Document:

Filed by Bowne Pure Compliance

Exhibit 10.10

RESTRICTED STOCK AGREEMENT

KAYDON CORPORATION

1999 Long Term Stock Incentive Plan

	 	 	 	 	 	 	 	 	 	 	 
	Grantee:

	 	 	 	 	 	Grant Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Address:

	 	 	 	 	 	Number of Shares:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 
	 	 
	 	 

This Restricted Stock Agreement (the “Agreement”) is made as of the Grant Date between KAYDON
CORPORATION, a Delaware corporation (the “Company”), and
 _____ 
(“Grantee”).

The Kaydon Corporation 1999 Long Term Stock Incentive Plan (the “Plan”) is administered by the
Compensation Committee of the Company’s Board of Directors (the “Committee”). The Committee has
determined that Grantee is eligible to participate in the Plan.

The Committee has granted restricted stock to Grantee, subject to the terms and conditions
contained in this Agreement and in the Plan.

Grantee acknowledges receipt of a copy of the Prospectus for the Plan and accepts these shares
of restricted stock subject to all of the terms, conditions, and provisions of this Agreement and
the Plan.

1. Grant of Restricted Stock. The Company grants to Grantee, effective as of the Grant Date
set forth above, and Grantee accepts, the shares of $0.10 par value Common Stock of the Company set
forth above, subject to the terms and conditions of this Agreement (the “Restricted Stock”).

2. Conditions. The Company awards the Restricted Stock to Grantee subject to the conditions
described below and to a vesting schedule. Those conditions must be met or otherwise lapse, and
vesting must occur, before Grantee will receive any stock under this Agreement. If Grantee
breaches the terms of this Agreement or ceases to be employed by the Company for certain reasons as
described in this Agreement, if the applicable restrictions are not satisfied or do not lapse, or
if Grantee does not vest in some or all of the Restricted Stock, Grantee will promptly surrender to
the Company those shares of Restricted Stock as to which the restrictions have not lapsed or in
which Grantee’s interest has not vested pursuant to this Agreement as set forth below.

 

 

 

3. Restrictions on Restricted Stock. If Grantee is then employed by the Company and has not
breached the terms of this Agreement, the restrictions on twenty percent (20%) of the initial
number of shares of Restricted Stock will lapse and the Grantee will vest in those shares
on each January 5 following the Grant Date, commencing with January 5,                     . Vesting under
this provision will continue until all of the shares are vested, the Grantee is no longer employed
by the Company, or another provision of this Agreement supersedes this section, whichever occurs
first. The Committee may, in its sole discretion, accelerate the lapsing of restrictions and the
vesting of the Restricted Stock at any time before the restrictions would otherwise lapse or before
full vesting. As restrictions lapse and vesting occurs, a certificate for the number of shares of
Restricted Stock as to which restrictions have lapsed will be forwarded to the Grantee.

4. Transferability. Unless the Committee otherwise consents or the Plan otherwise explicitly
provides, Grantee will not sell, exchange, transfer, pledge, or otherwise dispose of the Restricted
Stock at any time, whether voluntarily or involuntarily, by operation of law or otherwise. The
provisions of this paragraph will not apply to Restricted Stock that has vested pursuant to this
Agreement. If Grantee violates the restrictions in this Section, Grantee’s right to shares of
Restricted Stock remaining subject to restrictions or which have not yet vested will immediately
cease and terminate and Grantee will immediately forfeit and surrender to the Company all shares of
Restricted Stock that are still subject to restrictions or which have not yet vested.

5. Rights as a Shareholder. Grantee will have certain rights as a shareholder with respect to
the Restricted Stock, including but not limited to the right to vote the Restricted Stock at
shareholders’ meetings, the right to receive, without restriction, all cash dividends paid with
respect to the Restricted Stock, and the right to participate with respect to the Restricted Stock
in any stock dividend, stock split, recapitalization, or other adjustment in the capital stock of
the Company, or any merger, consolidation, or other reorganization involving an increase, decrease,
or adjustment in the capital stock of the Company.

(a) Substitute Shares. Any shares or other security received as a result of any stock
dividend, stock split, or reorganization will be subject to the same terms, conditions, and
restrictions as those relating to the Restricted Stock granted under this Agreement.

