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                                                                    EXHIBIT 10.1

                                  HARDINGE INC.

                            2002 INCENTIVE STOCK PLAN

               1.  ESTABLISHMENT OF PLAN.

               Hardinge Inc. (hereafter referred to as the "Company") proposes
to grant to selected employees of the Company and its subsidiaries: (a)
Incentive Stock Options, (b) Non-Qualified Stock Options, (c) Stock Appreciation
Rights, (d) Restricted Stock Incentives, and (e) Performance Share Incentives
(collectively hereinafter sometimes referred to as "Incentives") for the purpose
of enhancing the profitability and value of the Company for the benefit of its
shareholders by providing stock awards to attract, retain and motivate officers
and other key employees who make important contributions to the success of the
Company.

               The Company also proposes to grant to Outside Directors options
to purchase common stock of the Company pursuant to the Plan. The purpose of
such Director Options is to provide incentives for highly qualified individuals
to stand for election to the Board and to continue service on the Board and to
encourage increased stock ownership by Outside Directors in order to promote
long-term stockholder value. Restricted Stock Incentives, Incentive Stock
Options (as defined in Section 422A of the Internal Revenue Code), Stock
Appreciation Rights, Performance Share Incentives and Dividend Equivalents will
not be granted to Outside Directors under the Plan.

               Incentives shall be granted pursuant to the plan herein set
forth, which shall be known as the Hardinge Inc. 2002 Incentive Stock Plan
(hereinafter referred to as the "Plan").

               2.  DEFINITIONS OF CERTAIN TERMS USED IN THE PLAN.

               a.  "Affiliate" means any subsidiary, whether directly or
                   indirectly owned, or parent of the Company, or any other
                   entity designated by the Committee.
               b.  "Board" means the Company's Board of Directors.
               c.  "Change of Control" is defined in Section 18 of the Plan.
               d.  "Code" means the Internal Revenue Code of 1986, as amended,
                   or any successor code thereto.
               e.  "Committee" means the Incentive Compensation Committee of the
                   Board of Directors of the Company or any successor committee
                   the Board of Directors may designate to administer the Plan.
               f.  "Common Stock" means the Hardinge Inc. Common Stock, par
                   value $.01 per share.
               g.  "Competition" means to manage, operate, join, control,
                   participate in, provide consulting advice to, act as an agent
                   or director of, or have any financial interest in (as a
                   partner, stockholder, investor or otherwise), any firm,
                   corporation, partnership, association, joint stock company,
                   joint venture, unincorporated organization, limited liability
                   company or any such similar business operation or activity
                   (or any portion thereof), directly or indirectly, in
                   competition with any of the business operations or activities
                   of the Company or its Affiliates or affecting or attempting
                   to affect a Change of Control.
               h.  "Director Stock Option" means a Nonqualified Option granted
                   to Outside Directors pursuant to Section 7 of the Plan.
               i.  "Employee" means any person who is employed by the Company or
                   a subsidiary of the Company.
               j.  "Exchange Act" means the Securities Exchange Act of 1934, as
                   amended.
               k.  "Fair Market Value" of Stock means the fair and reasonable
                   value thereof as determined by the Committee according to
                   prices in trades as reported on the NASDAQ National Market.
                   If there are no prices so reported or if, in the opinion of
                   the Committee, such reported prices do not represent the fair
                   and reasonable value of the Stock, then the Committee shall
                   determine Fair Market Value by any means it deems reasonable
                   under the circumstances.

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               l.  "Incentive Stock Options" means stock options granted under
                   the Plan that meet the definition of Incentive Stock Options
                   under Section 422 of the Code.
               m.  "Nonqualified Options" means stock options granted under the
                   Plan that are not Incentive Stock Options.
               n.  "Outside Director" means any member of the Company's Board of
                   Directors who is not also an Employee.
               o. "Participant" shall mean any employee or director selected to
                  receive a grant under the Plan.
               p.  "Performance Share Incentives" means Incentives granted under
                   Section 9 of the Plan.
               q.  "Restricted Stock Incentives" means Incentives granted under
                   Section 10 of the Plan.
               r.  "Retirement" means retirement under any pension or retirement
                   plan of the Company or of a subsidiary, or termination of
                   employment with the Company or a subsidiary, by action of the
                   employing company, because of disability.
               s.  "Stock" means the Common Stock or any other authorized class
                   or series of common stock or any such other security
                   outstanding upon the reclassification of any of such classes
                   or series of common stock, including, without limitation, any
                   stock split-up, stock dividend, creation of targeted stock,
                   or other distributions of stock in respect of stock, or any
                   reverse stock split-up, or recapitalization of the Company or
                   any merger or consolidation of the Company with any
                   Affiliate.
               t.  "Stock Appreciation Rights" means Incentives granted under
                   Section 8 of the Plan.
               u.  "Stock Options" means Incentive Stock Options and
                   Nonqualified Options granted under the Plan.
               v.  A "subsidiary" means any corporation in which the Company
                   owns, directly or indirectly, at least thirty-five percent
                   (35%) of the total combined voting power of all classes of
                   stock; except that for purposes of any option subject to the
                   provisions of Section 424 of the Internal Revenue Code, as
                   amended, the term "subsidiary" means any corporation in an
                   unbroken chain of corporations beginning with the Company if,
                   at the time of the granting of an Option, each of the
                   corporations, other than the last corporation in the unbroken
                   chain, owns stock possessing fifty percent (50%) or more of
                   the total combined voting power of all classes of stock of
                   one of the other corporations in such chain.
               w.  "Termination for Cause" means an Employee's termination of
                   employment with the Company or an Affiliate or an Outside
                   Director's removal from office as a director of the Company,
                   in each case because of such person's willful engaging in
                   gross misconduct; provided, however, that a Termination for
                   Cause shall not include termination attributable to (i) poor
                   work performance, bad judgment or negligence, (ii) an act or
                   omission believed by such person in good faith to have been
                   in or not opposed to the best interests of the Company and
                   reasonably believed by such person to be lawful, or (iii) the
                   good faith conduct of such person in connection with a Change
                   of Control (including opposition to or support of such Change
                   of Control).

