Document:

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                        AMERICAN TECHNICAL CERAMICS CORP.

                           OFFICERS' PROFIT BONUS PLAN

         Officers' Profit Bonus Plan of American Technical Ceramics Corp., a
Delaware corporation (the "Corporation").

         WHEREAS, the Corporation has benefited from the efforts of its senior
corporate officers; and

         WHEREAS, the Corporation is desirous of continuing to retain and to
reward its senior corporate officers for their efforts on behalf of the
Corporation;

         WHEREAS, accordingly, in February 1992, the Corporation established the
American Technical Ceramics Officers' Profit Bonus Plan (as same may be amended
or modified from time to time in accordance with the terms hereof, this "Plan")
which has enabled eligible officers to participate in the profits of the
Corporation; and

         WHEREAS, the Corporation desirous of reducing the Plan to writing;

         NOW, THEREFORE, the terms of the Plan are as set forth herein.

                                    ARTICLE I

                               NATURE OF THE PLAN

         1.1  IN GENERAL. This Plan is intended to allow Eligible Officers (as
hereinafter defined) to share in the profits of the Corporation to the extent
provided in this Plan.

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         1.2 EXEMPTION FROM ERISA COVERAGE. This Plan is intended to be exempt
from the requirements of ERISA.

         1.3 EFFECTIVE DATE. This Plan has been in effect since in respect of
Fiscal Years beginning with the Fiscal Year ended June 30, 1992. It shall remain
in effect until terminated as provided herein.

                                   ARTICLE II

                                   DEFINITIONS

         2.1 "BOARD" or "BOARD OF DIRECTORS" shall mean the Board of Directors
of the Corporation.

         2.2 "BONUS PERCENTAGE" shall mean, for each Fiscal Quarter, the
percentage of the Profits of the Corporation in respect of such Fiscal Quarter
awarded to an Eligible Officer in accordance with Article IV hereof.

         2.3 "COMMITTEE" shall have the meaning set forth in Section 6.1 hereof.

         2.4 "CORPORATION" shall have the meaning set forth in the preamble
hereto.

         2.5 "DISTRIBUTION DATE" shall mean a date determined by the Committee
which shall be within fifteen days following the issuance of each news release
reporting the Corporation's quarterly earnings.

         2.6 "ELIGIBLE OFFICER" shall mean any Officer who is not an Excluded
Officer who is eligible to participate in the Plan in accordance with the
provisions of Article III of this Plan.

         2.7 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended ("ERISA").

                                      -2-

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         2.8 "EXCLUDED OFFICER" shall mean:

                  a. The President and the Chief Executive Officer of the
Corporation;

                  b. Any Officer who participates in another bonus plan
maintained by the Corporation or who otherwise is entitled to a bonus or an
incentive or contingent payment which does not include as an element thereof
participation in this Plan, unless such Officer is expressly permitted by the
Board or the Committee to participate in this Plan; and

                  c. Any other Officer who the Board or the Committee may
designate from time to time as an Excluded Officer.

         2.9 "FISCAL QUARTER" shall mean each of the fiscal quarters of the
Corporation which currently end on March 31, June 30, September 30 and December
31 of each Fiscal Year.

         2.10 "FISCAL YEAR" shall mean the fiscal year of the Corporation which
currently begins on July 1 and ends on the following June 30.

         2.10 "LOSS" shall mean the net loss of the Corporation for a Fiscal
Quarter before provisions for federal, state and local income taxes as reflected
in its financial statements for such Fiscal Quarter prepared in accordance with
generally accepted accounting principles.

         2.11 "OFFICER" shall mean the, the Chief Financial Officer, Chief
Operating Officer and any Vice President of the Corporation. Holding more than
one office does not entitle an individual to more than one award under this
Plan.

         2.12 "PLAN" shall have the meaning set forth in the third recital
hereto.

         2.12 "PROFITS" shall mean the net income of the Corporation for a
Fiscal Quarter before provision for federal, state and local income taxes as
reflected in its financial statements for such Fiscal Quarter prepared in
accordance with generally accepted accounting principles.

                                      -3-

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                                   ARTICLE III

                                   ELIGIBILITY

         3.1 ELIGIBILITY REQUIREMENTS. Subject to Section 3.2 of this Plan, all
Officers of the Corporation, other than Excluded Officers, who were Officers on
or before the first day of any Fiscal Quarter shall be eligible to participate
in the Plan for such Fiscal Quarter. Any questions concerning a Officer's status
for purposes of participating in the Plan shall be determined by the Committee
(or, if no Committee has been appointed, the Board) in its sole discretion.

