Document:

<PAGE>
                                                                   EXHIBIT 10.13

                               KAYDON CORPORATION

                         INCENTIVE COMPENSATION PROCESS

Kaydon believes that a person's normal day-to-day duties and responsibilities
are usually performed in a satisfactory manner and are controlled and rewarded
through our system of performance reviews and performance-based salary
adjustments. Kaydon further believes that employees effectively fulfilling their
day-to-day duties help their division/subsidiary maintain its present level of
performance. However, merely maintaining present levels is not Kaydon's
operating philosophy. Kaydon expects:

                Kaydon Financial Objectives

                -     15% Compound Earnings Growth

                -     20% Return on Stockholders' Investment

                -     15% Return on Capital Employed (ROCE)

Therefore, Kaydon Corporation's Incentive Compensation (KIC) process focuses
attention on individual/personal objectives and overall business unit
performance which together contribute to organizational growth and superior
performance.

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        Page
                                                                        ----
<S>                                                                     <C>
SCHEDULE OF EVENTS ...................................................    1

KIC PROCESS ..........................................................    2

OMG'S - TIMETABLES ...................................................    4

           GUIDELINES ................................................    4

           GOAL PREPARATION ..........................................    5

           GOAL DEVELOPMENT ..........................................    7

           MUTUAL GOAL-SETTING PROCESS ...............................    9

           SUPERVISOR PREPARATION ....................................    9

           SUPERVISOR/PARTICIPANT MEETING ............................   10

           KEY PARTS OF THE OMG ......................................   11

THE OMG ACTION STEPS .................................................   15

</TABLE>

ORIGINALLY ISSUED: 10/91
UPDATED AND ISSUED: 1/97
UPDATED AND ISSUED: 4/02

<PAGE>

                               SCHEDULE OF EVENTS

January 15th         Previous year's FINAL OMG REVIEW AND INDIVIDUAL EVALUATIONS
                     TO CORPORATE ADMINISTRATION.

January 20th         Each Business Unit General Manager submits a written
                     evaluation of the performance of his/her business unit
                     against "Plan Performance Measures" to Corporate
                     Administration.

February 15th        Management Committee makes its recommendations to the
                     Compensation Committee of the Board of Directors.

March 1st            Cash and/or stock awards are issued.

July 15th            Each Business Unit General Manager assures each participant
                     receives a mid-year review/evaluation of his/her
                     performance against written objectives.

December 10th        Each Business Unit General Manager submits his/her
                     participants' individual goals (OMG's) for the following
                     fiscal year to Corporate Administration.

                                       1

<PAGE>
                                 THE KIC PROCESS

INTRODUCTION

KIC stands for Kaydon Incentive Compensation. OMG stands for Organization
Management Goals. Together, they are one of the most important ways Kaydon has
of focusing attention on those objectives (OMG's) which contribute to continued
organization growth rather than simply maintenance. We are motivated to
accomplish those objectives through the opportunity to share in the company's
actual financial achievements (KIC).

There are two parts to every person's job: maintenance and growth. You could
work at your day-to-day duties as effectively as possible and still only help
your division maintain its present level of performance. How well we perform our
day-to-day responsibilities/accountabilities is the subject of our annual
pay-for-performance reviews and pay adjustments.

However, each of us has within our control a limited number of important,
non-routine objectives which can contribute to Kaydon's growth. These should be
identified each year and receive priority attention.

Some companies have "Management-by-Objectives" (MBO) systems which you may have
heard about. Each person's MBO's are not all that different from our OMG's, but
the KIC/OMG process takes MBO a step further with a direct tie-in to financial
reward. Each participant's opportunity to earn a Kaydon Incentive Compensation
award is a function of:

           The INDIVIDUAL'S TARGET BONUS OPPORTUNITY (expressed as a percent of
           base salary)

                                      TIMES

           The INDIVIDUAL'S PERSONAL PERFORMANCE AGAINST HIS/HER GOALS (as
           judged by his/her supervisor, general manager, and the management
           committee)

                                      TIMES

           The BUSINESS UNITS FISCAL YEAR PERFORMANCE (as measured by the
           general manager and the management committee and approved by the
           board of directors)

                                       2

<PAGE>

                                     TIMES

             The MANAGEMENT COMMITTEE'S RATING (the committee's evaluation of
             the business unit's performance)

                                  SUBMITTED TO

             The COMPENSATION COMMITTEE'S FINAL RATING (the Compensation
             Committee's final evaluation of the business unit's performance;
             the committee has full discretionary authority to adjust the
             recommended evaluation upwards or downwards).

TEAMWORK. The KIC award reflects the accomplishments of both the individual and
the group, for it is through the efforts of all employees within a Business Unit
working together to achieve common goals that the performance measures are met.

KIC/OMG was designed as a way of promoting entrepreneurial management within a
large corporation. Like those who own their own business, KIC participants have
an equity stake in their personal performance, the performance of their Unit,
and the performance of the Corporation.

