Exhibit 10.18

FORMS OF AWARD AGREEMENTS UNDER THE AMENDED AND RESTATED KENNAMETAL INC. STOCK
AND INCENTIVE PLAN OF 2002

KENNAMETAL INC.

INCENTIVE BONUS AWARD

Grant Date: [date of grant]

     This Award made from KENNAMETAL INC., a Pennsylvania corporation (the
“Company”), to [insert name] (the “Employee”) is made, as of the above Grant
Date, under the Kennametal Inc. Stock and Incentive Plan of 2002, as amended
(the “Plan”). Capitalized terms used herein not otherwise defined shall have the
meaning ascribed to them in the Plan.

1.   Subject to the terms and conditions of this Agreement and the Plan
applicable to an Incentive Bonus Award, the Company hereby grants to the
Employee an Award with a target aggregate value of [write out amount] dollars
($[figure]) (the “Target Amount”).   2.   Payment of this Award is subject to,
and contingent upon, achievement of the three year performance goals set forth
in Schedule A (the “Performance Goals”). The amount of this Award payable to
Employee will be determined by the level of achievement of the Performance Goals
as set forth in the Performance Goal Payout Table in Schedule A. Achievement of
the Performance Goals, including the level of achievement, and the date of
payment, if any, shall be determined by the Compensation Committee of the Board
of Directors (the “Compensation Committee”), in its sole discretion, and
Employee agrees to be bound by such determination. Any payment of this Award
would be made following the completion of the Company’s 2007 fiscal year.   3.  
In the event of Employee’s death or Disability prior to July 1, 2007, this Award
shall be paid at a percentage of the Target Amount determined by dividing
(i) the number of months starting with July 2004 and ending with the month of
Employee’s death or Disability, by (ii) 36. In the event of Employee’s death,
Disability or Retirement on or after July 1, 2007, the amount of this Award to
be paid, if any, and the date of payment shall be determined by the Compensation
Committee, in its sole discretion, in accordance with Paragraph 2 hereof. In the
event of Employee’s Retirement prior to July 1, 2007, the amount of this Award
to be paid, if any, will be equal to the amount that would have been paid to
Employee had Employee not elected Retirement as determined by the Compensation
Committee, in its sole discretion, in accordance with Paragraph 2 hereof, and
such amount shall be reduced by multiplying such amount by a percentage
determined by dividing (i) the number of months starting with July 2004 and
ending with the month of Employee’s Retirement, by (ii) 36.   4.   If the Award
is not owed due to a previous Change in Control, death, Disability or
Retirement, it shall be forfeited upon Employee’s termination of employment for
any reason (other than death, Disability or Retirement) prior to the date of
payment of the Award or upon the Compensation Committee’s determination, in its
sole discretion, that the Performance Goals have not been achieved.   5.   The
Award may be paid in cash or in shares of Capital Stock, or any combination of
cash and shares, in the sole discretion of, and on a date determined by, the
Compensation Committee. In the event that any portion of the Award is paid in
shares of Capital Stock, the Compensation Committee shall determine the number
of shares to be delivered to Employee based on the aggregate value of the Award
to be paid in shares of Capital Stock and the Fair Market Value of

 

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    the Capital Stock on the day on which the Compensation Committee determines
the amount of the Award that is due, rounded to the nearest whole share. The
Employee acknowledges and agrees that the Compensation Committee shall, in its
sole discretion, determine the amount of cash and/or shares of Capital Stock in,
and the date on, which the Award is to be paid and the Employee agrees to be
bound by all such determinations.   6.   The Award may not be sold, assigned,
pledged, exchanged, hypothecated, gifted or otherwise transferred, encumbered or
disposed of.   7.   All other terms and conditions applicable to this Award are
contained in the Plan.

              KENNAMETAL INC.
 
       

  By:    

     

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      David W. Greenfield

  Title:   Vice President, Secretary and General Counsel

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KENNAMETAL INC.

NONSTATUTORY STOCK OPTION AWARD

Grant Date: [date of grant]

     This Nonstatutory Stock Option Award made from KENNAMETAL INC., a
Pennsylvania corporation (the “Company”), to [insert name] (the “Optionee”) is
made, as of the above Grant Date, under the Kennametal Inc. Stock and Incentive
Plan of 2002, as amended (the “Plan”).