               3.  STOCK RESERVED FOR INCENTIVES.

               A maximum of 450,000 shares of Common Stock or the number of
securities to which said number of shares may be adjusted in accordance with
Section 4 below, may be issued upon granting of Restricted Stock Incentives,
Performance Share Incentives, and the exercise of Stock Options and Stock
Appreciation Rights under the Plan. Such shares may be either authorized and
unissued shares or previously issued shares purchased by the Company for
purposes of the Plan. Subject to adjustment in accordance with Section 4 below,
a maximum of one percent (1%) of the outstanding shares of the Company's Common
Stock as of the first business day of any calendar year may be the subject of
Incentives granted under the Plan in that calendar year. The shares available
for granting Incentives in any year shall be increased by the number of shares
available under the Plan in previous years but not covered by Incentives granted
under the Plan in those years plus any shares as to which options or other
benefits granted under the Plan have lapsed, expired, terminated or been
cancelled. Any shares subject to stock options, grants or Incentives may
thereafter be subject to new stock options, grants or Incentives under the Plan
if there is a forfeiture of any such grants or Incentives, or the lapse,
expiration or termination of any such option but not if there is a surrender of
an option or portion thereof pursuant to a Stock Appreciation Right as provided
hereafter in Section 8. The maximum number of shares in respect of which
Incentives may be granted during the term of the Plan to an individual recipient
of Incentives shall be 112,500.

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               The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which counsel to Company deems necessary to
the proper issuance and sale of any shares hereunder, shall relieve the Company
from any liability for failure to issue or sell such shares as to which such
authority has not been obtained.

               4.  ADJUSTMENT PROVISIONS

               In the event of any extraordinary dividend, reorganization,
recapitalization, stock dividend, stock split-up, change in par or no par value,
combination of shares, merger, consolidation, sale of all or substantially all
of the assets of the Company, warrant or rights offering or combination,
exchange or reclassification of Common Stock or any other similar event or any
other change in the corporate structure or shares of the Company, the Committee
or its delegate shall cause such equitable adjustment as it deems appropriate to
be made in the number and kind of shares then remaining available for issue
under the Plan, and in the terms of the outstanding Incentives to reflect such
event and preserve the value of such Incentives. In the event the Committee
determines that any such event has a minimal effect on the value of Incentives,
it may elect not to cause any such adjustments to be made. In all events, the
determination of the Committee or its delegee shall be conclusive. If any such
adjustment would result in a fractional security being issuable or awarded under
the Plan, such fractional security shall be disregarded. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect and no
adjustment by reason hereof shall be made with respect to the number or price of
shares subject to a grant.

               5.  ADMINISTRATION OF THE PLAN.

               The authority to grant Incentives to employees under the Plan
shall be vested in the Committee; provided, however, that the Committee shall
have no authority regarding the granting of Director Stock Options to Outside
Directors, which grants shall be non-discretionary. The Committee shall
determine those eligible to receive Incentives and the amount, type and terms of
each Incentive, subject to the provisions of the Plan. Each member of the
Committee shall be (i) an "outside director" within the meaning of Section
162(m) of the Code, subject to any transitional rules applicable to the
definition of outside director, and (ii) a "disinterested person" within the
meaning of Rule 16b-3 under the Exchange Act, or otherwise qualified to
administer this Plan as contemplated by that Rule or any successor Rule under
the Exchange Act. In making any determinations under the Plan, the Committee
shall be entitled to rely on reports, opinions or statements of officers or
employees of the Company, as well as those of counsel, public accountants and
other professional or expert persons. All determinations, interpretations and
other decisions under or with respect to the Plan or any Incentives by the
Committee shall be final, conclusive and binding upon all parties, including
without limitation, the Company, any Employee, and any other person with rights
to any Incentive under the Plan, and no member of the Committee shall be subject
to individual liability with respect to the Plan.

               Subject to the provisions of the Plan, the Committee from time to
time shall determine the individuals to whom, and the time or times at which,
Incentives shall be granted and the terms thereof. In the case of officers to
whom Incentives may be granted, the selection of such officers and all of the
foregoing determinations shall be made directly by the Committee in its sole
discretion. In the case of key employees other than officers, the selection of
such employees and all of the foregoing determinations may be delegated by the
Committee to an administrative group of officers chosen by the Committee.
Incentives granted to one employee need not be identical to those granted other
employees.

               The Committee shall administer and shall have full power to
construe and interpret the Plan; prescribe, amend and rescind rules and
regulations relating to the Plan; and make all other determinations and take all
other actions that the Committee believes reasonable and proper, including the
power to delegate responsibility to others to assist it in administering the
Plan. The determinations of the Committee shall be made in accordance with its
judgment as to the best interests of the Company and its stockholders and in
accordance with the purposes of the Plan. The Committee's determinations shall
in all cases be conclusive.

               A majority of the members of the Committee shall constitute a
quorum, and all determinations of the Committee shall be made by a majority of
the entire Committee. Any determination of the Committee may be made, without
notice or meeting, by the written consent of a majority of the Committee
members.

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               6.  ELIGIBILITY.

               Any Employee selected by the Committee, except a member of the
Committee, shall be eligible for any Incentive contemplated under the Plan. In
making its determination, the Committee shall take into account the present and
potential contributions of the Employees to the success of the Company and such
other such factors as the Committee shall deem relevant. Outside Directors of
the Company shall be eligible for grants of Director Stock Options under Section
7 of the Plan. An Employee or Director who has been granted an Incentive under
this or any other plan of the Company or any of its Affiliates may or may not be
granted additional Incentives under the Plan at the discretion of the Committee.
As a condition to the exercise of a grant, the Company may require the
Participant exercising the grant to represent and warrant that at the time of
exercise the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel to the Company, such a representation is required by applicable law.

               7.  STOCK OPTIONS.

               The Committee may grant Incentive Stock Options, other statutory
options under the Code, and Nonqualified Options to eligible Employees, and such
Stock Options shall be subject to the terms and conditions of this Section 7 of
the Plan and such other terms and conditions as the Committee may prescribe.

