<PAGE>
                                                                    EXHIBIT 10.5


                               KAYDON CORPORATION
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                            AS AMENDED AND RESTATED





<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE                                                                         PAGE
-------                                                                         ----
<S>           <C>                                                               <C>
I             Establishment ..................................................   1
              1.1       Effective Date .......................................   1
              1.2       Intent ...............................................   1
              1.3       Trust ................................................   1

II            Definitions ....................................................   2
              2.1       Accrued Benefit ......................................   2
              2.2       Active Participant ...................................   2
              2.3       Actuarial Equivalent .................................   3
              2.4       Average Monthly Compensation .........................   3
              2.5       Board of Directors ...................................   3
              2.6       Compensation .........................................   3
              2.7       Committee ............................................   3
              2.8       Covered Compensation .................................   3
              2.9       Disability ...........................................   4
              2.10      Disability Retirement Eligibility ....................   4
              2.11      Early Disability Retirement Eligibility ..............   4
              2.12      Early Retirement Eligibility .........................   4
              2.13      Employer .............................................   5
              2.14      Normal Retirement Eligibility ........................   5
              2.15      Plan Year ............................................   5
              2.16      Vested Retirement Eligibility ........................   5
              2.17      Year of Credited Service .............................   5
              2.18      Year of Vesting Service ..............................   7

III           Benefits .......................................................   8
              3.1       Normal Retirement Benefit ............................   8
              3.2       Early Retirement Benefit .............................   8
              3.3       Vested Retirement Benefit ............................   8
              3.4       Disability Benefit ...................................   9
              3.5       Death Benefit ........................................  10
              3.6       Benefit Limitations ..................................  11
              3.7       Special Transfer Employee Rule .......................  13
              3.8       Change in Control Override ...........................  14

IV            Distribution ...................................................  15
              4.1       Time and Method of Payment ...........................  15
              4.2       Change of Circumstances ..............................  16
              4.3       Designation of Beneficiary ...........................  16
              4.4       Claims Procedure .....................................  16
              4.5       Facility of Payment ..................................  18
              4.6       Offset ...............................................  18
              4.7       Distribution in the Event of Taxation ................  18
</TABLE>


                                      -i-


<PAGE>

<TABLE>
<S>           <C>                                                               <C>
V             Administration .................................................  20
              5.1       Committee ............................................  20
              5.2       Limitation of Liability and Indemnification ..........  21

VI            Amendment and Termination of Plan ..............................  22
              6.1       Amendment or Termination .............................  22
              6.2       Change in Control Agreement ..........................  23

VII          Miscellaneous ...................................................  24
             7.1        Nonassignability .....................................  24
             7.2        Employment Rights Not Enlarged .......................  24
             7.3        Participants' Rights Limited .........................  24
             7.4        Interpretation and Construction ......................  24
             7.5        Governing Law ........................................  25
             7.6        Arbitration ..........................................  25
</TABLE>

Appendix A
Appendix B
Appendix C
Appendix D


                                      -ii-

<PAGE>

                               KAYDON CORPORATION
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

         Kaydon Corporation and certain of its related entities identified in
Appendix A (individually, an Employer, or collectively, the Employers) amend and
restate the Kaydon Corporation Supplemental Executive Retirement Plan (the Plan)
effective August 1, 1998.

                                    ARTICLE I
                                 ESTABLISHMENT

         1.1 EFFECTIVE DATE. This Plan was generally effective as of January 1,
1994 as to Kaydon Corporation and January 1, 1997 as to the other Employer or
Employers. The Plan was amended and restated in 1997 and is now further amended
and restated, in both cases to reflect amendments adopted by the Board November
7,1996.

         1.2 INTENT. The Plan is intended to be an unfunded deferred
compensation arrangement for purposes of the Internal Revenue Code of 1986, as
amended (the Code) and for purposes of Title I of the Employee Retirement Income
Security Act of 1974, as amended (ERISA).

         (a) ERISA EXEMPTION. The Plan is provided for the benefit of a select
group of management employees, is intended to result in taxation to participants
only when amounts are actually received under this Plan and is intended to be
exempt from the participation, funding, vesting and fiduciary requirements of
ERISA.

         (b) UNFUNDED. The Plan constitutes only a promise by each Employer to
make benefit payments in the future. Participants have the status of general
unsecured creditors of their Employer.

         1.3 TRUST. Any trust created by an Employer and any assets held by the
trust to assist the Employer in meeting its obligations under this Plan will
conform, in general form, to the terms of the model trust described in Rev.
Proc. 92-64 as modified from time to time.



                                      -1-
<PAGE>

                                   ARTICLE II
                                  DEFINITIONS

                  2.1 ACCRUED BENEFIT. A participant's Accrued Benefit is the
Retirement Benefit earned to date under the Basic form (as defined in the Kaydon
Corporation Retirement Plan) taking into account the offset of the participant's
benefit under the Kaydon Corporation Retirement Plan from time to time.

         (a) CALCULATION. The Accrued Benefit is based on the Average Monthly
Compensation, Years of Vesting Service, Years of Credited Service (to a maximum
of 30) the benefit formula and the remaining Plan provisions in effect at the
earlier of termination of employment, cessation of Active Participation, or
other earlier computation date and, for purposes of determining the benefit
under the Kaydon Corporation Retirement Plan, the terms of that Plan in effect
from time to time.

