Document:

Exhibit 10.11

INCREMENTAL FACILITY
AMENDMENT

To:                              Credit Suisse, as Administrative Agent
under the Credit Agreement referred to below

Dated:             June 9, 2006

Reference is hereby made to the Credit Agreement dated
as of July 19, 2005 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among
SAFETY PRODUCTS HOLDINGS, INC., a Delaware corporation, as a Guarantor, SPH
ACQUISITION LLC, a Delaware limited liability company (now known as NORCROSS
SAFETY PRODUCTS L.L.C., a Delaware limited liability company (the “Parent
Borrower”)), NORTH SAFETY PRODUCTS INC., a Delaware corporation, and MORNING
PRIDE MANUFACTURING L.L.C., a Delaware limited company (the “U.S. Subsidiary
Borrowers”) (the U.S. Subsidiary Borrowers together with the Parent
Borrower being collectively referred to as the “U.S. Borrowers”), NORTH
SAFETY PRODUCTS LTD., a company organized and existing under the laws of Canada
(“the Canadian Borrower”) (the Canadian Borrower, together with the U.S.
Borrowers, being collectively referred to as the “Borrowers”), the
several banks and other financial institutions or entities from time to time
parties to this Agreement which extend a Commitment to the U.S. Borrowers (the “U.S.
Lenders”), the several banks and other financial institutions or entities
from time to time parties to this Agreement which extend a Commitment to the
Canadian Borrower (the “Canadian Lenders” and, together with the U.S.
Lenders, the “Lenders”), GMAC COMMERCIAL FINANCE LLC, LASALLE BANK
NATIONAL ASSOCIATION and US BANK NATIONAL ASSOCIATION, as documentation agents
(in such capacity, the “Documentation Agents”), BANK OF AMERICA, N.A.,
as syndication agent (in such capacity, the “Syndication Agent”), CREDIT
SUISSE, as administrative agent (in such capacity, the “Administrative Agent”)
and CREDIT SUISSE, TORONTO BRANCH, as Canadian agent (in such capacity, the “Canadian
Agent”).  Terms used herein without
definition shall have the meanings assigned to such terms in the Credit Agreement.

WHEREAS, pursuant to Section 2.25 of the Credit
Agreement, Borrower may from time to time request incremental Term Loans and
related incremental Term Commitments in an aggregate amount not to exceed
$100,000,000, subject to the terms and conditions set forth therein;

WHEREAS, the Borrowers hereby submit this request to
the Administrative Agent that the effective date of the increase of Term Loans
to which this Incremental Facility Amendment (defined below) relates be the
date hereof, and that the amount of such increase be $15,000,000.

WHEREAS, Credit Suisse and the other Lenders listed on
the signature pages hereto (the “Increasing Lenders”) have agreed,
subject to the terms and conditions set forth herein and in the Credit
Agreement, to make an incremental Term Loan (the “Incremental Term Loan”)
and provide a related incremental Term Commitment (the “Incremental Term
Commitment”) to Borrower in an amount of $15,000,000, the proceeds of which
will be used to acquire all of the equity interests of The White Rubber
Corporation (“White Rubber”) (the “Acquisition”) pursuant to a
stock purchase agreement entered into between White Rubber, the stockholders 

of White Rubber and the Parent Borrower dated June 9,
2006 and to pay the costs and expenses related thereto; and

WHEREAS, pursuant to Section 2.25 of the Credit
Agreement, amendments to the Credit Agreement that are required to give effect
to increases in the Term Loans shall only require the consent of the Parent
Borrower and the Administrative Agent.

NOW, THEREFORE:

SECTION 1.           Incremental
Amendment.

(a)           This amendment (this
“Incremental Facility Amendment”) is an amendment increasing the Term
Loans referred to in Section 2.25 of the Credit Agreement, and Parent Borrower
and the Increasing Lenders hereby agree and notify you that:

(i)   the total Incremental Term Commitment of the
Increasing Lenders is 

$15,000,000; and

(ii)  subject to the satisfaction of the conditions
to Borrowing under Section 5.2 of the Credit Agreement and to the satisfaction
of the conditions set forth in clauses (A) through (C) below, the funding
of the Incremental Term Loan will occur in one drawing upon the Parent
Borrower’s request in accordance with Sections 2.1 and 5.2 of the Credit
Agreement (provided that the Closing Date shall be the date hereof).  In the event that all or any portion of the
Incremental Term Loan is not borrowed on or before the date hereof, the
unborrowed portion of the Incremental Term Commitment shall automatically
terminate on such date unless the Increasing Lenders shall agree to an extension.