               (a) OPTION PRICE. The option price per share with respect to each
          Stock Option shall be determined by the Committee, but shall not be
          less than 100% of the fair market value of the Common Stock on the
          date the Stock Option is granted, as determined by the Committee.
          Except as provided in Section 4 hereof, under no circumstances shall
          the Board or the Committee lower the exercise price of outstanding
          options issued under the Plan.

               (b) PERIOD OF OPTION. The period of each Stock Option shall be
          fixed by the Committee; provided, however, that such period shall not
          exceed ten (10) years from the grant date in the case of Incentive
          Stock Options.

               (c) PAYMENT. The option price shall be payable at the time the
          Stock Option or the Director Stock Option is exercised in cash or, at
          the discretion of the Committee, in whole or in part in the form of
          shares of Common Stock already owned by the grantee (based on the fair
          market value of the Common Stock on the date the option is exercised
          by the Committee). No shares shall be issued until full payment
          therefor has been made. A grantee of a Stock Option or a Director
          Stock Option shall have none of the rights of a stockholder until the
          shares are issued.

               (d) EXERCISE OF OPTION. The shares covered by a Stock Option may
          be purchased in such installments and on such exercise dates as the
          Committee may determine. Any shares not purchased on the applicable
          exercise date may be purchased thereafter at any time prior to the
          final expiration of the Stock Option. In no event (including those
          specified in paragraphs (e), (f) and (g) of this section below) shall
          any Stock Option or any Director Stock Option be exercisable after its
          specified expiration period and in no event shall a Stock Option or
          Director Stock Option be exercised after the expiration of ten (10)
          years from the date such option is granted. The Committee may provide
          that, subject to such conditions as it considers appropriate, upon the
          delivery of shares of Common Stock to the Company in payment of the
          exercise price of a Stock Option, the grantee of such Stock Option
          automatically be awarded a Stock Option for up to the number of shares
          of Common Stock so delivered.

               (e) RETIREMENT AND TERMINATION. Upon Retirement or termination of
          employment of the Stock Option grantee for reasons other than those
          described in Section 14 of the Plan, Stock Option privileges shall
          apply only to those Options immediately exercisable at the date of
          such Retirement or termination. The Committee, however, in its
          discretion, may provide on a case by case basis that any Stock Options
          outstanding but not yet exercisable upon such Retirement or
          termination of the Stock Option grantee may become exercisable in
          accordance with a schedule to be determined by the Committee. Options
          exercisable upon Retirement shall remain exercisable for three (3)
          years after Retirement; Options exercisable upon termination for
          reasons other than Retirement or those described in Section 14 of the
          Plan shall remain exercisable for six (6) months after such
          termination.

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               (f) DEATH. Upon the death of a Stock Option or Director Stock
          Option grantee, Stock Option or Director Stock Option privileges shall
          apply only to those shares which were immediately exercisable at the
          time of death, and options exercisable upon death shall remain
          exercisable for three (3) years after death. The Committee, in its
          discretion, may provide that any Stock Options or Director Stock
          Options outstanding but not yet exercisable upon the death of a Stock
          Option or Director Stock Option grantee may become exercisable in
          accordance with a schedule to be determined by the Committee. Such
          privileges shall expire unless exercised by legal representatives
          within such period of time as determined by the Committee but in no
          event later than the date of the expiration of the Stock Option or
          Director Stock Option.

               (g) LIMITS ON INCENTIVE STOCK OPTIONS. Except as may otherwise be
          permitted by the Code, the Committee shall not, in the aggregate,
          grant to any Employee Incentive Stock Options that are first
          exercisable during any one calendar year (under all such plans of such
          Employee's employer corporation and its parent and subsidiary
          corporations) to the extent that the aggregate fair market value of
          the Common Stock, at the time the Incentive Stock Options are granted,
          exceeds $100,000.

               Commencing with the 2002 annual meeting of the stockholders of
the Company, Director Stock Options with an option period of ten (10) years and
an option price equal to 100% of the fair market value of the Common Stock on
the date the Director Stock Option is granted, shall be granted to each Outside
Director for 750 shares of the Company's Common Stock effective as of the close
of each annual meeting of the stockholders of the Company (i) at which such
individual is elected a director, or (ii) following which such individual will
continue to serve as a director or member of a continuing class of directors,
and except as specifically provided in this paragraph, such Director Stock
Options shall be subject to the terms and conditions of this Section 7 of the
Plan.

               8.  STOCK APPRECIATION RIGHTS.

               The Committee may, in its discretion, grant a right to receive
the appreciation in the fair market value of shares of Common Stock either
singly or in combination with an underlying Stock Option granted hereunder. Such
Stock Appreciation Rights shall be subject to the following terms and conditions
and such other terms and conditions as the Committee may prescribe:

               (a) TIME AND PERIOD OF GRANT. If a Stock Appreciation Right is
          granted in connection with an underlying Stock Option, it may be
          granted at the time of the Stock Option Grant or at any time
          thereafter but prior to the expiration of the Stock Option Grant. If a
          Stock Appreciation Right is granted in connection with an underlying
          Stock Option, at the time the Stock Appreciation Right is granted the
          Committee may limit the exercise period for such Stock Appreciation
          Right, before and after which period no Stock Appreciation Right shall
          attach to the underlying Stock Option. In no event shall the exercise
          period for a Stock Appreciation Right granted with respect to an
          underlying Stock Option exceed the exercise period for such Stock
          Option. If a Stock Appreciation Right is granted without an underlying
          Stock Option, the period for exercise of the Stock Appreciation Right
          shall be set by the Committee.

               (b) VALUE OF STOCK APPRECIATION RIGHT. If a Stock Appreciation
          Right is granted in connection with an underlying Stock Option, the
          grantee will be entitled to surrender the Stock Option which is then
          exercisable and receive in exchange therefor an amount equal to the
          excess of the fair market value of the Common Stock on the date the
          election to surrender is received by the Company over the Stock Option
          price multiplied by the number of shares covered by the Stock Options
          which are surrendered. If a Stock Appreciation Right is granted
          without an underlying Stock Option, the grantee will receive upon
          exercise of the Stock Appreciation Right an amount equal to the excess
          of the fair market value of the Common Stock on the date the election
          to surrender such Stock Appreciation Right is received by the Company
          over the fair market value of the Common Stock on the date of grant
          multiplied by the number of shares covered by the grant of the Stock
          Appreciation Right.

