<PAGE>
 
                                                                    EXHIBIT 10.7

                                ZERO CORPORATION

                     DIRECTORS' DEFERRED COMPENSATION PLAN
                          AS ADOPTED OCTOBER 20, 1993
                 AND AS AMENDED EFFECTIVE AS OF JANUARY 1, 1996

                                    PURPOSE

     The purpose of the ZERO Corporation Directors' Deferred Compensation Plan
is to provide the opportunity to defer the receipt of compensation payable to
the members of the Board of Directors of ZERO Corporation upon whose judgment,
initiative and efforts the continued success of ZERO Corporation and its
divisions and subsidiaries is dependent.

                                   ARTICLE I
                            TITLE AND EFFECTIVE DATE
                            ------------------------

     1.01   TITLE This Plan shall be known as the ZERO Corporation Directors'
            -----                                                            
Deferred Compensation Plan.

     1.02  EFFECTIVE DATE The effective date of this Plan shall be January 1,
           --------------                                                    
1994.

                                   ARTICLE II
                                  DEFINITIONS
                                  -----------

     2.01  Unless otherwise clearly apparent from the context, the phrases or
terms used herein shall be as defined on Appendix A attached to this Plan.

                                  ARTICLE III
                                  ELIGIBILITY
                                  -----------

     3.01  Only Eligible Directors may participate in the Plan.  As a condition
to becoming a Participant hereunder, however, an Eligible Director must complete
and return to the Named Fiduciary a duly executed Election Form prior to the
applicable Election Date.  Election Forms remain in effect for the Plan Year to
which they apply.  A Participant must file a new Election Form for any
subsequent Plan Year.

                                   ARTICLE IV
                            DEFERRAL OF COMPENSATION
                            ------------------------

     4.01  Each Participant in the Plan may irrevocably elect to have all or a
portion of his or her Plan Compensation during a Plan Year following the
applicable Election Date deferred and credited to the Participant's Bookkeeping
Account in accordance with the terms and conditions hereof.  The amount of such
Plan Compensation to be so deferred under this paragraph 4.01 for a Plan Year
shall be any whole number or percentage as the Participant shall select on his
or her Election Form; provided, that such amount for any Plan Year shall not be
less than Five Thousand ($5,000) Dollars.
<PAGE>
 
     4.02  An Eligible Director desiring to participate in the Plan must submit
his or her written Election Form to the Named Fiduciary before the applicable
Election Date.  Valid Election Forms filed by the applicable Election Date shall
cause Plan Compensation to be deferred for the Plan Year (or portion thereof in
the case of Participants for whom paragraph 2.08(b) of Article II is the
applicable Election Date) for which such Election is made.

     4.03  A Participant who has not submitted to or does not have on file a
valid Election Form with the Named Fiduciary before the applicable Election Date
may not defer any Plan Compensation for the applicable Plan Year.

                                   ARTICLE V
                         DEFERRAL ACCOUNT AND CREDITING
                         ------------------------------

     5.01  Plan Compensation deferred by a Participant under a written Election
Form shall be credited in a dollar amount to a separate Bookkeeping Account for
each Participant as of the date on which such Plan Compensation would otherwise
be payable to the Participant.

     5.02  The deferrals credited to the Participant's Bookkeeping Account shall
also be credited earnings on a quarterly basis equal to the Moody's Seasoned
Corporate Bond Rate for the last month of each quarter on which earnings are
applied plus three percent (3%) until such account value is distributed pursuant
to Article VI hereof. Plan Compensation deferred shall be deemed to be invested
and accruing earnings starting on the date the amounts deferred are credited to
the Bookkeeping Account.

     5.03  The Participant shall at all times have a nonforfeitable right to the
value of his or her Bookkeeping Account attributable to his or her own deferrals
under paragraph 4.01 of Article IV hereof plus interest credited thereon, with
no right of offset by the Company except as set forth in paragraph 6.06(b) of
Article VI hereof.