         3.2 CHANGE IN STATUS. For purposes of this Plan, an employee or
Excluded Officer who, as a result of a change in employment status or otherwise,
becomes an Officer or is no longer an Excluded Officer shall become eligible to
participate in the Plan on the first day of the next Fiscal Quarter after such
change in status. An Officer who, as a result of a change in employment status
or otherwise, is no longer an Officer or who becomes an Excluded Officer, shall
cease his or her participation in this Plan on the date his or her status
changes. If an Officer ceases to be an Officer or becomes an Excluded Officer on
or prior to the last day of any Fiscal Quarter, he or she shall not be eligible
to participate in this Plan in respect of such Fiscal Quarter unless the Board,
in its sole discretion, determines otherwise. If, however, an Officer ceases to
be an Officer or becomes an Excluded Officer after the last day of a Fiscal
Quarter, he or she shall still be eligible to participate in this Plan with
respect to the Fiscal Quarter just concluded, provided he or she is still
employed by the Corporation on the applicable Distribution Date.

                                      -4-

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                                   ARTICLE IV

                         DETERMINATION OF THE BONUS POOL

         4.1 DETERMINATION OF BONUS PERCENTAGE. The Board, in its sole
discretion, shall determine the Bonus Percentage in respect of each Fiscal
Quarter to which each Eligible Officer shall be entitled. Such determination may
be made prior to, during or after the end of each Fiscal Quarter, although it is
expected that, in general, said percentage will be determined prior to the
commencement of the applicable Fiscal Quarter. In no event shall the aggregate
Bonus Percentage of all Eligible Officers in respect of any Fiscal Quarter
exceed 5%. The Board, for any reason or for no reason, in its sole discretion,
may elect not to contribute any of the Profits in respect of any Fiscal Quarter
to the Plan regardless of the level of Profits.

         4.2 TREATMENT OF LOSSES. In the event that the Corporation sustains
Losses, rather than Profits, in any Fiscal Quarter, no bonuses shall be payable
in respect of such Fiscal Quarter under this Plan. In addition, unless otherwise
determined by the Board, should the Corporation sustain a Loss in any Fiscal
Quarter, such Loss shall be applied to the first succeeding Fiscal Quarter
during the same Fiscal Year in which the Corporation realizes Profits, such
that, for purposes of calculating bonuses in such Fiscal Quarter, the amount of
such Profits shall be reduced by the amount of any Losses not previously applied
in such manner. Losses incurred in a Fiscal Quarter during a Fiscal Year shall
not be applied to reduce Profits in any Fiscal Quarter other than a Fiscal
Quarter falling within the same Fiscal Year. Any ambiguities regarding the
Corporation's Profits or Losses in respect of any Fiscal Quarter shall be
resolved by the Board, in its sole discretion.

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                                    ARTICLE V

                       PAYMENT OF BONUSES; TITLE TO FUNDS

         5.1 PAYMENT OF BONUSES. The bonuses determined in accordance with the
provisions of this Article V shall be paid to Eligible Officers on or before
each Distribution Date.

         5.2 TITLE TO FUNDS. Title to all funds under this Plan shall remain in
the Corporation until said funds are actually distributed. The existence of this
Plan or any allocation of funds shall not create any title or vested interest in
any separate fund by any Officer.

                                   ARTICLE VI

                           ADMINISTRATION OF THE PLAN

         6.1 APPOINTMENT OF COMMITTEE. The Plan shall be administered by the
Board. Alternatively, the Board may appoint a committee of not less than two
persons (who need not be directors but who shall not be eligible to participate
in this Plan) who shall be responsible for the administration and operation of
this Plan and who shall have the duties, responsibilities and powers set forth
in this Article VI (the "Committee").

         6.2 DUTIES AND RESPONSIBILITIES OF THE COMMITTEE. If appointed, the
Committee shall have, without limitation, the following responsibilities:

                  a.  Determination of Eligible Officers;

                  b.  Distribution of funds to Eligible Officers in accordance
                      with the terms of this Plan;

                  c.  Establishing administrative rules and regulations of this
                      Plan as necessary or appropriate;

                  d.  Resolving disputed issues and determining claims for
                      benefits; and

                                      -6-

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                  e.  Resolving any ambiguities arising under the Plan
                      concerning its operation and administration.