Thus, KIC is not to be confused with a profit-sharing program where rewards are
often distributed without regard to individual and/or team performance. KIC
PARTICIPANTS MAY GET AN "A" FOR EFFORT, BUT ONLY EARN "$" FOR DELIVERING
RESULTS.

In summary the KIC Process serves these important functions:

         1.  Focuses organizational priorities--brings strategic business
             planning to the level of the individual; and

         2.  Promotes objective assessments of individuals' actual
             accomplishments; and

         3.  Allows for objective distribution of incentive compensation.

                                        3

<PAGE>
                      ORGANIZATION MANAGEMENT GOALS (OMG'S)
           TIMETABLES, GUIDELINES, GOAL PREPARATION, GOAL DEVELOPMENT,
                             FORMS AND ACTION STEPS

                             ----------------------

TIMETABLES

Organization Management Goals (OMG's) are drafted in the late Fall each year in
conjunction with each business unit's Strategic and Annual Business Plans, and
are finalized and submitted in December. Progress toward completion of one's
goals is reviewed in mid-July with the Final Review in early January of the
following year. A face-to-face discussion between the manager and the employee
is held at each review. Also, the manager summarizes the performance of the
employee on the OMG form.

The actual dates each year for all of the steps in the KIC/OMG Process are
published in the Corporate Planning Guide, but in general follow the Schedule of
Events which prefaces this manual.

GUIDELINES

Each of the elements of the OMG process serves a key function in the management
and motivation of effective performance. IT CANNOT, AND SHOULD NOT, BE DISMISSED
AS ANOTHER BUREAUCRATIC RITUAL!

Goals are developed jointly with the participant's supervisor and must reflect a
limited number of special, highly important, non-routine objectives which will
be the primary focus for the participant's attention in the coming year.

Each OMG must be stated specifically enough so that its accomplishment or lack
of same can be measured quantitatively if possible, and if not, then
qualitatively evaluated.

The essence of an acceptable goal is its importance to Kaydon's present and/or
future success, its departure from what is normally a part of the employee's
day-to-day work, and its measurability.

An OMG is a commitment, but not a blind one. Occasionally, we find that the
needs of a Business Unit have changed substantially. Under such special
circumstances goals may be revised, replaced or dropped during the year with the
approval of the General Manager, the Senior V.P. Operations and V.P.
Administration. However, financial goals which are directly tied into a
Division/Subsidiary's budget and business plan may not be modified or dropped.

New participants should be introduced to the KIC process within their first
month of employment. OMG's must be written and approved during this period.
Generally if the person becomes a participant in the latter half of the year,
KIC participation begins the following year.

                                       4
<PAGE>

GOAL PREPARATION

Organization Management Goals (OMG's) represent the focal point of the
individual's attention for the coming year. Individual objectives should be
developed as follows:

         a.   An individual will generally have from four (4) to six (6) goals
              of which:

              1. about 70% will be related to the coming year's business plan;
                 and

              2. about 30% will be related to actions which benefit Kaydon's
                 future performance.

         b.   Each goal will be assigned OMG percentages (through agreement with
              the person's supervisor) such that the total of all the objectives
              for the participant will be worth one hundred (100) percent.
              Generally, no single objective should be valued at less than
              fifteen (15) percent, or more than fifty (50) percent.

         c.   Goals are brief and succinct and state what is to be accomplished,
              how it's accomplishment is to be measured and the date by which
              the objective is to be achieved.

         d.   Goals having implications for the future beyond the coming
              business plan year are stated so that the eventual goal is clear
              and specific, and the accomplishments toward that goal in the
              measurement year are clearly measurable.

         e.   No individual's goal should, in its entirety, be a direct copy of
              another individual's goal. For instance, if "receivables as a
              percent to sales" is the Division VP/General Manager's goal, then
              his Controller's goal should include some description of how such
              a goal will be accomplished or pursued.

         f.   Whenever possible, goals should represent one or two themes which
              are related to the theme of the underlying business plan. A
              General Manager, for example, may in a particular year be
              concentrating heavily on increasing EBIT, or on developing a
              broader Sales base, or on expanding the potential of his
              management team. A department head might be concentrating on
              productivity improvement, cost reductions, reducing turnover,
              distributor training, etc.

              Each participant's goals for the year are completed in
              consultation with his/her supervisor. However, the participant's
              goals must be approved by the General Manager of the Business Unit
              or the Department/Unit Head, the Sr. V.P. of Operations and the VP
              Administration. The approvals are dependent upon the reporting
              relationships. Therefore, goal writing, discussions and
              submissions should begin shortly after the annual Strategic/Annual
              Business Planning Session is completed for the business unit.

                                       5
<PAGE>
         g.   Effective goals have the following characteristics:

              -    REALISTIC YET CHALLENGING. Goals should be attainable but
                   require a bonafide "stretch."

              -    UNDERSTANDABLE. Goals should be clear and easily understood.