(A)    no
Event of Default shall have occurred and be continuing or occur as a result of
the Incremental Term Loan;

(B)    the
proceeds of the Incremental Term Loans will be used solely for Permitted
Acquisitions and the costs and expenses related thereto;

(C)    on
a pro forma basis, after giving effect to the making of the Incremental Term
Loan and the use of proceeds, the Consolidated Senior Leverage Ratio does not
exceed 3.25 to 1.00;

(D)    on
a pro forma basis (as set forth in the definition of the term “Permitted
Acquisition” in the Credit Agreement), the Borrowers are in compliance with
Section 7.1 of the Credit Agreement; and

(E)    Parent
Borrower shall have delivered to the Administrative Agent and Increasing
Lenders an officer’s certificate, dated the date of borrowing, certifying
satisfaction of the requirements of Section 2.25(a) of the Credit Agreement,
including as described in clauses (A), (B), (C) and (D) above.

 2
 

 

(b)           Each of the
Increasing Lenders and the Parent Borrower hereby agree that the Incremental
Term Loan made pursuant to this Incremental Facility Amendment will be a Term
Loan and any Lender with an outstanding Incremental Term Loan will be a Term
Lender, in each case for any and all purposes under the Credit Agreement and
(A) shall rank pari  passu in right of payment and right of
security in respect of the Collateral with the existing Term Loans and (B)
shall have the same terms as Term Loans existing immediately prior to the effectiveness
of this Incremental Facility Amendment.

(c)           The table set forth
in Section 2.2 of the Credit Agreement is hereby amended by adding (i) to each
quarterly installment from and including the fourth quarterly installment to
and including the twenty-forth quarterly installment, $37,500 and (ii) to each
quarterly installment from and including the twenty-fifth quarterly installment
to and including the twenty-eighth quarterly installment, $3,553,125.

(d)           The Parent Borrower
covenants and agrees that the proceeds of the Incremental Term Loan shall be
used by the Parent Borrower for the Acquisition and to pay the costs and
expenses related thereto.

SECTION 2.           Representations, Warranties and
Covenants.  The Parent Borrower
represents, warrants and covenants to the Administrative Agent and to the
Increasing Lenders that:

(a)           this Incremental
Facility Amendment has been duly authorized, executed and delivered by it and
constitutes a legal, valid and binding obligation of the Parent Borrower,
enforceable against the Parent Borrower in accordance with its terms;

(b)           after giving effect
to this Incremental Facility Amendment, the representations and warranties set
forth in Section 4 of the Credit Agreement and the other Loan Documents will be
true and correct with the same effect as if made on and as of the date hereof
(unless expressly stated to relate to an earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date), as
supplemented by the updated schedules attached hereto as Exhibit A  with regard to the corresponding schedules,
representations and warranties in the Credit Agreement; and

(c)           as applicable, (i)
each of the conditions to requesting Incremental Term Loans set forth in clause
(a) of Section 2.25 of the Credit Agreement that does not require funding of
the Incremental Term Loans is satisfied on the date of entering into this
Incremental Facility Amendment and (ii) each and all of the conditions to
requesting Incremental Term Loans set forth in clause (a) of Section 2.25 of
the Credit Agreement will be satisfied on the date of borrowing of the Incremental
Term Loan.

SECTION 3.           Conditions to Effectiveness.  This Incremental Amendment shall become
effective when:

(a)           the Administrative
Agent shall have received counterparts of this Incremental Facility Amendment
that, when taken together, bear the signatures of the Parent Borrower and the
Increasing Lenders;

 3
 

 

(b)           the representations
and warranties set forth in Section 2 hereof are true and correct (as set forth
on an officer’s certificate delivered to the Administrative Agent and the
Increasing Lenders); and

(c)           all fees and
expenses required to be paid or reimbursed by the Parent Borrower pursuant to
the Credit Agreement, including all invoiced fees and expenses of counsel to
the Administrative Agent and Increasing Lenders shall have been paid or reimbursed,
on or prior to effectiveness applicable.

SECTION 4.           Roles.  Credit Suisse shall act in the capacity as
Sole Lead Arranger and Sole Bookrunner and Bank of America, N.A. shall act in
the capacity as Syndication Agent with respect to this Incremental Facility
Amendment, but in such capacity shall not have any obligations, duties or
responsibilities, nor shall incur any liabilities, under this Incremental
Facility Amendment or any other Loan Document.