(b) Registration. Certificates for the shares of stock evidencing the Restricted Stock
will not be issued but the shares will be registered in Grantee’s name in book entry form as
soon as administratively feasible after Grantee’s acceptance of this Agreement.

6. Termination of Employee Status. If Grantee ceases to be an employee of the Company, except
as otherwise provided in any Employment Agreement or Change in Control Compensation Agreement that
may exist between Grantee and the Company from time to time (an “Other Agreement”):

(a) Termination Due to Disability or Death. By reason of disability (as defined in the
Plan or in any Other Agreement to which Grantee is a party) (“Disability”) or death, the
 shares of Restricted Stock will vest on the date of death or Disability.

(b) Retirement. By reason of retirement at or after age 65, the shares of Restricted
Stock will continue to vest in the same manner as though employment had not
terminated. If unforfeited Restricted Stock remains unvested at Grantee’s death
following retirement from employment at or after attainment of age 65, the shares of
Restricted Stock will vest on the date of death.

 

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(c) Termination for Reason Other Than Retirement, Disability or Death. For any reason
other than death, Disability, or retirement at or after age 65, with or without cause, no
further vesting of Restricted Stock will occur and any shares of Restricted Stock still
subject to restrictions or which have not yet vested as of the date of termination of
employment will automatically be forfeited and returned to the Company.

Any provision regarding vesting of restricted stock upon termination of employment set forth
in an Other Agreement shall govern the vesting of the Restricted Stock under this Agreement.
Further, notwithstanding the foregoing, if at any time upon or following termination of employment
the Committee determines that reason to terminate the Grantee for cause, as defined in the Plan,
exists at the time of termination or existed at such time, all shares of Restricted Stock for which
restrictions have not lapsed or which have not yet vested will be forfeited to the Company.

7. Employment by the Company. Nothing in this Agreement imposes upon the Company any
obligation to retain Grantee in the employ of the Company for any given period or upon any specific
terms of employment. Grantee acknowledges that, except as otherwise agreed by the Company in a
signed written agreement, Grantee’s employment is at will and terminable by Grantee or the Company
at any time and for any reason.

8. Tax Withholding. Grantee authorizes the Company to:

(a) Withhold. Withhold and deduct from future wages of Grantee (or from other amounts
that may be due and owing to Grantee from the Company), or make other arrangements,
including arrangements for the surrender of shares of the Company Common Stock previously
owned by Grantee or surrender of shares of then vesting Restricted Stock in each case with a
fair market value equal to the amount to be withheld, for the collection of, all amounts
deemed necessary to satisfy any and all federal, state, and local withholding and
employment-related tax requirements attributable to an award of Restricted Stock (including
any taxes arising under Sections 409A or 4999 of the Code); or

(b) Remit. Require Grantee promptly to remit the amount of such withholding to the
Company before taking any action with respect to the Restricted Stock.

9. Acknowledgment. By signing this Agreement and accepting the Restricted Stock, Grantee:

(a) Representation. Acknowledges acceptance of the Restricted Stock and receipt of the
documents referred to in this Agreement, represents that Grantee is familiar with the
provisions of the Plan and agrees to its incorporation in the Agreement, agrees to all of
the other terms and conditions of the Agreement and agrees to promptly provide
any information with respect to the Restricted Stock reasonably requested by the
Company;

 

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(b) Taxes. Agrees to comply with the requirements of applicable federal and other laws
with respect to withholding or providing for the payment of required taxes (including any
taxes arising under Sections 409A of the Code);

(c) Limitation of Rights. Acknowledges that all of Grantee’s rights to the Restricted
Stock are embodied in the Agreement and in the Plan, except as set forth in an Other
Agreement;

(d) Employment. Agrees that while Grantee is employed by the Company, the Grantee will
devote full business time and energies to the business and affairs of the Company and will
not, without the Company’s written consent, accept other employment or permit any personal
business interests to interfere with the performance of Grantee’s duties; and

(e) Duties. Agrees to use Grantee’s best efforts, skill and abilities to promote the
interests of the Company, to work with other employees of the Company in a competent and
professional manner and generally to promote the interests of the Company and to perform
such other duties of a management or professional nature as may be assigned to Grantee.

