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                                                                    Exhibit 10.5


                                 KENNAMETAL INC.
               AMENDED AND RESTATED DIRECTORS STOCK INCENTIVE PLAN

                       (AS AMENDED THROUGH JULY 29, 2003)


                                    ARTICLE I

                               GENERAL PROVISIONS

     SECTION 1.1. ESTABLISHMENT AND PURPOSE. There is hereby established the
Kennametal Inc. Directors Stock Incentive Plan (the "Plan") pursuant to which
each director of Kennametal Inc. (the "Company") or of a Qualifying Subsidiary
(as hereinafter defined) who is not an employee of the Company or any of its
subsidiaries (a "Non-Employee Director") shall be eligible: (a) to elect to
receive shares of the Company's capital stock, par value $1.25 per share (the
"Capital Stock"), in lieu of cash compensation; and (b) through an election to
defer receipt of any compensation to be earned by such Non-Employee Director
made under the Kennametal Inc. Deferred Fee Plan for Outside Directors or the
deferred compensation plan of such Qualifying Subsidiary (the "Deferred
Compensation Plan"), to have Kennametal Stock Credits (as hereinafter defined)
credited to an account established for such Non-Employee Director by the
Company. The purpose of the Plan is to assist the Company in attracting,
retaining and motivating highly qualified Non-Employee Directors and to promote
identification of, and align Non-Employee Directors' interests more closely
with, the interests of the stockholders of the Company.

     SECTION 1.2. DEFINITIONS. In addition to the terms previously or hereafter
defined herein, the following terms when used herein shall have the meanings set
forth below:

     "Board" shall mean the Board of Directors of the Company.

     "Committee" shall mean the committee of the Board appointed by the Board to
administer the Plan. Unless otherwise determined by the Board, the Committee
shall be the Committee on Executive Compensation of the Board.

     "Company Stock Credit" shall mean a credit that is equivalent to one share
of Capital Stock.

     "Compensation" shall mean all remuneration paid to a Non-Employee Director
for service as such that is not deferred pursuant to the Deferred Compensation
Plan.

     "Deferred Compensation" shall mean all remuneration paid to a Non-Employee
Director for service as such that is deferred pursuant to the Deferred
Compensation Plan.

     "Fair Market Value" shall mean with respect to Capital Stock, as of any
date, the mean of the highest and lowest sales prices for the Capital Stock as
reported in the New York Stock

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Exchange--Composite Transactions reporting system for the date in question or,
if no sales were effected on such date, on the next preceding date on which
sales were effected

     "Plan Year" shall mean the twelve-month period beginning January 1 and
ending December 31 in any particular year.

     "Qualifying Subsidiary" shall mean any direct or indirect subsidiary of the
Company which has been designated as being eligible to participate in the Plan
by the Committee.

     "Stock Credit" shall mean a Company Stock Credit.

     SECTION 1.3. ADMINISTRATION. The Plan shall be administered by the
Committee. The Committee shall serve at the pleasure of the Board of Directors.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members of the Committee present at any meeting at which a
quorum is present, or acts approved in writing by a majority of the members of
the Committee, shall be deemed the acts of the Committee. The Committee is
authorized to interpret and construe the Plan, to make all determinations and
take all other actions necessary or advisable for the administration of the
Plan, and to delegate to employees of the Company or any subsidiary the
authority to perform administrative functions under the Plan; provided, however,
that the Committee shall have no authority to determine the persons entitled to
receive Capital Stock or Stock Credits under the Plan nor the timing, amount or
price of Capital Stock or Stock Credits issued under the Plan.

     SECTION 1.4. ELIGIBILITY. An individual who is a Non-Employee Director
shall be eligible to participate in the Plan.

     SECTION 1.5. CAPITAL STOCK SUBJECT TO THE PLAN. The maximum number of
shares of Capital Stock that may be issued pursuant to the Plan is 200,000.
Capital Stock to be issued under the Plan may be either authorized and unissued
shares of Capital Stock or shares of Capital Stock held in treasury by the
Company.