               (c) PAYMENT OF STOCK APPRECIATION RIGHT. Payment of a Stock
          Appreciation Right shall be in the form of shares of Common Stock,
          cash, or any combination of shares and cash. The form of payment upon
          exercise of such a right shall be determined by the Committee either
          at the time of the grant of the Stock Appreciation Right or at the
          time of exercise of the Stock Appreciation Right.

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               9.  PERFORMANCE SHARE INCENTIVES.

               The Committee may grant awards under which payment may be made in
shares of Common Stock, cash or any combination of shares and cash if the
performance of the grantee, the Company or any subsidiary or division of the
Company selected by the Committee during the award period meets certain goals
established by the Committee. Such Performance Share Incentives shall be subject
to the following terms and conditions and such other terms and conditions as the
Committee may prescribe.

               (a) INCENTIVE PERIOD AND PERFORMANCE GOALS. The Committee shall
          determine and include in a Performance Share Incentive grant the
          period of time for which a Performance Share Incentive is made
          ("Incentive Period"), which period must be a minimum of one year. The
          Committee shall also establish performance objectives ("Performance
          Goals") to be met by the Company, subsidiary or division or the
          grantee during the Incentive Period as a condition to payment of the
          Performance Share Incentive. The Performance Goals may include
          earnings per share, return on stockholders' equity, return on assets,
          net income, Company earnings performance compared to its domestic
          competition or any other financial or other measurement established by
          the Committee. The Performance Goal may include minimum and optimum
          objectives or a single set of objectives.

               (b) PAYMENT OF PERFORMANCE SHARE INCENTIVES. The Committee shall
          establish the method of calculating the amount of payment to be made
          under a Performance Share Incentive if the Performance Goals are met,
          including the fixing of a maximum payment. The Performance Share
          Incentive shall be expressed in terms of shares of Common Stock
          referred to as "Performance Shares". After the completion of an
          Incentive Period, the performance of the grantee, the Company,
          subsidiary or division shall be measured against the Performance Goals
          and the Committee shall determine whether all, none or any portion of
          a Performance Share Incentive shall be paid. The Committee, in its
          discretion, may elect to make payment in shares of Common Stock, cash
          or a combination of shares and cash. Any cash payment shall be based
          on the fair market value of Performance Shares on, or as soon as
          practicable prior to, the date of payment.

               (c) REVISION OF PERFORMANCE GOALS. At any time prior to the end
          of an Incentive Period, the Committee may revise the Performance Goals
          and the computation of payment if unforeseen events occur which have a
          substantial effect on the performance of the Company, subsidiary or
          division and which in the judgment of the Committee make the
          application of the Performance Goals unfair unless a revision is made.

               (d) REQUIREMENT OF EMPLOYMENT. A grantee of a Performance Share
          Incentive must remain in the employment of the Company until the
          completion of the Incentive Period in order to be entitled to payment
          under the Performance Share Incentive; provided that the Committee
          may, in its sole discretion, provide for a partial payment where such
          an exception is deemed equitable.

               (e) DIVIDENDS. The Committee may, in its discretion, at the time
          of the granting of a Performance Share Incentive, provide that any
          dividends declared on the Common Stock during the Incentive Period,
          and which would have been paid with respect to the Performance Shares
          had they been owned by a grantee, be (i) paid to the grantee, or (ii)
          accumulated for the benefit of the grantee and used to increase the
          number of Performance Shares of the grantee.

               10. RESTRICTED STOCK INCENTIVES.

               The Committee may issue shares of Common Stock to a grantee which
shares shall be subject to the following terms and conditions and such other
terms and conditions as the Committee may prescribe:

               (a) REQUIREMENT OF EMPLOYMENT. A grantee of a Restricted Stock
          Incentive must remain in the employment of the Company during a period
          designated by the Committee ("Restriction Period"). If the grantee
          leaves the employment of the Company prior to the end of the
          Restriction Period, the Restricted Stock Incentive shall terminate and
          the shares of Common Stock shall be returned immediately to the
          Company; provided that

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          the Committee may, at the time of the grant, provide for the
          employment restriction to lapse with respect to a portion or portions
          of the Restricted Stock Incentive at different times during the
          Restriction Period. The Committee may, in its discretion, also provide
          for such complete or partial exceptions to the employment restriction
          as it deems equitable, but in no event shall the Restriction Period be
          less than three years.

               (b) RESTRICTIONS ON TRANSFER AND LEGEND ON STOCK CERTIFICATES.
          During the Restriction Period, the grantee may not sell, assign,
          transfer, pledge or otherwise dispose of the shares of Common Stock
          except as provided under Section 11 hereof. Each certificate for
          shares of Common Stock issued hereunder shall contain a legend giving
          appropriate notice of the restrictions in the grant.

               (c) ESCROW AGREEMENT. The Committee may require the grantee to
          enter into an escrow agreement providing that the certificates
          representing the Restricted Stock Incentive will remain in the
          physical custody of an escrow holder until all restrictions are
          removed or expire.

               (d) LAPSE OF RESTRICTIONS. All restrictions imposed under the
          Restricted Stock Incentive shall lapse upon the expiration of the
          Restriction Period if the conditions as to employment set forth above
          have been met. The grantee shall then be entitled to have the legend
          removed from the certificates.

               (e) DIVIDENDS. The Committee shall, in its discretion, at the
          grant of the Restricted Stock Incentive, provide that any dividends
          declared on the Common Stock during the Restriction Period shall
          either be (i) paid to the grantee, or (ii) accumulated for the benefit
          of the grantee and paid to the grantee only after the expiration of
          the Restriction Period.

               11. DIVIDEND EQUIVALENTS.
               The Committee is hereby authorized to grant to eligible employees
Dividend Equivalents under which the employee shall be entitled to receive
payments in cash equivalent to the amount of cash dividends paid by the Company
to holders of Common Stock with respect to a number of shares of Common Stock
granted under the Plan as determined by the Committee. Subject to the terms of
the Plan and any applicable agreement, such Dividend Equivalents may have such
terms and conditions as the Committee shall determine.