SECTION 5.           Applicable Law.  THIS INCREMENTAL FACILITY AMENDMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.  SECTION 10.16 OF THE CREDIT
AGREEMENT SHALL APPLY TO THIS INCREMENTAL FACILITY AMENDMENT.

SECTION 6.           Credit Agreement; Loan Document.  Except as expressly set forth herein, this
Incremental Facility Amendment shall not by implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
any party under, the Credit Agreement, nor alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement, all of which are ratified and affirmed in
all respects and shall continue in full force and effect.  For the avoidance of doubt, this Incremental
Facility Amendment shall be deemed to be a “Loan Document” within the meaning
of the Credit Agreement.

SECTION 7.           Counterparts.  This Incremental Facility 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 agreement.  Delivery of an executed counterpart of a
signature page of this Incremental Facility Amendment by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Incremental Facility Amendment.

[Signature Page Follows]

 

 4

 

IN WITNESS WHEREOF, the parties hereto have caused
this Incremental Facility Amendment to be duly executed by their authorized
officers as of the date set forth above.

	
  

  	
   

  	
  U.S. BORROWERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NORCROSS SAFETY PRODUCTS L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David F. Myers, Jr.

  
	
   

  	
   

  	
   

  	
  Name: David F. Myers, Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NORTH SAFETY PRODUCTS INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David F. Myers, Jr.

  
	
   

  	
   

  	
   

  	
  Name: David F. Myers,
  Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MORNING PRIDE MANUFACTURING L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David F. Myers, Jr.

  
	
   

  	
   

  	
   

  	
  Name: David F. Myers,
  Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
					

 

 1
 

 

	
  

  	
  INCREASING LENDERS

  
	
   

  	
   

  	
   

  
	
   

  	
  CREDIT SUISSE, acting through its Cayman Islands
  Branch, as Increasing Lender

  
	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William O’Daly

  
	
   

  	
   

  	
  Name: William O’Daly

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rianka Mohan

  
	
   

  	
   

  	
  Name: Rianka Mohan

  
	
   

  	
   

  	
  Title: Associate

  
				

 

 

 2
 

[OTHER INCREASING LENDERS]

By:                                                                                                               

Name:

Title:

[if a second signature is required by the institution
named on this page:]

By:                                                                                                               

Name:

Title:

 3
 

CONSENTED TO:

CREDIT SUISSE,
acting through its Cayman

Islands Branch, as
Administrative Agent

	
  By:

  	
  /s/ William O’Daly

  	
   

  
	
   

  	
  Name: William O’Daly

  	
   

  
	
   

  	
  Title: Director

  	
   

  

 

	
  By:

  	
  /s/ Rianka Mohan

  	
   

  
	
   

  	
  Name: Rianka Mohan

  	
   

  
	
   

  	
  Title: Associate

  	
   

  

 

 4Exhibit 10.20

NON-QUALIFIED OPTION
AGREEMENT

OF

SAFETY PRODUCTS HOLDINGS, INC.

THIS AGREEMENT (the “Agreement”) is entered
into as of January 2, 2006 (the “Grant Date”) by and between Safety
Products Holdings, Inc., a Delaware corporation (the “Company”) and , an
employee of the Company (or one of its Subsidiaries), hereinafter referred to
as the “Optionee.”

WHEREAS, the Company wishes to afford the Optionee the
opportunity to purchase shares of its common stock, par value $0.01 per share (“Common
Stock”); and

WHEREAS, the Company wishes to carry out the 2005
Option Plan of Safety Products Holdings, Inc., (as it may be amended from time
to time, the “Plan”), the terms of which are hereby incorporated by
reference and made a part of this Agreement (all capitalized terms used herein
have the meanings set forth herein or in the Plan, as applicable); and

WHEREAS, the Committee appointed to administer the
Plan pursuant to Section 6.1 of the Plan (the “Committee”) has
determined that it would be to the advantage and best interest of the Company
and its shareholders to grant the Non-Qualified Option provided for herein to
the Optionee as an inducement to enter into or remain in the service of the
Company (or one of its Subsidiaries) and as an incentive for increased efforts
during such service, and has advised the Company thereof and instructed the
undersigned officers to issue said Option;

NOW, THEREFORE, in consideration of the mutual
covenants herein contained and other good and valuable consideration, receipt
of which is hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I.

DEFINITIONS

Whenever the following terms are used in this
Agreement, they shall have the meaning specified below unless the context
clearly indicates to the contrary.  Capitalized terms used in this Agreement and
not defined below shall have the meaning given such terms in the Plan.  The singular pronoun shall include the
plural, where the context so indicates.