         6.3 RESERVATION OF RIGHTS BY BOARD. The Committee shall have no
authority to (i) change any Bonus Percentage established by the Board, (ii)
resolve ambiguities concerning the amount of the Corporation's Profits or
Losses, or (iii) amend or terminate this Plan, which determinations shall be
made solely by the Board.

         6.4 NO DUTY OF ENFORCEMENT. The Committee shall have no obligation to
enforce the payment of any funds to any Eligible Officer and such payment shall
be the sole responsibility of the Corporation.

         6.5 INDEMNIFICATION. The Corporation shall indemnify the Committee and
its individual members for their actions performed in connection with the
administration and operation of this Plan to the full extent provided by the
Certificate of Incorporation and By-Laws of the Corporation and by applicable
law.

                                   ARTICLE VII

                                  MISCELLANEOUS

         7.1 AMENDMENT OR TERMINATION. The Plan may be amended or terminated by
the Board at any time in its sole discretion.

         7.2 GENDER OR NUMBER. Except as otherwise clearly indicated by context,
words in the masculine gender shall be deemed to include the feminine gender and
vice versa. Words in the singular form shall be deemed to include the plural
form and vice versa.

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         7.3 CONTROLLING STATE LAW. This Plan shall be construed and enforced
according to the laws of the State of New York.

         7.4 NO CONTRACT OF EMPLOYMENT. Neither participation in the Plan,
establishment of the Plan or any modification thereof, nor payment of any
benefit, shall give any Officer the right to be retained in the employ of the
Corporation.

         7.5 NOTICES. All notices to the Corporation, the Board and the
Committee shall be delivered to such party at the following address:

         American Technical Ceramics Corp.
         One Norden Lane
         Huntington Station, New York 11746
         Attention: Kathleen M. Kelly, Vice President - Administration

                                    * * * * *

                                      -8-

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         IN WITNESS WHEREOF, American Technical Ceramics Corp. has caused these
presents to be executed by its officers duly authorized this ___ day of
________, 2003.

                                            AMERICAN TECHNICAL CERAMICS CORP.

                                            BY:_________________________________
                                                  Victor Insetta, President

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                               SEVERANCE AGREEMENT

         THIS SEVERANCE AGREEMENT is made and entered into effective as of the
first day of November, 2003 by and between AMERICAN TECHNICAL CERAMICS CORP., a
Delaware corporation (the "Company"), and KATHLEEN M. KELLY, residing at 60 Ruth
Street, Smithtown, NY 11787 ("Employee").

         WHEREAS, Employee has been and is currently employed by the Company as
an executive officer; and

         WHEREAS, to induce Employee to remain in the Company's employ, the
Company has agreed to provide Employee with certain benefits in the event of the
termination of Employee's employment with the Company under certain
circumstances;

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

         1. Definitions. For purposes of this Severance Agreement, the following
terms shall have the following meanings:

         "Cause" shall mean (a) Employee's conviction of a felony or other crime
of moral turpitude, (b) Employee's commission of any act or omission to take any
action in bad faith to the material detriment of the Company or any present of
future parent, subsidiary or affiliate of the Company, or (c) Employee's willful
failure or refusal to perform any duties consistent with her position assigned
from time to time which failure or refusal continues for a period of 10 days or
more after Employee has received notice of same from the Company.

         "Change of Control" shall mean the occurrence of any person (as defined
in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended ("the
Exchange Act")) or group (as defined in Section 13(d)(3) and 14(d)(2) of the
Exchange Act of persons, other than Victor Insetta, acquiring more than 50% of
the voting power of the Company, including by way of merger, consolidation or
otherwise.

         "Good Reason" shall mean after a Change of Control, (a) the assignment
to Employee of duties materially and adversely inconsistent with Employee's
status and position or a material and adverse alteration in the nature of
Employee's duties and/or responsibilities, reporting obligations, titles or
authority, (b) a reduction by the Company in Employee's aggregate compensation
or a failure by the Company to pay any such amounts when due; or (c) the
Company's failure to substantially provide any material employee benefits due to
be provided to Employee; or (d) the relocation of Employee to a location other
than the Company's facilities in Huntington Station, New York, without
Employee's consent.