         (b) REDUCTION. The Accrued Benefit of a participant who receives
payment of any benefits under the Plan is reduced by the Actuarial Equivalent of
the payments.

         2.2 ACTIVE PARTICIPANT. An Active Participant is an employee of Kaydon
Corporation or a wholly owned subsidiary of Kaydon Corporation which has adopted
this Plan who has been designated by the Board of Directors or by the
Compensation Committee of the Board of Directors as eligible to begin accruing
benefits under this Plan and is identified in Appendix B.

         (a) CESSATION OF ACTIVE PARTICIPATION. An employee who becomes an
Active Participant remains an Active Participant until the earlier of the date
the employee is no longer actively employed in that manner and the date the
employee is removed from this Plan by the Board of Directors or the Compensation
Committee.

         (b) PARTICIPATION. An individual who is or was an Active Participant
remains a participant until no further amounts are payable to the individual
under this Plan.



                                      -2-
<PAGE>

         2.3 ACTUARIAL EQUIVALENT. Actuarial Equivalence is determined under the
assumptions and methods set forth in Appendix D.

         2.4 AVERAGE MONTHLY COMPENSATION. Average Monthly Compensation is the
participant's Average Monthly Compensation determined under the Kaydon
Corporation Retirement Plan, calculated at the earlier of termination of
employment, cessation of Active Participation, or other earlier computation date
using the definition of Compensation contained in this Plan.

         2.5 BOARD OF DIRECTORS. The Board of Directors is the Board of
Directors of Kaydon Corporation.

         2.6 COMPENSATION. Compensation is Compensation as provided in the
Kaydon Corporation Retirement Plan, except that Compensation is determined
without application of the Code Section 401(a)(17) Dollar Limit and the
Compensation Dollar Limit of the Kaydon Corporation Retirement Plan.

         2.7 COMMITTEE. The Committee consists of one or more persons appointed
by the Board of Directors of Kaydon Corporation. In the absence of a specially
appointed Committee, the Board of Directors of Kaydon Corporation or the
Compensation Committee of the Board of Directors has the responsibilities of the
Committee provided in this Plan. Any members of the Committee who are employees
may not receive compensation for their services to the Committee.

         2.8 COVERED COMPENSATION. Covered Compensation is Covered Compensation
as provided in the Kaydon Corporation Retirement Plan.



                                      -3-
<PAGE>

         2.9 DISABILITY. Disability is any physical or mental condition which
causes the individual to cease active work with the Employer, is reasonably
expected to be permanent, and is approved by the Board of Directors or the
Committee in its discretion, based on evidence satisfactory to it. Receipt of
permanent and total disability benefits under the Social Security Act, as
amended, or a finding of Disability for purposes of the Kaydon Corporation
Retirement Plan may be considered by the Board or the Committee, but are not
dispositive.

         2.10 DISABILITY RETIREMENT ELIGIBILITY. Disability Retirement
Eligibility is the later of Normal Retirement Eligibility and the first day of
the month on or following the last payment made under the Employer's long term
disability insurance program with respect to an individual who has completed ten
(10) Years of Vesting Service or ten (10) Years of Credited Service, incurred a
Disability while an Active Participant and after attaining age 55, and ceased
active work with the Employers.

         2.11 EARLY DISABILITY RETIREMENT ELIGIBILITY. Early Disability
Retirement Eligibility is the later of Early Retirement Eligibility and the
first day of the month on or following the last payment made under the
Employer's long term disability insurance program with respect to an individual
who has completed ten (10) Years of Vesting Service, incurred a Disability while
an Active Participant and after attaining age 55 and ceased active work with the
Employers.

         2.12 EARLY RETIREMENT ELIGIBILITY. Early Retirement Eligibility is the
first day of the month on or following the date an Active Participant attains
age 55, completes at least ten (10) Years of Vesting Service and ceases active
work with the Employers.


                                      -4-
<PAGE>

         2.13 EMPLOYER. Employer means Kaydon Corporation and any wholly owned
subsidiary of Kaydon Corporation which has adopted this Plan.

         2.14 NORMAL RETIREMENT ELIGIBILITY. Normal Retirement Eligibility is
the first day of the month on or following the date an Active Participant:

         (a) GENERAL RULE. Who has completed ten (10) Years of Vesting Service
or ten (10) Years of Credited Service attains age 65; or

         (b) SPECIAL RULE. Who was first employed by the Employers after age 55
attains age 65.

         2.15 PLAN YEAR. The Plan Year is an annual accounting period ending
each December 31.

         2.16 VESTED RETIREMENT ELIGIBILITY. Vested Retirement Eligibility is
the first day of the month on or following the date a participant who is no
longer an Active Participant but who has a vested interest in an Accrued Benefit
ceases active work with the Employers. The Accrued Benefit is vested upon the
earlier of:

         (a) AGE AND SERVICE. The later of attainment of age 55 while (or prior
to becoming) an Active Participant and the completion of either ten (10) Years
of Vesting Service or ten (10) Years of Credited Service; or

         (b) AGE. The attainment of age 65 while (or prior to becoming) an
Active Participant.

