Document:

Prepared and filed by St Ives Burrups

 Exhibit
      10.66

Mr. Joseph C. Horvath

323 Stonegate Court

Chambersburg, Pennsylvania 17201

Re:      Terms of Employment

Dear Joe:

     This letter will confirm the terms of your employment with T.B. Wood’s (“Company”). 

     1.      Position and Location.  You will be employed as the Company’s Chief Financial Officer.   In this capacity, you will perform such job duties as are customarily performed by a chief financial officer and such other duties as the Company may, from time to time, decide to assign to you.  You will perform your job duties at the Company’s offices in Chambersburg, Pennsylvania, except when traveling on company business.

     2.      Term. You
    will be employed for a period of eighteen (18) months commencing on November
    3, 2003. The Company shall have the right to terminate your employment before
    the expiration of this term for “Cause.” “Cause” means
    your material failure to comply with the Company’s reasonable instructions
    and directives; your material breach of this agreement or your legal obligations
    to the Company; misconduct detrimental to the Company’s interests;
    conviction of a felony involving moral turpitude; death or disability (disability
    to mean your inability to perform the essential functions of your job for
    a period of (90) consecutive days); and/or your material failure to perform
    your job duties in accordance with accepted professional standards.

     3.      Salary, Compensation, and Benefits.  You will be paid a base annualized salary of $ 170,000 (subject to all legally required and authorized withholdings and deductions) in accordance with the Company’s normal payroll procedures.  You will receive such salary increases and additional compensation as the Company decides upon in its sole discretion.  You will be entitled to participate in all employee pension and welfare plans (such as healthcare) in which similarly situated executives may participate, subject to the terms of those plans.

     4.      Compliance
      with Company Rules and Policies.  You will comply with the Company’s
      generally applicable rules, regulations, business procedures, and policies
      (as the Company may amend or modify them from time to time).

     5.      Confidentiality
      and Non-Solicitation.  You agree that, except as reasonably necessary
      to perform your duties as Chief Financial Officer of the Company, you will
      not, both during and after your employment
      with the Company, use for your own benefit or disclose to any person or
      entity, any of the Company’s confidential or proprietary information, including (without limitation) its plans, data, lists, compilations, strategies, and other information relating to the Company’s finances, marketing, sales, customers, or employees, that you may acquire during your employment with the Company.  You also agree that during your employment, and for a period of one (1) year following the termination of your employment, you will not (on your own behalf or any other person’s/entity’s behalf): solicit any Company employee, customer, or agent, or any other person/entity with whom/which the Company does
business, to terminate his/her/its relationship with the Company or not to do business with the Company, in whole or in part; solicit any customer (or prospective customer) of the Company to buy any products or services that the Company sells or markets from any person/entity other than the Company; disparage, defame, or criticize the Company or its officers, directors, or managers; or otherwise interfere with the Company’s business in any way. You agree that if you breach any of the covenants set forth in this section, the Company will suffer irreparable harm and therefore will be entitled to injunctive relief in addition to any other remedies to which it may be entitled under law; that the Company’s
breach (or claimed breach) of this or any other agreement will not be a defense
to your failure to abide by such covenants; and that such covenants will survive
the termination of your employment (regardless of the reason for termination).

     If these terms are acceptable, please sign below in the designated space.  We look forward to working with you.

Sincerely,

/s/James R. Swenson

James R. Swenson, Interim CEO

Intending to be legally bound to 

    the terms of this letter agreement, 

I sign my name below.

/s/Joseph C. Horvath

Joseph C. Horvath      November 14, 2003Prepared and filed by St Ives Burrups

Exhibit 10.67

TB WOOD’S CORPORATION

GRANT OF FAIR MARKET VALUE (FMV) NON-QUALIFIED STOCK OPTION

     1.      Grant of Option and Exercise Price.  Subject to the terms and conditions set forth herein and in the TB Wood's Corporation 1996 Stock-Based Incentive Compensation Plan (the "Plan"), TB Wood's Corporation (the "Company") hereby grants to _____________, (the "Optionee"), a stock option (the "Option") to purchase up to ­­________shares of Common Stock of the Company, par value $.01 per share (the "Common Stock"), at an exercise price of $8.72 per share (the "Exercise Price").  The Option is a non-qualified stock option.