1.   The Company hereby grants to the Optionee a Nonstatutory Stock Option (the
“Option”) to purchase [number of shares granted] shares of the Company’s Capital
Stock, par value $1.25 per share (the “Shares”), at the price of $[grant price]
per Share, subject to the terms and conditions of the Plan. Capitalized terms
used herein not otherwise defined shall have the meaning ascribed to them in the
Plan.   2.   The Option must be exercised within ten (10) years from the Grant
Date and only at the times and for the number of Shares indicated as follows:
(a) prior to the first anniversary of the Grant Date, the Option is not
exercisable as to any Shares; (b) on the first anniversary of the Grant Date,
the Option shall become exercisable as to one-third (1/3) of the Shares; (c) on
the second anniversary of the Grant Date, the Option shall become exercisable as
to an additional one-third (1/3) of the Shares; and (d) on the third anniversary
of the Grant Date, the Option shall become exercisable as to the remaining
one-third (1/3) of the Shares.   3.   All other terms and conditions applicable
to this Award are contained in the Plan.

              KENNAMETAL INC.
 
       

  By:    

     

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      David W. Greenfield

  Title:   Vice President, Secretary and General Counsel

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KENNAMETAL INC.

OPTION AWARD

Grant Date: [date of grant]

     This Option Award made from KENNAMETAL INC., a Pennsylvania corporation
(the “Company”), to [insert name] (the “Optionee”) is made, as of the above
Grant Date, under the Kennametal Inc. Stock and Incentive Plan of 2002, as
amended (the “Plan”).

1.   The Company hereby grants to the Optionee an Option (the “Option”) to
purchase [number of shares granted] shares of the Company’s Capital Stock, par
value $1.25 per share (the “Shares”), at the price of $[grant price] per Share,
subject to the terms and conditions of the Plan. Capitalized terms used herein
not otherwise defined shall have the meaning ascribed to them in the Plan.   2.
  For United States taxpayers, it is intended that the Option constitute an
Incentive Stock Option under Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”) as to all of the Shares; provided, however, that the
Code imposes certain limitations on the amount of stock options that can qualify
as Incentive Stock Options. If the Option, either alone or in conjunction with
any other option(s), exceeds the limitations, if any, imposed by the Code or
does not otherwise qualify for treatment as an Incentive Stock Option, the
Option, or that portion of the Option in excess of such limitation, shall
automatically be reclassified (in whole share increments and without fractional
share portions) as a Nonstatutory Stock Option, with later granted options being
so reclassified first. If relevant, you may want to contact the Company to
determine which portion, if any, of the Option qualifies as an Incentive Stock
Option. You are obligated under the Plan to notify the Company in the event of
any disposition of Shares of Capital Stock effected within two (2) years of the
Grant Date or within one (1) year of the acquisition of such Shares.   3.   The
Option must be exercised within ten (10) years from the Grant Date and only at
the times and for the number of Shares indicated as follows: (a) prior to the
first anniversary of the Grant Date, the Option is not exercisable as to any
Shares; (b) on the first anniversary of the Grant Date, the Option shall become
exercisable as to one-third (1/3) of the Shares; (c) on the second anniversary
of the Grant Date, the Option shall become exercisable as to an additional
one-third (1/3) of the Shares; and (d) on the third anniversary of the Grant
Date, the Option shall become exercisable as to the remaining one-third (1/3) of
the Shares.   4.   All other terms and conditions applicable to this Award are
contained in the Plan.

              KENNAMETAL INC.
 
       

  By:    

     

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      David W. Greenfield

  Title:   Vice President, Secretary and General Counsel

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KENNAMETAL INC.

RESTRICTED STOCK AWARD

Grant Date: [date of grant]

     This Restricted Stock Award made from KENNAMETAL INC., a Pennsylvania
corporation (the “Company”), to [insert name] (the “Awardee”) is made, as of the
above Grant Date, under the Kennametal Inc. Stock and Incentive Plan of 2002, as
amended (the “Plan”).