Section 1.1             “Cause” shall mean the
Company or an Affiliate having “Cause” to terminate the Optionee’s employment,
as defined in any employment agreement between the Optionee and the Company or
an Affiliate; provided, that in the absence of an employment
agreement containing such a definition, “Cause” to terminate the Optionee’s
employment means: (i) embezzlement or misappropriation of funds; (ii)
conviction of a felony involving moral turpitude; (iii) commission of a
material act of dishonesty, fraud, or deceit; or (iv) breach of any material
provisions of any agreement with the Company or any subsidiary to which he is a
party; (v) habitual or willful neglect of his duties; (vi) breach of fiduciary
duty to the Company or any subsidiary involving personal profit; or (vii)
material violation of any other duty to the Company or any subsidiary, or its
stockholders or members imposed by its directors or by law.

 

Section 1.2             “Change in Control” shall
mean (i) a change in beneficial ownership or control of the Company effected
through a transaction or series of transactions (other than an offering of
Common Stock to the general public through a registration statement filed with
the Securities and Exchange Commission) whereby any “person” or related “group”
of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the
Exchange Act) (other than (a) the Company or any of its subsidiaries,
(b) Odyssey, (c) any of their respective affiliates, or (d) an employee benefit
plan maintained by the Company or any of its subsidiaries) directly or
indirectly acquires beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of securities of the Company possessing more than fifty
percent (50%) of the total combined voting power of the Company’s securities
outstanding immediately after such acquisition or (ii) a sale of substantially
all of the Company’s assets.

Section 1.3             “Committee” shall have the meaning set forth in
the Recitals hereto.

Section 1.4             “Common Stock” shall have the meaning set forth
in the Recitals hereto.

Section 1.5             “Company” shall have the meaning set forth in the
Recitals hereto.

Section 1.6             “Disability” shall mean “Disability”
as defined in any employment agreement between the Optionee and the Company or
a Subsidiary; provided, that in
the absence of an employment agreement containing such a definition, “Disability”
shall mean the Optionee’s inability to perform, with or without reasonable
accommodation, the essential functions of the Optionee’s position for a total
of three months during any six consecutive month period as a result of incapacity
due to mental or physical illness as determined by a physician selected by the
Company or its insurers and acceptable to the Optionee or the Optionee’s legal
representative, such agreement as to acceptability not to be unreasonably
withheld or delayed.

Section 1.7             “EBITDA” 
for a given period shall mean the sum of (a) the sum of (i) Adjusted
EBITDA (as reported in the Company’s reports filed with the SEC for such
period), plus (ii) any LIFO reserve adjustment (whether positive or negative),
plus (iii) unrealized foreign exchange gains or losses, plus (iv) other
non-recurring or extraordinary gains or losses, plus (b) any management or
similar fees charged to the Company by any Principal Stockholder (but only to
the extent that such fees are deducted from the earnings described in clause
(a) above but excluding reimbursement of any reasonable out of pocket fees and
expenses).

Section 1.8             “EBITDA Target” and “Cumulative EBITDA Target”
for a given period shall be as set forth in Exhibit A of this Agreement,
subject to the provisions of Section 4.6.

Section 1.9             “Grant Date” shall have the meaning set forth in
the Recitals hereto.

Section 1.10           “Investment” shall mean any
investment of funds by any Principal Stockholder in debt and equity securities
or instruments of the Company and its Subsidiaries.

Section 1.11           “Investor Return” shall mean the compound annual
pre-tax internal rate of return on a given Investment determined with respect
to the period beginning on the initial date of such Investment and ending on
the effective date of a Change in Control.

 2
 

 

Section 1.12           “Odyssey” shall mean Odyssey Investment Partners
Fund III, LP, a Delaware limited partnership.

Section 1.13           “Option” shall mean the Option to purchase Common
Stock granted under this Agreement.

Section 1.14           “Person” shall mean an individual, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, governmental authority or
other entity of whatever nature.

Section 1.15           “Plan” shall have the meaning set forth in the
Recitals hereto.