         2.17 YEAR OF CREDITED SERVICE. A Year of Credited Service is a Year of
Credited Service determined under the Kaydon Corporation Retirement Plan,
including service credited prior to participation in this Plan, except that:

                                      -5-
<PAGE>

         (a) ADDITIONAL CREDIT. For purposes of the Accrued Benefit once the
individual attains the Eligibility requirement below and for purposes of the
computation of the Normal Retirement, Early Retirement, Death, or Disability
Benefit under Sections 3.1, 3.2, 3.4 and 3.5(b) only (and not for purposes of
calculating the Accrued Benefit prior to the time the individual attains the
Eligibility requirement below, calculating the  Vested Retirement Benefit, or
determining eligibility for a benefit, vesting, or any other purpose), Active
Participants identified in Appendix C as potentially eligible for Additional
Credit who are described in this subsection will be credited with Years of
Credited Service as provided in this subsection in addition to the Years of
Credited Service already credited to the Participant.

                  (i) ELIGIBILITY. An individual is eligible for the additional
         credit provided in subsection (ii) if the individual attains while an
         Active Participant in this Plan Normal Retirement Eligibility,
         Disability Retirement Eligibility, Early Disability  Retirement
         Eligibility, or Early Retirement Eligibility and age 62, or dies while
         an Active Participant in this Plan with a Qualifying Spouse who is
         eligible for a benefit under Section 3.5(b).

                  (ii) AMOUNT OF CREDIT. The number of additional Years of
         Credited Service credited is equal to the Active Participant's Years of
         Credited Service actually earned under the Kaydon Corporation
         Retirement Plan or credited under Section 3.7 of this Plan (excluding,
         for example, Years of Credited Service imputed under the terms of that
         Plan or this Plan, other than in accordance with Section 3.7 of this
         Plan).

                  (iii) REMOVAL. An individual may be removed from the list of
         Active Participants identified in Appendix C as potentially eligible
         for Additional Credit at any time prior to the earlier of attainment of
         the Eligibility requirement, above, and the date which is six months
         prior to the time the provisions of Section 3.8 of this Plan have
         operated with respect to the individual. Subject to that limitation,



                                      -6-
<PAGE>

         that removal may occur in the discretion of the Board of Directors or
         the Committee.

         (b) MAXIMUM. In every case, total Years of Credited Service are limited
to 30.

         (c) LIMITATION. Years of Credited Service are not credited under this
Plan after an individual ceases to be an Active Participant in this Plan.

         2.18 YEAR OF VESTING SERVICE. A Year of Vesting Service is a Year of
Vesting Service determined under the Kaydon Corporation Retirement Plan, except
that Years of Vesting Service are not credited under this Plan after an
individual ceases to be an Active Participant in this Plan.


                                      -7-
<PAGE>

                                  ARTICLE III
                                    BENEFITS

         3.1 NORMAL RETIREMENT BENEFIT. An Active Participant who attains Normal
Retirement Eligibility is entitled to the following benefit, calculated in the
Basic Form as defined in the Kaydon Corporation Retirement Plan, payable
beginning on the first day of the month following retirement at or after
attainment of Normal Retirement Eligibility. The benefit is one percent (1%) of
Average Monthly Compensation plus fifty-eight hundredths percent (.58%) of
Average Monthly Compensation in excess of Covered Compensation, multiplied by
Years of Credited Service (to a maximum of 30 years), less the Participant's
benefit under the Kaydon Corporation Retirement Plan, calculated in the Basic
Form, payable beginning at the same date.

         3.2 EARLY RETIREMENT BENEFIT. A participant who retires after attaining
Early Retirement Eligibility is entitled to a benefit computed in the same
manner as the Normal Retirement Benefit, payable on the first day of the month
following attainment of age 65. The Committee, in its discretion, however, may
begin the payment of benefits to an Active Participant who retires after
attaining Early Retirement Eligibility prior to age 65. In that case, the
benefit is calculated by subtracting from the Actuarial Equivalent (determined
under Appendix D) of the Participant's Accrued Benefit (calculated without the
offset of the benefit under the Kaydon Corporation Retirement Plan) the
Participant's actuarially adjusted benefit under the Kaydon Corporation
Retirement Plan from time to time.

         3.3 VESTED RETIREMENT BENEFIT. A participant who retires after
attaining Vested Retirement Eligibility is entitled to the following benefit,
calculated in the Basic Form as defined in the Kaydon Corporation Retirement
Plan, payable beginning on the first day of the month following attainment of
age 65. The benefit is calculated under



                                      -8-
<PAGE>

the formula provided in Section 3.1. The Committee, in its discretion, however,
may begin the payment of benefits to a participant who terminates service and
retires after attaining Vested Retirement Eligibility. In that case, the benefit
is reduced in the same manner as an Early Retirement Benefit.

         3.4 DISABILITY BENEFIT. An Active Participant who retires due to
Disability and attains Disability Retirement Eligibility is entitled to the
individual's Accrued Benefit calculated based on the Years of Credited Service
the Participant would have completed had employment continued to Normal
Retirement Eligibility (with additional Years of Credited Service credited under
Section 2.17(a), if applicable, based only on the individual's actual Years of
Credited Service) and Average Monthly Compensation determined on the first day
of the month coincident with or next following the occurrence of the Disability.

