Exhibit 10.1
CONSULTING AGREEMENT
Consultant is retiring from his employment with the Corporation on November 30,
2007. The Corporation wishes to retain Consultant to provide certain limited
consulting services, as defined in the Section titled “Scope”, below (the
“Consulting Services”) for a three month period commencing December 1, 2007 and
ending February 29, 2008. The Corporation and Consultant wish to enter into an
agreement under which Consultant will perform the Consulting Services as an
independent contractor.
Scope:     The C.E.O. of the Corporation has requested John Brocci provide
consulting services from December 1, 2007 through February 29, 2008 in
transitioning his current duties and responsibilities to others within the
organization and performing special assignments and/or projects as requested by
the CEO (collectively, the “Services”).
Agreement     Kaydon Corporation (the “Corporation”) seeks to benefit from the
experience and expertise of John Brocci (the “Consultant”) by retaining the
Consultant to provide the Services outlined in the Scope above. The parties
agree that Consultant’s duties and responsibilities as they existed prior to
retirement on December 1, 2007 will cease on that date, that Consultant will
have no day-to-day line responsibilities after that date and that his role will
be limited to providing advice and guidance to those to whom such
responsibilities have transitioned. The Consultant is willing to perform
Services for the Corporation under these terms and accordingly, the Corporation
and the Consultant agree as follows:

1)   Relationship of the Parties:     Consultant’s relationship with the
Corporation is that of an independent contractor and nothing in this Agreement
is intended to or should be construed to create a partnership, agency, joint
venture or employment relationship. Except for all Corporation benefits which
have inured to John Brocci based upon his prior employment by the Corporation,
Consultant agrees that the Services he will provide under this Agreement do not
entitle him to any benefits that may be available to the Corporation’s
employees, including, but not limited to: vacation pay, holiday pay; health
care, life insurance, pension benefits, 401k plan benefits, etc.      
Consultant will have no authority to enter into contracts or agreements on
behalf of the Corporation or to obligate the Corporation in any manner without
the express written consent of the CEO. Consultant is not an agent of the
Corporation and does not have, nor will he hold himself out as having, any
right, power or authority to create any contract or obligation, either expressed
or implied, on behalf of, in the name of, or binding upon the Corporation, or to
pledge the Corporation’s credit or to extend credit in the Corporation’s name.
The Corporation is interested only in the results obtained by Consultant, who
will have sole control of the manner and means of performance under this
Agreement.   2)   Services:     The Consultant will provide advice, counsel and
Services to the Corporation as provided in the Scope above.   3)  
Duration:     This Agreement covers the period from December 1, 2007 through
February 29, 2008.   4)   Expenses:     The Corporation will provide the
Consultant prompt reimbursement for all necessary business expenses (including
but not limited to mileage for the use of his personal vehicle per IRS rules,
lodging, air travel, meals, etc.) associated with his carrying out Services for
the Corporation.   5)   Compensation and Other Special Considerations:     As
full consideration for the Services provided by the Consultant, the Corporation
will:

  a)   At the first of each calendar month for the months of December 2007,
January 2008 and February 2008, pay the Consultant $15,617.00; and,

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  b)   On February 29, 2008, the Corporation will pay the Consultant a
‘contractual completion bonus’ of $300,000.00.     c)   The Consultant’s Ann
Arbor home is for sale. Should his home sell during the period of October 1,
2007 through February 29, 2008 such that he is required to find temporary
housing in the Ann Arbor area in order to fulfill the terms of this Agreement,
the Corporation will reimburse the Consultant for reasonable temporary living
expenditures as approved by the CEO.     d)   As an inducement to John Brocci to
enter into this Agreement with the Corporation, the Corporation agrees that it
will pay the ‘contractual completion bonus’ regardless of cessation of this
Agreement on account of John Brocci’s death, disability or for any other reason
except for John Brocci’s voluntary termination of the Agreement prior to
February 29, 2008 or upon termination of this Agreement by the Corporation ‘For
Cause’. ‘For Cause’, for purposes of this Agreement, is defined as the
commission of fraud or a felony (other than a felony involving a motor vehicle
not involving alcohol or drugs) by Consultant, willful or gross misconduct by
Consultant relating to the Services, or the commission of any other intentional
act by Consultant that causes substantial injury to the Corporation. It is
understood the use of the For Cause standard affects John Brocci’s entitlement
to the ‘contractual completion bonus’ only and does not generally limit the
Corporation’s ability to terminate this Agreement for any reason or no reason at
all and does not affect in any way all benefits that inured to Consultant prior
to his retirement from the Corporation.