Section 1.16           “Principal Stockholders” shall
mean (i) Odyssey, (ii) any general or limited partner or member of Odyssey (an “Odyssey
Partner”), (iii) any corporation, partnership, limited liability company or
other entity that is an Affiliate of Odyssey or Odyssey Partner (including
without limitation any applicable coinvest vehicle established following the
date hereof) (collectively, the “Odyssey Affiliates”), (iv) any managing
director, member, general partner, director, limited partner, officer or
employee of (A) Odyssey, (B) any Odyssey Partner or (C) any Odyssey Affiliate,
or the heirs, executors, administrators, testamentary trustees, legatees or
beneficiaries of any of the foregoing Persons referred to in this clause (iv)
(collectively, the “Odyssey Associates”), (v) any trust, the
beneficiaries of which, or corporation, limited liability company or
partnership, the stockholders, members or general or limited partners of which,
include only Odyssey Stockholders, Odyssey Partners, Odyssey Affiliates,
Odyssey Associates, their spouses or their lineal descendants; and (vi) a
voting trustee for one or more Odyssey Stockholders, Odyssey Affiliates,
Odyssey Partners or Odyssey Associates; provided that in no event shall the
Company or any subsidiary be considered an Odyssey Partner, Odyssey Affiliate,
or Odyssey Associate and provided, further, that an underwriter or other
similar intermediary engaged by the Company in an offering of the Company’s
debt or equity securities or other instruments shall not be deemed a Principal
Stockholder with respect to such engagement.

Section 1.17           “Proceeds” shall mean the aggregate fair market
value of the consideration received or determined by the Board in good faith to
be reasonably likely to be receivable by the Principal Stockholders in
connection with a Change in Control, after taking into account the Board’s
reasonable good faith determination of all post closing adjustments, as of the
effective date of such Change in Control (after giving effect to different
dates of investment, if any); provided
however, that if the Principal Stockholders retain any Investment or
portion thereof following such Change in Control, the fair market value of such
Investment (or portion) immediately following such Change in Control shall be
deemed “consideration received” for purposes of calculating the Proceeds, and provided further that the fair market
value of any non-cash consideration (including stock) shall be determined as of
the date of such Change in Control.

Section 1.18           “Management Stockholders Agreement” shall mean the
agreement by and among the Optionee, the Company, Odyssey Investment Partners
Fund III, LP, a Delaware limited partnership and certain other stockholders
which contains certain restrictions and

 3
 

limitations applicable to the shares of Common Stock
acquired upon Option exercise (and/or to other shares of Common Stock, if any,
held by the Optionee during the term of such agreement).

Section 1.19           “Target Amount” shall mean, with respect to any
Investment, a dollar amount representing:

(i)            If
a Change in Control occurs within 3 years after the “Closing” (as such term is
defined in the Management Stockholders Agreement):

(a)    2.5
times the amount of such Investment, and

(b)    A
30% Investor Return on such Investment. or

(ii)    If
a Change in Control occurs more than 3 years after the Closing but prior to 4
years after the Closing:

(a)     2.75
times the amount of such Investment, and

(b)     A
25% Investor Return on such Investment. or

(iii)    If
a Change in Control occurs 4 or more years after the Closing:

(a)      3
times the amount of such investment, and

(b)     A
22% Investor Return on such Investment.

For purposes of calculating the Target Amount:

(x)            The
amount of an Investment shall be the amount paid by such Principal Stockholder
to any Person (including, without limitation, the Company, any Subsidiary, or
any underwriter) for the purchase of debt and equity securities or instruments;
provided that if such Principal
Stockholder shall have acquired such debt and equity securities or instruments
directly from another Principal Stockholder or through an uninterrupted series
of Principal Stockholders, the amount of such Investment shall be the amount
initially paid to purchase such debt and equity securities or instruments from
a Person other than a Principal Stockholder; and

(y)           The
initial date of an Investment shall be the date such Principal Stockholder
purchased such debt and equity securities or instruments from any Person
(including, without limitation, the Company, any Subsidiary, or any
underwriter); provided that if
such Principal Stockholder acquired such debt and equity securities or
instruments directly from another Principal Stockholder or through an
uninterrupted series of Principal Stockholders, the initial date of such
Investment shall be the date such debt and equity securities or instruments
were initially acquired from a Person other than a Principal Stockholder.

 4
 

 

ARTICLE II.

GRANT OF OPTION

Section 2.1             Grant of Option. 
In consideration of the Optionee’s agreement to enter into or remain in
the employ of the Company or one of its Subsidiaries, and for other good and
valuable consideration, as of the Grant Date, the Company irrevocably grants to
the Optionee the Option to purchase any part or all of an aggregate of  shares of Common Stock upon the terms and
conditions set forth in the Plan and this Agreement.

Section 2.2             Option Subject to Plan.  The Option granted hereunder is subject to
the terms and provisions of the Plan, including without limitation, Article V
and Sections 7.1, 7.2 and 7.3 thereof.