                                   ARTICLE VI
                                 DISTRIBUTIONS
                                 -------------

     6.01  At the time of electing deferrals for each Plan Year, a Participant
shall specify the amount to be deferred, and any other matter required to be
specified by the Company on its Election Form.  In addition, in his or her
initial deferral election, Participant shall specify the payment method and
commencement date (relative to the date of Separation from Service) for his or
her Bookkeeping Account which shall apply to all amounts deferred in the initial
year and in all subsequent years.  A separate designation of payment
commencement time and method of distribution shall be made depending upon
whether a Participant's Separation from Service occurs on or after attaining age
55 or before

                                       2
<PAGE>
 
attaining age 55.  The period of deferral shall end, and distribution of the
value of a Participant's Bookkeeping Account shall begin on the date specified
in the Participant's initial deferral election.  The Participant may elect to
receive distributions in substantially equal installments over a five (5) or ten
(10) year period or in a lump sum, or in such other payment form  as offered by
the Company.  In the case of any payment deferred beyond Separation from
Service, interest at the rate specified in paragraph 5.02 of Article V shall be
credited on all amounts remaining in the Bookkeeping Account of the Participant
from which the payments are to be made.

     Notwithstanding the foregoing, a Participant may, after the initial
deferral election, modify any election with respect to either time of payment
commencement or the method of distribution without penalties so long as such
change is made at least one (1) year before the commencement date previously
elected; provided, however, that a modification made on or before December 31,
1996 to create an installment payment stream of ten (10) years in response to
H.R. 394 (pertaining to pension source taxation) need not be made within one (1)
year before the payment commencement date and such modification shall apply to
all remaining payments due hereunder; provided further, however, the Named
Fiduciary must make a determination that any subsequent modification in election
would not have a detrimental effect on the tax consequences of benefits deferred
by other Participants hereunder or such subsequent modification will be
disregarded.

     6.02  In the event of a Participant's death before the payments have
commenced hereunder, the Participant's Bookkeeping Account shall be distributed
as soon as practicable after his or her death to his or her Beneficiary(ies)
designated in accordance with Article VIII hereof in the manner selected on the
Participant's most recent Election Form designating his or her Beneficiary(ies).
In the event of a Participant's death after payments have commenced, any
remaining amounts in the Participant's Bookkeeping Account shall be distributed
to the Participant's Beneficiary(ies) in the same manner of distribution as was
being followed at the time of his or her death.  A Beneficiary may not, upon the
Participant's death or other incapacity, change the form and/or commencement
time of the death benefit otherwise payable to him or her to any other form
and/or commencement time available under Section 6.01.

     6.03  Notwithstanding paragraphs 6.01 and 6.02 hereof, if the total amount
in a Participant's Bookkeeping Account is Fifty Thousand ($50,000) Dollars or
less, such Bookkeeping Account shall be distributed to him or her in full within
thirty (30) days after Separation from Service or upon the occurrence of a
Disability or shall be distributed in full to his or her Beneficiary upon his or
her death.  In the event that either the Named Fiduciary or the Committee
determines, in their sole discretion, that a Change in

                                       3
<PAGE>
 
Control is likely, the Company will, effective automatically and concurrently
with the Change in Control, deposit in one or more grantor trusts (within the
meaning of Section 671 of the Internal Revenue Code of 1986) funds in an amount
sufficient to pay Participant that amount which is the value of his or her
Bookkeeping Account.  For purposes of this Section 6.03, "Change in Control"
shall be as defined on Appendix A hereto.

     6.04  All distributions of a Participant's Bookkeeping Account hereunder
shall be made in cash payments only and shall commence not later than January 1
of the first year following the Director's Separation from Service.

     6.05  The Company shall have the right to deduct from all payments any
federal, state, local or foreign taxes or other charges required by law to be
withheld or elected by the Participant to be withheld with respect to such
payments.