               12. NONTRANSFERABILITY.

               Each Incentive granted under the Incentive Stock Plan shall not
be transferable other than by Will or the laws of descent and distribution, and
with respect to Stock Options, shall be exercisable during the grantee's
lifetime by the grantee only or the grantee's guardian or legal representative.

               13. NO RIGHT OF EMPLOYMENT.

               The Incentive Stock Plan and the Incentives granted hereunder
shall not confer upon any eligible employee the right to continued employment
with the Company or affect in any way the right of the Company to terminate the
employment of an eligible employee at any time and for any reason.

               14. TAXES.

               The Company shall be entitled to withhold, or otherwise collect
from the recipient, the amount of any tax attributable to any amount payable or
shares deliverable under the Plan after giving the person entitled to receive
such amount or shares notice as far in advance as practicable. The recipient may
elect, subject to approval by the Committee, to have shares withheld by the
Company in satisfaction of such taxes, or to deliver other shares of Stock owned
by the recipient in satisfaction of such taxes. With respect to officers of the
Company or a subsidiary or other recipients subject to Section 16(b) of the
Exchange Act, the Committee may impose such other conditions on the recipient's
election as it deems necessary or appropriate in order to exempt such
withholding from the penalties set forth in said Section. The number of shares
to be withheld or delivered shall be calculated by reference to the Fair Market
Value of the appropriate class or series of Stock on the date that such taxes
are determined.

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               15. FORFEITURE OF INCENTIVES.

               Unless the Committee shall have determined otherwise, the
recipient of an Incentive shall forfeit all amounts not payable or privileges
with respect to Stock Options not immediately exercisable upon the occurrence of
any of the following events:

               a.  The recipient is Terminated for Cause.
               b.  The recipient voluntarily terminates his or her employment
                   other than by Retirement after attainment of age 55, or such
                   other age as may be provided for in the Incentive.
               c.  The recipient engages in Competition with the Company or any
                   Affiliate.
               d.  The recipient engages in any activity or conduct contrary to
                   the best interests of the Company or any Affiliate.

               Stock Options and Director Stock Options immediately exercisable
upon the occurrence of any of the preceding events shall remain exercisable for
seven (7) days after the occurrence of such event unless the Committee in its
sole discretion shall provide that such Stock Options and Director Stock Options
shall remain exercisable for a longer period.

               The Committee may include in any Incentive any additional or
different conditions of forfeiture it may deem appropriate. The Committee also,
after taking into account the relevant circumstances, may waive any condition of
forfeiture stated above or in the Incentive contract.

               In the event of forfeiture, the recipient shall lose all rights
in and to the Incentive. Except in the case of Restricted Stock Incentives as to
which the restrictions have not lapsed, this provision, however, shall not be
invoked to force any recipient to return any Stock already received under an
Incentive.

               Such determinations as may be necessary for application of this
Section, including any grant of authority to others to make determinations under
this Section, shall be at the sole discretion of the Committee, and its
determinations shall be conclusive.

               16. ACCELERATION.

               The Committee may, in its sole discretion, accelerate the date of
exercise, vesting, lapse of restrictions or other receipt of any Incentive,
provided that in no event shall the Restriction Period for Restricted Stock
Incentives be less than three years.

               17. RIGHTS AS A SHAREHOLDER.

               A recipient of an Incentive shall, unless the terms of the
Incentive provide otherwise, have no rights as a shareholder, with respect to
any options or shares which may be issued in connection with the Incentive until
the issuance of a Stock certificate for such shares, and no adjustment other
than as stated herein shall be made for dividends or other rights for which the
record date is prior to the issuance of such Stock certificate. In addition,
with respect to Restricted Stock Incentives, recipients shall have only such
rights as a shareholder as may be set forth on the certificate or in the terms
of the Incentive.

               18. FOREIGN NATIONALS.

               Incentives may be awarded to persons who are foreign nationals or
employed outside the United States on such terms and conditions different from
those specified in the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or to comply with applicable laws.

               19. CHANGE IN CONTROL PROVISIONS.

               (a) Impact of Event. Notwithstanding any other provision of the
                   Plan to the contrary, in the event of a Change in Control,
                   any Incentives outstanding as of the date such Change in
                   Control is determined

                                                                             A-8
<Page>

                   to have occurred and not then exercisable and vested shall
                   become fully exercisable and vested to the full extent of the
                   original grant and all restrictions on Incentives shall
                   immediately lapse.

               (b) Change in Control Cash Out. Notwithstanding any other
                   provision of the Plan, upon the occurrence of a Change of
                   Control all outstanding Stock Options shall immediately
                   become fully exercisable, and during the 60-day period from
                   and after such Change in Control (the "Exercise Period"), an
                   optionee shall have the right, in lieu of the payment of the
                   exercise price for the shares of Stock being purchased under
                   the Stock Option or Director Stock Option and by giving
                   notice to the Company, to elect (within the Exercise Period)
                   to surrender all or part of the Stock Option or Director
                   Stock Option to the Company and to receive cash, within 30
                   days of such notice, in an amount equal to the amount by
                   which the Change in Control Price per share of Stock on the
                   date of such election shall exceed the exercise price per
                   share of Stock under the Stock Option or Director Stock
                   Option (the "Spread") multiplied by the number of shares of
                   Stock granted under the Stock Option or Director Stock Option
                   as to which the right granted under this section shall have
                   been exercised; provided, however, that if the end of such
                   60-day period from and after a Change in Control is within
                   six months of the date of grant of a Stock Option or Director
                   Stock Option held by an optionee who is an officer or
                   director of the Company and is subject to Section 16(b) of
                   the Exchange Act, such Stock Option or Director Stock Option
                   shall be cancelled in exchange for a cash payment to the
                   optionee, effected on the day which is six months and one day
                   after the date of grant of such Option, equal to the Spread
                   multiplied by the number of shares of Stock granted under the
                   Stock Option or Director Stock Option. For purposes of this
                   paragraph only, the date of grant of any Stock Option or
                   Director Stock Option approved by the Committee prior to the
                   date on which the Plan is approved by the Company's
                   shareholders shall be deemed to be the date on which the Plan
                   is approved by the Company's shareholders.