Section 2.3             Option Price. 
The purchase price of the shares of Common Stock covered by the Option
shall be $10.00 per share (without commission or other charge).

ARTICLE III.

EXERCISABILITY

Section 3.1             Commencement of Exercisability

(a)           Subject
to accelerated vesting pursuant to subsection (e) and Section 3.3, 33.33% of
the Option shall become exercisable in cumulative installments provided that
the Optionee remains continuously employed in active service by the Company
from the Grant Date through such date as follows:

(i)            The
first installment shall consist of 4.13333% of the shares covered by the Option
which shall become exercisable on the Grant Date;

(ii)           The
second installment shall consist of 7.29925% of the shares covered by the
Option which installment shall become exercisable at the rate of 25% of the
installment on the last day of each calendar quarter in the year ending
December 31, 2006;

(iii)          The
third installment shall consist of 7.29925% of the shares covered by the Option
which installment shall become exercisable at the rate of 25% of the
installment on the last day of each calendar quarter in the year ending
December 31, 2007;

(iv)          The
fourth installment shall consist of 7.29925% of the shares covered by the
Option which installment shall become exercisable at the rate of 25% of the
installment on the last day of each calendar quarter in the year ending
December 31, 2008; and.

(v)           The
fifth installment shall consist of 7.29925% of the shares covered by the Option
which installment shall become exercisable at the rate of 25% of the
installment on the last day of each calendar quarter in the year ending
December 31, 2009.

(b)           Subject
to subsections (c) and (e) and Section 3.3, 66.66% of the shares subject to the
Option shall become fully exercisable on the day immediately preceding the
eighth 

 5
 

anniversary of the Grant
Date provided that the Optionee remains continuously employed in active service
by the Company from the Grant Date through such date.

(c)           Notwithstanding
subsection (b) but subject to subsection (e) and Section 3.3:

(i)            An
installment consisting of 7.2900% of the shares covered by the Option shall
become exercisable on March 31, 2006 and an installment consisting of 14.8425%
of the shares covered by the Option shall become exercisable on, or within 120
days following, December 31 of each calendar year 2006 through 2009, if the
EBITDA as of such December 31 equals or exceeds the applicable EBITDA Target
for such year.

(ii)           If
the EBITDA as of the end of any calendar year 2005 through 2009 is less than
the applicable EBITDA Target with respect to such year, that portion of the
Option that was subject to accelerated exercisability pursuant to Section
3.1(c)(i) with respect to such year shall become exercisable on, or within 120
days following, the first December 31 thereafter as of which (A) the EBITDA as
of such December 31 equals or exceeds the applicable EBITDA Target for such
year and (B) the Cumulative EBITDA equals or exceeds the applicable Cumulative
EBITDA Target through such December 31.

(d)           The
Committee shall determine, in the good faith exercise of its discretion whether
the respective EBITDA and Cumulative EBITDA Targets have been met, and shall
determine the extent, if any, to which the Option has become exercisable, on
any such date as the Committee in the good faith exercise of its sole
discretion shall determine; provided,
however, that with respect to each calendar year such date shall not
be later than the 120th day following December 31 of such calendar year.

(e)           Notwithstanding
the foregoing provisions of this Section 3.1, but subject to Section 3.3 and to
the Board’s authority to otherwise accelerate vesting in the exercise of its
sole discretion, upon a Change in Control, which occurs within 4 years of the
Closing, through which the Principal Stockholders receive Proceeds greater than
or equal to the sum of the Target Amounts with respect to all Investments, the
Option shall become fully vested and exercisable immediately prior to the
effective date of such Change in Control.

(f)            No
portion of the Option which is unexercisable at Termination of Employment shall
thereafter become exercisable.

Section 3.2             Duration of Exercisability.  The installments provided for in Section 3.1
are cumulative.  Each such installment
which becomes exercisable pursuant to Section 3.1 shall remain exercisable
until it becomes unexercisable.

Section 3.3             Expiration of Option.  The Option may not be exercised to any extent
by anyone after the first to occur of the following events:

(a)                                  The
tenth anniversary of the Grant Date; or

 6
 

(b)           Unless the Committee approves a later
date, the sixtieth day following the date of the Optionee’s Termination of
Employment for any reason other than (i) termination by the Company for Cause
or due to Disability; or (ii) the Optionee’s death; or

(c)           Unless
the Committee approves a later date, the date of the Optionee’s Termination of
Employment by reason of termination by the Company for Cause; or

(d)           In
the case of a Termination of Employment by the Company due to Disability or as
a result of the Optionee’s death, the expiration of 12 months from the date of
the Optionee’s Termination of Employment; or

(e)           The
occurrence of a Change in Control, provided that any portion of the Option
which is exercisable as of the occurrence of the Change in Control may be
exercised concurrently therewith.  The
Committee will provide the Optionee with notice of an anticipated Change in
Control and  a period of at least seven
(7) days preceding the Change in Control to effect such exercise.