         (a) REDUCED DISABILITY BENEFIT. The Committee, in its discretion,
however, may begin the payment of benefits to an Active Participant who retires
due to Disability prior to age 65 and attains Early Disability Retirement
Eligibility. This benefit is the actuarial equivalent of the individual's
Accrued Benefit, calculated based on the Years of Credited Service the
Participant would have completed had employment continued to the date benefits
begin (with additional Years of Credited Service credited under Section 2.17(a),
if applicable, based only on the individual's actual Years of Credited Service)
and Average Monthly Compensation determined on the first day of the month
coincident with or next following the occurrence of the Disability, reduced and
payable in the same manner as an Early Retirement Benefit.

         (b) NOTICE. A participant whose employment terminated as the result of
a permanent disability must advise the Committee within sixty (60) days should
payment of Social Security disability insurance benefits be discontinued.



                                      -9-
<PAGE>

         (c) EXAMINATION. The Committee may require any participant whose
employment terminated as the result of a permanent disability to provide
evidence the Committee considers appropriate verifying the participant's
continued eligibility for disability benefits under this Plan.

         (d) EFFECT OF DISCONTINUANCE. If the permanent disability of a
participant ceases, the Disability Benefit shall also cease and the participant
shall receive no further Years of Credited Service unless, in the case of a
participant receiving an unreduced Disability Benefit, the participant returns
to the employ of an Employer within thirty (30) days after the cessation of
disability.

                  (i) SPECIAL CREDIT. In that event, the participant shall
         receive Years of Credited Service for the entire period of permanent
         disability.

                  (ii) OTHER. If the participant does not return to the employ
         of an Employer within thirty (30) days after the cessation of
         disability, or in the case of a participant receiving a reduced
         Disability Benefit, the participant shall not receive any Years of
         Credited Service for the period of permanent disability and shall be
         entitled only to the benefit, if any, applicable on the date of
         commencement of the permanent disability, determined as if employment
         with the Employers had terminated as of that date.

         3.5 DEATH BENEFIT. Death Benefits are payable only under this Section.

         (a) NON-ELIGIBLE. If an individual dies before vesting, no benefit is
payable under this Plan.

         (b) ELIGIBLE DEATH. The Qualifying Spouse (as defined in the Kaydon
Corporation Retirement Plan) of a participant who dies after vesting but before
benefits are payable is entitled to the Spousal Survivor Annuity. If the Spousal
Survivor Annuity is not payable, no benefit is payable under this Plan.



                                      -10-
<PAGE>

                  (i) SPOUSAL SURVIVOR ANNUITY. The Spousal Survivor Annuity
         is an equal monthly benefit for the Qualifying Spouse's life equal to
         the Qualifying Spouse's benefit under the Joint and Spousal Survivor
         form of benefits (as defined in the Kaydon Corporation Retirement Plan)
         (with additional Years of Credited Service under Section 2.17(a), if
         applicable) less the Spousal Survivor Annuity benefit payable under the
         Kaydon Corporation Retirement Plan from time to time.

                  (ii) PAYMENT. The Spousal Survivor Benefit is payable at the
         earliest time payment of the Spousal Survivor Annuity benefit under the
         Kaydon Corporation Retirement Plan could commence and is not payable if
         the spouse does not survive until the actual commencement date. The
         benefit is actuarially reduced as provided in Appendix D.

         (c) POST-BENEFIT DEATH. The designated beneficiary of a participant who
dies after benefits are payable is entitled to a continuation of payment under
the elected payment form if the participant was properly receiving payments in
the Joint and Spousal Survivor form, the Joint and Survivor form, or the Period
Certain form (as defined in the Kaydon Corporation Retirement Plan).

         3.6 BENEFIT LIMITATIONS. Notwithstanding any other provision of the
Plan (except as provided in this subsection (a)):

         (a) FORFEITURE OF VESTED BENEFITS. An individual forfeits all amounts
payable under the Plan, whether or not vested and whether or not benefits have
yet commenced, if the individual:

             (i) FOR CAUSE. Is discharged For Cause;

             (ii) EMPLOYMENT. Is employed other than by Kaydon Corporation
         or one of its wholly-owned subsidiaries or is self-employed, in any
         capacity to any




                                      -11-
<PAGE>

         extent, prior to attainment of age 65, without prior written approval
         of the Committee or the Board of Directors; or

                  (iii) COMPETE. Is employed or is self-employed, in any
         capacity to any extent, at any age, in any industry determined by the
         Committee or the Board of Directors in its discretion to be an industry
         in which Kaydon Corporation or any of its subsidiaries competes.

         Subsection (ii) shall not apply if Section 3.8 operates with respect to
the individual. For purposes of this Plan, discharge is For Cause if the
participant, in connection with the participant's duties as an employee of the
Employer or any of its affiliates, committed a fraud or any felony, engaged in
deliberate, willful or gross misconduct, or committed any other act which causes
or may reasonably be expected to cause substantial injury to Kaydon or any of
its affiliates. For purposes of clarification, this use of this For Cause
standard for discharge affects the participant's entitlement to benefits under
this Plan only and does not generally limit the ability of Kaydon or other
employer to terminate participant's employment for any reason or for no reason
at all.

         (b) RECEIPT OF BENEFIT. Receipt of any benefit under the Plan fully
terminates the employment relationship with the Employers.