     6.06  Notwithstanding any provision hereunder to the contrary, a
Participant may take a distribution of all or a portion of his or her
Bookkeeping Account in a manner inconsistent with his or her deferral election
even though the Participant is not then suffering a financial hardship, as
defined in paragraph 7.01 of Article VII hereof, provided that the distribution
is reduced by (a) five percent (5%) if the Participant is still then in the
active service of the Company or (b) ten percent (10%) if the Participant is not
then in the active service of the Company.  If clause (a) of the previous
sentence applies, the Participant may not again make deferrals hereunder until
the beginning of the third year following the year in which a distribution under
this Section 6.06 is made.  All reductions hereunder shall be forfeited to the
Company.

                                  ARTICLE VII
                             HARDSHIP DISTRIBUTIONS
                             ----------------------

     7.01   At the request of a Participant before complete distribution of his
or her Bookkeeping Account, the Committee may, in its sole discretion,
accelerate and pay all or part of the value of a Participant's Bookkeeping
Account due under the Plan. Accelerated distributions at the request of the
Participant or a Participant's Beneficiary may be allowed only in the event of a
financial emergency beyond the Participant's or Beneficiary's control due to
unforeseeable circumstances and only if disallowance of a distribution would
create a severe hardship for the Participant or Beneficiary.  An accelerated
distribution must be limited to only that amount necessary to relieve the
financial emergency.

                                       4
<PAGE>
 
                                 ARTICLE VIII
                                  BENEFICIARY
                                  -----------

     8.01   A Participant shall, by completing the Beneficiary Designation Form,
designate one or more Beneficiaries to receive benefits under the Plan payable
in the event of his or her death before complete distribution of his or her
Bookkeeping Account. If more than one Beneficiary is named, the share and/or
precedence of each Beneficiary shall be indicated. A Participant shall have the
right to change the Beneficiary by notifying the Named Fiduciary in the
appropriate spaces of a revised Beneficiary Designation Form. However, no
designation or change in designation of Beneficiary shall be effective until
received, accepted and acknowledged by the Company.

     8.02  The Committee shall be entitled to rely on the last Beneficiary
Designation Form filed by the Participant and accepted and acknowledged by the
Company prior to his or her death.  If the Committee has any doubt as to the
proper Beneficiary to receive payments hereunder, the Committee shall have the
right to direct the Company to deposit any and all payments due Beneficiary into
a separate bank account in the name of the Estate of Participant until the
matter is finally adjudicated. However, any payment made by the Company, in good
faith and in accordance with the Plan and the directions of the Committee, shall
fully discharge the Company and the Committee from all further obligations with
respect to that payment.

     8.03  In making any payments to or for the benefit of any minor or
incompetent Beneficiary, the Committee, in its sole discretion, may direct the
Company to make a distribution to a legal or natural guardian or other relative
of a minor or court appointed committee of such incompetent. Alternatively, the
Committee may direct the Company to make a payment to any adult with whom the
minor or incompetent temporarily or permanently resides. The receipt by a
guardian, committee, relative or other person shall be a complete discharge to
the Company and the Committee. Neither the Committee nor the Company shall have
any responsibility to see to the proper application of any payments so made.

                                   ARTICLE IX
                           ADMINISTRATION OF THE PLAN
                           --------------------------

     9.01  The Plan shall be administered by the Employee Benefits Committee as
constituted and approved from time to time by the Board. Such persons shall
serve at the pleasure of the Board. Participants in this Plan may serve as
members of the Committee. All resolutions or other actions taken by the
Committee shall be by vote of a majority of those present at a meeting at which
a majority of the members are present, or in writing by a majority of all the
members at the time in office if they act without a meeting.