Section 3.4             Partial Exercise. 
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable; provided, however, that each partial
exercise shall be for not less than 100 shares and shall be for whole shares
only.

Section 3.5             Exercise of Option.  The exercise of the Option shall be governed
by the terms of this Agreement and the terms of the Plan, including, without
limitation, the provisions of Article V of the Plan.

ARTICLE IV.

OTHER PROVISIONS

Section 4.1             Not a Contract of Employment.  Nothing in this Agreement or in the Plan shall
confer upon the Optionee any right to continue in the employ of the Company or
any of its Subsidiaries or shall interfere with or restrict in any way the
rights of the Company or its Subsidiaries, which are hereby expressly reserved,
to discharge the Optionee at any time for any reason whatsoever, with or
without Cause, except as may otherwise be provided by any written agreement
entered into by and between the Company and the Optionee.

Section 4.2             Shares Subject to Plan and Management Stockholders
Agreement.  The Optionee acknowledges
that any shares acquired upon exercise of the Option are subject to the terms
of the Plan and the Management Stockholders Agreement including, without
limitation, the restrictions set forth in Section 5.6 of the Plan and that by
signing this Agreement the Optionee agrees to be bound by the Plan and the
Management Stockholders Agreement.  The
Optionee also acknowledges that in any instance requiring the interpretation or
construction of the Management Stockholders Agreement, such interpretation or
construction shall be performed by the Board in the good faith exercise of its
discretion.

Section 4.3             Construction. 
This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Delaware, without regard to the principles of

 7
 

conflicts of law thereof, or principles of conflicts
of law of any other jurisdiction which could cause the application of the laws
of any jurisdiction other than the State of Delaware.

Section 4.4             Conformity to Securities Laws.  The Optionee acknowledges that the Plan is
intended to conform to the extent necessary with all provisions of the
Securities Act and the Exchange Act and any and all regulations and rules
promulgated thereunder by the Securities and Exchange Commission, including
without limitation Rule 16b-3. 
Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the Option is granted and may be exercised, only in such a
manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law,
the Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

Section 4.5             Amendment, Suspension and Termination.  The Committee or the Board may wholly or
partially amend or otherwise modify, suspend or terminate the Option or this
Agreement without the consent of the Optionee to the extent it deems
appropriate; provided however, that in the case of amendments, modifications
suspensions or terminations adverse to the Optionee, the Committee or the Board
must obtain the Optionee’s consent to any such action, provided however, that
such consent shall not be required if, as determined by the Committee in the
good faith exercise of its sole discretion, such action is required to either:
(a) comply with applicable laws or (b) prevent the Optionee from being subject
to any excise tax or penalty under Section 409A.

Section 4.6             Adjustments in EBITDA Targets.  The EBITDA Targets (including the Cumulative
EBITDA Targets) specified in Exhibit A are based upon certain revenue and
expense assumptions about the future business of the Company as of the date the
Option is granted.  Accordingly, in the
event that, after such date, the Committee determines, in its sole discretion,
that any acquisition or disposition of any business by the Company or any
dividend or other distribution (whether in the form of cash, Common Stock,
other securities, or other property), recapitalization, reclassification, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Common Stock or other
securities of the Company, issuance of warrants or other rights to purchase
Common Stock or other securities of the Company, any unusual or nonrecurring
transactions or events affecting the Company, or the financial statements of
the Company, or change in applicable laws, regulations, or accounting
principles occurs such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to the Option, then the Committee shall, within 60 days after consummation of
such event, in good faith and in such manner as it may determine to be
equitable after consultation with the Company’s senior management, adjust the
amounts set forth on Exhibit A to reflect the projected effect of such
transaction(s) or event(s) on EBITDA, subject to Section 7.1 of the Plan.

Section 4.7             Restrictive Covenants.

