UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 11-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 Commission file number 1-11333
 
 KAYDON CORPORATION EMPLOYEE STOCK
OWNERSHIP AND THRIFT PLAN
 
 KAYDON CORPORATION
315 E. EISENHOWER PARKWAY
SUITE 300
ANN ARBOR, MI 48108




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Report of Independent Registered Public Accounting Firm
    
    
    1Statement of Net Assets Available for Benefits
    
    
    2Statement of Changes in Net Assets Available for Benefits
    
    
    3Notes to Financial Statements
    
    
    4-14Schedule H, Line 4i  Schedule of Assets (Held at End of Year)
    
    
    15Exhibit 23 Consent of Independent Registered Public Accounting Firm
    
    
    16




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The Plan.
   By:
    /s/ Anthony T. BehrmanAnthony T. Behrman
Vice President  Human Resources,
On behalf of Kaydon Corporation as Plan
Administrator




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Audited Financial Statements  and Supplemental Schedule




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Contents
 Report of Independent Registered Public Accounting Firm
    
    
    1Audited Financial StatementsStatements of Net Assets Available for Benefits
    
    
    2Statement of Changes in Net Assets Available for Benefits
    
    
    3Notes to Financial Statements
    
    
    4-14Supplemental ScheduleSchedule H, Line 4i  Schedule of Assets (Held at End of Year)
    
    
    15




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1




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December 31,2010
    
    
    2009AssetsInvestments, at fair value:Mutual Funds
    
    $
    46,308,294
    
    
    $
    Pooled separate accounts
    
    
    
    
    
    
    18,685,508Kaydon Corporation common stock
    
    
    9,152,812
    
    
    
    8,630,666Guaranteed Income Fund
    
    
    
    
    
    
    8,670,777Total investments
    
    
    55,461,106
    
    
    
    35,986,951ReceivablesNotes receivable from participants
    
    
    331,105
    
    
    
    11,521Employer contribution receivable
    
    
    605,397
    
    
    
    Other receivable
    
    
    26,221
    
    
    
    Dividend receivable
    
    
    43,375
    
    
    
    45,751Total assets
    
    
    56,467,204
    
    
    
    36,044,223LiabilitiesCorrective distributions
    
    
    6,504
    
    
    
    107,157Total liabilities
    
    
    6,504
    
    
    
    107,157Net assets reflecting all investments at fair value
    
    $
    56,460,700
    
    
    $
    35,937,066Net assets available for benefits
    
    $
    56,460,700
    
    
    $
    35,937,066
 See accompanying notes.
 2




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AdditionsParticipant contributions
    
    $
    3,501,080Transfer in from ACE Controls, Inc. Employee Retirement Plan
    
    
    6,999,434Transfer in from Purafil, Inc. 401(k) Profit Sharing Plan
    
    
    3,184,674Transfer in from Avon Bearings Corporation 401(k) Profit
Sharing Plan
    
    
    3,162,580Interest and dividend income on investments
    
    
    1,149,801Interest income on notes receivable from participants
    
    
    16,366Employer contributions
    
    
    631,526Total additions
    
    
    18,645,461DeductionsBenefit payments to participants
    
    
    4,393,300Administrative expenses
    
    
    10,052Total deductions
    
    
    4,403,352Net appreciation in fair value of investments
    
    
    6,281,525Net increase
    
    
    20,523,634Net assets available for benefits at beginning of year
    
    
    35,937,066Net assets available for benefits at end of year
    
    $
    56,460,700
 See accompanying notes.
 3




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1. Description of Plan
  General
     4




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1. Description of Plan (continued)
 Contributions
   
    
    Canfield Technologies, Inc. based on compensation earned during all of 2010 and 2009;
    
    Indiana Precision, Inc., based on compensation earned on or after January 4, 2010, and
compensation earned on or before March 29, 2009; and
    
    Tridan International, Inc., based on compensation earned on or before March 29, 2009.
    Participant Accounts
  5




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1. Description of Plan (continued)
 Vesting
  Participant Loans
   Payment of Benefits
 st 1 2 1 2
 6




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1. Description of Plan (continued)
 Voting Rights
  Plan Termination
  2. Summary of Accounting Policies
 Basis of Accounting
  Reclassifications
  Notes Receivable from Participants
  7




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2. Summary of Accounting Policies (continued)
 Corrective Distributions
  Use of Estimates
  Administrative Expenses
  Investment Valuation
   8




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2. Summary of Accounting Policies (continued)
  Level 1 
    