         (c) KAYDON CORPORATION RETIREMENT PLAN BENEFIT. Except where Section
3.8 operates, an individual is entitled to a benefit under this Plan only if the
individual is entitled to and is receiving a benefit from the Kaydon Corporation
Retirement Plan or would be entitled to a benefit from that Plan except that the
individual's Employer did not maintain that Plan.

         (d) SINGLE BENEFIT. A participant is eligible for only one (1) type of
benefit under the Plan. The receipt of a Plan benefit during any month precludes
payment of another type of benefit for the same month. Under no circumstances
will the Plan pay duplicate benefits with respect to the same participant or
surviving spouse benefits in



                                      -12-
<PAGE>

excess of the actuarial present value of the benefits described in this Article
III determined as of the earlier of the commencement of benefits or the date of
the participant's death.

         (e) EMPLOYMENT AFTER BENEFIT COMMENCEMENT. Benefit payments under the
Plan cease and are forfeited during any period of reemployment with an Employer
or a prior Employer and during any other period during which benefits under the
Kaydon Corporation Retirement Plan are suspended.

         (f) WITHHOLDING AND PAYROLL TAXES. Benefit payments shall be reduced as
determined in the sole discretion of the Employer for any withholding for
federal, state and local income, employment and other taxes required to be
withheld by the Employer in connection with the benefits paid under this Plan.

         3.7 SPECIAL TRANSFER EMPLOYEE RULE. An Active Participant who is
employed while an Active Participant by a subsidiary of Kaydon Corporation which
does not maintain the Kaydon Corporation Retirement Plan:

         (a) SERVICE. Is credited with Years of Vesting Service and Years of
Credited Service under this Plan as though the subsidiary had maintained the
Kaydon Corporation Retirement Plan during the Active Participant's employment by
the subsidiary as an Active Participant; and

         (b) BENEFIT. Receives a benefit under this Plan calculated taking that
imputed service into account for purposes of this Plan. The benefit offset under
this Plan is then calculated based on the greater of:

                  (i) PENSION BENEFIT. The participant's benefit under the
         Kaydon Corporation Retirement Plan based on the aggregate of the
         participant's actual service under that Plan and imputed service under
         Section 3.7(a) of this Plan; or

                  (ii) OTHER BENEFIT. The sum of the participant's actual
         benefit under the Kaydon Corporation Retirement Plan, the participant's
         actual benefit under




                                      -13-
<PAGE>

         any other Kaydon Corporation or other subsidiary defined benefit plan,
         and the Actuarial Equivalent of the participant's actual benefit under
         any other Kaydon Corporation or other subsidiary defined contribution
         plan.

         3.8 CHANGE IN CONTROL OVERRIDE. To the extent a participant is a party
to an effective Change in Control Agreement with an Employer which explicitly
provides for amendment of this Plan as to the participant, upon a Change in
Control as defined in that Agreement and a termination of employment triggering
the operation of that Agreement as to participant, this Plan shall be deemed
amended as to that participant to the extent provided in the Change in Control
Agreement.



                                      -14-
<PAGE>

                                   ARTICLE IV
                                  DISTRIBUTION

         4.1 TIME AND METHOD OF PAYMENT. Except as otherwise explicitly
provided, benefits under this Plan will be paid (other than in the case of death
of the participant) in the presumptive form of payment applicable to the
participant provided for in the Kaydon Corporation Retirement Plan (or which
would be applicable to the participant if the individual were a participant in
that plan), commencing on the first day of the month following attainment of age
65.

         (a) COMMITTEE. Notwithstanding those rules, the Committee may, in its
 sole discretion and without the consent of the individual, spouse, or
 beneficiary (except in the case of operation of Section 3.8):

                  (i) MODIFY TIME OR FORM. Accelerate the commencement of
         benefits to a date not prior to the participant's termination of
         employment and attainment of eligibility for Retirement and pay
         benefits in any form of payment allowed under the Kaydon Corporation
         Retirement Plan from time to time; and

                  (ii) LUMP SUM. Pay the Actuarial Equivalent of the remaining
         benefit in a lump sum before or after benefits commence. Any such
         payment satisfies the obligation of the Employer under this Plan.

         (b) EQUIVALENCE. Each optional form and time of payment of benefits
must be the Actuarial Equivalent of the benefit payable under the Basic form.

         (c) LIMITATION. A participant may not participate in any decision of
the Committee involving that individual.



                                      -15-
<PAGE>

         4.2 CHANGE OF CIRCUMSTANCES. Once payments have begun, no method of
payment may be revoked or modified, nor the benefit increased, by reason of a
subsequent divorce or death of the spouse of a participant before that of the
participant or by reason of the participant's actual retirement after benefits
have begun because of the participant's attainment of age 70-1/2.

         4.3 DESIGNATION OF BENEFICIARY. The beneficiary or contingent
beneficiary designated to receive amounts payable under the Plan (other than the
Spousal Survivor Annuity or the Spousal Survivor portion of the Joint and
Spousal Survivor Annuity) in the event of the participant's death is the same
beneficiary and contingent beneficiary, respectively, applicable to the
participant from time to time under the Kaydon Corporation Retirement Plan.

         4.4 CLAIMS PROCEDURE. A participant or beneficiary, the Committee and
the Board of Directors must observe the following procedures for claims to
benefits.