10. Commitments of Grantee. Notwithstanding any other provisions of this Agreement or the
Plan, in consideration of the grant of Restricted Stock to Grantee, in recognition of the highly
competitive nature of the industries in which the Company conducts its business and to further
protect the goodwill of the Company and to promote and preserve its legitimate business interests,
Grantee agrees that during the period commencing on the Grant Date and ending two years after the
date of termination of the Grantee’s employment by the Company, Grantee will not:

(a) Compete. Engage in any business activities engaged in by the Company at any time
(“Business Activities”) (other than on behalf of the Company) whether such engagement is as
an officer, director, proprietor, employee, partner, investor (other than as a holder of
less than 1% of the outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent or otherwise, in any geographic area in which the products or services of the
Company have been distributed or provided during the period commencing two years prior to
the Grant Date.

(b) Customers. Other than on behalf of the Company supply products or provide services
(but only to the extent such restricted activities constitute Business Activities) to any
customer with whom the Company has done any business during the period commencing two years
prior to the Grant Date, whether as an officer, director, proprietor, employee, partner,
investor (other than as a holder of less than 1% of the outstanding capital stock of a
publicly traded corporation), consultant, advisor, agent or otherwise.

 

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(c) Assist. Assist others in engaging in any of the Business Activities in the manner
prohibited to the Grantee.

(d) Employee Solicitation. Induce or attempt to induce employees of the Company to
engage in any activities prohibited to the Grantee or to terminate their employment.

(e) Confidentiality. Disclose the contents of any Proprietary Information of the
Company. Proprietary Information means information or material of the Company which is not
generally available to or used by others or the utility or value of which is not generally
known or recognized as standard practice, whether or not the underlying details are in the
public domain. Proprietary Information includes, without limitation:

(i) Information or materials which relate to the Company’s trade secrets,
manufacturing, methods, machines, articles of manufacture, compositions, inventions,
engineering services, technological developments, know-how, purchasing, accounting,
merchandising or licensing;

(ii) Software in various stages of development (source code, object code,
documentation, diagrams, flow charts), designs, drawings, specifications, models,
data and customer information; and

(iii) Any information of the type described above which the Company obtained
from another party and which the Company treats as proprietary or designates as
confidential, whether or not owned or developed by the Company.

(f) Cooperation. Fail to furnish such information and render such assistance and
cooperation as may reasonably be requested in connection with any litigation or legal
proceedings concerning the Company (other than any legal proceedings concerning Grantee’s
employment) provided the Company agrees to pay or reimburse Grantee for all reasonable
expenses incurred in cooperating with such requests.

(g) Non-Disparagement. Disparage the Company or their respective officers, directors
or employees.

The Grantee and the Company consider the commitments contained above to be reasonable for the
purpose of preserving the Company’s goodwill, proprietary rights, trade secrets, valuable
confidential business interests, relationships with specific prospective and existing customers and
going concern value, and to protect the Company’s business opportunities, markets and trade areas.
If a final judicial determination is made by a court having jurisdiction that the time or territory
or scope of restricted activities or any other commitment contained in this Section 10 is an
unenforceable restriction on the activities of Grantee, the provisions of this Agreement will not
be rendered void but will be deemed amended to apply as to such maximum time, restricted activities
and territory and to such other extent as the court may determine or indicate to be reasonable.

 

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Alternatively, if the court finds that any commitment contained in this Section 10 is
unenforceable, and the commitment cannot be amended so as to make it enforceable, that finding
shall not affect the enforceability of any of the other commitments contained here. In addition,
without limiting the generality of the preceding or the Company’s remedies for Grantee’s breach of
any of these commitments, upon Grantee’s material breach of any of these commitments, all shares of
Restricted Stock which have not at the time of breach been freed from restrictions and vested will
automatically be forfeited and returned to the Company.

