Document:

Exhibit 4.2

This
Security is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a nominee
thereof.  This Security may not be
transferred to, or registered or exchanged for Securities registered in the
name of, any Person other than the Depository Trust Company or a nominee
thereof and no such transfer may be registered, except in the limited
circumstances described in the Indenture. 
Every Security authenticated and delivered upon registration or transfer
of, or in exchange for or in lieu of, this Security shall be a Global Security
subject to the foregoing, except in such limited circumstances.

UNLESS
THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

CARLISLE COMPANIES INCORPORATED

$150,000,000

6
1/8 % Notes Due 2016

	
  No. 1

  	
  CUSIP 142339AC4

  

 

Principal Sum: ONE
HUNDRED FIFTY MILLION DOLLARS ($150,000,000)

Certain
capitalized terms used by not defined herein shall have the meanings given to
them in the Indenture under which this Security is issued.

Carlisle
Companies Incorporated, a Delaware corporation (herein called the “Company,”
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the Principal Sum specified above, as may reduced
from time to time pursuant to Schedule A hereto, on August 15, 2016,
unless earlier redeemed or repaid as herein provided, and to pay interest, if
any, thereon from August 18, 2006 or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually on February
15 and August 15 in each year, commencing February 15, 2007 until the principal
hereof is paid or made available for payment at the rate per annum of 6 1/8
%.  The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Record Date for such interest, which shall be the February 1 or August 1
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.  Any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.

 

Payment
of the principal of and interest on this Security will be made by transfer of
immediately available funds to a bank account in the Borough of Manhattan, the
City of New York designated by the holder in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts.

REFERENCE
IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE
REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME
EFFECT AS IF SET FORTH AT THIS PLACE.

Unless
the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

[SIGNATURE PAGE FOLLOWS]

 

IN WITNESS WHEREOF, the
Company has caused this instrument to be signed manually or by facsimile by its
duly authorized officer.

Dated: August 18, 2006

	
  

  	
  CARLISLE COMPANIES INCORPORATED

  
	
   

  	
   

  
	
  [CORPORATE SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Carol P. Lowe

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  

 

 

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

This
is one of the Securities of the series designated herein and referred to in the
within-mentioned Indenture.

THE BANK OF NEW YORK
TRUST COMPANY, N.A.,

as Series Trustee

	
  By: 

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

 

[REVERSE
OF SECURITY]

This Security is one of a duly authorized issue of Securities of the
Company designated as its “6 1/8 % Notes Due 2016” (herein called the “Securities”),
limited in aggregate principal amount to $150,000,000 issued and to be issued
under an Indenture, dated as of January 15, 1997, between the Company and U.S.
Bank National Association (as successor in interest to State Street Bank and
Trust Company, as successor in interest to Fleet National Bank), as Trustee, as
amended and supplemented by the First Supplemental Indenture, dated as of
August 18, 2006, among the Company, U.S. Bank National Association, as Original
Trustee, and The Bank of New York Trust Company, N.A., as Series Trustee,
herein called the “Trustee” which term includes any successor trustee under the
Indenture (collectively, the “Indenture”), to which indenture and all
indentures supplemental thereto referenced is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are and are to be, authenticated and delivered.

The Securities shall be redeemable, in whole or in part, at the Company’s option at any time (a “Redemption Date”). The redemption price (the “Redemption Price”) will be equal to the greater of (i) 100% of the principal amount of any Securities being redeemed; or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 20 basis points.  In addition, in each case, accrued and unpaid interest, if any, will be paid to the Redemption Date. Notwithstanding the foregoing, installments of interest on Securities that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to the registered holders as of the close of business on the relevant record date in accordance with the Securities and the Indenture.  The Company will mail notice by first-class mail of any redemption at least 30 days, but not more than 60 days, before the Redemption Date to each registered holder of the Securities to be redeemed. Once the notice is mailed, the Securities called for redemption will become due and payable on the Redemption Date and at the applicable Redemption Price, plus accrued and unpaid interest to the Redemption Date.  On and after the Redemption Date, interest will cease to accrue on the Securities or any portion of the Securities called for redemption (unless the Company defaults in the payment of the Redemption Price and accrued interest). On or before the Redemption Date, the Company will deposit with a paying agent (or the Trustee) money sufficient to pay the Redemption Price of and accrued interest on the Securities to be redeemed on that date. If less than all of the Securities are to be redeemed, and the Securities are Global Securities, the Securities to be redeemed will be selected by the Depositary Trust Company (“DTC”), as the Depositary by lot. If the Securities to be redeemed are not Global Securities then held by the DTC, the Securities to be redeemed will be selected by the Series Trustee by a method the Series Trustee deems to be fair and appropriate.
“Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
“Comparable Treasury Issue” means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Securities to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Securities.

