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                                                                    EXHIBIT 10.8



                                  FURON COMPANY

                           ECONOMIC VALUE ADDED (EVA)

                           INCENTIVE COMPENSATION PLAN

                             AS AMENDED AND RESTATED
                           EFFECTIVE FEBRUARY 1, 1998


1.0        INTRODUCTION


1.1        Overview

           Furon Company (the "Company") has established an Economic Value Added
           (EVA) Incentive Compensation Plan (the "Plan") in an effort to relate
           more directly the Company's incentive compensation to an increase in
           the value of the Company to its shareholders. The Plan, which is for
           officers, operational vice presidents, general managers of selected
           business units and selected other key employees, replaces the
           Company's Short-Term Incentive Bonus Plan and Long-Term Performance
           Incentive Plan. The Plan provides a direct link between incentive
           compensation and the return earned on capital relative to a minimum
           required rate of return and historic actual performance. Pursuant to
           the Plan, a specific target incentive amount will be established for
           each participant based on a percentage of his or her base salary at
           the beginning date of the fiscal year for Plan participation
           eligibility. Incentive compensation for participants changes as a
           result of variation in the return on capital for the Company as a
           whole, in the case of the Company's executive officers and certain
           other key employees, and the return on capital of a business unit in
           the case of other participants. The Plan will be administered by the
           Compensation Committee (the "Committee") of



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           the Company's Board of Directors (the "Board") and, to the extent
           provided herein, the Company's Chairman of the Board, President and
           Chief Financial Officer (collectively, the "Executive Group").

1.2        EVA

           The primary financial objective of the Company is to increase
           shareholder value. To support that effort the Company has introduced
           a new system of financial measurement called "Economic Value Added"
           (EVA). Economic Value Added is the internal measure of operating and
           financial performance that best reflects the change in shareholder
           value. Put simply, EVA is what is left over from operating profits
           after deducting the cost of capital.

           The Company takes the view that the financial marketplace is a
           competition for scarce capital. Management of the Company is charged
           with the task of putting that scarce capital to work to earn the best
           possible returns. As long as the Company is investing in projects
           that earn a rate of return higher than its cost of capital, then
           investors will earn a return in excess of their required reward and
           the Company's capital or stock will command a premium in the
           marketplace.

           This approach places less emphasis on the traditional means of
           evaluating financial results, such as return on equity or earnings
           per share, because these measures do not always correspond to the
           creation of economic value. Economic Value Added provides a framework
           within which management can make decisions that will build long-term
           value for the Company and its 



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           shareholders rather than focus on short-term result. Economic Value
           Added can be more specifically defined as the economic profit
           generated by the business, less a charge for the use of capital.
           Economic profit is an after-tax measure of operating results which
           differ from normal accounting profit as the consequence of certain
           adjustments for non-economic charges.

1.3        Incentive Compensation

           The Company recognizes that the performance and contributions of its
           key employees will play a pivotal role in maximizing shareholder
           value. By measuring not only the Company's overall performance, but
           also the performance of each business unit, EVA provides the backbone
           of an incentive compensation program that effectively encourages
           management decisions that maximize the value of investors' capital.
           The objectives underlying the Plan are to more closely link incentive
           awards to value added for shareholders, and to provide a culture of
           performance and ownership among the Company's key employees. This
           requires management to share some of the Company's business risk with
           shareholders, but also provides the opportunity for the upside
           potential that results from the creation of value. Said another way,
           it helps managers think as owners. Accordingly, the Plan rewards
           long-term continuous improvements in shareholder value.



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           Incentives are focused on the generation of improved Economic Value
Added, which in turn results from:

           1.         Enhanced business efficiencies - Improve the rate of
                      return on the existing capital base by improving operating
                      profits without tying up any more capital.

           2.         Profitable growth - Invest more capital as long as the
                      profits earned are in excess of the charge for additional
                      capital; and

           3.         Strategic downsizing - Reduce capital or liquidate capital
                      where it is employed in products, projects or operations
                      that are earning less than the cost of capital.

2.0        EVA INCENTIVE COMPENSATION

2.1        General

           Participants in the Plan are eligible to earn an EVA Incentive
           Compensation Bonus ("Bonus") under the Plan for a fiscal year for
           which performance is being measured based upon the actual EVA
           performance for the Company as a whole or their business unit, as the
           case may be, for the fiscal year, relative to an established EVA
           target performance for the fiscal year (the "EVA Target").



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2.2        Eligibility for and Rate of Participation in the Plan

           The Company's officers, operational vice presidents, general managers
           of selected business units ("General Managers") and selected other
           key employees are eligible to participate in the Plan. The rate of
           participation under the Plan for Company officers shall be determined
           by the Committee.

           It is the responsibility of the Group General Manager or appropriate
           Company officer to secure the necessary approvals from the Executive
           Group each fiscal year before a participant is eligible to
           participate in the Plan for that fiscal year. (See Company Human
           Resources Policy 2.51). Approval must also be secured from the
           Executive Group to remove a participant from the Plan.

           The rate of participation under the Plan for operational vice
           presidents and General Managers shall be determined by the Executive
           Group. Participation and rate of participation under the Plan at the
           division level will be recommended by the responsible Vice President
           or General Manager and subject to the written approval of the
           Executive Group. Participation and rate of participation at the Main
           Office for non-officers will be determined by the Executive Group.
           The rate of participation shall be a percentage amount of the
           participant's actual base salary at the beginning date of the fiscal
           year (i.e. Base salary shall not be reduced by (i) 401(k)
           contributions or deferred base compensation elections, (ii)
           contributions to any Company cafeteria plan intended to qualify under
           Section 125 of the Internal Revenue Code, or (iii) contributions to
           any Company employee stock purchase plan). For a new hire, percentage
           participation rate 



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           shall be the base salary on date of hire (see Section 3.2).