                                   ARTICLE II

                           ELECTIONS AND DISTRIBUTIONS

     SECTION 2.1. ELECTIONS TO RECEIVE CAPITAL STOCK FROM COMPENSATION. Any
Non-Employee Director may elect to receive Capital Stock under this Plan in lieu
of all or a portion of the Compensation otherwise payable to such Non-Employee
Director in any Plan Year beginning with the Plan Year commencing January 1,
1993 (a "Stock Acquisition Election"). If a Non-Employee Director makes a Stock
Acquisition Election, the Non-Employee Director shall receive, on the date that
the Compensation otherwise would have been paid, the number of shares of Capital
Stock that could have been purchased on that date based on the amount of
Compensation subject to the Stock Acquisition Election and the Fair Market Value
of the Capital Stock on that date, rounded up to the nearest whole share. In the
absence of a Stock Acquisition Election, all Compensation shall be paid to the
Non-Employee Director in cash in accordance with the Company's policies and
procedures. Certificates for Capital Stock acquired by the Non-


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Employee Director pursuant to a Stock Acquisition Election shall be issued
quarterly following the period during which such Capital Stock is acquired, as
provided above.

     SECTION 2.2. ELECTIONS TO RECEIVE COMPANY STOCK CREDITS FROM DEFERRED
COMPENSATION. Any Non-Employee Director may elect to receive Company Stock
Credits under this Plan in any Plan Year with respect to all or a portion of the
Deferred Compensation credited to the Non-Employee Director in that Plan Year,
beginning with the Plan Year commencing January 1, 1993 (a "Company Stock Credit
Election"). If a Non-Employee Director makes a Company Stock Credit Election, an
account established for the Non-Employee Director and maintained by the Company
shall be credited with that number of Company Stock Credits equal to the number
of shares of Capital Stock (including fractions of a share to four decimal
places) that could have been purchased with the amount of Deferred Compensation
subject to a Company Stock Credit Election based on the Fair Market Value of the
Capital Stock on the day that the Deferred Compensation is credited under the
Deferred Compensation Plan. A Company Stock Credit Election shall be valid in
any period only if the Non-Employee Director has elected to participate in the
Deferred Compensation Plan for such period.

     SECTION 2.3. TERMS AND CONDITIONS OF ELECTIONS. A Stock Acquisition
Election or a Company Stock Credit Election (an "Election") shall be subject to
the following terms and conditions:

          (a)  An Election shall be in writing and shall be irrevocable; and

          (b)  An Election may be made on or before December 31, 1992, to take
     effect on January 1, 1993; thereafter, an Election shall be effective for
     any Plan Year only if made on or prior to the June 30 immediately preceding
     the commencement of such Plan Year, provided, however, that if a new
     Director's term begins after June 30 of a particular Plan Year, an Election
     may be made prior to the time that the Director is entitled to payment of
     compensation for such period and shall be effective when made; and

          (c)  An Election shall remain in effect for all future Plan Years
     unless terminated or changed pursuant to an Election made on or prior to
     June 30 to take effect for the next Plan Year.

     SECTION 2.4. ADJUSTMENT OF STOCK CREDIT ACCOUNTS.

          (a)  Cash Dividends--As of the date that any cash dividend is paid to
     stockholders of the Company, the applicable Stock Credit account of the
     Non-Employee Director shall be credited with additional Stock Credits equal
     to the number of shares of stock underlying such Stock Credit (including
     fractions of a share to four decimal places) that could have been purchased
     on that date with the dividends paid on the underlying shares based on the
     Fair Market Value of the Capital Stock on that date.

          (b)  Stock Dividends--In the event that a stock dividend shall be paid
     upon the stock underlying the Stock Credit Account, the number of Stock
     Credits in the Non-Employee Director's applicable Stock Credit account
     shall be adjusted by adding thereto


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     additional Stock Credits equal to the number of shares of the underlying
     stock which would have been distributable on such stock represented by
     Stock Credits if such shares had been outstanding on the date fixed for
     determining the stockholders entitled to receive such stock dividend.