11. Income Taxes and Deferred Compensation. Neither the Company nor any of its employees,
officers, directors, or service providers shall have any obligation whatsoever to pay any federal
or state income taxes, to prevent the Grantee from incurring them, or to mitigate or protect the
Grantee from any such tax liabilities, except as otherwise expressly set forth in a written
agreement between the Company and the Grantee. Nevertheless, if the Company reasonably determines
that the Grantee’s receipt of payments or benefits pursuant to Section 6 of the Plan as a result of
the Grantee’s cessation of employment with the Company constitutes “nonqualified deferred
compensation” within the meaning of Section 409A, payment of such amounts shall not commence until
the Grantee incur a “separation from service” within the meaning of Treasury Regulation §
1.409A-1(h) (“Separation from Service”). If, at the time of the Grantee’s Separation from Service,
the Grantee is a “specified employee” (under Internal Revenue Code Section 409A), any amount that
constitutes “nonqualified deferred compensation” within the meaning of Code Section 409A that
becomes payable to the Grantee on account of the Grantee’s Separation from Service (including any
amounts payable pursuant to the preceding sentence) will not be paid until after the end of the
sixth calendar month beginning after the Grantee’s Separation from Service (the “409A Suspension
Period”). Within 14 calendar days after the end of the 409A Suspension Period, the Grantee shall be
paid a lump sum payment in cash equal to any payments delayed because of the preceding sentence,
without interest. Thereafter, the Grantee shall receive any remaining benefits as if there had not
been an earlier delay.

12. Change in Control. Notwithstanding the restrictions and vesting rules of this Agreement,
in the event of a Change in Control as defined in the Plan, the Restricted Stock will no longer be
subject to any restrictions and will vest. In addition, in that circumstance, the Committee as
constituted before the Change in Control may, in its sole discretion:

(a) Purchase. Provide for the purchase of the shares of Restricted Stock by the
Company for an amount of cash equal to the value of the shares immediately prior to the
Change in Control; and

(b) Adjust. Adjust the shares as the Committee deems appropriate to reflect the Change
in Control.

 

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13. Arbitration. Grantee and the Company agree that, except with respect to the enforcement
of the Company’s rights under Section 10 of this Agreement, any disagreement dispute, controversy,
or claim arising out of or relating to this Agreement, its interpretation, or validity, or except
as required by any Other Agreement, the terms and conditions of Grantee’s employment (including but
not limited to the termination of that employment), will be settled exclusively and finally by
arbitration irrespective of its magnitude, the amount in controversy, or the nature of the relief
sought.

(a) Rules. The arbitration shall be conducted in accordance with the Employment
Arbitration Rules (the “Arbitration Rules”) of the American Arbitration Association (the
“AAA”) (the terms of which then in effect are incorporated here).

(b) Arbitrator. The arbitral tribunal shall consist of one arbitrator skilled in
arbitration of executive employment matters. The parties to the arbitration shall jointly
directly appoint the arbitrator within thirty (30) days of initiation of the arbitration. If
the parties fail to appoint the arbitrator as provided above, the arbitrator shall be
appointed by the AAA as provided in the Arbitration Rules and shall be a person who has had
substantial experience in executive employment matters. The Company shall pay all of the
fees, if any, and expenses of the arbitrator and the arbitration.

(c) Location. The arbitration shall be conducted in the Southeastern Michigan area or
in such other city in the United States of America as the parties to the dispute may
designate by mutual written consent.

(d) Procedure. At any oral hearing of evidence in connection with the arbitration,
each party or its legal counsel shall have the right to examine its witnesses and to
cross-examine the witnesses of any opposing party. No evidence of any witness may be
presented in any form unless the opposing party or parties has the opportunity to
cross-examine the witness, except under extraordinary circumstances where the arbitrator
determines that the interests of justice require a different procedure.

(e) Decision. Any decision or award of the arbitrator shall be final and binding upon
the parties to the arbitration proceeding. The parties agree that the arbitral award may be
enforced against the parties to the arbitration proceeding or their assets wherever they may
be found and that a judgment upon the arbitral award may be entered in any court having
jurisdiction.

(f) Power. Nothing contained here shall be deemed to give the arbitral tribunal any
authority, power, or right to alter, change, amend, modify, add to, or subtract from any of
the provisions of this Agreement.

The provisions of this Section shall survive the termination or expiration of this Agreement,
shall be binding upon the Company’s and Grantee’s respective successors, heirs, personal
representatives, designated beneficiaries and any other person asserting a claim described above,
and may not be modified without the consent of the Company. To the extent arbitration is required,
no person asserting a claim has the right to resort to any federal, state or local court or
administrative agency concerning the claim unless expressly provided by federal
statute, and the decision of the arbitrator shall be a complete defense to any action or
proceeding instituted in any tribunal or agency with respect to any dispute, unless precluded by
federal statute.

 

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14. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.

15. Binding Effect and Amendment. This Agreement is the entire agreement between the parties
and will be binding upon, and will inure to the benefit of, the parties to this Agreement and their
respective heirs, successors, and assigns, and may be modified only by a writing signed by the
parties.