           The determination of which business units are eligible to participate
           in the Plan will be made by the Executive Group. The Executive Group
           may elect at any time to terminate such eligibility based on actual
           operating performance or business conditions. Unless otherwise
           determined by the Executive Group, general managers and other key
           employees of discontinued operations or other business units
           scheduled to be divested shall not be eligible to participate in the
           Plan.

2.3        EVA Target and Actual Performance

           In determining the EVA Target for the first and second fiscal years
           of the Plan's operation and the actual EVA performance for each
           fiscal year, for the Company as a whole an each business unit, the
           Company will utilize principles and concepts from the Stern Stewart
           EVA Bonus System, as may be modified by the Company from time to
           time, and which is incorporated by reference into this Plan. In
           future years, the EVA Target for the Company/business unit will be
           calculated by the Company as (i) an average from the previous year's
           EVA Target and actual EVA performance if such actual EVA performance
           is equal to or greater than such EVA Target or (ii) such EVA Target
           minus an amount equal to 30% of the difference between such EVA
           Target and such actual EVA performance if it is not.

           All such determinations, modifications and calculations shall be
           subject to 



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           approval by the Executive Group. In addition, the EVA Target for the
           Company and each business unit for the first fiscal year of the
           Plan's operation shall be subject to approval by the Committee.

2.4        Current Bonus and EVA Incentive Compensation Bank

           The Company has placed no cap on the Bonus that a participant may
           potentially earn for a fiscal year. However, a participant is only
           eligible to receive up to 100% of his or her Target Bonus for a given
           fiscal year (the "Current"); the balance (if any) will be deferred.
           The Plan will use an EVA Incentive Compensation Bank ("Bank") concept
           where the deferred amount will be "deposited" in a Bank maintained
           for the participant by the Company as an accounting accrual against a
           possible future payment by the Company. No interest (subject to
           Section 2.6(c)) shall be earned on the deferred amount or credited to
           the Bank. The participant has no vested right to receive the deferred
           amount; rather, the distribution and unconditional vesting thereof
           are subject to the future events described herein. An individual
           record of the participant's Bank will be maintained by corporate
           accounting at the Company's Main Office.

           Each participant's Bank will be composed of a Cash Account and a
           Stock Unit Account. Each Stock Unit Account may be composed of one or
           more Subaccounts, as necessary, to account for Stock Units credited
           pursuant to Section 2.6 with respect to different fiscal years.



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           The following table sets forth the effects that the various possible
           Total Unit Values will have on a participant's Current Bonus and Bank
           for a fiscal year for which performance is being measured:

<TABLE>
<CAPTION>
                                               As a Percentage of Target Bonus
                                               ------------------------------------------------------------------
           Total Unit Values                   Current Bonus                      Bank
           -----------------                   -------------                      ----
<S>                                            <C>                                <C>
           Greater than 1.5 (150%)             100%                               Deposit excess attributable to
                                                                                  Total Unit Value of up to 1.5 to
                                                                                  Stock Unit Account, deposit
                                                                                  excess attributable to Total Unit
                                                                                  Value over 1.5 to Cash Account.

           Greater than 1.0 (100%) but no      100%                               Deposit excess to Stock Unit
           more than 1.5 (150%)                                                   Account.

           0 to 1.0                            0 to 100%                          None.

           Less than 0                         None                               Deduct Shortfall From Cash
                                                                                  Account.
</TABLE>


           At the end of each fiscal year for which performance is being
           measured under the Plan, a participant will be eligible to receive a
           payment from his or her Cash Account equal to 33% of: (i) the
           participant's beginning Cash Account balance for the fiscal year for
           which performance is being measured less (ii) any subtractions from
           the Cash Account resulting from a Total Unit Value of less than zero
           for the fiscal year for which performance is being measure; where
           such amount is a positive number. Negative Cash Account balances are
           carried forward in the Bank to be offset by additions to the Cash
           Account. However, negative Cash Account balances do not reduce the
           Current Bonus. Stock Unit Accounts are paid in accordance with
           Section 2.6.



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           Examples are attached to this document to illustrate Bonus payments
           and additions to and subtractions from the Bank for a hypothetical
           participant receiving an annual 5% base salary increase (see
           Attachments A and B). Attachment A illustrates positive performance
           except in Years 4 and 5 and shows how negative performance can impact
           a participant's Bank in both the current year and in subsequent years
           beginning in Year 4. Attachment B, on the other hand, illustrates
           solid performance for all ten (10) years where the participant earns
           a Bonus each year.

2.5        Acquisitions and Extraordinary Capital Expenditures

           Funds expended for capital expenditures and acquisitions will be
           added to the capital base and accrue a capital charge for the cost of
           capital. In instances where a capital expenditures is for a major
           internal expansion project (possibly the construction of a new plant)
           or an acquisition is significant relative to the size of the business
           unit, the Executive Group may, at their sole discretion, determine
           that due to the size and significant nature of the capital
           expenditure or acquisition, the funds expended will be amortized into
           the capital base over a period of time thereby reducing the capital
           charge.



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2.6        Stock Unit Accounts

           (a)        The Company shall establish and maintain a Stock Unit
                      Account for each participant. Each participant's Stock
                      Unit Account shall consist of such Subaccounts as
                      necessary to account for Stock Units that are credited
                      with respect to different fiscal years.