         2. Severance. If Employee's employment with the Company is terminated
by the Company for any reason other than for Cause or if Employee's employment
with the Company is terminated by Employee for Good Reason, then:

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              (a) the Company shall continue to pay Employee her base salary at
her then current rate for the number of months equal to the sum of the number of
years Employee has been an officer of the Company, plus three, up to a maximum
of 15 months (such period, the "Severance Period");

              (b) during the Severance Period, the Company shall continue to
provide Employee and Employee's family with medical insurance coverage of the
nature and in the amount of the coverage provided at the time of termination;
and

              (c) Employee shall be entitled to exercise all stock options which
have vested on or prior to the effective date of termination until the earlier
of the expiration of the Severance Period and the period during which such
options would have been exercisable but for the termination of employment.

         For purposes of the foregoing, the number of years Employee has been an
officer of the Company will be calculated by reference to the date on which she
was first elected to office by the Company's board of directors (i.e., September
12, 1989) and by rounding up for any partial year served over five months. By
way of example only, if Employee served the Company as an officer for three
years and four months, the number of years for which Employee would be given
credit in subparagraph (a) above is three, but if Employee served the Company as
an officer for three years, five months and one day, the number of years for
which Employee would be given credit in subparagraph (a) above is four.

         3. Miscellaneous.

              (a) Successors and Assigns. This Severance Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors, heirs, personal representatives, legal representatives, and assigns;
provided, that no rights or obligations of the Company under this Severance
Agreement may be assigned or transferred except that, without limiting
Employee's rights under this Severance Agreement, upon a Change of Control, the
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Severance Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place.

              (b) Usage. As used in this Severance Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets (by merger, purchase or otherwise) provided for in Section 3(a) or
which otherwise becomes bound by all the terms and provisions of this Severance
Agreement by operation of law.

              (c) Tax Withholding and Deductions. Payments to Employee of all
compensation contemplated under this Severance Agreement shall be subject to all
applicable legal requirements of federal, state, local and foreign taxing
authorities with respect to the withholding of taxes. Notwithstanding any
amounts withheld pursuant to the foregoing, Employee shall be responsible for
the payment of all applicable income tax and other tax liability, if any, on all
compensation paid to her under the terms of this Severance Agreement, other than
the Company's share of social security and similar taxes.

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              (d) Amendment; Waiver. This Severance Agreement may not be
modified, amended or waived in any manner except by an instrument in writing
signed by the parties hereto. The waiver by either party of compliance with any
provision of this Severance Agreement by the other party shall not operate or be
construed as a waiver of any other provision of this Severance Agreement, or of
any subsequent breach by such party of a provision of this Severance Agreement.

              (e) Severability. The provisions of this Severance Agreement shall
be deemed severable, and the invalidity or unenforceability of any one or more
of the provisions hereof shall not affect the validity and enforceability of the
other provisions hereof.

              (f) Notices. Any notice required to be given hereunder shall be
sufficient if in writing, and shall be deemed duly given (a) when delivered
personally, (b) one business day after being deposited with a nationally
recognized overnight courier service (with proof of service), and (iii) three
days after being mailed by certified or registered mail (return receipt
requested and first-class postage prepaid), in the case of Employee, to her
residence (as set forth on the first page of this Severance Agreement), and, in
the case of the Company, to its principal office to the attention of the
President, or in each case, at such other address as either party may notify to
the other in writing.

              (g) Governing Law. This Severance Agreement shall be construed and
enforced in accordance with the laws of the State of New York. The courts of
such state shall have exclusive jurisdiction over all controversies arising out
of or in connection with this Severance Agreement. The parties consent to
personal jurisdiction in the courts of Suffolk County, New York and agree that
process may be served upon them in any such action by registered mail or
personally within or without such state.

              (h) Entire Agreement. This Severance Agreement constitutes the
entire agreement of the parties and embodies all the representations and
warranties which have been made between them with respect to the subject matter
hereof. All previous agreements or understandings between the parties hereto,
whether in writing or oral, are merged into this Severance Agreement. This
Severance Agreement may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought.

              (i) Headings. The section headings in this Severance Agreement are
for convenience only and shall not be used to interpret or construe its
provisions.

              (j) Counterparts. This Severance Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. This Severance Agreement
may be delivered by facsimile, and facsimile signatures shall be treated as
originals for all applicable purposes.

         {The remainder of this page is left intentionally blank. Signature
page(s) to follow.}

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         IN WITNESS WHEREOF, the parties hereto have executed this Severance
Agreement as of the date and year first above written.

                                       AMERICAN TECHNICAL CERAMICS CORP.

                                       By: /S/VICTOR INSETTA
                                           -------------------------------------
                                           Victor Insetta, President and
                                           Chief Executive Officer

                                       /S/KATHLEEN M. KELLY
                                       -----------------------------------------
                                       Kathleen M. Kelly

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