              -    SPECIFIC. Goals should be concrete, not vague or abstract and
                   create a clear picture of the end result. Avoid the use of
                   adjectives (fast, high, bad) and adverbs (more, less,
                   quickly) since they are not specific.

              -    MEASURABLE. Goals must be measurable in terms of HOW MUCH
                   (quality, quantity, cost or time) and WHEN (month and year)
                   the goal will be accomplished.

              -    DOCUMENTED. The mid-year and year-end evaluation process
                   provides the mechanism for formal measurement of actual
                   performance against each goal's requirements.

              -    COMPATIBLE. Goals must be consistent with each organization's
                   goals and not conflict with those of other teammates.

              -    ACCEPTABLE. Goals must be mutually agreed upon by the
                   employee and management.

              -    VALUE. Goals should enhance/enrich the unit's performance
                   meaningfully and, again, measurably.

                                       6

<PAGE>

GOAL DEVELOPMENT

WRITING OMG'S

The purpose of this section is to develop skills in constructing OMG's for
yourself and/or your subordinates. It covers:

         -    Sources of OMG's

         -    Manager-Employee mutual goal-setting process

         -    Nuts and bolts of writing a good objective

SOURCES OF OMG'S

Since Organizational Management Goals are the focal points which each of us
should have in a given year, each goal should be an extension of a current
organizational priority. There are a number of good sources and methods for
getting (and giving) guidance on putting together an individual's OMG's:

         -    Business Plan

         -    Local needs

         -    Cross-functional brainstorming at local level

         -    Individual's developmental needs

Each of these will be discussed in turn

             BUSINESS PLAN. In the Fall, each operating subsidiary develops
             overall goals in such areas as Sales, EBIT, Quality, Service,
             Manufacturing (productivity improvements, cost reductions, etc.),
             Safety, Employee Involvement, Employee Development, etc. From this
             business plan, the role of each function (e.g. Sales, Finance) in
             achievement of these goals can be identified. Finally, individual
             employees can then more easily identify what contribution he/she
             can make. Writing personal objectives in a vacuum (in the absence
             of such information) is not only tough, but is less likely to be
             truly focused toward current company priorities.

             It is the responsibility of line management (e.g.
             Division/Subsidiary General Manager) and function heads
             (Controller, Engineering Manager, etc.) to communicate the Business
             Plan to other OMG participants. One method is for the General
             Manager to write a memo (not too long or detailed) summarizing how
             the goals of the Division/Subsidiary relate to the goals which
             should be part of each sub-unit. Another method is for the
             General Manager's staff, subsequent to the Business Plan
             presentation and the creation of the budget for the succeeding year
             to meet and brainstorm the goals of each submittal. A function-head
             might also choose to emphasize certain key objectives which require
             commitment from most everyone in that function across operations.
             For example, the Vice President and Corporate Controller of the
             Corporation might direct all Divisional/Subsidiary Controllers to
             include an OMG concerning a particular upgrade of financial systems
             at each location.

                                       7

<PAGE>

LOCAL NEEDS. OMGs may come from local needs of the operation that are not
reflected, or emphasized, in the subsidiary's overall Business Plan. Such goals
might include everything from Safety and Hazardous Waste, to installation or
substantial expansion of CAD/CAM technology.

CROSS-FUNCTIONAL BRAINSTORMING. An effective method in formulating OMGs involves
active discussion and negotiation between functions. The General Manager and his
direct reports meet for 2-3 hours to develop location-specific goals out of the
Division/Subsidiary's Business Plan. Each individual then drafts OMGs for
his/herself (and/or department). The group then reassembles to coordinate their
goals and to eliminate unnecessary overlap and conflicting goals between
functions (e.g. accounting and manufacturing). This method often involves
(strong and at times, loud!) negotiations, but ensures that each department gets
the cooperation and other resources it needs later in the year.

Team members should be aware of each other's goals in order to coordinate their
efforts and prevent omissions or duplications. In discussing a team member's
OMGs, consider the following questions.

1.   How does his/her OMGs affect me or others in my group? (Consider conflict
     with your own responsibilities and goals, resources or help which you must
     provide.)

2.   To what extent will his/her contribution and the responsibility for results
     in his/her respective areas be:

     a.   Shared with boss?

     b.   Fully their own?

     c.   Shared with peer (e.g., me)?

     d.   Delegated to subordinate?

3.   If your relationship with him/her is an interdependent one - has he/she
     included OMGs you need his/her help on? How will you be kept informed of
     his/her progress in terms of variance from forecasted dates, units,
     dollars, etc.?

4.   What data do you need to measure his/her progress towards goals which
     affect your own progress? Will you get it in time?

5.   What can you do to help him/her meet his/her goals?

6.   Where will you compete for resources to achieve goals?

7.   If you are in competition for resources, how can the issue be resolved so
     that one of you doesn't "lose out" entirely?