               (c) Definition of Change in Control. For purposes of the Plan, a
                   "Change in Control" shall mean the happening of any of the
                   following events:

                       (i)   An acquisition by any individual, entity or group
                             within the meaning of Section 13(d)(3) or 14(d)(2)
                             of the Exchange Act) (a "Person") resulting in
                             beneficial ownership (within the meaning of Rule
                             13d-3 promulgated under the Exchange Act) of 20% or
                             more of either (x) the then outstanding shares of
                             Common Stock of the Company (the "Outstanding
                             Company Common Stock") or (y) the combined voting
                             power of the then outstanding voting securities of
                             the Company entitled to vote generally in the
                             election of directors (the "Outstanding Company
                             Voting Securities"); excluding, however, the
                             following acquisitions of Outstanding Company
                             Common Stock and Outstanding Company Voting
                             Securities: (1) any acquisition directly from the
                             Company (other than an acquisition pursuant to the
                             exercise of a conversion privilege), (2) any
                             acquisition by the Company, (3) any acquisition by
                             any employee benefit plan (or related trust)
                             sponsored or maintained by the Company or any
                             corporation or other entity controlled by the
                             Company or (4) any acquisition by any person
                             pursuant to a reorganization, merger or
                             consolidation if, following such reorganization,
                             merger or consolidation, the conditions described
                             in clauses (1), (2) and (3) of subsection (iii) of
                             this section are satisfied, or

                       (ii)  Individuals who, as of the effective date of the
                             Plan, constitute the Board (the "Incumbent Board")
                             cease for any reason to constitute at least a
                             majority of the Board; provided, however, that any
                             individual who becomes a member of the Board
                             subsequent to such effective date, whose election,
                             or nomination for election by the Company's
                             shareholders, was approved by a vote of at least a
                             majority of directors then comprising the Incumbent
                             Board, shall be considered as though such
                             individual were a member of the incumbent Board;
                             but, provided further, that any such individual
                             whose initial assumption of office occurs as a
                             result of either an actual or threatened election
                             contest (as such terms are used in Rule 14a-11 of
                             Regulation 14A promulgated under the Exchange Act)
                             or other actual or

                                                                             A-9
<Page>

                             threatened solicitation of proxies or consents by
                             or on behalf of a person other than the Board shall
                             not be so considered as a member of the Incumbent
                             Board; or

                       (iii) Approval by the shareholders of the Company of a
                             reorganization, merger or consolidation or sale or
                             other disposition of all or substantially all of
                             the assets of the Company ("Business Combination");
                             excluding, however, such a Business Combination
                             pursuant to which (1) all or substantially all of
                             the individuals and entities who are the beneficial
                             owners, respectively, of the Outstanding Company
                             Common Stock and Outstanding Company Voting
                             Securities immediately prior to such Business
                             Combination own, directly or indirectly, more than
                             60% of, respectively, the outstanding shares of
                             common stock, and the combined voting power of the
                             then outstanding voting securities entitled to vote
                             generally in the election of directors, as the case
                             may be, of the corporation or other entity
                             resulting from such Business Combination
                             (including, without limitation, a corporation which
                             as a result of such transaction owns the Company or
                             all or substantially all of the Company's assets
                             either directly or through one or more
                             subsidiaries) in substantially the same proportions
                             as their ownership, immediately prior to such
                             Business Combination, of the Outstanding Company
                             Common Stock and Outstanding Company Voting
                             Securities, as the case may be, (2) no person
                             (other than the Company, any employee benefit plan
                             or related trust sponsored or maintained by the
                             Company or any corporation or other entity
                             controlled by the Company or such corporation
                             resulting from such Business Combination and any
                             person beneficially owning, immediately prior to
                             such Business Combination, directly or indirectly,
                             20% or more of the Outstanding Company Common Stock
                             or Outstanding Company Voting Securities, as the
                             case may be) will beneficially own, directly or
                             indirectly, 20% or more of, respectively, the
                             outstanding shares of common stock of the
                             corporation or other entity resulting from such
                             Business Combination or the combined voting power
                             of the outstanding voting securities of such
                             corporation or other entity entitled to vote
                             generally in the election of directors and (3) at
                             least a majority of the members of the board of
                             directors of the corporation or other entity
                             resulting from such Business Combination were
                             members of the Incumbent Board at the time of the
                             execution of the initial agreement, or of the
                             action of the Board, providing for such Business
                             Combination; or

                       (iv)      The approval by the shareholders of the
                                 Company of a plan of partial or complete
                                 liquidation or dissolution of the Company.

               (d) Change in Control Price. For purposes of the Plan, "Change in
               Control Price" means the higher of (i) the highest reported sales
               price, regular way, of a share of Stock in any transaction
               reported on the NASDAQ National Market or other national
               securities exchange on which such shares are listed, as
               applicable, during the 60-day period prior to and including the
               date of a Change in Control and (ii) if the Change in Control is
               the result of a tender or exchange offer or a Business
               Combination, the highest price per share of Stock paid in such
               tender or exchange offer or Business Combination; provided,
               however, that in the case of a Stock Option which (A) is held by
               an optionee who is an officer or director of the Company and is
               subject to Section 16(b) of the Exchange Act and (B) was granted
               within 240 days of the Change in Control, then the Change in
               Control Price for such Stock Option shall be the Fair Market
               Value of the Stock on the date such Stock Option is exercised,
               cancelled or cashed out pursuant to the terms of the Plan. To the
               extent that the consideration paid in any such transaction
               described above consists all or in part of securities or other
               non-cash consideration, the value of such securities or other
               non-cash consideration shall be determined in the sole discretion
               of the Board.