           (b)        At the end of each fiscal year (or as soon as
                      administratively practicable after the Unit Value for such
                      year is determined) in which the Unit Value is greater
                      than 1.0 (each a "Crediting Year"), each participant's
                      Subaccount for that Crediting Year shall be credited with
                      Stock Units pursuant to this Section 2.6(b). The number of
                      Stock Units to be credited for each such Crediting Year
                      shall equal (i) the excess amount (expressed in dollars)
                      that is to be credited to such participant's Stock Unit
                      Account pursuant to Section 2.4, divided by (ii) the
                      "Trust Price," as defined below. For the Crediting Year
                      ended January 31, 1998, the Trust Price shall equal the
                      average price per share paid (or received) by the trustee
                      of the Furon Company Employee Benefits Trust to acquire
                      (or sell) Furon Company common stock in the period
                      commencing March 30, 1998 and ending April 30, 1998. For
                      the Crediting Year ended January 31, 1999, the Trust Price
                      shall equal the average price per share paid (or received)
                      by 



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                      the trustee of the Furon Company Employee Benefits Trust
                      to acquire (or sell) Furon Company common stock in the
                      period commencing April 30, 1998 and ending January 31,
                      1999. For each subsequent Crediting Year, the Trust Price
                      shall equal the average price per share paid (or received)
                      by the trustee of the Furon Company Employee Benefits
                      Trust to acquire (or sell) Furon Company common stock
                      during the fiscal year corresponding to the Crediting
                      Year. If the trustee made no purchases or sales during the
                      relevant period, the Trust Price shall be the
                      volume-weighted average price of Furon Company common
                      stock on the New York Stock Exchange for the 30-day period
                      following the announcement of Unit Values for the
                      Crediting Year.

           (c)        As of the end of each fiscal year (or as soon as
                      administratively practicable thereafter), each of a
                      participant's Subaccounts shall be credited with
                      additional Stock Units in an amount equal to the amount of
                      the Dividend Equivalents representing cash dividends paid
                      during such year on that number of shares equal to the
                      aggregate Stock Units in that Subaccount as of the
                      beginning of that fiscal year, divided by the Trust Price.

           (d)        At the end of each fiscal year (or as soon as
                      administratively practicable thereafter) in which a
                      participant's Cash Account balance (after any adjustments
                      pursuant to Section 2.4 with respect to that fiscal year)
                      is positive (i.e., greater than zero), one-third of the
                      Stock Units then credited to each of the participant's
                      Subaccounts (excluding any Stock Units credited to a
                      Subaccount pursuant to Section 2.6(b) established with
                      respect to that fiscal year but including any Stock Units
                      credited to the participant's Subaccounts pursuant to
                      Section 2.6(c) with respect to that



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                      fiscal year) will become payable to the participant.

           (e)        Any Stock Units remaining credited to a participant's
                      Subaccount at the end of the tenth fiscal year (or as soon
                      as administratively practicable thereafter) following the
                      Crediting Year with respect to such Subaccount was
                      established shall be distributed in a single lump sum.

           (f)        Benefit distributions in respect of Stock Units shall be
                      in the form of an equivalent number of whole shares of
                      Common Stock. The Committee may settle fractional share
                      interests in cash, permit the accumulation of fractional
                      share interests, disregard fractional share interests, or
                      adopt such other rules as it deems appropriate for the
                      payment or administration of fractional share interests.
                      The Common Stock to be delivered shall be shares owned by
                      the Company or any Company grantor trust which were
                      acquired through purchase on the open market. In the event
                      that the Company (or any Company grantor trust) has an
                      insufficient number of shares of Common Stock (which were
                      purchased on the open market) available for Plan purposes,
                      or for any other reason determined by the Committee (in
                      its sole discretion), amounts payable or distributable in
                      the form of Common Stock may be settled in cash.

           (g)        If any stock dividend, stock split, recapitalization,
                      merger, consolidation, combination or other
                      reorganization, exchange of shares, sale of all or
                      substantially all of the assets of the Company, split-up,
                      split-off, 



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                      extraordinary redemption, liquidation or similar change in
                      capitalization or any distribution to holders of the
                      Company's Common Stock (other than cash dividends and cash
                      distributions) shall occur, proportionate and equitable
                      adjustments consistent with the effect of such event on
                      stockholders generally (but without duplication of
                      benefits if Dividend Equivalents are credited) shall be
                      made in the number and type of shares of Common Stock or
                      other securities, property and/or rights contemplated
                      hereunder and of rights in respect of Stock Units and
                      Stock Unit Accounts credited under this Plan so as to
                      preserve the benefits intended.

3.0        CHANGES IN EMPLOYMENT STATUS

3.1        Termination or Transfer of Employment

           (a)        The only time a participant may receive in a fiscal year a
                      distribution from his or her Cash Account in excess of 33%
                      of the balance, as provided in Section 2.4 is upon the
                      Retirement, Death or Disability (as those terms are
                      defined herein) of the participant while an actual
                      full-time employee of the Company. In such circumstances,
                      the participant's entire Cash Account balance (as
                      determined below in the case of Retirement) shall be paid
                      to the retiree or disabled participant or his or her
                      designated Beneficiary or Beneficiaries.

                      The only time a participant may receive in a fiscal year a
                      distribution from his or her Stock Unit Account other than
                      as provided in Section 2.6(d) or 



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                      2.6(e) is upon the Retirement, Death or Disability (as
                      those terms are defined herein) of the participant while
                      an actual full-time employee of the Company. In such
                      circumstances, the total number of Stock Units then
                      credited to the participant's Stock Unit Account (as
                      determined below in the case of Retirement) shall be paid
                      to the retiree or disabled participant or his or her
                      designated Beneficiary or Beneficiaries.