    Inputs are quoted prices in active markets for identical assets or liabilitiesLevel 2 
    
    Inputs are quoted prices for similar assets or liabilities in an active market,
quoted prices for
identical or similar assets or liabilities in markets that are not active, inputs other
than quoted prices that are observable and market-corroborated inputs which are derived
principally from or corroborated by observable market data.Level 3 
    
    Inputs are derived from valuation techniques in which one or more significant
inputs or value
drivers are unobservable.
  Fair Value Measurement at December 31, 2010 Using:Total
    
    
    Quoted Prices in
    
    
    SignificantFair Value
    
    
    Active Markets
    
    
    Other
    
    
    SignificantMeasurement at
    
    
    for Identical
    
    
    Observable
    
    
    UnobservableDecember 31, 2010
    
    
    Assets (Level 1)
    
    
    Inputs (Level 2)
    
    
    Inputs (Level 3)Mutual Funds:Life Cycle Funds
    
    $
    27,679,254
    
    
    $
    27,679,254
    
    
    
    
    
    
    
    Domestic Equity Funds
    
    
    8,181,473
    
    
    
    8,181,473
    
    
    
    
    
    
    
    Bond Fund
    
    
    4,865,099
    
    
    
    4,865,099
    
    
    
    
    
    
    
    Short Term Money Market
    
    
    3,918,039
    
    
    
    3,918,039
    
    
    
    
    
    
    
    International Equity Fund
    
    
    1,664,429
    
    
    
    1,664,429
    
    
    
    
    
    
    
    Kaydon Corporation common
stock
    
    
    9,152,812
    
    
    
    9,152,812
    
    
    
    
    
    
    
    Total investments at fair value
    
    $
    55,461,106
    
    
    $
    55,461,106
    
    
    
    
    
    
    
    
 9




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2. Summary of Accounting Policies (continued)
 Fair Value Measurement at December 31, 2009 Using:Total
    
    
    Quoted Prices in
    
    
    SignificantFair Value
    
    
    Active Markets
    
    
    Other
    
    
    SignificantMeasurement at
    
    
    for Identical
    
    
    Observable
    
    
    UnobservableDecember 31, 2009
    
    
    Assets (Level 1)
    
    
    Inputs (Level 2)
    
    
    Inputs (Level 3)Pooled separate accounts:Equity Funds
    
    $
    10,010,857
    
    
    
    
    
    
    $
    10,010,857
    
    
    
    Life Cycle Funds
    
    
    3,351,458
    
    
    
    
    
    
    
    
    
    
    $
    3,351,458International Equity Funds
    
    
    2,734,244
    
    
    
    
    
    
    
    2,734,244
    
    
    
    Bond Fund
    
    
    1,851,409
    
    
    
    
    
    
    
    
    
    
    
    1,851,409Specialty Funds
    
    
    737,540
    
    
    
    
    
    
    
    737,540
    
    
    
    Kaydon Corporation common
stock
    
    
    8,630,666
    
    
    $
    8,630,666
    
    
    
    
    
    
    
    Guaranteed Income Fund
    
    
    8,670,777
    
    
    
    
    
    
    
    
    
    
    
    8,670,777Total investments at fair value
    
    $
    35,986,951
    
    
    $
    8,630,666
    
    
    $
    13,482,641
    
    
    $
    13,873,644
   Level 3 AssetsYear Ended December 31, 2010Pooled Separate
    
    
    GuaranteedTotal Assets
    
    
    Accounts
    
    
    Income FundBalance, January 1, 2010
    
    $
    13,873,644
    
    
    $
    5,202,867
    
    
    $
    8,670,777Realized gains/(losses)
    
    
    76,609
    
    
    
    76,609
    
    
    
    Interest
    
    
    96,875
    
    
    
    
    
    
    
    96,875Purchases, sales,
issuances and
settlements, net
    
    
    (14,047,128
    )
    
    
    (5,279,476
    )
    
    
    (8,767,652
    )Balance, December 31, 2010
    
    
    
    
    
    
    
    
    
    
    
  10




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3. Investments (continued)
  December 31,2010
    
    
    2009Kaydon Corporation common stock
    
    $
    9,152,812
    
    
    $
    8,630,660T. Rowe Price Retirement 2020 Fund
    
    
    6,543,439
    
    
    
    T. Rowe Price Retirement 2025 Fund
    
    
    5,364,700
    
    
    
    Pimco Total Return Fund
    
    
    4,865,099
    
    
    
