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Exhibit 10.1
KAYDON CORPORATION
EXECUTIVE MANAGEMENT BONUS PROGRAM
(Amended and Restated Effective May 6, 2008)
1.
Definitions
. The following terms have the meanings indicated unless a
different meaning is clearly required by the
context:
“Approval
Date” means March 2, 2005, which is the date on which
this Bonus Plan was approved by the Board of Directors of the
Company.
“Bonus
Plan” means this Kaydon Corporation Executive Bonus
Program, as amended from time to time.
“Cause”
means:
(i) any
act or failure to act by Participant done with the intent to
harm in any material respect the financial interests or
reputation of the Company or any affiliated
companies;
(ii) Participant
being convicted of (or entering a plea of guilty or
nolo
contendere to) a felony (other than a felony involving
a motor vehicle not involving alcohol or drugs);
(iii) Participant’s
dishonesty, misappropriation or fraud with regard to the
Company or any affiliated companies, including (but not
limited to) any falsification of company records or reports
(other than good faith expense account disputes);
(iv) a
grossly negligent act or failure to act by Participant which
has a material adverse effect on the Company or any affiliated
companies; or
(v) the
continued refusal to follow the directives of the Board or its
designees which are consistent with Participant’s duties
and responsibilities; provided that the foregoing refusal
shall not be “cause” if Participant in good faith
believes that such direction is illegal, unethical or immoral
and promptly so notifies the Board in writing.
“Change
in Control” means (i) the failure of the Continuing
Directors at any time to constitute at least a majority of the
Board of Directors of the Company, (ii) the acquisition by any
Person other than an Excluded Holder of beneficial ownership
(within the meaning of Rule 13d-3 issued under the Securities
Exchange Act of 1934, as amended) of 20% or more of the
outstanding Common Stock of the Company of the combined voting
power of the Company’s outstanding voting securities,
(iii) the approval
by
the stockholders of the Company of a reorganization, merger or
consolidation unless with a Permitted Successor, or (iv) the
approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company or a sale or
disposition of all or substantially all of its assets other
than to a Permitted Successor.
“Committee”
means the Compensation Committee of the Company’s Board
of Directors, each of the members of which is a
“non-employee director” within the meaning of Rule
16b-3.
“Company”
means Kaydon Corporation and any of its wholly-owned
subsidiaries or affiliates.
“Continuing
Directors” means the individuals constituting the Board
of Directors of the Company on the Approval Date, and any
subsequent directors whose election or nomination for election
was approved by a vote of 2/3 or more of the individuals who
are then Continuing Directors, but specifically excluding any
individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest or
other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board of Directors
of the Company.
“Excluded
Holder” means any Person who on the Approval Date was
the beneficial owner of 20% or more of the outstanding Common
Stock of the Company, a subsidiary of the Company, any
employee benefit plan of the Company or any subsidiary of the
Company or any trust holding such Common Stock pursuant to the
terms of an employee benefit plan of the Company.
“Executive
Officer” means the Chief Executive Officer
(“CEO”), the Chief Financial Officer, the Chief
Operating Officer and such other Senior Vice Presidents or
other senior executive officers of the Company as the
Committee shall designate from time to time.
“Good
Reason” means (a) the assignment of a Participant to any
duties or responsibilities that are a reduction of, or are
materially inconsistent with, the Participant’s
position, duties, responsibilities or status on the
Participation Date, (b) a change in a Participant’s
reporting responsibilities or titles in effect on the
Participation Date that results in a reduction of the
Participant’s responsibilities or position, (c) the
reduction of a Participant’s annual salary, level of
benefits (except for a reduction uniformly applicable to all
similarly situated executives), or projected Supplemental
Executive Retirement Plan benefits, or (d) transfer of the
Participant to a location more than forty (40) miles from the
Participant’s location of employment on the
Participation Date which requires a change in residence or a
material increase in the amount of travel normally required of
the Participant in connection with his employment or such
other definition as is provided in any Employment Agreement
between the Company and a Participant.
“Participation
Date” means the date on which a Participant first
becomes a participant under the Bonus Plan.
“Permitted
Successor” means a corporation that immediately after
the consummation of a transaction described in the definition
of “Change in Control” satisfies all of the
following criteria: (a) at least 60% of the voting securities
of such corporation is beneficially owned by Persons who were
the beneficial owners of the Company’s Common Stock
immediately prior to such transaction, (b) no Person other
than an Excluded Holder beneficially owns, directly or
indirectly, 20% or more of the outstanding voting securities
of such corporation and (c) at least a majority of the Board
of Directors of such corporation is comprised of Continuing
Directors.
“Person”
means a natural person, corporation, partnership, limited
liability company, government or political subdivision, agency
or instrumentality of a government.
2.
Purpose .
The purpose of this Bonus Plan is to provide annual incentives
to certain senior executive officers in a manner designed to
reinforce the Company’s performance goals; to link a
significant portion of participants’ compensation to the
achievement of such goals; and to continue to attract,
motivate and retain key executives on a competitive
basis.
3.
Participation
. Participants in this Bonus Plan are the Executive Officers
of the Company. The Committee shall determine the effective
date of a Participant’s participation in this Bonus Plan
and shall notify all Participants of their selection for
participation in writing.
4.
Performance
Metric and Adjustments . The metric, or benchmark,
against which Company performance shall be measured for
purposes of determining whether bonuses shall be awarded to
Participants, and the amount of such bonuses, shall be
earnings before interest, taxes, depreciation and
amortization, as further adjusted or defined by the Committee
from time to time (“EBITDA&rd
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