(a)          The Optionee shall not, at any time
during the Term or during the eighteen month  period
immediately following Termination of Employment (the “Restricted Period”)
directly or indirectly engage in, have any equity interest in, or manage or
operate any person, firm, corporation, partnership or business (whether as
director, officer, employee, agent,

 8
 

 

representative,
partner, security holder, consultant or otherwise (each, a “Position”))
that engages in any business or activity (a “Competitive Activity”)
which competes with any product line that, as of Termination of Employment, the
Company or any entity owned by the Company anywhere in the world (i)
manufactures or provides; or (ii) has taken affirmative steps to commence
manufacturing or providing. 
Notwithstanding the foregoing (x) the Optionee shall be permitted to
acquire a passive stock or equity interest in such a business provided the
stock or other equity interest acquired is not more than five percent (5%) of
the outstanding interest in such business, and (y) the Optionee shall, with the
prior written consent of the Company, be permitted to hold a Position with a
such a business so long as the Optionee and all persons who directly or
indirectly report to the Optionee do not directly engage in any Competitive
Activity.

(b)           During the
Restricted Period, the Optionee will not, and will not permit any of his
affiliates to, directly or indirectly, recruit or otherwise solicit or induce
any employee, customer, subscriber or supplier of the Company to terminate its
employment or arrangement with the Company, otherwise change its relationship
with the Company, or establish any relationship with the Optionee or any of his
affiliates for any business purpose deemed competitive with any product line or
service that, as of Termination of Employment, the Company or any entity owned
by the Company anywhere in North American (i) manufactures or provides; or (ii)
has taken affirmative steps to commence manufacturing or providing.

(c)           Except
as required in the faithful performance of the Optionee’s duties and
responsibilities of employment or pursuant to Section 4.7(d) the Optionee
shall, in perpetuity, maintain in confidence and shall not directly, indirectly
or otherwise, use, disseminate, disclose or publish, or use for his benefit or
the benefit of any person, firm, corporation or other entity any confidential
or proprietary information or trade secrets of or relating to the Company,
including, without limitation, information with respect to the Company’s
operations, processes, products, inventions, business practices, finances,
principals, vendors, suppliers, customers, potential customers, marketing
methods, costs, prices, contractual relationships, regulatory status,
compensation paid to employees or other terms of employment, or deliver to any
person, firm, corporation or other entity any document, record, notebook,
computer program or similar repository of or containing any such confidential
or proprietary information or trade secrets. 
The parties hereby stipulate and agree that as between them the
foregoing matters are important, material and confidential proprietary
information and trade secrets and affect the successful conduct of the
businesses of the Company (and any successor or assignee of the Company).  Upon termination of the Optionee’s employment
with the Company for any reason, the Optionee will promptly deliver to the
Company all correspondence, drawings, manuals, letters, notes, notebooks,
reports, programs, plans, proposals, financial documents, or any other
documents concerning the Company’s customers, business plans, marketing
strategies, products or processes.

(d)           The Optionee may
respond to a lawful and valid subpoena or other legal process but shall give
the Company the earliest possible notice thereof, shall, as much in advance of
the return date as possible, make available to the Company and its counsel the
documents and other information sought and shall assist such counsel in
resisting or otherwise responding to such process.

 9
 

 

(e)           The Optionee agrees
not to disparage the Company, any of its products or practices, or any of its
directors, officers, agents, representatives, stockholders or affiliates,
either orally or in writing, at any time.

(f)            In the event the
terms of this Section 4.7 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a
period of time or over too great a geographical area or by reason of its being
too extensive in any other respect, it will be interpreted to extend only over
the maximum period of time for which it may be enforceable, over the maximum
geographical area as to which it may be enforceable, or to the maximum extent
in all other respects as to which it may be enforceable, all as determined by
such court in such action.

(g)           As used in this
Section 4.7, the term “Company” shall include the Company, its parent, related
entities, and any of its direct or indirect Subsidiaries.

(h)           Notwithstanding the
foregoing, in any case in which the subject matter of any of subsections (a)
through (c) and (e) above is covered in a written employment agreement between
the Company or any Subsidiary of the Company and the Optionee, the terms of
that employment agreement will govern with respect to that subject matter.

[signature page
follows]

 10

 

IN WITNESS WHEREOF, this Agreement has been executed
and delivered by the parties hereto.

	
  SAFETY PRODUCTS HOLDINGS,
  INC.

  
	
  By:_________________________________

  
	
  Its:
  _________________________________

  
	
   

        _________________________________

  
	
  _________________________________

  
	
  Residence Address:

  
	
                                                                          _________________________________

  
	
                                                                          _________________________________

  
	
   

  
	
                Optionee’s
  Social Security Number: _________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]