahoma, Tennessee
                                              Smithville, Tennessee
                                              Dyersburg, Tennessee
                                              Dallas, Texas
                                              Palestine, Texas
                                              Winchester, Virginia

</TABLE>


                                       8
<PAGE>   12



                                   ARTICLE III

                             AMOUNT OF PLAN BENEFITS

         3.1 BENEFIT PAYABLE TO ACTIVE PARTICIPANTS. Except as set forth below,
the supplemental benefit payable to an eligible Participant under the Plan who
is credited with service for benefit accrual purposes under the Cooper Salaried
Plan, shall be an amount which when added to the retirement benefit payable to
such Participant under the Cooper Salaried Plan equals the retirement benefit
which would have been payable under the Cooper Salaried Plan to the Participant,
if (i) the limitations of Sections 401(a)(17) and 415 of the Code were not in
effect; and/or (ii) the Participant had not deferred any compensation under the
Cooper Deferral Plan or the McGraw Deferral Plan which would have been
considered as compensation for benefit accrual purposes under the Cooper
Salaried Plan and was not so considered. Notwithstanding the foregoing, prior to
the Champion Closing, in no event shall the supplemental benefit of a
Participant who is a former Moog SERP participant and who is listed below (a
"Former Moog SERP Participant") be less than the amount hereinafter set forth,
reduced, however, by 3/12 of one percent for each month that commencement of
benefits precedes attainment of age 60.

<TABLE>
<CAPTION>
                         Former Moog
                            SERP                     Monthly Single Life Annuity Payable
                        Participant                          at or after Age 60
                     -----------------               -------------------------------------   
<S>                                                             <C>      
                     L. W. McCurdy                              $2,213.47
                     J. A. Passante                               $628.67
                     J. F. Collins                                $698.34
                     T. M. Smith                                  $297.17
                     J. C. Corey                                  $688.81
                     G. Holler                                    $436.97
                     K. G. Mullen                               $1,020.42
</TABLE>


                                       9
<PAGE>   13


         3.2 BENEFIT PAYABLE TO PARTICIPANTS FORMERLY COVERED BY ANOTHER
NONQUALIFIED PLAN. The supplemental benefit payable to a Participant who was not
credited with service for benefit accrual purposes under the Cooper Salaried
Plan shall be an amount determined as follows:

             (a) Prior to the Champion Closing, the benefit payable under the
         Plan to any Participant who retired or separated from service prior to
         August 1, 1990, and who was covered under the Champion Excess Plan on
         July 31, 1990, shall be the amount which such Participant was eligible
         to receive under the terms of the Champion Excess Plan in effect as of
         the date of such retirement or separation from service.

             (b) Prior to the Champion Closing, the benefit payable under the
         Plan to any Participant who was a participant in the Champion
         Supplemental Plan on July 31, 1990, shall be an amount which such
         Participant would have received (i) under the Champion Spark Plug
         Company Salaried Employees' Retirement Income Plan (the "Champion
         Salaried Plan") if he had been covered under such plan on July 31, 1990
         and if all his service with Champion Spark Plug Company or a
         predecessor or subsidiary thereof had been covered under the Champion
         Salaried Plan, or (ii) under the DeVilbiss Company Salaried Employees
         Retirement Plan (the "DeVilbiss Salaried Plan") if all his service with
         the Company or a predecessor or subsidiary thereof had been covered
         under the DeVilbiss Salaried Plan, or (iii) under the Baron Drawn Steel
         Salaried Retirement Plan (the "Baron Salaried Plan") if all his service
         with the Company or a predecessor or subsidiary thereof had been
         covered under the Baron Salaried Plan; provided, however, that if such
         a Participant was covered under more than one of the aforementioned
         plans, his benefit shall be determined under the provisions of the plan
         which would produce the greatest benefit; and provided further, that
         the amount of any benefit payable to a Participant under any plan which
         is based on service that is used to determine a benefit hereunder shall
         reduce such Participant's Plan benefits.

         3.3 CESSATION OF BENEFITS TO CERTAIN PARTICIPANTS. Notwithstanding the
foregoing, benefits otherwise payable under the Plan to certain Participants
listed below shall cease as of the applicable effective date.

             (a) Prior to the Champion Closing, in the event that a Participant
         who retired or separated from service prior to August 1, 1990 and who
         was covered under the Champion Excess Plan on July 31, 1990, engages in
         competition with the Company, in the sole judgment of the Plans
         Administration Committee, all benefits otherwise payable hereunder to
         such Participant shall be forfeited 



                                       10
<PAGE>   14

         immediately and that no further benefits under the Plan or otherwise
         shall be payable or due such Participant. In addition, payments made to
         a Participant while such Participant engaged in competition with the
         Company shall be refundable to the Company at its request.