8.   How might his/her goals change for the next planning period? How will this
     affect you?

                                       8

<PAGE>
         INDIVIDUAL'S DEVELOPMENTAL NEEDS. An individual may need to strengthen
         certain skills (or acquire certain experience) in order to take on
         additional job responsibilities. These are developmental needs and
         should not be confused with remedial needs which address weakness in
         performance of current key job responsibilities at an acceptable level.

         Developmental needs can make excellent OMGs, contributing very directly
         to both operational and individual growth. For example, if an otherwise
         excellent employee would be made more effective with the acquisition of
         a more forceful style, attendance at a seminar might be a first step.
         However, the skill is more likely to take hold if it must be applied
         on-the-job; therefore, an OMG to run a seminar on an important topic,
         or to regularly present various topics at each staff meeting, etc.,
         would benefit both the individual and the operation.

MUTUAL GOAL-SETTING PROCESS

The specific objectives that an individual commits to for the coming year are
developed through a process of mutual goal-setting between the individual and
his/her manager. The purpose and importance of this joint participation is as
follows:

     -    Builds Mutual Commitment - from both the employee to complete the OMGs
          and the manager to supply the necessary resources.

     -    Aids Self-Management - employee can better monitor his/her own
          progress because the derivation of the goals is better understood.

     -    Two Heads are Better than One! - both the broader business view of the
          manager and the employee's familiarity with the nitty-gritty necessary
          to complete the objective are essential in formulating a meaningful,
          achievable goal.

Each OMG participant is expected to take a large share of the responsibility
for: developing his/her own objectives, preparing for the goal-setting meeting,
actively participating in the meeting itself, and in subsequent review meetings.

SUPERVISOR PREPARATION FOR OMG GOAL SETTING

     -    PURPOSE

              -    Let employee know the purpose and importance of this session

     -    EMPLOYEE PREPARATION

              -    Brief employee on relevant organizational/departmental goals

              -    Ask employee to review any pertinent information (job
                   description, last year's OMGs and reviews, appraisal, etc.)

              -    Ask employee to prepare tentative goals and give you a copy a
                   few days in advance of the meeting

              -    Prepare a similarly fashioned report

     -    TIME AND PLACE

              -    Indicate time and place of meeting (about 1-1/2 - 2 weeks in
                   advance)

     -    SUPPORTIVE STATEMENT

              -    Express your support and anticipation for a productive
                   session.

                                       9

<PAGE>
SUPERVISOR/PARTICIPANT MEETING

-    SET-UP

         -    Minimize interruptions and distractions

-    INTRODUCTION

         -    Put employee at ease by starting on a positive note regarding
              current performance, relationship, the operation, etc.

         -    Review purpose of session (to mutually plan employee's OMG's).

-    GOAL-SETTING

         -    (In advance, review employee's draft of OMG's, plan comments)

         -    Review drafted OMG's with employee; help identify weaknesses in
              content (e.g., low priority issue) and/or format (e.g. does not
              include measure or target date).

         -    Suggest changes or additions, solicit employee reactions and
              ideas. Make sure employee gets his/her say.

         -    Objectives are quantifiable.

-    INDICATE NEGOTIABLES AND NON-NEGOTIABLES

         -    Negotiate differences to a mutually agreeable level.

         -    Determine resources and assistance needed.

-    CLOSE

         -    Ask if employee has anything more to add.

         -    Ask for redrafting or retyping, as necessary.

         -    Indicate importance of meeting OMG's.

         -    Offer your assistance and express confidence in employee's ability
              to meet expectations.

                                       10
<PAGE>
KEY PARTS OF THE OMG

Each OMG must have six parts:

         -    Activity description

         -    Measure

         -    Target Date (for earlier phases and the final product)

         -    Limitations (if any)

         -    Value

         -    Weight (%) committed to OMG (for each part, if subdivided, and the
              whole goal)

Additionally, the OMG can be strengthened with a brief description of the
planned steps or methods needed to achieve the desired results. This is
especially useful for a new or project-oriented OMG, or one where it is
especially important to agree on needed resources before committing to the
objective.

GOAL SETTING STEPS:

    The following steps are necessary for developing a well-constructed goal:

        1.      Determine the overall intent or purpose of the goal. Just what
                is it you are trying to accomplish to help performance?

                    Example:   Reduce the number of computer jobs that fail
                               during production processing.

        2.      Plan a strategy for how you will go about accomplishing this
                goal.

                    Example:   Develop a quality assurance program to reduce
                               computer job failures.

        3.      Identify a work-related measure that will help you track your
                progress.

                    Example:   The number of jobs that fail versus the total
                               number of jobs that process.

        4.      Set a specific performance goal (a realistic target) that
                indicates how much and by when you can expect to meet the
                desired performance.

                    Example:   By 1 October decrease the computer job failure
                               rate from 10% to 5%.

        5.      Establish an approach for reaching the goal.

                    Example:  1. Establish a quality assurance team by 1 March.
                              2. Document quality assurance standards by 31 May.
                              3. Implement new quality assurance process by 15
                                 June.
                              4. Issue a follow-up report by 30 July.