    T. Rowe Price Retirement 2015 Fund
    
    
    4,427,062
    
    
    
    T. Rowe Price Retirement 2030 Fund
    
    
    4,216,253
    
    
    
    Fidelity Retirement Government Money Market Fund
    
    
    3,918,039
    
    
    
    Guaranteed Income Fund
    
    
    
    
    
    
    8,670,777Large Cap Growth/Jennison Fund
    
    
    
    
    
    
    3,600,533Templeton Foreign Account
    
    
    
    
    
    
    2,454,060Turner Mid-Cap Growth Fund
    
    
    
    
    
    
    2,441,837High Grade Bond/GSAM Fund
    
    
    
    
    
    
    1,851,409
  Net Realized and UnrealizedAppreciation in Fair Value ofInvestmentsMutual Funds
    
    $
    5,261,517Pooled Separate Accounts
    
    
    (187,466
    )Kaydon Corporation common stock
    
    
    1,207,474$
    6,281,525
 4. Guaranteed Income Fund
  11




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4. Guaranteed Income Fund (continued)
   5. Reconciliation to Form 5500
  Net assets available for benefits per the financial statements
at December 31, 2010
    
    $
    56,460,700Less dividends receivable at December 31, 2010
    
    
    (43,375
    )Net assets available for benefits per the Form 5500 at
December 31, 2010
    
    $
    56,417,325Net assets available for benefits per the financial statements
at December 31, 2009
    
    $
    35,937,066Less dividends receivable at December 31, 2009
    
    
    (45,751
    )Net assets available for benefits per the Form 5500 at
December 31, 2009
    
    $
    35,891,315
  Interest and dividends on investments paid to the Plan per the
financial statements
    
    $
    1,149,801Add dividends receivable at December 31, 2009
    
    
    45,751Less dividends receivable at December 31, 2010
    
    
    (43,375
    )Interest and dividends on investments paid to the Plan per the
Form 5500
    
    $
    1,152,177
 12




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6. Risks and Uncertainties
  7. Related Party Transactions
  8. Tax Status
   13




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9. New Accounting Pronouncements and Recently Adopted Accounting Pronouncements
   14




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Description of Investment IncludingIdentity of Issue, Borrower,
    
    Maturity Date, Rate of Interest,
    
    
    
    CurrentLessor, or Similar Party
    
    Collateral, Par, or Maturity Value
    
    Cost
    
    Value*Fidelity Investments Institutional 
     Operations Company, Inc.T. Rowe Price Retirement 2020 Fund
    
    
    
    $
    6,543,439T. Rowe Price Retirement 2025 Fund
    
    
    
    
    5,364,700Pimco Total Return Fund
    
    
    
    
    4,865,099T. Rowe Price Retirement 2015 Fund
    
    
    
    
    4,427,062T. Rowe Price Retirement 2030 Fund
    
    
    
    
    4,216,253Fidelity Retirement Government Money
Market Fund
    
    
    
    
    3,918,039T. Rowe Price Retirement 2010 Fund
    
    
    
    
    2,744,150American Funds Growth Fund of America
    
    
    
    
    2,068,250T. Rowe Price Small-Cap Value Fund
    
    
    
    
    1,890,710Thornburg International Value Fund
    
    
    
    
    1,664,429Prudential Jennison Small Company Fund
    
    
    
    
    1,595,628Dodge & Cox Stock Fund
    
    
    
    
    1,492,507T. Rowe Price Retirement 2035 Fund
    
    
    
    
    1,273,638Fidelity Spartan 500 Index Fund
    
    
    
    
    1,134,378T. Rowe Price Retirement 2040 Fund
    
    
    
    
    1,081,987T. Rowe Price Retirement Income Fund
    
    
    
    
    816,466T. Rowe Price Retirement 2045 Fund
    
    
    
    
    607,719T. Rowe Price Retirement 2005 Fund
    
    
    
    
    429,180T. Rowe Price Retirement 2050 Fund
    
    
    
    
    109,848T. Rowe Price Retirement 2055 Fund
    
    
    
    
    64,812*Kaydon Corporation
    
    Kaydon Corporation common stock
    
    
    
    
    9,152,812*Participant loans
    
    Interest rates range from 5.25% to
10.50%, with various maturity dates
    
    $
    
    
    331,105$
    55,792,211
 
 *
    
    Party-in-interest 15




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EXHIBIT INDEX
 Exhibit No.
    
    Description23
    
    Consent of Independent Registered Public Accounting Firm
 16