                      For purposes of this Plan, designated Beneficiary or
                      Beneficiaries shall be the same as the participants
                      designate(s) in the Company Employees' Profit Sharing
                      Retirement Plan Summary Plan Description document, as
                      amended.

           (b)        A participant whose employment with the Company is
                      terminated, either voluntary or involuntary, for any
                      reason other than Retirement, Death or Disability, is not
                      eligible to receive any amount from his or her Bank;
                      rather the entire amount in the Bank (including Stock
                      Units credited pursuant to Section 2.6) is forfeited upon
                      such termination.

           (c)        If a participant is transferred into a position not
                      eligible for participation in the Plan or if he or she is
                      no longer eligible to participate in the Plan, but the
                      participant remains employed by the Company, he or she:
                      (i) is not eligible to receive any amount from his or her
                      Cash Account, rather, the entire amount in the Cash
                      Account is forfeited upon such termination; and (ii) he or
                      she will no longer be eligible for additional Stock Units
                      pursuant 



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                      to Section 2.6(b) or Section 2.6(c) and any Stock Units
                      then credited to his or her Stock Unit Account shall only
                      be payable pursuant to Section 2.6(e) (notwithstanding
                      Section 2.6(d)). If the transferred participant later
                      terminates employment with the Company (for any reason
                      including Death, Disability, or Retirement), the Stock
                      Units then credited to his or her Stock Unit Account shall
                      be forfeited.

           (d)        If a participant's employment terminates (other than due
                      to Retirement, death or disability), or Plan participation
                      terminates pursuant to Section 3.1(c), the participant
                      shall receive no portion of any Current Bonus.

                      If a participant Retires or terminates employment due to
                      death or disability during the fiscal year, the
                      participant is eligible to receive (i) a prorated amount
                      of the Current Bonus that he or she would have earned for
                      the full fiscal year had he or she remained a participant
                      in the Plan, and (ii) the participant's Bank balance
                      (including distribution of all Stock Units credited to his
                      or her Stock Unit Account in the form of Common Stock or
                      cash) at the end of the fiscal year after giving effect to
                      his or her prorated share of any additions or deletions
                      that would have been made to his or her Bank in respect of
                      the fiscal year if the participant had remained a
                      participant in the Plan. Each such proration shall be
                      based upon a fraction the numerator of which is the number
                      of full months during the fiscal year prior to Retirement
                      death or disability and the denominator of which is 12. If
                      the participant's last work day is before the fifteenth of
                      the month, he or 



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                      she will receive no credit for the entire month. If the
                      last work day is after the fifteenth of the month, he or
                      she will receive full credit for that particular month.
                      Payment to the participant will be made following the end
                      of the fiscal year at the time payments are made to
                      continuing participants in the Plan pursuant to Section 4.

           (e)        In situations where a participant transfers to a new
                      Company business unit and remains an eligible participant,
                      the individual's Bank balance, either positive or
                      negative, shall transfer with him or her. Current Bonus
                      payments and additions or subtractions to the Bank for the
                      fiscal year during which the transfer takes place shall be
                      determined by a proration of the Total Unit Value achieved
                      by the participant's previous and new business units based
                      upon the time during the fiscal year that the participant
                      was employed at each respective business unit.



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3.2        Partial EVA Bonus Credit

           Unless otherwise determined by the Executive Group, Plan participants
           who commence participation after the start of a fiscal year will be
           entitled to receive a partial Bonus credit based on months of service
           as a Plan participant during the applicable fiscal year. If
           participation commences on or before the 15th of a month, the
           participant will receive credit for the entire month. If
           participation commences after the 15th of a month, the participant
           will receive no EVA Bonus credit for that month. For example, if an
           eligible employee commenced Plan participation on June 3, he or she
           would receive eight (8) months of credit and thus be eligible to earn
           two-thirds (2/3) of the full fiscal year Bonus. If the participation
           commenced on June 16, the participant would receive seven (7) months
           of credit.

4.0        PAYMENT OF BONUS

           Any and all payments under the Plan and any payment of Stock Units in
           the form of shares of Common Stock or cash are at the discretion of
           the Committee and the Executive Group. Payments and the delivery of
           any shares will be made at the conclusion of the Company's fiscal
           year and after the Company's financial statements have been audited.
           All EVA payments will be made less all applicable taxes in accordance
           with Section 8.4. In order to receive a payment in respect of a
           participant's Cash Account, other than in the case of Retirement,
           Death or Disability or the occurrence of an Event (as defined in
           Section 8.5), the Plan participant must be a full-time employee of
           the Company at both the end of 



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           the fiscal year in which the Bonus is earned and at the time the
           payment is actually made. Unless otherwise determined by the
           Executive Group, if both of the above conditions are not met, there
           shall be no payment to the individual. Payment will normally be made
           to the participant prior to the end of the first fiscal quarter. This
           includes any payments from a participant's Cash Account pursuant to
           Section 2.4 and any delivery of shares or payment of cash in respect
           of a participant's Stock Unit Account pursuant to Section 2.6.
           Pursuant to Section 3.1, in the case of the Death or Disability of a
           participant, payment to the participant or to his or her Beneficiary
           or Beneficiaries of any funds in the participant's Cash Account or
           delivery of shares or payment of cash in respect of any Stock Units
           credited to the participant's Stock Unit Account shall be made within
           sixty (60) days after the occurrence of any of the aforementioned
           events.

5.0        TRAINING

           Plan participants will receive a copy of the "EVA Incentive
           Compensation" booklet prepared for the Company by Stern Stewart &
           Company and a copy of the Plan Prospectus. In addition, the Company
           may conduct management training sessions for Plan participants
           concerning the Plan's application. Training will be determined by
           Company officials to provide participants with the opportunity to
           fully understand the Plan and its principles. Responsibility to
           educate participants of a business unit in the mechanics of EVA shall
           remain with the unit's Vice President or General Manager, controller
           and human resources representative.