                                       5
<PAGE>
 
     9.02  Subject to the terms of the Plan, the Committee shall, from time to
time, establish rules, forms and procedures for the administration of the Plan.
Except as herein otherwise expressly provided, the Committee shall have the
exclusive right to interpret the Plan and to make, amend, interpret and enforce
all rules adopted in connection with the Plan and to decide any and all matters
arising hereunder or in connection with the administration of the Plan, and it
shall endeavor to act, whether by general rules or by particular decisions, so
as not to discriminate in favor of or against any person. The decisions, actions
and records of the Committee shall be conclusive and binding upon the Company
and all persons having or claiming to have any right or interest in or under the
Plan.

     9.03  In the administration of the Plan, the Committee may, from time to
time, employ agents and delegate to them such administrative duties as it deems
appropriate and may, from time to time, consult with counsel who may be counsel
to the Company.

     9.04  The members of the Committee and the officers and Directors of the
Company shall be entitled to rely on all certificates and reports made by any
duly appointed accountants, and on all opinions given by any duly appointed
legal counsel, which legal counsel may be counsel for the Company.

     9.05  To enable the Committee to perform its functions, the Company shall
supply full and timely information to the Committee on all matters relating to
the compensation of Participants and the date and circumstances of the
Separation from Service or death or Disability of a Participant and such other
pertinent information as the Committee may reasonably require.

     9.06   The Company shall indemnify and save harmless each member of the
Committee against any and all expenses and liabilities arising out of his or her
membership on the Committee. Expenses against which a member of the Committee
shall be indemnified hereunder shall include, without limitation, the amount of
any settlement or judgment, costs, counsel fees, and related charges reasonably
incurred in connection with a claim asserted, or a proceeding brought or
settlement thereof. The foregoing right of indemnification shall be in addition
to any other rights to which any such member of the Committee may be entitled as
a matter of law.

                                   ARTICLE X
                                CLAIMS PROCEDURE
                                ----------------

     10.01  Benefits shall be paid automatically in accordance with the
provisions of this instrument. The Participant, or a Beneficiary or any other
person claiming through the Participant, shall make a written request for
benefits under this Plan. This written claim shall be mailed or delivered to the
Named Fiduciary who shall review such claim.

                                       6
<PAGE>
 
     10.02  If the claim is denied, in full or in part, the Named Fiduciary
shall provide a written notice within forty-five (45) days setting forth the
specific reasons for denial, and any additional material or information
necessary to perfect the claim, and an explanation of why such material or
information is necessary, and appropriate information and explanation of the
steps to be taken if a review of the denial is desired.

     10.03  If the claim is denied and a review by the full Committee is
desired, the Participant (or Beneficiary) shall notify the Named Fiduciary in
writing within thirty (30) days (a claim shall be deemed denied if the Named
Fiduciary does not take any action within the aforesaid forty-five (45) day
period) after receipt of the written notice of denial.  In requesting a review,
the Participant or his or her Beneficiary may request a review of the Plan
document or other pertinent documents, may submit any written issues and
comments, and may request that a hearing be held, but the decision to hold a
hearing shall be within the sole discretion of the Committee.

     10.04  The decision on the review of the denied claim shall be rendered by
the Committee within thirty (30) days after the receipt of the request for
review (if a hearing is not held) or within sixty (60) days after the hearing if
one is held. The decision shall be written and shall state the specific reasons
for the decision including reference to specific provisions of the Plan on which
the decision is based.

     10.05  If, after the review process, a claimant seeks further redress, the
subject of the dispute shall be submitted to arbitration in Los Angeles,
California, in accordance with the Commercial Rules of the American Arbitration
Association then in effect, which arbitration shall be the exclusive remedy of
the parties hereto. The resulting arbitration award shall be deemed a final
order of a court having jurisdiction over the subject matter and shall not be
appealable. All fees and expenses connected with the arbitration proceeding,
other than counsel fees incurred by either party, if any, shall be shared
equally by both parties.