                Each of your goals should have an approach defined which
                describes how you will achieve the end results. The approach
                identifies the milestones which serve as progress checkpoints of
                key activities leading toward achievement of the goals.

                                       11

<PAGE>

   Here are a few tips to help you choose meaningful milestones for your goal:

        -       The number of milestones you set should be limited to the few,
                crucial tasks which must be completed in order to reach your
                goal.

        -       Milestones should be set at regular intervals throughout the
                timeframe of a goal to serve as progress checkpoints. Beware of
                the common tendency to make milestones numerous and detailed in
                the short-term but fewer and much more vague further out on the
                goal timeline.

        -       Milestones should be tasks over which you have control or
                influence and completion of which is easy to observe.

WRITING GOAL STATEMENTS

Effective goal statements contain the following elements:

-       Unit of measure - WHAT specifically is to be improved?

              Examples:

                    Poor: Improve first-time quality

                    Better: Reduce the percentage of drill hole defects

-       Target - HOW MUCH improvement will there be? What is the specific level
        of performance desired?

             Examples:

                    From $275,000 to $130,000; from 7% to 4%; from 12 to 10 days

-       Achievement Date - WHEN will the improvement be accomplished?

             Examples:

                    By 1 July 2002; by year-end; during third quarter

                             GOAL STATEMENT EXAMPLE

        Decrease the (WHAT) percentage of rejected invoices

        from 4.3% to (HOW MUCH) 2.7% by (WHEN) 1 October 2002 saving

        (MEASURE & VALUE) one day every two weeks of the receivable clerks time.

                                       12
<PAGE>
Read through the items that follow and the analysis provided for each example.

EXAMPLE 1 - QUALITY CONTROL
To reduce the average amount of time lapse between testing and test engineers'
analysis reports by 3 days (from 5 days to 2 days) by July 1 without overtime.

         Activity Description:   To reduce time lapse between testing and
                                 test reports.

         Measure:                     By 3 days (from 5 days to 2 days).

         Target Date:                 Achieving 3 day reduction by July 1

         Limitations:                 Without overtime.

         Value:                       None?? This goal fails to define what
                                      benefit their change brings? Is it
                                      quantifiable?
EXAMPLE 2 - SALES

Increase sales of widgets from $1,000,000 in 2001 to $1,350,000 in 2002, through
targeted marketing campaign to be developed, completed and implemented by 4/l.

         Activity:                    Targeted Marketing Campaign

         Measure:                     Sales Increase by a Specific Amount

         Target Date:                 Year-end Sales Increase

         Limitations:                 None

         Value:                       $350,000 in Top Line Growth

EXAMPLE 3 - COST REDUCTION

Develop and implement a logistics plan which optimizes freight movement and
reduces current cost from $250,000 to $200,000 by year-end.

         Activity:                    A Logistics Plan

         Measure:                     Reduces Costs by a Target Amount

         Target Date:                 Year-End

         Limitations:                 None

         Value:                       Saves Division $50,000

                                       13

<PAGE>
TO SUMMARIZE, THE NUTS AND BOLTS OF WRITING GOOD GOALS ARE:

S - SPECIFIC

         -        Precisely stated

         -        Agreed to by both manager and employee

M - MEASURABLE

         -        Indicates end results -- not activities

         -        Quantified if possible (dollars, units, percents -- benchmark
                  against previous year).

         -        Subjective measurement included if necessary.

         -        Includes a target date (Oct. 31st, 3rd Quarter)

A - ACHIEVABLE

         -        Capable of being reached within the given time, with
                  obtainable resources, by the specific individual.

         -        Have some real "stretch".

C - COMPATIBLE

         -        Tied in to the business objectives of
                  department/group/business unit.

Those of you who are familiar with Sterling Institute's Careers in Management
program will recognize S - M - A - C. Sterling uses it in the context of
"action-planning", which of course is another term for goal-setting.

                                       14

<PAGE>
                         THE OMG ACTION STEPS AND FORMS

STEP 1

To begin the process each year, the participant will set his/her goals and each
goal's value in conjunction with his/her supervisor. They will be listed on the
back of Form A. The front of Form A will also be partially completed, which sets
out the individual's name, title, division, and target bonus percentage. Form A
should be typed by either the General Manager's secretary or the Human Resources
Department. Once completed, each division's forms are sent to Corporate
Administration by the due date.

STEP 2

At the mid-year meeting in July with the participant's manager, progress on each
objective is discussed. After this meeting, the manager will assign percentages
based upon his/her evaluation of the person's progress to date and anticipated
final achievement. The percentages will be recorded on the back of Form A.

STEP 3

In mid-January the Final Review and Evaluation takes place. For each goal, the
participant states clearly and succinctly his/her accomplishment against the
goal and rates his/her accomplishment numerically (for example, if the goal was
established at 30 points and the participant believes he/she achieved half of
the goal, it would be expressed as: "Achieved 15 out of 30"). The Supervisor
does likewise for each goal and sums the participant's achievements on all goals
(expressed as "Achieved 75 out of 100"). The results are recorded on the back of
Form B - Final Review Form. Also, the front of Form A is completed by entering
the participant's Base Annual Salary at 12/31 and the Final OMG Performance
Rating of Participant. All forms are submitted to the General Manager.