         (a) CLAIM. If a participant, beneficiary or legal representative
asserts that a benefit which is payable has not been paid in a timely manner,
the individual must file an Application for Distribution with the Committee. The
Committee must grant or deny the request within ninety (90) days after receipt
unless special circumstances require an extension of time. The extension must
not exceed an additional ninety (90) days. The Committee must notify the
applicant in writing of the extension and the reasons for the extension.

         (b) DENIAL OF CLAIM. If a claim is denied, the Committee must provide
to the applicant a written notice containing the reason for the denial. If
notice of a denial of claim or an extension of time is not received by the
applicant within ninety (90) days, the claim is deemed denied.



                                      -16-
<PAGE>

         (c) EMPLOYER REVIEW. Within sixty (60) days after a denial is received,
the applicant may request a review upon written application to the Board of
Directors. The applicant may submit issues and comments in writing to the Board.
The Board must make a decision on review and notify the applicant of the
decision within ninety (90) days of receipt of the request for review unless
circumstances require an extension of time. The extension may not exceed an
additional ninety (90) days.

                  (i) PRE-CHANGE IN CONTROL. Prior to a Change in Control (as
         defined in a Change in Control Agreement affecting a participant), the
         Board has the duty and power in this regard to exercise discretionary
         authority to construe and interpret the Plan and decide all questions
         of eligibility for benefits. The decision of the Board upon review is
         final and binding on the applicant unless the applicant establishes
         that the decision of the Board is arbitrary and capricious.

                  (ii) POST-CHANGE IN CONTROL. After such a Change in Control:

                        (A) INTERPRETATION. The Board's construction and
                  interpretation of the Plan and its decisions regarding
                  eligibility for benefits with respect to the affected
                  participant must be reasonable and consistent with the spirit
                  and intent of the Plan; and

                        (B) STANDARD. The decision of the Board upon review with
                  respect to the affected participant is subject to de novo
                  review.

         (d) LIMITATION. Except as provided in a Change in Control Agreement
affecting the participant, this section does not allow a participant to request
or demand payment of benefits at any time or in any form other than at age 65 in
the presumptive form applicable to the participant under the Kaydon Corporation
Retirement Plan, or to challenge in any manner the Committee's failure or
refusal to exercise the discretion available to it under subsection 4.1(a).



                                      -17-
<PAGE>

         4.5 FACILITY OF PAYMENT. A payment made under this section fully
discharges the Employer and the Committee from all future liability with respect
to the payment.

         (a) INCAPACITY. If a person entitled to payment is legally, physically
or mentally incapable of receiving or acknowledging payment, the Committee may
direct payment: directly to the person; to the person's legal representative; to
the spouse, child or relative by blood or marriage of the person; to the person
with whom the person resides; or by expending the payment directly for the
benefit of the person. A payment made other than to the person is intended to be
used for the person's exclusive benefit.

         (b) LEGAL REPRESENTATIVE. The Committee is not required to commence
probate proceedings or to secure the appointment of a legal representative.

         (c) DETERMINATIONS. The Committee may act upon affidavits in making any
determination. The Committee, in relying upon affidavits or having made a
reasonable effort to locate any person entitled to payment, is authorized to
direct payment to a successor beneficiary or another person. A person omitted
from payment has no rights on account of payments so made.

         (d) ANTI-ESCHEAT. If the Committee cannot locate a person entitled to
payment, the amount is a forfeiture which is reinstated if a claim is made
within the applicable limitations period by a person entitled to payment.

         4.6 OFFSET. The Committee shall offset any benefit by the value of
benefits received before reemployment or when or to the extent benefits should
not have been paid. In addition, in all cases the benefit payable under this
Plan is reduced by the benefit payable under the Kaydon Corporation Retirement
Plan.

         4.7 DISTRIBUTION IN THE EVENT OF TAXATION. If, for any reason, all or
any portion of the participant's benefit under this Plan becomes taxable to the
participant prior to receipt, the participant may petition the Committee for a
distribution of assets



                                      -18-
<PAGE>

sufficient to meet the participant's tax liability (including additions to tax,
penalties and interest).

         (a) CALCULATION. Upon the grant of such a petition, which grant shall
not be unreasonably withheld, the Employer shall distribute to the participant
immediately available funds in an amount equal to the participant's federal,
state and local tax liability associated with such taxation (not to exceed the
participant's Vested Accrued Benefit under the Plan). The liability shall be
measured by using the participant's then current highest federal, state and
local marginal tax rate, plus the rates or amounts for the applicable additions
to tax, penalties and interest.

         (b) TIMING. If the petition is granted, the tax liability distribution
shall be made within 90 days of the grant.

         (c) EFFECT. The distribution shall affect and reduce the participant's
Accrued Benefit and the benefits to be paid under this Plan.



                                      -19-
<PAGE>

                                    ARTICLE V
                                 ADMINISTRATION

         5.1 COMMITTEE. The Committee has responsibility for general
administration of the Plan.

         (a) AUTHORITY. The Committee has the duty and power to:

                  (i) CONSTRUCTION. Exercise discretionary authority to construe
         and interpret the Plan and decide all questions of eligibility for
         participation and benefits;

                  (ii) PROCEDURES. Prescribe procedures and forms for the
         payment of benefits; and

                  (iii) BENEFIT AUTHORIZATION. Determine entitlement to, the
         amount of, the timing of and the form of benefits and authorize benefit
         payments.