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6.0        INTERPRETATION

           The terms and conditions of this Plan shall be interpreted by the
           Executive Group.

7.0        TERMINATION AND/OR MODIFICATION

           The Committee retains the complete authority to make any unilateral
           changes to the Plan for any reason and at any time, which includes
           the termination of the Plan itself.

8.0        MISCELLANEOUS

8.1        Effective date

           This Plan was first effective as of February 2, 1992. This amendment
           to and restatement of the Plan is effective as of February 1, 1998.

8.2        Administration

           This Plan shall be administered by the Committee and, to the extent
           provided herein, the Executive Group. Action of the Committee or the
           Executive Group with respect to the administration of this Plan shall
           be taken pursuant to a majority vote or written consent of a majority
           of its members. The Committee and the Executive Group may delegate
           administrative functions to individuals 



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           who are officers or employees of the Company. Any action under this
           Plan taken by, or inaction under this Plan of, the Company, the
           Board, the Committee, the Executive Group, any officer or any
           delegate of the Committee or the Executive Group shall be within the
           absolute discretion of that person and shall be conclusive and
           binding upon all persons.

           The Committee may authorize in writing the delayed payment or
           delivery of shares of Common Stock which may become due under this
           Plan, pursuant to and under the terms of any Board-approved deferred
           compensation plan or program.

8.3        No Contract or Other Rights

           Nothing contained in this Plan (or in any other documents related to
           this Plan or to Bonuses) shall confer upon any key employee or
           participant any right to any Bonus or to continue in the employ of
           the Company or constitute any contract or agreement of compensation,
           employment or otherwise, or interfere in any way with the right of
           the Company to reduce such person's Bonus or other compensation or to
           terminate the employment of such person with or without cause.

           No benefit payable under, or interest in, this Plan or in any Bonus
           shall be subject in any manner to anticipation, alienation, sale,
           transfer, assignment, pledge, encumbrance or charge and any such
           attempted action shall be void and no such benefit or interest shall
           be, in any manner, liable for, or subject to debts, 



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           contracts, liabilities, engagements or torts of any person. The
           Committee and the Executive Group shall disregard any attempted
           transfer, assignment or other alienation prohibited by the preceding
           sentence.

           No person shall have any right, title or interest in any fund or in
           any specific asset of the Company by reason of any Bonus granted
           hereunder. Neither the provisions of this Plan (or of any documents
           related hereto, nor the creation or adoption of this Plan, nor any
           action taken pursuant to the provisions of this Plan shall create, or
           be construed to create, a trust of any kind or a fiduciary
           relationship between the Company and any person.

8.4        Tax Withholding

           There shall be deducted from each payment or distribution made under
           the Plan or any other compensation payable to a participant (or
           beneficiary) all taxes which are required to be withheld by the
           Company (or a subsidiary) in respect to such payment or distribution
           or this Plan. As a condition precedent to any payment of cash or
           delivery of shares under this Plan, if the Company (or a subsidiary),
           for any reason, elects not to (or cannot) satisfy the withholding
           obligation from the amounts otherwise payable under this Plan or
           otherwise, the participant (or beneficiary) shall pay or provide for
           payment in cash of the amount of any taxes which the Company (or a
           subsidiary) may be required to withhold with respect to the benefits
           hereunder.



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8.5        Acceleration of Bank Payments

           Notwithstanding the provisions of Section 8.3, upon the occurrence of
           an "Event" (as defined below), each participant shall immediately
           have a fully vested and unrestricted contract right to receive full
           and immediate payment in cash of the participant's then outstanding
           Cash Account balance and delivery of shares of Common Stock or
           payment of cash in respect of Stock Units credited to his or her
           Stock Unit Account. The Committee may accelerate the vesting and
           payment of Plan benefits in anticipation of or in connection with the
           occurrence of an Event. Notwithstanding the foregoing, this Section
           8.5 shall not apply to any participant who alone or together with one
           or more other persons acting as a partnership, limited partnership,
           syndicate, or other group for the purpose of acquiring, holding or
           disposing of securities of the Company, triggers a "Change in
           Control" under clause (iv)(A) below which causes the occurrence of
           the Event.

           "Event" shall mean any of the following:

           (i)        Approval by the shareholders of the Company of the
                      dissolution or liquidation of the Company;

           (ii)       Approval by the shareholders of the Company of an
                      agreement to merge or consolidate, or otherwise
                      reorganize, with or into one or more entities which are
                      not "Subsidiaries" (as defined below), as a result of
                      which less than 50% of the outstanding voting securities
                      of the surviving or resulting entity are, or are to be,
                      owned by former shareholders of the Company;



                                       22
<PAGE>   23

           (iii)      Approval by the shareholders of the Company of the sale or
                      transfer of substantially all of the Company's business
                      and/or assets to a person or entity which is not a
                      Subsidiary; or

           (iv)       A Change in Control. A "Change in Control" shall be deemed
                      to have occurred if:

                      (A)        any "person", alone or together with all
                                 "affiliates" and "associates" of such person,
                                 is or becomes (1) an "Acquiring Person" as
                                 defined in the Rights Agreement, dated as of
                                 March 21, 1989 and as amended, by and between
                                 the Company and The Bank of New York, Rights
                                 Agent or (2) the "beneficial owner" of 30% of
                                 the outstanding voting securities of the
                                 Company (the terms "person", "affiliates",
                                 "associates" and "beneficial owner" are used as
                                 such terms are used in the Securities Exchange
                                 Act of 1934 and the General Rules and
                                 Regulations thereunder); provided, however,
                                 that a "Change in Control" shall not be deemed
                                 to have occurred if such "person" is the
                                 Company, any Subsidiary or any employee benefit
                                 plan or employee stock plan of the Company or
                                 of any Subsidiary, or any trust or other entity
                                 organized, established or holding shares of
                                 such voting securities by, for or pursuant to,
                                 the terms of any such plan; or