16. Remedies. Grantee acknowledges that any breach of the promises in Section 10 of this
Agreement would cause the Company irreparable damage and therefore agrees that, in the event of a
breach of one or more of those commitments, the Company shall be entitled to preliminary and
permanent injunctive relief in addition to any direct, incidental, and consequential damages,
including lost profits, arising from that breach.

17. Agreement Controls. The Plan is incorporated by reference into this Agreement.
Capitalized terms not defined in this Agreement have those meanings provided in the Plan. In the
event of any conflict between the terms of this Agreement and the terms of the Plan, the provisions
of this Agreement control as long as the applicable provision does not violate any law, change the
character or effect of the Plan or the Restricted Stock under federal or state, tax or securities
law, or exceed the Committee’s authority under the Plan. In that case, the terms of the Plan shall
control.

Executed this
 _____ 
day of
 _____.

	 	 	 	 	 	 	 	 	 	 	 
	KAYDON CORPORATION	 	 	 	GRANTEE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By: 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
	Its:	 	 	 	 	DATE: 	 	 	 	 
	 

	 	 	 	 	 	 	 
	 	 

 

8Filed by Bowne Pure Compliance

Exhibit 10.11

KAYDON CORPORATION 1999 LONG TERM STOCK INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

NON-QUALIFIED STOCK OPTION AGREEMENT, dated as of
 _____, 200_____; between KAYDON
CORPORATION, a Delaware corporation (the “Corporation”), and
 _____ 

(“Optionee”).

The Kaydon Corporation 1999 Long Term Stock Incentive Plan Committee (the Committee), pursuant
to the Corporation’s 1999 Long Term Stock Incentive Plan (the Plan), has granted to the Optionee,
on the date of this Agreement, an option under the Plan to purchase an aggregate of
 _____ 

shares of Common Stock of the Corporation par value $0.10 per share (“Common Stock”). To evidence
the option and to set forth its terms and conditions as provided in the Plan, the Corporation and
the Optionee agree as follows.

1. Confirmation of Grant and Price. The Corporation, by this Agreement, evidences and
confirms its grant to the Optionee on the date of this Agreement of an option (the Option) to
purchase
 _____ 
shares of Common Stock, at an option price of $           per share. The Option
is subject to all of the provisions of the Plan, whether or not explicitly stated in this
Agreement, except that the ability of the Board of Directors or the Committee to amend this
Agreement without the consent of Optionee is limited as provided in this Agreement.

2. Term for Exercise. The Option becomes available for exercise, subject to the provisions of
this Agreement, as to the percentage of the aggregate number of shares of Common Stock subject to
the Option and on the dates set forth below:

(a) Percentage and Date Schedule

	 	 	 
	Percentage of Number	 	Date First Available
	of Shares	 	for Exercise
	20%	 	One year after the date of grant

	20%	 	Two years after the date of grant

	20%	 	Three years after the date of grant

	20%	 	Four years after the date of grant

	20%	 	Five years after the date of grant

(b) Later Exercise. The right to purchase is cumulative. If the full number of shares
exercisable in any period is not exercised, the balance may be exercised at any time or from
time to time after that date, as long as the exercise occurs prior to the expiration or
termination of the Option.

(c) Expiration. The Option expires                     , 200                    .

3. Non-Qualified Stock Option. The Option evidenced by this Agreement is not intended to be
an incentive stock option as that term is defined in Section 422 of the Internal Revenue Code of
1986, as amended (the Code).

 

 

 

4. Who May Exercise. During the lifetime of the Optionee, the Option may be exercised only by
the Optionee. If the Optionee dies, the Option may be exercised, to the extent provided in Section
5 hereof, by the Optionee’s estate or a person who acquires the right to exercise the Option by
bequest or inheritance or by reason of the death of the Optionee.

5. Exercise After Termination of Employment. Except as explicitly provided below, no part of
an Option may be exercised by an Optionee unless the Optionee is then in the employ of the
Corporation or any parent or subsidiary and was continuously so employed since the date of the
grant. It is not a termination of employment for purposes of this section if the Optionee
transfers employment from the Corporation to any subsidiary or vice versa, or from one subsidiary
to another, without an intervening period, if the Optionee is absent on sick leave or is granted a
leave of absence (not to exceed one year), or if the Optionee changes status to become a consultant
to the Corporation or a subsidiary. Termination will include termination by reason of the fact that
an entity employing Optionee is no longer a subsidiary of the Company.