     2.      Vesting of Options.  One-third of the shares of Common Stock subject to the option shall vest on the first anniversary of the date of grant of the Option (the "Grant Date"), an additional one-third of the shares of Common Stock subject to the option shall vest on the second anniversary of the Grant Date, and the final one-third of the shares of Common Stock subject to the option shall vest on the third anniversary of the Grant Date.

     3.      Time of Exercise.  The Option may be exercised from time to time with respect to shares for which the Option has vested but no later than the tenth anniversary of the Grant Date. Upon the tenth anniversary of the Grant Date, the Optionee's right to exercise the Option shall terminate absolutely.

     4.      Payment for Shares of Common Stock.  Upon exercise of an Option and before delivery of the shares of Common Stock, full payment for shares of Common Stock purchased upon the exercise of the Option shall be made in cash or, subject to the approval of the Company committee administering the Plan (the "Committee"), in whole or in part in shares of Common Stock valued at the fair market value on the date of exercise.

     5.      Manner of Exercise.  The Option shall be exercised by giving written notice of exercise to the Company (Attn: Chief Financial Officer) at the Company's main office at 440 North Fifth Avenue, Chambersburg, Pennsylvania 17201-1778.  Such notice of exercise must include a statement of preference as to the manner in which payment to the Company shall be made.  Such notice shall be deemed to have been given when hand-delivered, telecopied or mailed, first-class postage prepaid, and shall be irrevocable once given.

     6.      Issuance of Certificates.  As promptly as is reasonably practicable after the exercise of the Option as determined by the Company, a certificate for the shares of Common Stock issuable on the exercise of the Option shall be delivered to Optionee or to his personal representative, heir or legatee.

     7.      Nontransferability of Option.  The Option may not be transferred or assigned by Optionee otherwise than by will or the laws of descent and distribution or be exercised other than by Optionee or, in the case of his death, by his personal representative, heir or legatee.

     8.      Taxes.  Optionee shall be responsible to make appropriate provision for all taxes required to be withheld in connection with any Option, the exercise thereof and the transfer of the shares of Common Stock.  Such responsibility shall extend to all applicable federal, state, local or foreign withholding taxes.  In the case of exercise of the Option, the Company shall, at the election of Optionee, have the right to retain the number of shares of Common Stock whose aggregate fair market value equals the amount to be withheld in satisfaction of the applicable withholding taxes.

     9.      Termination of Employment.  If the Optionee's employment by the Company (or a subsidiary thereof) is terminated for any reason, all unvested Options shall be forfeited and the Optionee shall have no further right to exercise such Options.  If the Optionee's employment by the Company (or a subsidiary thereof) is terminated by reason of disability or retirement, all unexercised, vested Options may be exercised pursuant to the terms of the Option for a period of three months from the date of such termination of employment or until the expiration of the term of the Option, whichever period is shorter; provided, however, that if the Optionee's employment is terminated by death, all
unexercised, vested Options may be exercised pursuant to the terms of the Option for a period of six months from the date of such termination of employment or until the expiration of the term of the Option, whichever period is shorter.  If the Optionee's employment by the Company (or a subsidiary thereof) is terminated for any reason other than death, disability or retirement, all unexercised, vested options shall terminate three months from the date of such termination of employment.

     10.      Rights Prior to Exercise.  Neither Optionee nor his personal representative, heir or legatee shall have any of the rights of a stockholder with respect to any Common Stock until the date of the issuance to him or her of a certificate for such Common Stock as provided herein.

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     11.      Amendments.  The Committee may from time to time amend the terms of this Option to the extent it deems appropriate to carry out the terms and provisions of the Plan.           

     12.      Interpretation.  The Committee shall have sole power to resolve any dispute or disagreement arising out of this Agreement.  The interpretation and construction of any provision of this Option or the Plan made by the Committee shall be final and conclusive and, insofar as possible, shall be consistent with the requirements of a non-qualified stock option.

     13.      Option Not to Affect Employment.  The Option granted hereunder shall not confer upon Optionee any right to continue in the employment of the Company or any Subsidiary.       

                                                       TB WOOD'S CORPORATION

                                                       By:  /s/James R. Swenson

                                                              James R. Swenson Interim CEO

Dated as of February 5, 2004

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