         (b) PROCEDURE AND ACTION. The Committee may elect one of its members as
chairperson and may designate a secretary. The Committee must keep a brief
record of all meetings. Any delegation of duties by the Committee must state the
scope of the delegation with reasonable specificity. The Committee acts by a
majority of its members, either by vote at a meeting or by signature to a
writing. Action by the Committee must be evidenced by written and duly executed
instrument.

         (c) FINALITY. Except as provided in subsection (d), the decision or
action of the Committee with respect to any question arising out of or in
connection with the administration, interpretation and application of the Plan
is final and conclusive and binding on all persons having any interest in the
Plan.

         (d) POST-CHANGE IN CONTROL. After a Change in Control (as defined in a
Change in Control Agreement affecting a participant):



                                      -20-
<PAGE>

                  (i) INTERPRETATION. The Committee's construction and
         interpretation of the Plan and its decisions regarding eligibility for
         benefits with respect to the affected participant must be reasonable
         and consistent with the spirit and intent of the Plan; and

                  (ii) STANDARD. The decisions of the Committee with respect to
         the affected participant are subject to de novo review.

         (e) OTHER DISCRETION. The Committee also has the authority, in its
complete and absolute discretion, to grant on a case by case basis additional
Years of Credited Service in addition to the Years of Credited Service already
credited to the participant. Total Years of Credited Service must be limited to
30.

         5.2 LIMITATION OF LIABILITY AND INDEMNIFICATION. As a condition of
participation in the Plan, each participant agrees that neither the Employers'
officers and agents, the Committee, the Board of Directors, nor their individual
members shall in any way be subject to any suit, litigation, or legal liability
for any cause or reason in connection with the Plan or its operation, and each
participant releases the Employers' officers and agents, the Committee, the
Board of Directors and their individual members from any and all such liability
or obligation. The Board of Directors, the Committee and their respective
individual members shall not be liable for any act, omission, determination,
construction, or communication made by that individual or any other party. Each
shall be indemnified by Kaydon Corporation against any and all liabilities
arising by reason of any act or failure to act made in good faith pursuant to
the provisions of the Plan, including expenses reasonably incurred in the
defense of any claim of liability.



                                      -21-
<PAGE>

                                   ARTICLE VI
                       AMENDMENT AND TERMINATION OF PLAN

         6.1 AMENDMENT OR TERMINATION. The Board of Directors of Kaydon
Corporation may amend or terminate the Plan at any time and the Board of
Directors of each Employer may amend or terminate the Plan as to that Employer
at any time. Except as explicitly limited, no individual has any right to
continuation of the Plan, to continued participation in the Plan, or to
continued accrual under the Plan.

         (a) LIMITATION. No amendment or termination may, without the consent of
the participant, modify Section 4.4(c)(ii) or 5.1(d) of this Plan or
retroactively decrease the vested Accrued Benefit of a participant:

                  (i) REGULAR VESTING. Who completed ten (10) Years of Credited
         Service or ten (10) Years of Vesting Service and attained age 55 while
         (or prior to becoming) an Active Participant and prior to the amendment
         or termination;

                  (ii) AGE VESTING. Who attained age 65 while (or prior to
         becoming) an Active Participant and prior to the amendment or
         termination; or

                  (iii) CHANGE IN CONTROL. Upon or after the occurrence of a
         Change in Control, if the participant is at that time a party to an
         effective Change in Control Agreement.

         (b) BENEFITS, RIGHTS AND FEATURES. No amendment or termination upon or
after the occurrence of a Change in Control may, without the consent of the
participant, adversely affect the benefits, rights or features of this Plan
(determined in accordance with Section 411(d) of the Code and applicable
regulations) at the time of the Change in Control with respect to a participant
who is at that time:

                  (i) CHANGE IN CONTROL. A party to an effective change in
         control Agreement; and

                  (ii) THIS PLAN. An Active Participant in this Plan.



                                      -22-
<PAGE>

         (c) AUTOMATIC. Subject to subsections (a) and (b), above, any freeze of
benefit accrual or termination of the Kaydon Corporation Retirement Plan shall
automatically effect a freeze or termination of this Plan, as the case may be.

         6.2 CHANGE IN CONTROL AGREEMENT. This Plan may also be amended as to a
participant by an effective Change in Control Agreement or other written
document which explicitly amends this Plan and which is signed by the
participant, and authorized representatives of Kaydon Corporation or the
participants Employer.




                                      -23-
<PAGE>

                                  ARTICLE VII
                                 MISCELLANEOUS

         7.1 NONASSIGNABILITY. Benefits are not subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, charge, attachment,
garnishment, execution, or levy (Assignment), before actual receipt, by
creditors of the participant or the participant's beneficiary. Any assignment
which violates this section is void. The right to receive a benefit is not an
asset for insolvency or bankruptcy.

         7.2 EMPLOYMENT RIGHTS NOT ENLARGED. The Plan does not create any
employment rights or restrict an Employer's right to discharge an employee.