(a) General Rules. Unless governed by a special rule, below, the Option terminates on
the earlier of the expiration date specified in Section 2 and the date which is 10 days
after the date of termination of employment. Unless acceleration of or continued vesting is
specifically provided for in this Section 5 or in an Employment Agreement between Optionee
and the Corporation which specifically addresses vesting of stock based awards upon
termination, vesting of awards shall cease and no further installments of the Option will
become exercisable following termination of employment by the Corporation or any parent or
subsidiary and the Option shall be exercisable pursuant to the rules set forth in this
Section 5 only with respect to the number of shares of Common Stock as to which the Optionee
could have exercised the Option at the date of termination. The Board of Directors or the
Committee may, in its discretion, amend this Agreement to accelerate the exercisability of
any installments of the Option which were not exercisable at the time of the Optionee’s
death.

(b) Exceptions for Involuntary Termination and Disability. In the case of involuntary
termination of employment or a Disability within the meaning of the Plan or as defined in
any employment agreement between Optionee and the Corporation, the Option terminates on the
earlier of the expiration date specified in Section 2 and the date which is three months
after the date of termination of employment.

(c) Exception for Death. In the case of death, the Option terminates on the earlier of
the expiration date specified in Section 2 and the date which is one year from the date of
death.

(d) Exception for Retirement. In the case of termination of employment by reason of
retirement at or after age 65, the Option will continue to vest in accordance with the
Option vesting schedule in effect on the date of retirement and will continue to be
exercisable in accordance with its terms as though the Optionee had continued in employment
unless otherwise provided in an Employment Agreement between Optionee and the Company.

 

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(e) Termination following Change in Control. If the Optionee is a party to a Change in
Control Compensation Agreement or an Employment Agreement which explicitly provides for
acceleration of vesting and exercisability of options upon events of termination following a
“Change in Control,” the vesting and exercisability of the Option for terminations following
a Change in Control (as defined in such other agreement) will be governed by the terms of
such Change in Control Compensation Agreement or Employment Agreement to the extent such
provisions are different than or conflict with the provisions of this Agreement. Such
acceleration is not subject to cancellation under the Plan and is also irrevocable as long
as the Optionee is a party to such a Change in Control Compensation Agreement or Employment
Agreement.

Notwithstanding the foregoing, if at any time upon or following termination of employment the
Committee determines that reason to terminate the Optionee for cause, as defined in the Plan,
exists at the time of termination or existed at such time, the Committee may terminate the
unexercised portion of the Option concurrently with or at any time following the termination of
employment. Further, nothing in the Plan or in this Agreement confers upon the Optionee any right
to continue in the employ of the Corporation or any of its affiliates, or interferes in any way
with the right of the Corporation or any of its affiliates to terminate the Optionee’s employment
at any time during the Option period or otherwise.

6. Restrictions on Exercise. The Option may be exercised only with respect to full shares.
No fractional shares of Common Stock will be issued.

(a) General Limitation. The Option may not be exercised in whole or in part, and no
payment by the Corporation shall be made nor shall any certificates representing shares of
Common Stock subject to the Option be delivered, if:

i. Governmental Approval. At any time any requisite approval or consent of any
governmental authority of any kind having jurisdiction over the exercise of options
has not been effectively secured;

ii. Registration. The shares are not effectively registered under the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended; or

iii. Withholding. Applicable federal, state and local tax withholding
requirements are not satisfied (including, any taxes arising under Sections 409A or
4999 of the Code).

(b) Representation. The Corporation may require as a condition to the exercise of the
Option in whole or in part at any time that the Optionee or any person exercising the Option
after the Optionee’s death in accordance with the provisions of Section 4 (the Holder)
represent to the Corporation in writing that the shares are being acquired for the
Optionee’s or Holder’s own account for investment only and not with a view to distribution
or with any present intention of reselling any.

(c) Hardship. The Option is not exercisable for the period of at least twelve (12)
months to the extent provided under the hardship distribution provisions of the
Kaydon Corporation Employee Stock Ownership and Thrift Plan or other Corporation or
affiliate plan to the extent the Optionee receives a hardship distribution from that plan.