6)   Taxes:     Consultant will pay all taxes however designated which are
levied or assessed upon Compensation paid to the Consultant under this
Agreement. The Corporation will issue a 1099 to the Consultant for all
Compensation paid.

7)   Survival of Obligations:     The termination or expiration of this
Agreement will not terminate any of the Corporations’ obligations accrued prior
to such expiration/termination. Further, should any governmental authority
determine this Agreement results in any deleterious affects on the compensation
or benefits which inured to John Brocci as an employee of the Corporation, from
March 2, 1989 through November 30, 2007 (in particular, benefits from the Kaydon
Corporation Retirement Plan and the Kaydon Corporation Supplemental Executive
Retirement Plan), the Corporation shall provide a full and complete legal
defense for the Consultant; and should a court of competent jurisdiction
determine any negative effect to John Brocci’s compensation and benefits, the
Corporation shall make him whole including any tax consequences and penalties.

8)   Restrictive Covenants:     The Corporation and Consultant agree the
Consultant can render consulting services to others providing such service are
not with a competitor (as defined on form IR-956) and the Consultant does not
violate his existing restrictions that continue to operate as a result of his
prior employment with the Corporation. Further, the Consultant acknowledges as
an employee he was subject to confidentiality, non-disclosure and other relevant
restrictions and agrees such restrictions continue during the period of this
Agreement and beyond.

9)   Indemnification:     The Corporation will indemnify and reimburse
Consultant for the following losses incurred by Consultant during or following
the term of this Agreement to the extent arising out of, or as a result of, the
Consultant’s entering into, or performing services under, this Agreement. The
losses include expenses incurred by Consultant attributable to personal injury
of Consultant, damage to Consultant’s property, and liability imposed on
Consultant to third parties based on his performance under this Agreement.
Notwithstanding the foregoing, no indemnification will be made under this
Section:

  1)   On account of Consultant’s conduct which was knowingly fraudulent,
deliberately dishonest, or which constituted willful misconduct;

  2)   On account of Consultant’s conduct which was in bad faith such that
Consultant did not reasonably believe it to be in, or not opposed to, the best
interests of the Corporation or its shareholders, or that produced an unlawful
personal benefit; or

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  3)   With respect to a criminal proceeding, if Consultant had no reasonable
cause to believe that his conduct was lawful.

In addition, the indemnifiable losses also include any diminution of any
qualified or nonqualified pension benefit earned by Consultant while he was an
employee of the Corporation from March 2, 1989 through November 30, 2007, any
expenses incurred by Consultant in contesting any asserted diminution, and any
tax, interest or penalty imposed on Consultant under Section 409A of the
Internal Revenue Code attributable to amounts paid under this Agreement or under
the Kaydon Corporation Supplemental Executive Retirement Plan.
Reimbursement to Consultant under this section is subject to the following
limits:

  (a)   The amount eligible for reimbursement during a taxable year of
Consultant may not affect the amount eligible for reimbursement in any other
taxable year;

  (b)   The reimbursement of an eligible amount must be made on or before the
last day of Consultant’s taxable year next following the taxable year in which
the expense being reimbursed was incurred by Consultant; and

  (c)   The right to this reimbursement is not subject to liquidation or
exchange for any other benefit.

10)   Governing Law:     This Agreement will be governed in all respects by the
laws of the State of Michigan.

      Consultant   Corporation
 
   
/s/ John F. Brocci
  /s/ James O’Leary
 
   
John F. Brocci
  James O’Leary
 
   
Dated: November 19, 2007
  Dated: November 29, 2007

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