               20. AMENDMENT OF INCENTIVE.

               The Committee may amend, modify or terminate any outstanding
Incentive, including substituting therefor another Incentive of the same or a
different type, changing the date of exercise or realization and converting an

                                                                            A-10
<Page>

Incentive Stock Option to a Nonstatutory Stock Option, provided that the
holder's consent to such action shall be required unless the Committee
determines that the action, taking into account any related action, would not
materially and adversely affect the Employee and provided further that under no
circumstances, except as provided in Section 4 hereof, shall the exercise price
of outstanding stock options issued under the Plan be reduced.

               21. AMENDMENT TO PRIOR PLAN.

               No grants shall be made under the Company's 1996 Incentive Stock
Plan on or after shareholder approval of the Plan.

               22. EFFECTIVE DATE AND TERM.

               This Plan shall be effective upon adoption by the shareholders of
the Company at its 2002 Annual Meeting to be held on May 7, 2002. The Plan shall
continue in effect until May 6, 2012, when it shall terminate. Upon termination,
any balances of shares reserved for issuance under the Plan shall be cancelled,
and no Incentives shall be granted under the Plan thereafter. The Plan shall
continue in effect, however, insofar as is necessary to complete all of the
Company's obligations under outstanding Incentives to conclude the
administration of the Plan.

               23. TERMINATION AND AMENDMENT OF PLAN.

               The Plan may be terminated at any time by the Board of Directors
except with respect to any Stock Options, Director Stock Options, Restricted
Stock Incentives, Stock Appreciation Rights or Performance Share Incentives then
outstanding. Also, the Board may, from time to time, amend the Plan as it may
deem proper and in the best interests of the Company or as may be necessary to
comply with any applicable laws or regulations, provided that no such amendment
shall, without approval of the holders of a majority of the outstanding shares
of Common stock, (i) increase the total number of shares which may be issued
under the Plan, (ii) reduce the minimum purchase price or otherwise materially
increase the benefits under the Plan, (iii) change the basis for valuing Stock
Appreciation Rights, (iv) impair any outstanding Incentives without the consent
of the holder, (v) alter the class of employees eligible to receive Incentives,
or (vi) withdraw the administration of the Plan from the Committee.

               24. CONSTRUCTION OF PLAN.

               The place of administration of the Plan shall be in the State of
New York, and the validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined solely in accordance with the laws, but not the laws
pertaining to choice of laws, of the State of New York.

               25. OTHER LAWS.

               The Committee may refuse to issue or transfer any shares or other
consideration under a grant if, acting in its sole discretion, it determines
that the issuance or transfer of such shares or such other consideration might
violate any applicable law or regulation or entitle the Company to recover the
same under Section 16(b) of the Exchange Act, and any payment tendered to the
Company by a Participant, other holder or beneficiary in connection with the
exercise of such grant shall be promptly refunded to the relevant Participant,
holder, or beneficiary. Without limiting the generality of the foregoing, no
grant granted hereunder shall be construed as an offer to sell securities of the
Company, and no such offer shall be outstanding, unless and until the Committee
in its sole discretion has determined that any such offer, if made, would be in
compliance with all applicable requirements of the U.S. federal securities laws
and any other laws to which such offer, if made, would be subject.

                                                                            A-11Exhibit 10.1  

        AMENDMENT
NO. 1 dated as of July 19, 2002 (this "Amendment"), in respect of the AMENDED AND RESTATED CREDIT AGREEMENT (the
"Credit Agreement") dated as of June 23, 2000 among BENCHMARK ELECTRONICS, INC. (the "Company"), the
Borrowing Subsidiaries from time to time party thereto, the LENDERS party thereto, FLEET NATIONAL BANK, as Documentation Agent, CREDIT SUISSE FIRST BOSTON, as Syndication Agent, BANK OF AMERICA, N.A.,
BANK ONE, NA and SUNTRUST BANK as Co-Agents and JPMORGAN CHASE BANK (formerly, Chase Bank of Texas, National Association), as Administrative Agent, Collateral Agent and Issuing Bank (the
"Administrative Agent"). 

        The
Company and each Subsidiary Guarantor has requested that the Credit Agreement be amended as set forth in Section 1 below and the parties hereto are willing so to amend the Credit
Agreement. Each capitalized term used but not defined herein has the meaning assigned thereto in the Credit Agreement. 

        In
consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree, on the terms and subject to the conditions set forth
herein, as follows: 

        SECTION
1. Amendment. Upon the effectiveness of this Amendment as provided in Section 3 below, Section 6.04 of the Credit Agreement is
hereby amended as follows: 

        (a)  Section
6.04(g) of the Credit Agreement is hereby amended by deleting the amount "$20,000,000" and substituting therefor "$50,000,000". 

        (b)  Section
6.04(p) of the Credit Agreement is hereby amended by deleting the word "and" at the end thereof. 

        (c)  Section
6.04(q) of the Credit Agreement is hereby amended by replacing the period at the end thereof with "; and". 

        (d)  The
Credit Agreement is hereby amended by inserting the following clause as Section 6.04(r): 

        "(r)
Investments consisting of the capital stock of ACT Manufacturing Thailand Public Company Limited (Thailand) and ACT Manufacturing UK Ltd acquired under the Asset and Share Purchase
Agreement dated as of July 2, 2002, among the Company, ACT Manufacturing, Inc., ACT Manufacturing Securities Corp., ACT Manufacturing U.S. Holdings, LLC, and CMC Industries, Inc.;  provided that the
consideration payable for all such Investments made under this clause (r) shall not exceed $60,000,000 in the aggregate." 

        SECTION
2. Representations and Warranties. The Company represents and warrants as of the Effective Date to the Lenders that: 

        (a)  Before
and after giving effect to this Amendment, the representations and warranties set forth in the Credit Agreement are true and correct in all material respects with
the same effect as if made on the Effective Date, except to the extent such representations and warranties expressly relate to an earlier date. 

        (b)  Immediately
before and after giving effect to this Amendment, no Default has occurred and is continuing. 

        SECTION
3. Conditions to Effectiveness. This Amendment shall become effective as of the date set forth above on the date (the
"Effective Date") that the following conditions are satisfied: 

        (a)  the
Administrative Agent (or its counsel) shall have received from the Company, each Subsidiary Guarantor and Lenders constituting the Required Lenders either (i)
executed counterparts of this Amendment or (ii) written evidence satisfactory to the Administrative Agent 

 

(which may include telecopy transmission of signed signature pages of this Amendment) that such parties have signed counterparts of this Amendment. 