 

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7. Manner of Exercise. To the extent the Option has become and remains exercisable as
provided in this Agreement, and subject to any additional administrative regulations the Committee
may from time to time adopt, the Option may be exercised from time to time, in whole or in part, by
a signed written notice to the Secretary of the Corporation on a form supplied by the Corporation.
The notice must specify the number of shares of Common Stock with respect to which the Option is
being exercised and be accompanied by full payment of the option price for the shares.

(a) Payment. Payment must be made in:

i. Cash or Shares. Cash; provided, however, that with the consent of the
Committee, payment may be made in whole or in part with (A) shares of Common Stock,
represented by certificates duly endorsed to the Corporation or its nominees, valued
at fair market value, (B) shares of Common Stock otherwise issuable upon exercise of
such Option, valued at fair market value, or other awards or property having a fair
market value on the exercise date equal to the exercise price;

ii. Instructions. With the consent of the Committee, by delivering with a
properly executed exercise notice irrevocable instructions to a third party to
promptly deliver to the Corporation the amount of sale or loan proceeds to pay the
exercise price;

iii. Combination. With the consent of the Committee, a combination of the
above; or

iv. Other. With the consent of the Committee, other consideration.

(b) Prior Holdings Limitation. The option price may not be paid in shares of Common
Stock that have been held by the Optionee for less than six months.

(c) Tax Withholding. Prior to the issuance of shares upon exercise of the Option,
Optionee must pay or provide for any applicable federal or state withholding obligations of
the Corporation (including any taxes arising under Sections 409A or 4999 of the Code). If
the Committee allows, Optionee may provide for payment of withholding taxes upon exercise of
the Option by (i) requesting that the Corporation retain shares with a fair market value
equal to the minimum amount of taxes required to be withheld or (ii) delivering to the
Corporation other shares of Common Stock owned by Optionee for a period of at least six
months having a fair market value equal to the minimum amount of taxes required to be
withheld. In the case of clause (i) above, the Corporation shall issue the net number of
 shares to the Optionee by deducting the shares retained from the shares issuable upon
exercise. Unless otherwise expressly set forth in a written agreement between the Company
and the Optionee, neither the Company nor any of its employees, officers, directors, or
service providers shall have any obligation whatsoever to pay such taxes, to prevent the
Optionee from incurring them, or to mitigate or protect the

 

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Optionee from any such tax liabilities. Nevertheless, if the Company
reasonably determines that the Optionee’s receipt of payments or benefits pursuant to
Section 6 of the Plan as a result of the Optionee’s cessation of employment with the Company
constitutes “nonqualified deferred compensation” within the meaning of Section 409A, payment
of such amounts shall not commence until the Optionee incur a “separation from service”
within the meaning of Treasury Regulation § 1.409A-1(h) (“Separation from Service”). If, at
the time of the Optionee’s Separation from Service, the Optionee is a “specified employee”
(under Internal Revenue Code Section 409A), any amount that constitutes “nonqualified
deferred compensation” within the meaning of Code Section 409A that becomes payable to the
Optionee on account of the Optionee’s Separation from Service (including any amounts payable
pursuant to the preceding sentence) will not be paid until after the end of the sixth
calendar month beginning after the Optionee’s Separation from Service (the “409A Suspension
Period”). Within 14 calendar days after the end of the 409A Suspension Period, the Optionee
shall be paid a lump sum payment in cash equal to any payments delayed because of the
preceding sentence, without interest. Thereafter, the Optionee shall receive any remaining
benefits as if there had not been an earlier delay.

(d) Right to Exercise. In the event that the Option is exercised by a person other
than the Optionee in accordance with Section 4, the person must furnish to the Corporation
evidence satisfactory to it of the person’s right to exercise the Option.

(e) Other Documents. The Corporation may require the Optionee or any other person
exercising the Option to furnish or execute any documents the Corporation deems necessary to
evidence the exercise or to comply with any requirements of this Agreement, the Plan, or any
law.

8. Non-Assignability. The Option may not be assigned, transferred or hypothecated by the
Optionee or other Holder except as provided below:

(a) Acceptable Assignments. Subject to subsection b., the Option may be assigned by
the Optionee:

i. Death. By will or by the laws of descent and distribution to the extent
provided in Section 4;

ii. Grantor Trust. To a revocable grantor trust established by the Optionee
for the Optionee’s sole benefit during the Optionee’s life, subject to the terms of
the Plan; or

iii. Other. To a beneficiary designated by the Optionee in writing on a form
approved by the Committee.