             (b) Any supplemental benefit credited or payable as of January 1,
         1995 to a Participant who is an employee of Cooper Cameron Corporation
         or a former employee of the Company who was last employed by the Cooper
         Tool Oil Division, the Cooper Energy Services Operations, the Cooper
         Turbocompressor Division, or Wheeling Machine Products Company and who
         was not employed by the Company on January 1, 1995, shall not be so
         credited or payable under the Plan but rather shall be credited and
         payable under the Cooper Cameron Corporation Supplemental Excess
         Defined Benefit Plan.

             (c) Any supplemental benefit credited or payable as of the Champion
         Closing to a Participant who is an employee of Champion Spark Plug
         Company or a former employee of the Company who was last employed at a
         Champion Spark Plug or Moog facility and who is not employed by the
         Company on the Champion Closing, shall not be so credited or payable
         under the Plan but rather shall be credited and payable under the
         Champion Spark Plug Company Supplemental Excess Defined Benefit Plan.


                                       11
<PAGE>   15



                                   ARTICLE IV

                            PAYMENT OF PLAN BENEFITS

         Except as specifically provided hereinafter, the supplemental benefits
determined under Article III shall be paid to a Participant or his Beneficiary,
if applicable, in the same manner and form as, and coincident with, the payment
of the retirement benefits of such Participant, or Beneficiary, under the Cooper
Salaried Plan, utilizing the factor or conditions applicable to the benefit of
such Participant or Beneficiary under the Cooper Salaried Plan. Notwithstanding
the foregoing:

         (i)      Prior to the Champion Closing, any supplemental benefit that
                  is determined pursuant to the provisions of Section 3.2 and
                  that is being paid thereunder to a Participant who is, or was,
                  not credited with benefit accrual service under the Cooper
                  Salaried Plan and who is, or was, eligible to such Plan
                  benefit due to the merger of the Champion Excess Plan, the
                  Champion Supplemental Plan, the Cameron Excess Plan, or the
                  Moog Automotive, Inc. Executive Supplemental Plan (a "Merged
                  Plan") into the Plan, shall be payable to such Participant in
                  the same manner, form, time, and duration applicable to the
                  benefits of such Participant under the Merged Plan formerly
                  covering such Participant.

         (ii)     Any supplemental benefit that is payable to a Participant who
                  is a former Moog SERP Participant pursuant to the provisions
                  of Section 3.1 shall be payable to such Participant in the
                  same manner, form, time and duration applicable to the
                  benefits of such Participant under the Moog SERP as of
                  December 31, 1993.

         (iii)    In no event shall any benefit of a Participant who is employed
                  by Cameron Forged Products Company, or a successor thereof, be
                  distributed to such Participant prior to his termination of
                  employment with Cameron Forged Products Company, or successor
                  thereof.



                                       12
<PAGE>   16



                                    ARTICLE V

                                  BENEFICIARIES

         In the event a Participant dies before his interest under the Plan has
been distributed to him in full, any remaining interest, or portion thereof,
shall be distributed pursuant to Article IV to his Beneficiary who shall be the
person designated as his beneficiary under the Cooper Salaried Plan, or if such
interest is attributable to the Champion Excess Plan, the Champion Supplemental
Plan, or the Cameron Excess Plan, his Beneficiary shall be his beneficiary
pursuant to the terms of the Champion Excess Plan, the Champion Supplemental
Plan or the Cameron Excess Plan, as the case may be.









                                       13
<PAGE>   17



                                   ARTICLE VI

                           ADMINISTRATIVE PROVISIONS

         6.1 ADMINISTRATION. The Plan shall be administered by the Local
Administrative Committee under the Cooper Salaried Plan which shall administer
it in a manner consistent with the administration of the Cooper Salaried Plan,
as from time to time amended, except that the Plan shall be administered as an
unfunded plan not intended to meet the qualification requirements of Section 401
of the Code.

         6.2 POWERS AND AUTHORITIES OF THE COMMITTEE. The Local Administrative
Committee shall have full power and authority to interpret, construe and
administer the Plan and its interpretations and construction hereof, and actions
hereunder, including the timing, form, amount or recipient of any payment to be
made hereunder, shall be binding and conclusive on all persons for all purposes.
The Local Administrative Committee may delegate any of its powers, authorities,
or responsibilities for the operation and administration of the Plan to any
person or committee so designated in writing by it and may employ such
attorneys, agents, and accountants as it may deem necessary or advisable to
assist it in carrying out its duties hereunder. No member of the Local
Administrative Committee shall be liable to any person for any action taken or
omitted in connection with the interpretation and administration of the Plan
unless attributable to his own willful misconduct or lack of good faith. Members
of the Local Administrative Committee shall not participate in any action or
determination regarding their own benefits, if any, payable under the Plan.

         6.3 INDEMNIFICATION. In addition to whatever rights of indemnification
a member of the Local Administrative Committee or the Plans Administration
Committee, or any other person or persons to whom any power, authority, or
responsibility is delegated pursuant to Section 6.2, may be entitled under the
articles of incorporation, regulations, or by-laws of the Company, 




                                       14

<PAGE>   18

under any provision of law, or under any other agreement, the Company shall
satisfy any liability actually and reasonably incurred by any such member or
such other person or persons, including expenses, attorneys' fees, judgments,
fines, and amounts paid in settlement, in connection with any threatened,
pending, or completed action, suit, or proceeding which is related to the
exercise or failure to exercise by such member or such other person or persons
of any of the powers, authority, responsibilities, or discretion provided under
the Plan.