                                   ARTICLE XI
                           AMENDMENT AND TERMINATION
                           -------------------------

     11.01  The Company, by action of the Board, may amend or modify this Plan
from time to time; provided that no such amendment or modification shall in any
way reduce the vested portion of affected Participants' (or Beneficiaries')
Bookkeeping Accounts measured as of the date the amendment or modification is
made, or, if later, the effective date of such actions; and, provided

                                       7
<PAGE>
 
further, no amendment or modification may assess costs or fees to Participants
or reduce (evenon a prospective basis) the interest rates payable hereunder on
Bookkeeping Accounts below Moody's Seasoned Corporate Bond Rate (as set forth in
paragraph 5.02), or take effect until the end of a calendar year.

     In addition, the Company, by action of its Board of Directors, may
terminate this Plan by discontinuing all future deferrals hereunder; provided,
that no such termination may affect the crediting of interest hereunder (either
pursuant to Participant elections or otherwise) or otherwise accelerate the
liquidation of Bookkeeping Accounts hereunder.

                                  ARTICLE XII
                                 MISCELLANEOUS
                                 -------------

     12.01  The Company's obligation under the Plan shall in every case be an
unfunded and unsecured promise to pay. Participants' rights as to benefits
hereunder shall be no greater than that of general, unsecured creditors of the
Company. The Company may establish one or more grantor trusts as described in
Section 671 of the Internal Revenue Code of 1986. Any assets which the Company
may acquire or set aside to cover its financial liabilities are and must remain
general assets of the Company and such assets as well as any assets set aside in
any grantor trust shall be subject to the claims of its general creditors.
Neither the Company nor the Plan gives the Participant any beneficial ownership
interest in any asset of the Company. All rights of ownership in any such assets
are and remain in the Company.

     12.02  Except insofar as permitted by applicable law, no sale, transfer,
alienation, assignment, pledge, collateralization or attachment of any benefits
under the Plan shall be valid or recognized by the Company. Neither the
Participant, his or her spouse, or designated Beneficiary shall have any power
to hypothecate, mortgage, commute, modify or otherwise encumber in advance of
any of the benefits payable hereunder, nor shall any of said benefits be subject
to seizure for the payment of any debts, judgments, alimony maintenance, owed by
the Participant or his Beneficiary, or be transferable by operation of law in
the event of bankruptcy, insolvency, or otherwise. Notwithstanding the
foregoing, the Company may, if the Committee so determines in its sole
discretion, follow the terms of any court order issued in connection with any
domestic relations proceeding including but not limited to marital dissolution
or child support.

     12.03  The Plan shall be binding upon the Company, its assigns, and any
successor company which shall succeed to substantially all of its assets and
business through merger, acquisition or consolidation, and upon a Director, his
or her Beneficiary, assigns, heirs, executors and administrators.

                                       8
<PAGE>
 
     12.04  The terms and conditions of the Plan shall not be deemed to
constitute a contract of employment between the Company and a Director.  Nothing
in this Plan shall of itself be deemed to give a Director the right to be
retained in the service of the Company or to interfere with any right of the
Company to discipline or discharge the Director at any time.

     12.05  A Director will cooperate with the Company by furnishing any and all
information reasonably requested by the Company and take such other actions as
may be requested in order to facilitate the administration of the Plan and the
payment of benefits hereunder.

     12.06  In case any provisions of this Plan shall be found illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but the Plan shall be construed and enforced as if such
illegal and invalid provision had never been included herein.

     12.07  Any notice which shall be or may be given under the Plan or an
Election Form shall be in writing and shall be mailed by United States mail,
postage prepaid. If notice is to be given to the Company, such notice shall be
addressed to the Company at 444 South Flower Street, Suite 2100, Los Angeles,
California 90071-2922, marked for the attention of the Corporate Secretary of
the Company or, if notice to a Director, addressed to the address shown on such
Director's Election Form or the last known address on the Company's personnel
records. Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and sent by facsimile, hand
delivered, or sent by mail, to the last known address of the Participant. Any
party may, from time to time, change the address to which notices shall be
mailed by giving written notice of such new address.