(b) Limitation. Notwithstanding those general rules, the Option may not be assigned by
Optionee if Optionee is a director or officer of the Corporation or an affiliate for
purposes of the securities laws, except as permitted under Rule 16b-3 of those laws.

 

5

 

9. Rights as Shareholders. The Optionee and any other Holder have no rights as a shareholder
with respect to any shares covered by the Option until the issuance of a certificate or
certificates to the Optionee or other Holder for the shares upon due exercise of the Option. No
adjustment will be made for dividends or other rights for which the record date is prior to the
issuance of the certificate or certificates.

10. Capital and Other Adjustments. In the event of any change in the number of outstanding
shares of Common Stock by reason of any stock dividend, stock split, combination or exchange of
shares, recapitalization, reclassification, merger, consolidation, reorganization, or other similar
transaction, the Committee may adjust the number, type and option price of shares of Common Stock
covered by the Option, by means of a grant of a substitute option or an additional option or
otherwise, as it in its discretion deems appropriate. In addition, in the event of any unusual or
nonrecurring event (including, but not limited to, the events described in the preceding sentence)
affecting the Corporation, any subsidiary, or the financial statements of the Corporation or any
subsidiary, or of changes in applicable laws, regulations, or accounting principles, the Committee
may adjust the terms and conditions of, and the criteria included in this Agreement if the
Committee determines that such adjustments are appropriate to prevent dilution or enlargement of
the benefits or potential benefits of the Option.

11. Change in Control. In the event of a Change in Control (as defined in the Plan), the
Option shall vest, shall become exercisable in full and shall no longer be subject to any
restrictions which would prevent immediate exercise. In addition, in that circumstance, the
Committee as constituted before the Change in Control may, in its sole discretion:

(a) Purchase. Provide for the purchase of the Option for an amount of cash equal to
the amount that could have been attained upon exercise had the Option been exercisable at
that time;

(b) Adjust. Adjust the Option as the Committee deems appropriate to reflect the Change
in Control; and

(c) Cause Assumption. Cause the Option to be assumed, or replaced with a new option,
by the acquiring or surviving corporation after the Change in Control.

12. Legality. The issuance or delivery of any shares of Common Stock pursuant to an Option
may be postponed by the Corporation for any period required to comply with any applicable
requirements under the Federal securities laws, any applicable listing requirements of any national
securities exchange or any requirements under any other applicable law or regulation. The
Corporation is not obligated to issue or deliver any shares if the issuance or delivery
constitutes, or in the opinion of counsel to the Corporation may constitute, a violation of any
provision of any law or of any regulation of any governmental authority or any national securities
exchange.

13. Notice. Notice to the Secretary of the Corporation shall be deemed given if in writing
and delivered to the Secretary of the Corporation at the then principal office of the Corporation
in accordance with the Sarbanes-Oxley Accounting/Corporate Responsibility Act of 2002 (such Notice must be delivered in a timely manner in order for the Corporation to meet
its reporting requirements).

 

6

 

14. Amendment. The Board of Directors or the Committee may amend the terms and conditions of
this Agreement as provided in the Plan, except that, without the consent of the Optionee, no
amendment may impair the rights of the Optionee or Holder relating to the Option or amend Sections
5(e), or 11, or this Section 14 of this Agreement. Notwithstanding that, the Option provided in
this Agreement may be canceled in the Committee’s sole discretion, as long as the Optionee is not a
party to an effective Change in Control Compensation Agreement or Employment Agreement, as
described in Section 5 above, upon payment of the value of the Option to the Optionee or Holder in
cash or in another Option, and such value may be determined by the Committee in its sole
discretion.

15. Governing Law. The words “exercise”, “subsidiary”, “outstanding” and any other words or
terms used in this Agreement which are defined or used in Section 421, 422 or 425 of the Code have
the meanings assigned to them in those Sections, unless the context clearly requires otherwise. In
all other respects this Agreement shall be construed and enforced in accordance with, and governed
by, the laws of the State of Delaware.

Executed
 _____ 
day of                     , effective as of the date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 
	KAYDON CORPORATION	 	 	 	OPTIONEE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
	Name: 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	
	Its: 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 	 

 

7

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