1.   The Company hereby grants to the Awardee a Restricted Stock Award for
[number of shares granted] shares of the Company’s Capital Stock, par value
$1.25 per share (the “Shares”). The Shares are subject to the Forfeiture
Restrictions (defined below). Capitalized terms used herein, but not otherwise
defined, shall have the meaning ascribed to them in the Plan.   2.   The
prohibition against transfer and the obligation to forfeit and surrender the
Shares to the Company are herein referred to as “Forfeiture Restrictions.” The
Shares may not be sold, assigned, pledged, exchanged, hypothecated, gifted or
otherwise transferred, encumbered or disposed of, except as described in the
Plan, to the extent then subject to the Forfeiture Restrictions. The Shares, to
the extent then subject to the Forfeiture Restrictions, shall be forfeited to
the Company upon termination of employment for any reason other than death,
Disability or Retirement. The Forfeiture Restrictions shall be binding upon, and
enforceable against, any transferee of the Shares.   3.   The Forfeiture
Restrictions shall lapse as to the Shares, provided, that the Awardee has
maintained Continuous Status as an Employee (as defined in the Plan) from the
Grant Date through the lapse date, as follows: (a) Forfeiture Restrictions shall
lapse as to one-third (1/3) of the Shares on the first anniversary of the Grant
Date; (b) Forfeiture Restrictions shall lapse as to an additional one-third
(1/3) of the Shares on the second anniversary of the Grant Date; and
(c) Forfeiture Restrictions shall lapse as to the remaining one-third (1/3) of
the Shares on the third anniversary of the Grant Date.   4.   The Shares shall
not be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable federal or state securities laws. Any certificates
representing the Shares shall bear such legend or legends as the Company deems
appropriate in order to assure compliance with applicable securities laws. The
Company may refuse to register the transfer of the Shares on the stock transfer
records of the Company if such transfer constitutes a violation of any
applicable securities law and the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the Shares.   5.
  All other terms and conditions applicable to this Award are contained in the
Plan.

              KENNAMETAL INC.
 
       

  By:    

     

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      David W. Greenfield

  Title:   Vice President, Secretary and General Counsel

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KENNAMETAL INC.

RESTRICTED STOCK AWARD

Grant Date: [date of grant]

     This Restricted Stock Award made from KENNAMETAL INC., a Pennsylvania
corporation (the “Company”), to [insert name] (the “Awardee”) is made, as of the
above Grant Date, under the Kennametal Inc. Stock and Incentive Plan of 2002, as
amended (the “Plan”).

1.   The Company hereby grants to the Awardee a Restricted Stock Award for
[number of shares granted] shares of the Company’s Capital Stock, par value
$1.25 per share (the “Shares”). The Shares are subject to the Forfeiture
Restrictions (defined below). Capitalized terms used herein, but not otherwise
defined, shall have the meaning ascribed to them in the Plan.   2.   The
prohibition against transfer and the obligation to forfeit and surrender the
Shares to the Company are herein referred to as “Forfeiture Restrictions.” The
Shares may not be sold, assigned, pledged, exchanged, hypothecated, gifted or
otherwise transferred, encumbered or disposed of, except as described in the
Plan, to the extent then subject to the Forfeiture Restrictions. The Shares, to
the extent then subject to the Forfeiture Restrictions, shall be forfeited to
the Company upon termination of employment for any reason other than death,
Disability or Retirement. The Forfeiture Restrictions shall be binding upon, and
enforceable against, any transferee of the Shares.   3.   The Forfeiture
Restrictions shall lapse as to the Shares on the third (3rd) anniversary of the
Grant Date (the “Lapse Date”); provided, that the Awardee has maintained
Continuous Status as an Employee (as defined in the Plan) from the Grant Date
through the Lapse Date.   4.   The Shares shall not be sold, or otherwise
disposed of, in any manner which would constitute a violation of any applicable
federal or state securities laws. Any certificates representing the Shares shall
bear such legend or legends as the Company deems appropriate in order to assure
compliance with applicable securities laws. The Company may refuse to register
the transfer of the Shares on the stock transfer records of the Company if such
transfer constitutes a violation of any applicable securities law and the
Company may give related instructions to its transfer agent, if any, to stop
registration of the transfer of the Shares.   5.   All other terms and
conditions applicable to this Award are contained in the Plan.

              KENNAMETAL INC.
 
       

  By:    

     

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      David W. Greenfield

  Title:   Vice President, Secretary and General Counsel

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KENNAMETAL INC.

RESTRICTED STOCK AWARD

Grant Date: [date of grant]

     This Restricted Stock Award made from KENNAMETAL INC., a Pennsylvania
corporation (the “Company”), to [insert name] (the “Director”) is made, as of
the above Grant Date, under the Kennametal Inc. Stock and Incentive Plan of
2002, as amended (the “Plan”).