                                       15

<PAGE>   19

                                   ARTICLE VII

                            AMENDMENT AND TERMINATION

         The Company reserves the right to amend or terminate the Plan at any
time by action of the Plans Administration Committee; provided, however, that no
such action shall adversely affect any Participant who is receiving supplemental
benefits under the Plan or who has accrued a supplemental benefit under the
Plan, unless an equivalent benefit is otherwise provided under another plan or
program sponsored by the Company.




                                       16
<PAGE>   20



                                  ARTICLE VIII

                            ADOPTION BY SUBSIDIARIES

         Any subsidiary of the Company which at the time is not an Employer may,
with the consent of the Company, adopt the Plan and become an Employer
hereunder. Notwithstanding the foregoing, effective as of the effective date
hereinafter set forth, the following subsidiaries shall not be included as an
Employer under the Plan.

<TABLE>
<CAPTION>
                Effective Date                        Subsidiary
                --------------                        ----------             
<S>                                           <C>                                               
                August 1, 1993                Belden Wire & Cable Company
                January 1, 1994               Gardner Denver Machinery Inc.
                May 26, 1994                  Cameron Forged Products Company
                January 1, 1995               Cooper Cameron Corporation
                Champion Closing              Champion Spark Plug Company and its
                                              subsidiaries
                Champion Closing              Moog Automotive Products, Inc. and its
                                              subsidiaries    
</TABLE>
                       


                                       17
<PAGE>   21



                                   ARTICLE IX

                                  MISCELLANEOUS

         9.1 NON-ALIENATION OF RETIREMENT RIGHTS OR BENEFITS. No benefit under
the Plan shall at any time be subject in any manner to alienation or
encumbrance. If any Participant or Beneficiary shall attempt to, or shall,
alienate or in any way encumber his rights or benefits under the Plan, or any
part thereof, or if by reason of his bankruptcy or other event happening at any
time any such benefits would otherwise be received by anyone else or would not
be enjoyed by him, his interest in all such benefits shall automatically
terminate and the same shall be held or applied to or for the benefit of such
person, his spouse, children, or other dependents as the Local Administrative
Committee may select.

         9.2 PAYMENT OF BENEFITS TO OTHERS. If any Participant or Beneficiary to
whom a retirement benefit is payable is unable to care for his affairs because
of illness or accident, any payment due (unless prior claim therefor shall have
been made by a duly qualified guardian or other legal representative) may be
paid to the spouse, parent, brother, or sister, or any other individual deemed
by the Local Administrative Committee to be maintaining or responsible for the
maintenance of such person. Any payment made in accordance with the provisions
of this Section 9.2 shall be a complete discharge of any liability of the Plan
with respect to the benefit so paid.

         9.3 PLAN NON-CONTRACTUAL. Nothing contained herein shall be construed
as a commitment or agreement on the part of any person employed by an Employer
to continue his employment with an Employer, and nothing herein contained shall
be construed as a commitment on the part of an Employer to continue the
employment or the annual rate of compensation of any such person for any period,
and all Participants shall remain subject to discharge to the same extent as if
the Plan had never been established.



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<PAGE>   22


         9.4 FUNDING. In order to provide a source of payment for its
obligations under the Plan, the Company may establish a trust fund. Subject to
the provisions of the trust agreement governing such trust fund, the obligation
of an Employer under the Plan to provide a Participant or a Beneficiary with a
benefit constitutes the unsecured promise of such Employer to make payments as
provided herein, and no person shall have any interest in, or a lien or prior
claim upon, any property of the Employer.

         9.5 CONTROLLING STATUS. No Participant shall be eligible for a
supplemental retirement benefit under the Plan unless such Participant is a
Participant on the date of his retirement, death, or other termination of
employment.

         9.6 CLAIMS OF OTHER PERSONS. The provisions of the Plan shall in no
event be construed as giving any person, firm or corporation any legal or
equitable right as against an Employer, its officers, employees, or directors,
except any such rights as are specifically provided for in the Plan or are
hereafter created in accordance with the terms and provisions of the Plan.

         9.7 SEVERABILITY. The invalidity or unenforceability of any particular
provision of the Plan shall not affect any other provision hereof, and the Plan
shall be construed in all respects as if such invalid or unenforceable provision
were omitted herefrom.



                                       19
<PAGE>   23



         9.8 GOVERNING LAW. The provisions of the Plan shall be governed and
construed in accordance with the laws of the State of Ohio.

         EXECUTED at Houston, Texas, this ___________ day of ___________, 1998.



                                          COOPER INDUSTRIES, INC.



                                          By: /s/ CARL J. PLESNICHER, JR.
                                             ---------------------------------
                                             Title: Senior Vice President,
                                                    Human Resources 



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