STEP 4

The General Manager evaluates his/her Business Unit's performance against the
following measures and submits a written summary/evaluation to the Management
Committee.

(a)      Sales growth

(b)      Return on capital employed

(c)      EBIT improvement

(d)      Sales per employee increase

(e)      Working capital reduction (as a percent of sales)

(f)      Cash generation

(g)      Strategic plan process and accomplishments

(h)      Compensation as a percent of sales

(i)      New product development / introduction / initiatives

(j)      New market initiatives / developments

(k)      People development

(l)      Total operating performance improvement

(m)      Incident and severity rate reduction

(n)      Continuous improvement initiatives / results

(o)      Cost reductions -- concrete / measurable

                                       15

<PAGE>
NOTE:             The thrust of all measures is continuous improvements.
                  However, where appropriate, the Management Committee will
                  look back multiple years to determine "real" improvement over
                  time. EBIT improvement will be measured after adjusting for
                  the total unit target bonus opportunity.

STEP 5

The General Manager submits his written business unit evaluation and each
participant's OMG review (completed Forms A and B, duplexed) to Corporate
Administration for distribution to the Management Committee.

STEP 6

The Management Committee reviews both the Individual's and Business Unit's
performance, assigns an overall performance rating to the latter, and submits
its recommendation to the Compensation Committee of the Board of Directors.

Note: Any Business Unit achieving 50% or less generally will not receive any
bonus award.

STEP 7

The Compensation Committee makes final determination and approves any awards
under the KIC process.

STEP 8

Once the Compensation Committee has made its determinations, Corporate
Administration will notify each Business Unit General Manager of the decisions
of both the Management Committee and the Board of Directors.

STEP 9

The General Manager will complete the front of Form A, entering the achievement
percentage and the participant's adjusted bonus payment.

The General Manager will also complete the comments section with an overview of
the operation's performance for the year (highlight missed opportunities and the
like) and a short statement relative to the participant's accomplishments,
attributes, etc.

Examples of each follow:

         The division had its finest year ever. Order input at over $9 million
         beat our goal by more than 15%, giving the division an excellent head
         start for $10 million sales next year. Sales beat budget by 12% and was
         actually 18% higher than the sales for last year.

         While the division moved more aggressively than it ever has in the
         sales area, it still was not able to shake its somewhat fractured
         approach to its markets. It requires a focused and forceful product
         rationalization effort on the part of the Sales and Marketing Staff.

         The cooperative efforts of Manufacturing, Quality and Engineering
         produced overall a 10% increase in product yield and were significant
         contributors to our success.

                                       16
<PAGE>
John Doe's goals in the areas of increased productivity and reduced raw stock
inventory were challenging and stretched both his critical thinking abilities
and people development skills. His work in cross-training personnel to improve
productivity will have long range effects and results will continue to be
reaped.

John has also proven through this year's goals that he can handle multiple
responsibilities with the proper amount of delegation. This was definitely a
growth year for John in terms of overall technical and managerial skills.

SUMMARY

This manual presents the rules, guidelines, some `low-to' suggestions, and forms
of the OMG/KIC process. However, the essence of our OMG/KIC process is to
provide an opportunity to make a difference individually and as a team and when
those efforts result in business unit growth and superior performance, to be
financially rewarded.

Following are some final thoughts on opportunity; on exhibiting superior
performance; on entitlement vs. delivering results; and on making a difference.

"Seek not for fresher founts afar, just drop your bucket where you are"

                                                   Sam Walter Foss

"The general tendency of things throughout the world is to render mediocrity the
ascendant power among mankind."

                                                   John Stuart Mill

"A man said to the universe: "Sir, I exist!" `However,'" replied the universe,
"The fact has not created in me a sense of obligation."

                                                   Stephen Crane

"The universe is not hostile, nor yet is it friendly. It is simply indifferent."

                                                   John Haynes Holmes

                                       17<PAGE>
                                                                   EXHIBIT 10.15

                       FIRST AMENDMENT TO CREDIT AGREEMENT

                  THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of December
19, 2002 (this "Amendment"), is among Kaydon Corporation (the "Company"), the
Subsidiary Borrowers set forth on the signature pages hereof (together with the
Company, the "Borrowers"), the Lenders set forth on the signature pages hereof
and Bank One, NA, as successor by merger with Bank One, Michigan, as L/C Issuer
and as Administrative Agent (in such capacity, the "Administrative Agent").

                                    RECITALS

                  A. Kaydon Corporation, the Subsidiary Borrowers set forth on
the signature pages hereof, the Lenders set forth on the signature pages hereof
and Bank One, Michigan, as L/C Issuer and as Administrative Agent are parties to
a Credit Agreement dated as of July 13, 1999 (the "Credit Agreement").