     12.08  The interest in the benefits hereunder of a spouse of a Participant
who has predeceased the Participant shall automatically pass to the Participant
and shall not be transferable by such spouse in any manner, including but not
limited to such spouse's will, nor shall such interest pass under the laws of
intestate succession.

     12.09  If, for any reason, all or any portion of a Participant's benefit
under this Plan becomes taxable to the Participant prior to receipt, a
Participant may petition the Committee for a distribution of any portion that
becomes taxable. Upon the grant of such a petition, which grant shall not be
unreasonably withheld, the Company shall distribute to the Participant
immediately available funds in an amount equal to that portion of Participant's
benefit that is taxable. If the petition

                                       9
<PAGE>
 
is granted, such distribution shall be made within ninety (90) days of the date
when the Participant's petition is granted. Such a distribution shall affect and
reduce the benefits to be paid under Articles VI or VII hereof.

     12.10  The benefits provided for a Participant and Participant's
Beneficiary under the Plan are in addition to any other benefits available to
such Participant under any other plan or program for employees of the Company.
The Plan shall supplement and shall not supersede, modify or amend any other
such plan or program except as may otherwise be expressly provided.

     12.11  The payment of benefits under the Plan to a Participant or
Beneficiary shall fully and completely discharge the Company and the Committee
from all further obligations under this Plan with respect to a Participant, and
that Participant's Election Form shall terminate upon such full payment of
benefits.

     12.12  Without limiting the provisions of paragraph 9.06 above, if any
action at law or in equity is necessary by a Participant or Beneficiary to
enforce the terms of the Plan, the Participant or Beneficiary shall be entitled
to recover reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which that party may be entitled.

     12.13  Titles and headings of the Articles of the Plan are included for
ease of reference only and are not to be used for the purpose of construing any
portion or provision of the Plan document.

     12.14  To the extent not preempted by Federal law, this Plan shall be
governed by and construed pursuant to the laws of the State of California.

     12.15  Any Election Form may be executed in one or more counterparts, each
of which is legally binding and enforceable.

                                 AS ADOPTED BY THE BOARD OF DIRECTORS
                                 OF ZERO CORPORATION APRIL 25, 1997

                                       10
<PAGE>
 
                                   APPENDIX A

                                  DEFINITIONS

          For purposes hereof, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:

1.   ACTIVE PLAN shall mean a plan which is accepting deferrals of a portion of
     -----------                                                               
     an Executive's compensation, and/or amounts credited to a Participant under
     the Company's Pension Restoration Plan adopted January 19, 1994 and the
     401(k) Executive Restoration Plan adopted July 27, 1994.

2.   BENEFICIARY shall mean the person or persons, trust or the estate of a
     -----------                                                           
     Participant entitled to receive any benefits under the Plan, as indicated
     by the Participant on the Beneficiary Designation Form.

3.   BOARD shall mean the Board of Directors of ZERO Corporation.
     -----                                                       

4.   BOOKKEEPING ACCOUNT means the bookkeeping record established for each
     -------------------                                                  
     Participant who elects to defer compensation under the Plan.

5.   CHANGE IN CONTROL shall mean the date upon which the first of the following
     -----------------                                                          
     events occurs:

     (a)  Consummation of (i) any consolidation or merger of the Company in
          which the Company is not the continuing or surviving corporation or
          pursuant to which shares of the Company's common stock would be
          converted into cash, securities or other property, other than a merger
          of the Company in which the holders of the Company's common stock
          immediately prior to the merger have substantially the same
          proportionate ownership of common stock of the surviving corporation
          immediately after the merger, or (ii) any sale, lease, exchange or
          other transfer (in one transaction or a series of transactions) of
          all, or more than fifty percent (50%), of the assets of the Company;

     (b)  The stockholders of the Company approve a plan or proposal for the
          liquidation or dissolution of the Company; or

     (c)  Any "person" (as such term is used in Sections 13 and 14(d)(2) of the
          Securities Exchange Act of 1934) other than a person owned by or
          directly or indirectly managed by the Company, shall become the
          beneficial owner, directly or indirectly, of twenty- five percent
          (25%) or more of the common stock of the Company.