                                       23
<PAGE>   24

                      (B)        individuals who at the beginning of any period
                                 of two consecutive calendar years constitute
                                 the Board cease for any reason, during such
                                 period, to constitute at least a majority
                                 thereof, unless the election, or the nomination
                                 for election by the Company's shareholders, of
                                 each new Board member was approved by a vote of
                                 at least three-quarters (3/4) of the Board
                                 members then still in office who were Board
                                 members at the beginning of such period.

                     "Subsidiary" shall mean any corporation or other entity a
                     majority or more of whose outstanding voting stock or
                     voting power is beneficially owned directly or indirectly
                     by the Company.

8.6        No Shareholder Rights

           This Plan creates no fiduciary duty to participants. The Stock Units
           credited to a participant's Stock Unit Account shall be used solely
           as a device for the determination of the number of shares of Common
           Stock (or cash) to be eventually distributed to such Participant in
           accordance with this Plan. The Stock Units shall not be treated as
           property or as a trust fund of any kind. No Participant shall be
           entitled to any voting or other stockholder rights with respect to
           Stock Units granted or credited under this Plan.

8.7        Compliance with Laws

           This Plan and the offer, issuance and delivery of shares of Common
           Stock and/or the payment of money under this Plan are subject to
           compliance with all 



                                       24
<PAGE>   25

           applicable federal and state laws, rules and regulations (including
           but not limited to state and federal securities law) and to such
           approvals by any listing, agency or any regulatory or governmental
           authority as may, in the opinion of counsel for the Company, be
           necessary or advisable in connection therewith. Any securities
           delivered under this Plan shall be subject to such restrictions, and
           the person acquiring such securities shall, if requested by the
           Company, provide such assurances and representations to the Company
           as the Company may deem necessary or desirable to assure compliance
           with all applicable legal requirements.



                                       25
<PAGE>   26

                           GLOSSARY OF SELECTED TERMS


<TABLE>
<S>                                      <C>             
"Bank."                                  Bank means the EVA Incentive
                                         Compensation Bank described in Section
                                         2.4 of the Plan, which is composed of a
                                         participant's Cash Account and Stock
                                         Unit Account.

"Base Unit Value."                       An amount equal to 0.5.

"Beneficiary" or "Beneficiaries."        See Company Employees Profit Sharing
                                         Retirement Plan Summary Plan
                                         Description document, as amended, for
                                         definition.

"Board."                                 The Company's Board of Directors.

"Bonus."                                 For a fiscal year for which performance
                                         is being measured, the participant's
                                         Target Bonus for the fiscal year
                                         multiplied by the Total Unit Value for
                                         the fiscal year.

"Cash Account."                          Cash Account means the bookkeeping
                                         account maintained by the Company for
                                         each participant that (i) is credited
                                         with cash amounts pursuant to Section
                                         2.4, and (ii) is debited with respect
                                         to shortfalls pursuant to Section 2.4,
                                         and benefits in respect of such account
                                         that are paid, forfeited, or
                                         terminated.

"Committee."                             The Compensation Committee of the Board.

"Common Stock."                          Common Stock means the common stock,
                                         without par value, of Furon Company
                                         (subject to adjustment pursuant to
                                         Section 2.6(g)).

"Company."                               Furon Company, a California corporation.

"Current Bonus."                         For a fiscal year for which performance
                                         is being measured, the participant's
                                         Target Bonus for the fiscal year
                                         multiplied by the lesser of (i) the
                                         Total Unit Value for the fiscal year or
                                         (ii) 1.0, where such amount is a
                                         positive number.

"Death."                                 In order to receive payment of funds
                                         from the Bank, a participant must be an
                                         active full-time employee and eligible
                                         to participate in the Plan at the time
                                         of death.

"Disability."                            Disability shall mean the total and
                                         permanent incapacity, as determined by
                                         the Executive Group based upon
                                         competent
</TABLE>



                                       26
<PAGE>   27
<TABLE>
<S>                                      <C>
                                         medical advice, of a participant to
                                         render substantial service to the
                                         Company by reason of mental or physical
                                         disability.

"Dividend Equivalent."                   Dividend Equivalent means the amount of
                                         cash dividends or other cash
                                         distributions paid by the Company on
                                         that number of shares of Common Stock
                                         equal to the number of Stock Units
                                         credited to a participant's Stock Unit
                                         Account as of the applicable record
                                         date for the dividend or other
                                         distribution, which amount shall be
                                         credited in the form of additional
                                         Stock Units to the participant's Stock
                                         Unit Account, as provided in Section
                                         2.6(c).

"EVA Target."                            The EVA target performance for the
                                         Company or a business unit, as the case
                                         may be, that has been established
                                         pursuant to the Plan for the fiscal
                                         year for which performance is being
                                         measured.

"Executive Group."                       The Company's Chairman of the Board,
                                         President and Chief Financial Officer.

"General Managers"                       The general managers of the Company's
                                         business units that the Executive Group
                                         from time to time determines are
                                         eligible for participation in the Plan.

"Performance Unit Value"                 An amount equal to: (i) the actual EVA
                                         performance minus the EVA Target for
                                         the Company/business unit for such
                                         fiscal year; divided by (ii) the
                                         Variation Factor for the
                                         Company/business unit.