                  B. The Borrowers desire to amend the Credit Agreement, and the
Administrative Agent, the L/C Issuer and the Lenders are willing to do so in
accordance with the terms hereof.

                                      TERMS

                  In consideration of the premises and of the mutual agreements
herein contained, the parties agree as follows:

                  ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set
forth in Article III hereof, the Credit Agreement shall be amended as follows:

          1.1 The following definitions are added to Article I in appropriate
alphabetical order:

          "Accumulated Funding Deficiency" means any accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302 of
ERISA.

          "Cash Equivalent Investments" means (i) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the date of
acquisition thereof; (ii) investments in commercial paper maturing within 270
days from the date of acquisition thereof and, at such date of acquisition,
rated A-1 or better by S&P or P-1 or better by Moody's; (iii) investments in
certificates of deposit, banker's acceptances and time deposits maturing within
180 days from the date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000; (iv) fully collateralized
repurchase agreements with a term of not more than 30 days for securities
described in clause (i) above or rated A-1, AAA or better by S&P or P-1, Aaa or
better by Moody's and entered into with a financial institution satisfying the
criteria described in clause (iii) above; (v) shares of money market, mutual or
similar funds having assets in excess of $100,000,000 and rated AAA by S&P or
Aaa by Moody's, (vi) auction rate securities including municipal securities and
preferred stock with holding periods not to exceed 270 days and rated AAA by S&P
or Aaa by Moody's and (vii) in the case of any Foreign Subsidiary (in addition
to the items permitted by the foregoing clauses (i) through (vi)) any of the
following: (a) marketable direct obligations issued by, or unconditionally
guaranteed by, the sovereign nation in which such Foreign Subsidiary is
organized and is conducting business or issued

<PAGE>

by any agency of such sovereign nation and backed by the full faith and credit
of such sovereign nation, in each case maturing within one year from the date of
acquisition, so long as the indebtedness of such sovereign nation is rated at
least A by S&P or A2 by Moody's or carries an equivalent rating form a
comparable foreign rating agency and (b) investments of the type and maturity
described in clauses (iii) through (vi) above of foreign obligors, which
investments or obligors have ratings described in such clauses or equivalent
ratings from comparable foreign rating agencies.

          "Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.

          "Moody's" means Moody's Investors Service, Inc.

          "Prohibited Transaction" means a "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code.

          "S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.

          1.2 Clause (iii) of the definition of Consolidated Total Indebtedness
in Article I is restated as follows: "(iii) all reimbursement and similar
obligations under outstanding letters of credit or banker's acceptances in
respect of drafts or other claims which may be presented in the future or have
been presented and have not yet been paid and are not included in clause (i)
above, other than such obligations pursuant to commercial letters of credit
representing the deferred purchase price of property or services arising in the
ordinary course of business."

          1.3 Section 5.9 is restated as follows:

          5.9 ERISA. No Accumulated Funding Deficiency exists with respect to
any Single Employer Plan; each Single Employer Plan otherwise complies in all
respects with all applicable requirements of ERISA, the Code and all other
applicable laws and regulations; no Reportable Event or Prohibited Transaction
has occurred with respect to any Single Employer Plan; other than, in each of
the foregoing cases in this Section 5.9, such events and occurrences which, when
aggregated with all other such events and occurrences described in this Section
5.9, would not result in a Material Adverse Effect.

          1.4 Section 6.13 is restated as follows:

          6.13. Investments and Acquisitions. The Company will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments in, or
Acquisition of, any entity which is not or, will not be, consolidated in the
Company's consolidated financial statements except (i) such Investments and
Acquisitions not exceeding $20,000,000 in aggregate amount and (ii) Investments
in Cash Equivalent Investments, without limit as to amount.

          1.5 Section 6.16 is restated as follows:

          6.16. Affiliates. The Company will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (i) in the ordinary course of business and
pursuant to the reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable

                                      -2-
<PAGE>

terms no less favorable to the Company or such Subsidiary than the Company or
such Subsidiary would obtain in a comparable arms-length transaction and (ii)
transactions between or among any of the Borrowers and Guarantors not involving
any other Affiliates.

          1.6 Section 7.10 is restated as follows:

          7.10 ERISA. The occurrence of a Reportable Event; the Company or any
other member of the Controlled Group shall have been notified by the sponsor of
a Multiemployer Plan that it has incurred withdrawal liability to such
Multiemployer Plan; the Company or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA; provided, however, that this Section shall apply
only to events or occurrences which, when aggregated with all other events and
occurrences described in this Section, could result in a Material Adverse
Effect.

          1.7 Section 9.8 is amended by adding the following to the end of the
third sentence thereof: "in effect immediately before the relevant change in
Agreement Accounting Principles became effective until either such notice is
withdrawn or such covenant or any such defined term is amended in a manner
satisfactory to the Company and the Required Lenders."