                                       11
<PAGE>
 
6.   COMMITTEE shall mean the Employee Benefits Committee appointed by the Board
     ---------                                                                  
     to administer the Plan in accordance with the provisions of the Plan.

7.   COMPANY shall mean ZERO CORPORATION.
     -------                             

8.   DISABILITY shall be deemed to occur if a Participant cannot engage in any
     ----------                                                               
     substantial, gainful activity because of a physical or mental impairment
     (as verified to the Committee's satisfaction) likely to result in death or
     to be of a continuous period of not less than twelve (12) months.

9.   ELECTION DATE is the date established by the Plan as the date before which
     -------------                                                             
     an Executive or Eligible Director must submit a valid Election Form to the
     Named Fiduciary.  The applicable Election Dates are as follows: (a) January
     1 of any Plan Year, or (b) thirty (30) days after a newly eligible
     Executive or Eligible Director is first notified of his or her right to
     participate in the Plan.

10.  ELECTION FORM means the written form which is submitted to the Named
     -------------                                                       
     Fiduciary before the relevant Election Date which indicates whether the
     Executive or Eligible Director wishes to defer a portion of his or her
     compensation, and the portion of such compensation to be deferred.  No
     Election Form shall be effective until received, acknowledged, and executed
     by the Company.  Each Election Form is, with respect to the applicable
     Executive or Eligible Director, incorporated herein by reference and made
     an integral part of the Plan.

11.  EXECUTIVE shall mean each of the key employees designated by the Board to
     ---------                                                                
     include generally corporate officers, division and subsidiary presidents
     and general managers and any other person designated by the Board to
     participate in the Plan.

12.  MOODY'S SEASONED CORPORATE BOND RATE, sometimes referred to as "Moody's",
     ------------------------------------                                     
     means the Moody's Corporate Bond Yield Average as published by Moody's
     Investors Service, Inc. (or any successor thereto).

13.  NAMED FIDUCIARY shall mean the Corporate Secretary of the Company.
     ---------------                                                   

14.  PARTICIPANT means an Executive (including such Executive's estate and/or
     -----------                                                             
     Beneficiary) for purposes of the Executive Deferred Compensation Plan as
     adopted October 20, 1993, or an Eligible Director (including such Eligible
     Director's estate and/or Beneficiary) for purposes of the Directors'
     Deferred Compensation Plan as adopted October 30, 1993, who has deferred a
     portion of Plan Compensation pursuant to the terms of the Plan, and whose
     Bookkeeping Account has not yet been distributed in full, plus those
     participants in the ZERO Corporation Deferred Compensation Plan as amended
     as of April 1, 1986, and the ZERO Corporation Alternate II Deferred
     Compensation Plan dated April 1, 1986.

                                       12
<PAGE>
 
16.  PLAN COMPENSATION shall mean the Participant's annual salary and/or bonus,
     -----------------                                                  
     and/or amounts credited to a Participant under the Company's Pension
     Restoration Plan adopted January 1, 1994 and the 401(k) Executive
     Restoration Plan adopted July 27, 1994.

17.  PLAN YEAR is the period (i) for the Executive Deferred Compensation Plan
     ---------                                                               
     and the Directors Deferred Compensation Plan as Adopted October 30, 1993
     from the Effective Date through December 31 and each successive twelve (12)
     calendar month period thereafter or (ii) for the Deferred Compensation Plan
     as Amended as of April 1, 1986 and the Alternate II Deferred Compensation
     Plan dated April 1, 1986 which begins on April 1 of each year and ends on
     March 31 of the following year.

18.  SEPARATION FROM SERVICE means the termination of the Participant's
     -----------------------                                           
     employment as a regular employee of the Company.

                                       13