"Plan."                                  The Furon Company Economic Value Added
                                         (EVA) Incentive Compensation Plan.

"Retirement."                            A participant is eligible to retire
                                         under the Plan if at the time of
                                         retirement: (i) The participant is at
                                         least age 60; and (ii) the participant
                                         has had at least ten (10) years of
                                         continuous full-time employment with
                                         the Company.

"Stock Unit."                            Stock Unit means a non-voting unit of
                                         measurement which is deemed solely for
                                         bookkeeping purposes under this Plan to
                                         be equivalent to one outstanding share
                                         of Common Stock (subject to adjustment
                                         pursuant to Section 2.6(g)).

"Stock Unit Account."                    Stock Unit Account means a bookkeeping
                                         account maintained by the Company for
                                         each participant that (i) is credited
                                         with Stock Units pursuant to Section
                                         2.6 and (ii) is debited with respect to
                                         Stock Units that are paid, forfeited,
                                         or terminated.
</TABLE>



                                       27
<PAGE>   28

<TABLE>
<S>                                      <C>
"Subaccount."                            Subaccount means a subaccount of a
                                         participant's Stock Unit Account
                                         established to separately account for
                                         Stock Units that are credited with
                                         respect to different fiscal years.

"Target Bonus."                          For a fiscal year for which performance
                                         is being measured, the participant's
                                         base salary for the fiscal year
                                         multiplied by the participant's rate of
                                         participation under the Plan.

"Total Unit Value"                       The Total Unit Value for the Company as
                                         a whole or a business unit, as the case
                                         may be, for a fiscal year shall be
                                         equal to the Base Unit Value plus the
                                         Performance Unit Value.

"Variation Factor"                       The Variation Factor for the Company as
                                         a whole or a business unit, as the case
                                         may be, shall be equal to the factor
                                         then in effect as determined by (i) the
                                         Compensation Committee, in the case of
                                         the Company's Variation Factor, or (ii)
                                         the Executive Group, in the case of a
                                         business unit's Variation Factor.
</TABLE>



                                       28
<PAGE>   29
                                 FURON COMPANY

                        EVA Incentive Compensation Plan

<TABLE>
<CAPTION>
           ASSUMPTIONS           YR1      YR2      YR3       YR4      YR5      YR6      YR7      YR8      YR9      YR10
-------------------------------------------------------------------------------------------------------------------------
<S>                            <C>      <C>      <C>      <C>       <C>      <C>      <C>      <C>      <C>      <C>     
Stock price ($/share)            20.00    24.00    28.80     34.56    41.47    49.77    59.72    71.66    86.00    103.20
Annual growth in stock price       20%

TARGET BONUS %                     15%      15%      15%       15%      15%      15%      15%      15%      15%       15%
BASE SALARY                    $65,000  $68,250  $71,663  $ 75,246  $79,008  $82,958  $87,106  $91,462  $96,035  $100,836
TARGET BONUS                    $9,750  $10,238  $10,749  $ 11,287  $11,851  $12,444  $13,066  $13,719  $14,405   $15,125

TOTAL UNIT VALUE                  3.00     2.50     1.70     -1.00    -0.50     1.80     2.20     3.00     1.75      2.00

TOTAL BONUS                    $29,250  $25,594  $18,274  ($11,287) ($5,926) $22,399  $28,745  $41,158  $25,209   $30,251
CURRENT BONUS                   $9,750  $10,238  $10,749        $0       $0  $12,444  $13,066  $13,719  $14,405   $15,125

THE CASH BANK ($)
-----------------
BEGINNING BANK BALANCE               -  $14,625  $19,988   $15,475   $2,792  ($3,134)    $600   $9,546  $26,943   $21,563
PERFORMANCE SUBTRACTIONS             -       $0       $0  ($11,287) ($5,926)      $0       $0       $0       $0        $0
                                        -------  -------  --------  -------  -------  -------  -------  -------   -------
BANK PAYOUT BALANCE                  -  $14,625  $19,988    $4,188  ($3,134) ($3,134)    $600   $9,546  $26,943   $21,563
BANK PAYOUT PERCENT                33%      33%      33%       33%      33%      33%      33%      33%      33%       33%
           Bank Payout              $0   $4,875   $6,662    $1,396       $0       $0     $200   $3,182   $8,981    $7,188
      PERFORMANCE ADDITIONS    $14,625  $10,238   $2,150        $0       $0   $3,733   $9,146  $20,579   $3,601    $7,563
      ENDING BANK BALANCE      $14,625  $19,988  $15,475    $2,792  ($3,134)    $600   $9,546  $26,943  $21,563   $21,938

THE STOCK BANK (SHARE UNITS)
----------------------------
BEGINNING BANK BALANCE               -   243.75   375.78    437.14   291.43   291.43   416.45   387.03   353.74    319.58
BANK PAYOUT PERCENT                33%      33%      33%       33%       0%       0%      33%      33%      33%       33%
           Bank Payout               -    81.25   125.26    145.71        -        -   138.82   129.01   117.91    106.53
PERFORMANCE ADDITIONS ($)      $ 4,875   $5,119   $5,375        $0       $0   $6,222   $6,533   $6,860   $7,203    $7,563
PERFORMANCE ADDITIONS 
  (Share units)                 243.75   213.28   186.62         -        -   125.02   109.39    95.72    83.75     73.29
       ENDING BANK BALANCE      243.75   375.78   437.14    291.43   291.43   416.45   387.03   353.74   319.58    286.34