                  ARTICLE II. REPRESENTATIONS. Each Borrower represents and
warrants to the Administrative Agent and the Lenders that:

                  2.1 The execution, delivery and performance of this Amendment
are within its powers, have been duly authorized and is not in contravention of
any statute, law or regulation or of any terms of its Articles of Incorporation
or By-laws or other charter documents, or of any material agreement or
undertaking to which it is a party or by which it is bound.

                  2.2 This Amendment is the legal, valid and binding obligation
of it, enforceable against it in accordance with the terms hereof, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.

                  2.3 After giving effect to the amendments contained herein,
the representations and warranties contained in Article V of the Credit
Agreement are true on and as of the date hereof with the same force and effect
as if made on and as of the date hereof.

                  2.4 After giving effect to the amendments contained herein, no
Default or Unmatured Default exists or has occurred and is continuing on the
date hereof.

                  ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall
not become effective until each of the following conditions is satisfied:

                                      -3-
<PAGE>

                  3.1 The Borrowers, the Guarantors and the Required Lenders
shall have signed this Amendment.

                  3.2 The Borrowers shall have delivered to the Administrative
Agent such other documents and satisfied such other conditions, if any, as
reasonably requested by the Administrative Agent.

                  ARTICLE IV.  MISCELLANEOUS.

                  4.1 The Company agrees to pay a work fee of $3,500 to each
Lender signing this Amendment on or before 5:00 p.m., Detroit time, on December
19, 2002, payable on or within two Business Days of the effective date of this
Amendment.

                  4.2 References in the Credit Agreement or in any other Loan
Document to the Credit Agreement shall be deemed to be references to the Credit
Agreement as amended hereby and as further amended from time to time.

                  4.3 The Borrowers agree to pay and to save the Administrative
Agent harmless for the payment of all reasonable documented costs and expenses
arising in connection with this Amendment, including the reasonable documented
fees of counsel to the Administrative Agent in connection with preparing this
Amendment and the related documents.

                  4.4 Except as expressly amended hereby, each Borrower and
Guarantor agrees that the Loan Documents and all other documents and agreements
executed by it in connection with the Credit Agreement in favor of the
Administrative Agent or any Lender are ratified and confirmed, as amended
hereby, and shall remain in full force and effect in accordance with their terms
and that they have no set off, counterclaim, defense or other claim or dispute
with respect to any of the foregoing. Terms used but not defined herein shall
have the respective meanings ascribed thereto in the Credit Agreement. This
Amendment may be signed upon any number of counterparts with the same effect as
if the signatures thereto and hereto were upon the same instrument, and
telecopied signatures shall be effective as originals.

                                      -4-
<PAGE>

                  IN WITNESS WHEREOF, the parties signing this Amendment have
caused this Amendment to be executed and delivered as of the day and year first
above written.

                             KAYDON CORPORATION

                             By: ____________________________________________

                            Title: __________________________________________

                             KAYDON RING AND SEAL, INC.
                             ELECTRO-TEC CORP.
                             THE COOPER SPLIT ROLLER BEARING
                               CORP.
                             INDUSTRIAL TECTONICS, INC
                             KAYDON ACQUISITION CORP. III
                             KAYDON ACQUISITION CORP. V
                             KAYDON ACQUISITION VII, INC.
                             GREAT BEND INDUSTRIES, INC.
                             KAYDON ACQUISITION IX, INC.
                             KAYDEE CORPORATION
                             KAYDON ACQUISITION X, INC.
                             KAYDON ACQUISITION XI, INC.
                             KAYDON ACQUISITION XII, INC.
                             KAYDON ACQUISITION XII, INC.
                             KAYDON ACQUISITION XIV, INC.

                             By: ____________________________________________

                             Title: ___________ of each of the entities
                                               above

                                      -5-
<PAGE>

                                  BANK ONE, NA, Individually as
                                  a Lender and as Administrative Agent

                                  By:
                                      -----------------------------------------

                                  Title:
                                         --------------------------------------

                                  WACHOVIA BANK, Individually as a Lender
                                  and as Syndication Agent

                                  By:
                                     ------------------------------------------

                                  Title:
                                        ---------------------------------------

                                  SUNTRUST BANK, TAMPA BAY, Individually
                                  as a Lender and as Documentation Agent

                                  By:
                                     ------------------------------------------
                                  Print Name:
                                              ---------------------------------
                                  Title:
                                        ---------------------------------------

                                  COMERICA BANK, Individually as a Lender
                                  and as Managing Agent

                                  By:
                                     ------------------------------------------

                                  Title:
                                        ---------------------------------------

                                  THE NORTHERN TRUST COMPANY

                                  By:
                                     ------------------------------------------

                                  Title:
                                        ---------------------------------------

                                  NATIONAL CITY BANK

                                  By:
                                     ------------------------------------------

                                  Title:
                                        ---------------------------------------

                                  THE BANK OF NEW YORK

                                  By:
                                     ------------------------------------------

                                  Title:
                                        ---------------------------------------

                                      -6-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}]]