        (b)  The
Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the Company,
confirming compliance with Section 2 hereof. 

        (c)  The
Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including such fees as have been separately
agreed and, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel and, including, without limitation, those
referred to in the invoice of Stibbe Simont Monahan Duhot dated as of March 19, 2001, and the invoice of Allen & Gledhill dated as of October 24, 2001) required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document. 

        SECTION
4. Affirmative Covenants. The Company covenants and agrees with the Lenders that the Collateral and Guarantee Requirement shall be
satisfied in respect of each of ACT Manufacturing Thailand Public Company Limited (Thailand) and ACT Manufacturing UK Ltd on or before the 90th day after the acquisition thereof under the Asset and
Share Purchase Agreement dated as of July 2, 2002, among the Company, ACT Manufacturing, Inc., ACT Manufacturing Securities Corp., ACT Manufacturing U.S. Holdings, LLC, and CMC Industries, Inc. 

        SECTION
5. Consent of Guarantors. Each of the Company and each Subsidiary Guarantor (as defined in the Guarantee Agreement) hereby
acknowledges receipt of and consents to the terms of this Amendment and confirms that its Guarantee pursuant to the Guarantee Agreement remains in full force and effect notwithstanding the execution
and delivery of this Amendment. 

        SECTION
6. Agreement. Except as specifically stated herein, the provisions of the Credit Agreement are and shall remain in full force and
effect. As used therein, the terms "Credit Agreement", "herein", "hereunder", "hereinafter", "hereto", "hereof" and words of similar import shall, unless the context otherwise requires, refer to the
Credit Agreement as amended hereby. 

        SECTION
7. Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

        SECTION
8. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy shall be effective as delivery of a manually executed
counterpart of this Amendment. This Amendment shall constitute a "Loan Document" for all purposes of the Credit Agreement and the other Loan Documents. 

        SECTION
9. Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning
hereof. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written. 

	 	 	BENCHMARK ELECTRONICS, INC.,
	

 	
 	

by	

 
	 	 	 	/s/  CARY FU      
 Name: Cary Fu

Title: President and CEO

2

 

	

 	
 	
BENCHMARK BV HOLDINGS, INC.
	

 	
 	

by	

 
	 	 	 	/s/  CARY FU      
 Name: Cary Fu

Title: President and CEO
	

 	
 	
BENCHMARK ELECTRONICS HUNTSVILLE, INC.
	

 	
 	

by	

 
	 	 	 	/s/  CARY FU      
 Name: Cary Fu

Title: President and CEO
	

 	
 	
AVEX HOLDINGS, INC.
	

 	
 	

by	

 
	 	 	 	/s/  CARY FU      
 Name: Cary Fu

Title: President and CEO
	

 	
 	
AVEX CONSTITUTION INC.
	

 	
 	

by	

 
	 	 	 	/s/  CARY FU      
 Name: Cary Fu

Title: President and CEO
	

 	
 	
AVEX LIBERTY INC.
	

 	
 	

by	

 
	 	 	 	/s/  CARY FU      
 Name: Cary Fu

Title: President and CEO
	

 	
 	
AVEX INTERNATIONAL CORPORATION
	

 	
 	

by	

 
	 	 	 	/s/  CARY FU      
 Name: Cary Fu

Title: President and CEO

3

 

	

 	
 	
JPMORGAN CHASE BANK,individually and as Issuing Bank, Collateral Agent and Administrative Agent,
	

 	
 	

by	

 
	 	 	 	/s/  MICHAEL D. PICKERD      
 Name: Michael D. Pickerd

Title: Senior Vice President
	

 	
 	
BANK OF AMERICA, N.A.,
	

 	
 	

by	

 
	 	 	 	/s/  JAMES P. JOHNSON      
 Name: James P. Johnson

Title: Managing Director
	

 	
 	
THE BANK OF TOKYO-MITSUBISHI, LTD.,
	

 	
 	

by	

 
	 	 	 	/s/  JOHN MEARNS      
 Name: John Mearns

Title: Vice President and Manager
	

 	
 	

by	

 
	 	 	 	/s/  JOEY POWELL      
 Name: Joey Powell

Title: Officer
	

 	
 	
BANK ONE, NA,
	

 	
 	

by	

 
	 	 	 	/s/  JOHN A. HORST      
 Name: John A. Horst

Title: Director

4

 

	

 	
 	
CITICORP NORTH AMERICA, INC.,
	

 	
 	

by	

 
	 	 	 	/s/  SUZANNE CRYMES      
 Name: Suzanne Crymes

Title: Vice President
	

 	
 	
COMERICA BANK,
	

 	
 	

by	

 
	 	 	 	/s/  GERALD R. FINNEY JR.      
 Name: Gerald R. Finney Jr.

Title: Vice President
	

 	
 	
COMPASS BANK,
	

 	
 	

by	

 
	 	 	 	/s/  MICHAEL A. INNES      
 Name: Michael A. Innes

Title: Vice President
	

 	
 	
CREDIT SUISSE FIRST BOSTON,
	

 	
 	

by	

 
	 	 	 	/s/  ROBERT HETU      
 Name: Robert Hetu

Title: Director
	

 	
 	

by	

 
	 	 	 	/s/  IAN W. NALITT      
 Name: Ian W. Nalitt

Title: Associate
	

 	
 	
FLEET NATIONAL BANK
	

 	
 	

by	

 
	 	 	 	/s/  WILLIAM E. RURODE, JR.      
 Name: William E. Rurode, Jr.

Title: Managing Director
	

 	
 	
GUARANTY BANK
	

 	
 	

by	

 
	 	 	 	/s/  DONALD R. PULLEN      
 Name: Donald R. Pullen

Title: Senior Vice President—Manager
	

 	
 	
SUNTRUST BANK,
	

 	
 	

by	

 
	 	 	 	/s/  SHONA ADAMS HOLDEN      
 Name: Shona Adams Holden

Title: Vice President

5

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