TOTAL BONUS PAYMENT
-------------------
CURRENT BONUS                  $ 9,750  $10,238  $10,749        $0       $0  $12,444  $13,066  $13,719  $14,405   $15,125
CASH BANK PAYOUT ($)                $0   $4,875   $6,662    $1,396       $0       $0     $200   $3,182   $8,981    $7,188
                               -------  -------  -------  --------  -------  -------- -------  -------  -------   -------
            TOTAL CASH         $ 9,750  $15,112  $17,412    $1,396       $0  $12,444  $13,266  $16,901  $23,386   $22,313

        TOTAL SHARE UNITS            -    81.25   125.26    145.71        -        -   138.82   129.01   117.91    106.53
Value = Total Share 
  Units x Share Price          $     -  $ 1,950  $ 3,607   $ 5,036      $ -      $ -  $ 8,290  $ 9,245  $10,140   $10,993

-------------------------------------------------------------------------------------------------------------------------
      CASH + VALUE OF 
        STOCK UNITS            $ 9,750  $17,062  $21,019    $6,432       $0  $12,444  $21,556  $26,146  $33,526   $33,306
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                  ATTACHMENT A

                                      A-1
<PAGE>   30
                                 FURON COMPANY
                        EVA Incentive Compensation Plan

<TABLE>
<CAPTION>
       Assumptions              YR1      YR2      YR3      YR4      YR5      YR6      YR7      YR8      YR9      YR10
-----------------------------------------------------------------------------------------------------------------------
<S>                           <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>     
Stock price ($/share)           20.00    24.00    28.80    34.56    41.47    49.77    59.72    71.66    86.00    103.20
Annual growth in stock price      20%

TARGET BONUS  %                   15%      15%      15%      15%      15%      15%      15%      15%      15%       15%
BASE SALARY                   $65,000  $68,250  $71,663  $75,246  $79,008  $82,958  $87,106  $91,462  $96,035  $100,836
TARGET BONUS                   $9,750  $10,238  $10,749  $11,287  $11,851  $12,444  $13,066  $13,719  $14,405   $15,125

TOTAL UNIT VALUE                 3.00     2.50     1.70     1.40     1.60     1.80     2.20     3.00     1.75      2.00

TOTAL  BONUS                  $29,250  $25,594  $18,274  $15,802  $18,962  $22,399  $28,745  $41,158  $25,209   $30,251
CURRENT BONUS                  $9,750  $10,238  $10,749  $11,287  $11,851  $12,444  $13,066  $13,719  $14,405   $15,125

THE CASH BANK ($)
-----------------
BEGINNING BANK BALANCE              -  $14,625  $19,988  $15,475  $10,317   $8,063   $9,108  $15,218  $30,724   $24,084
PERFORMANCE SUBTRACTIONS            -       $0       $0       $0       $0       $0       $0       $0       $0        $0
                                       -------  -------  -------  -------  -------  -------  -------  -------  --------
BANK PAYOUT BALANCE                 -  $14,625  $19,988  $15,475  $10,317   $8,063   $9,108  $15,218  $30,724   $24,084
BANK PAYOUT PERCENT               33%      33%      33%      33%      33%      33%      33%      33%      33%       33%
           Bank Payout             $0   $4,875   $6,662   $5,158   $3,439   $2,688   $3,036   $5,073  $10,241    $8,028
      PERFORMANCE ADDITIONS   $14,625  $10,238   $2,150       $0   $1,185   $3,733   $9,146  $20,579   $3,601    $7,563
      ENDING BANK BALANCE     $14,625  $19,988  $15,475  $10,317   $8,063   $9,108  $15,218  $30,724  $24,084   $23,619

THE STOCK BANK (SHARE UNITS)
----------------------------
BEGINNING BANK BALANCE              -   243.75   375.78   437.14   422.06   424.26   407.86   381.30   349.92    317.03
BANK PAYOUT PERCENT               33%      33%      33%      33%      33%      33%      33%      33%      33%       33%
           Bank Payout              -    81.25   125.26   145.71   140.69   141.42   135.95   127.10   116.64    105.68
PERFORMANCE ADDITIONS ($)      $4,875   $5,119   $5,375   $4,515   $5,926   $6,222   $6,533   $6,860   $7,203    $7,563
PERFORMANCE ADDITIONS 
  (Share units)                243.75   213.28   186.62   130.63   142.88   125.02   109.39    95.72    83.75     73.29
       ENDING BANK BALANCE     243.75   375.78   437.14   422.06   424.26   407.86   381.30   349.92   317.03    284.64

TOTAL BONUS PAYMENT
-------------------
CURRENT BONUS                  $9,750  $10,238  $10,749  $11,287  $11,851  $12,444  $13,066  $13,719  $14,405   $15,125
CASH BANK PAYOUT ($)               $0   $4,875   $6,662   $5,158   $3,439   $2,688   $3,036   $5,073  $10,241    $8,028
                              -------  -------  -------  -------  -------  -------  -------  ------- --------  --------
            TOTAL CASH         $9,750  $15,112  $17,412  $16,445  $15,290  $15,131  $16,102  $18,792  $24,647   $23,154

        TOTAL SHARE UNITS           -    81.25   125.26   145.71   140.69   141.42   135.95   127.10   116.64    105.68
Value = Total Share 
  Units x Share Price         $     -  $ 1,950  $ 3,607  $ 5,036  $ 5,835  $ 7,038  $ 8,119  $ 9,108 $ 10,031  $ 10,906

-----------------------------------------------------------------------------------------------------------------------
   CASH + VALUE OF 
     STOCK UNITS               $9,750  $17,062  $21,019  $21,481  $21,125  $22,169  $24,221  $27,900  $34,677   $34,059
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                  ATTACHMENT B

                                      B-1