1.   The Company hereby grants to the Director a Restricted Stock Award for
[number of shares granted] shares of the Company’s Capital Stock, par value
$1.25 per share (the “Shares”). The Shares are subject to the Forfeiture
Restrictions (defined below). Capitalized terms used herein, but not otherwise
defined, shall have the meaning ascribed to them in the Plan.   2.   The
prohibition against transfer and the obligation to forfeit and surrender the
Shares to the Company are herein referred to as “Forfeiture Restrictions.” The
Shares may not be sold, assigned, pledged, exchanged, hypothecated, gifted or
otherwise transferred, encumbered or disposed of, except as described in the
Plan, to the extent then subject to the Forfeiture Restrictions. The Shares, to
the extent then subject to the Forfeiture Restrictions, shall be forfeited to
the Company upon the Director’s cessation of service on the Company’s Board of
Directors for any reason other than death, Disability or Retirement. The
Forfeiture Restrictions shall be binding upon, and enforceable against, any
transferee of the Shares.   3.   The Forfeiture Restrictions shall lapse as to
the Shares on the third (3rd) anniversary of the Grant Date (the “Lapse Date”);
provided, that the Director continues to serve on the Company’s Board of
Directors from the Grant Date through the Lapse Date.   4.   The Shares shall
not be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable federal or state securities laws. Any certificates
representing the Shares shall bear such legend or legends as the Company deems
appropriate in order to assure compliance with applicable securities laws. The
Company may refuse to register the transfer of the Shares on the stock transfer
records of the Company if such transfer constitutes a violation of any
applicable securities law and the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the Shares.   5.
  All other terms and conditions applicable to this Award are contained in the
Plan.

              KENNAMETAL INC.
 
       

  By:    

     

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      David W. Greenfield

  Title:   Vice President, Secretary and General Counsel

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KENNAMETAL INC.

RESTRICTED STOCK AWARD

Grant Date: [date of grant]

     This Restricted Stock Award made from KENNAMETAL INC., a Pennsylvania
corporation (the “Company”), to [insert name] (the “Awardee”) is made, as of the
above Grant Date, under the Kennametal Inc. Stock and Incentive Plan of 2002, as
amended (the “Plan”).

1.   The Company hereby grants to the Awardee a Restricted Stock Award for
[number of shares granted] shares of the Company’s Capital Stock, par value
$1.25 per share (the “Shares”). The Shares are subject to the Forfeiture
Restrictions (defined below). Capitalized terms used herein, but not otherwise
defined, shall have the meaning ascribed to them in the Plan.   2.   The
prohibition against transfer and the obligation to forfeit and surrender the
Shares to the Company are herein referred to as “Forfeiture Restrictions.” The
Shares may not be sold, assigned, pledged, exchanged, hypothecated, gifted or
otherwise transferred, encumbered or disposed of, except as described in the
Plan, to the extent then subject to the Forfeiture Restrictions. The Shares, to
the extent then subject to the Forfeiture Restrictions, shall be forfeited to
the Company upon termination of employment for any reason other than death,
Disability or Retirement. The Forfeiture Restrictions shall be binding upon, and
enforceable against, any transferee of the Shares.   3.   The Forfeiture
Restrictions shall lapse as to the Shares on the fifth (5th) anniversary of the
Grant Date (the “Lapse Date”); provided, that the Awardee has maintained
Continuous Status as an Employee (as defined in the Plan) from the Grant Date
through the Lapse Date.   4.   Notwithstanding the Lapse Date set forth in
Section 3 above, if, for any fiscal year prior to the Lapse Date, during which
the Awardee has maintained Continuous Status as an Employee for the entire
fiscal year, the Compensation Committee of the Company’s Board of Directors (the
“Compensation Committee”), acting as the Plan Administrator, determines, in its
sole discretion, that the performance goals of the Company (the “Performance
Goals”) for such fiscal year were fully attained, the vesting schedule shall be
modified as follows: (a) the Forfeiture Restrictions shall lapse as to one-third
(1/3) of the Shares on such date as the Compensation Committee shall determine
following the end of the first such fiscal year; (b) the Forfeiture Restrictions
shall lapse as to an additional one-third (1/3) of the Shares on such date as
the Compensation Committee shall determine following the end of the second such
fiscal year; and (c) the Forfeiture Restrictions shall lapse as to the remaining
one-third (1/3) of the Shares on such date as the Compensation Committee shall
determine following the end of the third such fiscal year. The Awardee
acknowledges and agrees that the Compensation Committee shall, in its sole
discretion, determine the Performance Goals, whether or not the Performance
Goals were attained, and any date prior to the Lapse Date on which Forfeiture
Restrictions shall lapse and the Awardee agrees to be bound by all such
determinations.   5.   The Shares shall not be sold, or otherwise disposed of,
in any manner which would constitute a violation of any applicable federal or
state securities laws. Any certificates representing the Shares shall bear such
legend or legends as the Company deems appropriate in order to assure compliance
with applicable securities laws. The Company may refuse to register the transfer
of the Shares on the stock transfer records of the Company if such transfer
constitutes a violation of any applicable securities law and the Company may
give related instructions to its transfer agent, if any, to stop registration of
the transfer of the Shares.