          (c)  Other Adjustments--In the event that the outstanding shares of
     Capital Stock shall be changed into or exchanged for a different number or
     kind of shares of stock or other securities whether through reorganization,
     recapitalization, stock split-up, combination of shares, merger or
     consolidation, then there shall be substituted, for the shares of stock
     underlying the Stock Credits, the number and kind of shares of stock or
     other securities which would have been substituted therefor if the
     underlying shares had been outstanding on the date fixed for determining
     the stockholders entitled to receive such changed or substituted stock or
     other securities.

               In the event there shall be any change, other than specified in
this Section 2.4, in the number or kind of outstanding shares of stock
underlying the Stock Credits or of any stock or other securities into which such
underlying capital stock shall be changed or for which it shall have been
exchanged, then, if the Board of Directors shall determine, in its discretion,
that such change equitably requires an adjustment in the number of Stock
Credits, such adjustment shall be made by the Board of Directors and shall be
effective and binding for all purposes of the Plan and on each outstanding Stock
Credit account.

     SECTION 2.5. CHANGE IN CONTROL. In the event of any threatened or actual
change in control of the Company, issued and outstanding shares of Capital Stock
shall be substituted for the Company Stock Credits in each Non-Employee
Director's Stock Credit account, and such Capital Stock shall be transferred and
delivered to such Non-Employee Director.

     SECTION 2.6. DISTRIBUTION OF COMPANY STOCK CREDITS. Unless a Non-Employee
Director has selected a different payment option as set forth below, as soon as
practicable following the date that such Non-Employee Director ceases (other
than by reason of such Non-Employee Director's death) to be a Non-Employee
Director (hereinafter, "retirement"), the Company shall issue to such
Non-Employee Director that number of shares of Capital Stock equal to the whole
number of Company Stock Credits in such Non-Employee Director's Company Stock
Credit account and cash equal to the fractional Company Stock Credits in such
account multiplied by the Fair Market Value of the Capital Stock as of the date
of retirement. A Non-Employee Director may elect to receive the Capital Stock
represented by the Company Stock Credits in such Non-Employee Director's Company
Stock Credit account in monthly or annual installments beginning after
retirement from the Board by written notification to the Company of such elected
payment option and may modify any such election by a subsequent written
notification to the Company; provided, however, that the Company shall be
required to effect any such written notification only if submitted to the
Company no fewer than twelve months prior to such Non-Employee Director's
retirement from the Board. Notwithstanding the foregoing, the Committee, in its
sole discretion, shall have the right to pay a Non-Employee Director a cash
amount equal to the value of the Company Stock Credits, in lieu of distributing
Capital Stock.


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     SECTION 2.7. DISTRIBUTIONS ON DEATH. In the event of the death of a
Non-Employee Director, whether before or after cessation of service as a
Non-Employee Director, the Stock Credit account to which he or she was entitled
shall be converted to cash and distributed in a lump sum to such person or
persons or the survivors thereof, including corporations, unincorporated
associates or trusts, as the Non-Employee Director may have designated. All such
designations shall be made in writing, signed by the Non-Employee Director and
delivered to the Company. A Non-Employee Director may from time to time revoke
or change any such designation by written notice to the Company. If there is no
unrevoked designation on file with the Company at the time of the Non-Employee
Director's death, or if the person or persons designated therein shall have all
predeceased the Non-Employee Director or otherwise ceased to exist, such
distributions shall be made to the Non-Employee Director's estate. Any
distribution under this Section 2.7 shall be made as soon as practicable
following notification to the Company of the Non-Employee Director's death. In
any case in which the Non-Employee Director's Stock Credit account is to be
converted to cash pursuant to this Section 2.7, such cash amount shall be
determined by multiplying the number of whole and fractional shares of Capital
Stock to which the Non-Employee Director's Stock Credit account is equivalent by
the Fair Market Value of the shares underlying such account on the date of
death.