         7.3 PARTICIPANTS' RIGHTS LIMITED. The Plan does not give any
participant or beneficiary: any interest in any Employer's assets, business or
affairs; the right to question any Employer action or policy; or the right to
examine Employer books and records. The rights of all participants are limited
to the right to receive payment of benefits when due. The Employer's obligation
under the Plan is simply an unfunded and unsecured promise to pay money in the
future and its assets remain the general, unpledged and unrestricted assets of
the Employer. Notwithstanding these limits and any other provision of this Plan,
the Employer shall not be a party to any merger, consolidation, or
reorganization unless its obligations under this Plan are expressly assumed by
its successor. This Plan shall inure to the benefit of and shall be binding upon
the successors and assigns of the Employer and each participant.

         7.4 INTERPRETATION AND CONSTRUCTION. The use of the singular includes
the plural where applicable, and vice versa. The headings in the Plan do not
limit or extend the provisions of the Plan. Capitalized terms, except where
capitalized solely for



                                      -24-
<PAGE>

grammar, have the meanings as provided in the Plan. If a provision is
unenforceable in a legal proceeding, the provision is severed only for that
proceeding.

         7.5 GOVERNING LAW. The Plan is governed by the applicable laws of the
United States of America (including the Code, ERISA, securities law, labor law,
age discrimination law, and civil rights law) and, to the extent not preempted,
by the laws of Florida.

         7.6 ARBITRATION. Any claim which cannot be resolved under this Plan
shall be submitted to arbitration.

         (a) RULES. The arbitration shall be conducted by the American
Arbitration Association under its commercial arbitration rules within the county
where the Employer maintains its registered office.

         (b) AWARD. The Arbitrator's decision shall be embodied in an award
which shall be final and binding on the parties. In making an award, the
arbitrator may include any remedy contemplated by this Agreement and shall
allocate the fees and expenses of the arbitration.

KAYDON CORPORATION AND
KAYDON RING & SEAL, INC.

By /s/ Lawrence J. Cawley
   ----------------------------------
   Lawrence J. Cawley
   The Chairman and Chief Executive
   Officer of Kaydon Corporation


And /s/ John F. Brocci
   ----------------------------------
   John F. Brocci
   The President and Secretary of
   Kaydon Ring & Seal, Inc.
   and the Secretary of Kaydon Corporation



                                      -25-
<PAGE>

                                   APPENDIX A

                                OTHER EMPLOYERS


Kaydon Ring & Seal, Inc.


<PAGE>

                                   APPENDIX B

                              ACTIVE PARTICIPANTS

<TABLE>
<CAPTION>
                                                                                    Effective Date of
                                                            Effective Date of         Cessation of
Name                           Employer                   Active Participation    Active Participation
----                           --------                   --------------------    --------------------
<S>                            <C>                        <C>                     <C>
John F. Brocci                 Kaydon Corporation           January 1, 1994
Thomas A. Bushar               Kaydon Corporation           January 1, 1994
Brian P. Campbell              Kaydon Corporation           October 1, 1998
Lawrence J. Cawley             Kaydon Corporation           January 1, 1994
Stephen K. Clough              Kaydon Corporation           January 1, 1994          June 26,1998
Patrick T. Kirk                Kaydon Corporation           January 1, 1994
Arthur Ridler                  Kaydon Ring & Seal, Inc.     January 1, 1994
</TABLE>

<PAGE>

                                   APPENDIX C

                    ADDITIONAL CREDIT UNDER SECTION 2.17(A)

<TABLE>
<CAPTION>
                                                             Effective Date of                    Effective Date of
                                                     Eligibility for Additional Credit   Eligibility for Additional Credit
Name                         Employer                      Under Section 2.17(a)                Under Section 2.17(a)
----                         --------                      ---------------------                ---------------------
<S>                          <C>                     <C>                                 <C>
John F. Brocci               Kaydon Corporation            August 1, 1998

Brian P. Campbell            Kaydon Corporation            October 1, 1998

Lawrence J. Cawley           Kaydon Corporation            August 1, 1998

</TABLE>

<PAGE>

                                   APPENDIX D

                               ACTUARIAL FACTORS

D.l               TIME OF PAYMENT ACTUARIAL EQUIVALENCE. Actuarially reduced
                  from age 62 based on:

     (a)          INTEREST RATE. 7.5%

     (b)          MORTALITY. 1983 Group Annuity Mortality (GAM) with annuity
values based on 75% male and 25% female mortality.

D.2               FORM OF PAYMENT ACTUARIAL EQUIVALENCE.

     (a)          INTEREST RATE. 7.5%

     (b)          MORTALITY. 1983 Group Annuity Mortality (GAM) with annuity
values based on 75% male and 25% female mortality.

     (c)          LUMP SUM OVERRIDE. For purposes of determining lump sum
actuarial equivalence under this Plan, the interest rate, mortality and other
factors applicable for purposes of determining lump sum actuarial equivalence
under the Kaydon Corporation Retirement Plan from time to time and, to the
extent not addressed by that Plan, GATT shall be used instead of the interest
rate and mortality factors provided in this Appendix A.

D.3               OTHER. For any other purpose for which Actuarial Equivalence
                  is specified:

     (a)          INTEREST RATE. 7.5%

     (b)          MORTALITY. 1983 Group Annuity Mortality (GAM) with annuity
values based on 75% male and 25% female mortality.