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6.   All other terms and conditions applicable to this Award are contained in
the Plan.

              KENNAMETAL INC.

  By:    

     

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      David W. Greenfield

  Title:   Vice President, Secretary and General Counsel

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KENNAMETAL INC.

RESTRICTED STOCK AWARD

Grant Date: [date of grant]

     This Restricted Stock Award made from KENNAMETAL INC., a Pennsylvania
corporation (the “Company”), to [insert name] (the “Awardee”) is made, as of the
above Grant Date, under the Kennametal Inc. Stock and Incentive Plan of 2002, as
amended (the “Plan”).

1.   The Company hereby grants to the Awardee a Restricted Stock Award for
[number of shares granted] shares of the Company’s Capital Stock, par value
$1.25 per share (the “Shares”). The Shares are subject to the Forfeiture
Restrictions (defined below). Capitalized terms used herein, but not otherwise
defined, shall have the meaning ascribed to them in the Plan.   2.   The
prohibition against transfer and the obligation to forfeit and surrender the
Shares to the Company are herein referred to as “Forfeiture Restrictions.” The
Shares may not be sold, assigned, pledged, exchanged, hypothecated, gifted or
otherwise transferred, encumbered or disposed of, except as described in the
Plan, to the extent then subject to the Forfeiture Restrictions. The Shares, to
the extent then subject to the Forfeiture Restrictions, shall be forfeited to
the Company upon termination of employment for any reason other than death,
Disability or Retirement. The Forfeiture Restrictions shall be binding upon, and
enforceable against, any transferee of the Shares.   3.   The Forfeiture
Restrictions shall lapse as to the Shares on the sixth (6th) anniversary of the
Grant Date (the “Lapse Date”); provided, that the Awardee has maintained
Continuous Status as an Employee (as defined in the Plan) from the Grant Date
through the Lapse Date.   4.   Notwithstanding the Lapse Date set forth in
Section 3 above, if, for any fiscal year prior to the Lapse Date, during which
the Awardee has maintained Continuous Status as an Employee for the entire
fiscal year, the Compensation Committee of the Company’s Board of Directors (the
“Compensation Committee”), acting as the Plan Administrator, determines, in its
sole discretion, that the performance goals of the Company (the “Performance
Goals”) for such fiscal year were fully attained, the vesting schedule shall be
modified as follows: (a) the Forfeiture Restrictions shall lapse as to one-third
(1/3) of the Shares on such date as the Compensation Committee shall determine
following the end of the first such fiscal year; (b) the Forfeiture Restrictions
shall lapse as to an additional one-third (1/3) of the Shares on such date as
the Compensation Committee shall determine following the end of the second such
fiscal year; and (c) the Forfeiture Restrictions shall lapse as to the remaining
one-third (1/3) of the Shares on such date as the Compensation Committee shall
determine following the end of the third such fiscal year. The Awardee
acknowledges and agrees that the Compensation Committee shall, in its sole
discretion, determine the Performance Goals, whether or not the Performance
Goals were attained, and any date prior to the Lapse Date on which Forfeiture
Restrictions shall lapse and the Awardee agrees to be bound by all such
determinations.   5.   The Shares shall not be sold, or otherwise disposed of,
in any manner which would constitute a violation of any applicable federal or
state securities laws. Any certificates representing the Shares shall bear such
legend or legends as the Company deems appropriate in order to assure compliance
with applicable securities laws. The Company may refuse to register the transfer
of the Shares on the stock transfer records of the Company if such transfer
constitutes a violation of any applicable securities law and the Company may
give related instructions to its transfer agent, if any, to stop registration of
the transfer of the Shares.

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6.   All other terms and conditions applicable to this Award are contained in
the Plan.

              KENNAMETAL INC.
 
       

  By:    

     

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      David W. Greenfield

  Title:   Vice President, Secretary and General Counsel

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