     SECTION 2.8. CONVERSION OF DEFERRED COMPENSATION TO STOCK CREDITS. The
Committee may, in its discretion, permit a Non-Employee Director to convert
Deferred Compensation already credited to such Non-Employee Director's cash
account to Stock Credits (a "Conversion Election"). Any such election and the
related conversion shall occur only during specified periods designated by the
Committee and shall become effective on the date such election is delivered to
the Company. If a Non-Employee Director makes a Conversion Election, such
Non-Employee Director's Stock Credit account will be credited with that number
of Stock Credits equal to the number of shares of Capital Stock underlying the
Stock Credit Account (including fractions of a share to four decimal places)
that could have been purchased with the amount of Deferred Compensation subject
to the Conversion Election based on the Fair Market Value of the underlying
stock on the day that the Conversion Election is made.

                                   ARTICLE III
                            MISCELLANEOUS PROVISIONS

     SECTION 3.1. AMENDMENT AND DISCONTINUANCE. The Board of Directors may
alter, amend, suspend or discontinue the Plan, provided that no such action
shall deprive any person without such person's consent of any rights theretofore
granted pursuant hereto. The Board of Directors may, in its discretion, submit
any proposed amendment to the Plan to the stockholders of the Company for
approval and shall submit proposed amendments to the Plan to the stockholders of
the Company for approval if such approval is required in order for the Plan to
comply with Rule 16b-3 of the Exchange Act (or any successor rule).

     SECTION 3.2. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Notwithstanding any
provision of the Plan or the terms of any agreement entered into pursuant to the
Plan, the Company shall not be required to issue any shares hereunder prior to
registration of the shares subject to the Plan under the Securities Act of 1933
or the Exchange Act, if such registration


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shall be necessary, or before compliance by the Company or any participant with
any other provisions of either of those acts or of regulations or rulings of the
Securities and Exchange Commission thereunder, or before compliance with other
federal and state laws and regulations and rulings thereunder, including the
rules of the New York Stock Exchange, Inc. The Company shall use its best
efforts to effect such registrations and to comply with such laws, regulations
and rulings forthwith upon advice by its counsel that any such registration or
compliance is necessary.

     SECTION 3.3. COMPLIANCE WITH SECTION 16. With respect to persons subject to
Section 16 of the Exchange Act in relation to the Company, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3
(or its successor rule). To the extent that any provision of the Plan or any
action by the Board of Directors or the Committee fails to so comply, it shall
be deemed null and void to the extent permitted by law and to the extent deemed
advisable by the Committee.

     SECTION 3.4. NON-ALIENATION OF BENEFITS. No right or interest of a
Non-Employee Director in a Stock Credit account under the Plan may be sold,
assigned, transferred, pledged, encumbered or otherwise disposed of except as
expressly provided in the Plan; and no interest or benefit of any Non-Employee
Director under the Plan shall be subject to the claims of creditors of the
Non-Employee Director.

     SECTION 3.5. WITHHOLDING TAXES. To the extent required by applicable law or
regulation, each Non-Employee Director must arrange with the Company for the
payment of any federal, state or local income or other tax applicable to the
receipt of Capital Stock or Stock Credits under the Plan before the Company
shall be required to deliver to the Non-Employee Director cash or a certificate
for Capital Stock free and clear of all restrictions under the Plan, as the case
may be.

     SECTION 3.6. FUNDING. Except as provided in Section 2.5 hereof, no
obligation of the Company under the Plan shall be secured by any specific assets
of the Company, nor shall any assets of the Company be designated as
attributable or allocated to the satisfaction of any such obligation. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall be no greater than the right of any unsecured
creditor of the Company.

     SECTION 3.7. GOVERNING LAW. The Plan shall be governed by and construed and
interpreted in accordance with the internal laws of the Commonwealth of
Pennsylvania.

     SECTION 3.8. EFFECTIVE DATE OF PLAN. The Plan became effective upon
approval and adoption of the Plan by the holders of a majority of the
outstanding shares of Capital Stock of the Company at the 1992 annual meeting of
shareholders.


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