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“Comparable Treasury Price” means, with respect to any Redemption Date, (A) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (B) if the Trustee is provided with fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations or (C) if only one Reference Treasury Dealer Quotation is received, such quotation.
“Independent Investment Banker” means Banc of America Securities LLC, Citigroup Global Markets Inc. or another independent investment banking institution of national standing appointed by the Company.

“Reference Treasury Dealer”
means (A) any of Banc of America Securities LLC, Citigroup Global Markets Inc. and two other
primary U.S. Government securities dealers selected by the Company (each a ‘‘Primary
Treasury Dealer’’), and their respective successors, but if any of the
foregoing ceases to be a Primary Treasury Dealer, we will appoint another
Primary Treasury Dealer.

“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing and the Trustee by such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third business day preceding such Redemption Date.
Upon the occurrence of a Change of Control Triggering Event (as defined below), the Company shall notify the Trustee, and make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of each Holder’s Securities of such series at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event, the Company shall, or shall cause the Trustee to, mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control Triggering Event and stating: (1) that the Change of Control Offer is being made pursuant to the terms of this Security and that all Securities of such series properly tendered will be accepted for payment; (2) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”); (3) that any Security of such series not tendered will continue to accrue interest; (4) that, unless the Company defaults in the payment of the Change of Control Payment, all Securities of such series accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5) that Holders electing to have any Securities of such series, with the form entitled “Option of Holder to Elect Purchase” attached as Exhibit 1 to this Security completed, purchased pursuant to a Change of Control Offer will be required to surrender such Securities to the Trustee or paying agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date; (6) that Holders will be entitled to withdraw their election if the Trustee or paying agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Securities of such series delivered for purchase, and a statement that such Holder is withdrawing his election to have such Securities purchased; and (7) that Holders whose Securities of such series are being purchased only in part will be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 thereof. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Securities of such series in connection with a Change of Control Triggering Event. To the extent that the provisions of any securities laws or

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regulations conflict with the provisions of this paragraph or the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this paragraph or the Indenture by virtue of such conflict.  On the Change of Control Payment Date, the Company shall, to the extent lawful: (1) accept for payment all Securities of such series or portions thereof properly tendered pursuant to the Change of Control Offer, (2) deposit with the Trustee or paying agent an amount equal to the Change of Control Payment in respect of all Securities of such series or portions thereof properly tendered and (3) deliver or cause to be delivered to the Trustee the Securities of such series properly accepted together with an Officers’ Certificate stating the aggregate principal amount of such Securities or portions thereof being purchased by the Company. The paying agent shall promptly mail to each Holder of Securities of such series properly tendered the Change of Control Payment for such Securities, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Security equal in principal amount to any unpurchased portion of the Securities surrendered by such Holder, if any; provided, that each such new Security shall be in a principal amount of $2,000 or an integral multiple of $1,000 thereof. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.  The Company will not be required to make a Change of Control Offer upon a Change of Control Triggering Event if a third Person makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this paragraph and all other provisions of the Indenture applicable to a Change of Control Offer made by the Company and purchases all Securities of this series properly tendered and not withdrawn under such Change of Control Offer.

‘‘Change of Control Triggering Event’’ means the occurrence of both a
Change of Control and a Below Investment Grade Rating Event.

“Below Investment Grade Rating Event” means the Securities of such
series are rated below an Investment Grade Rating by each of the Rating
Agencies on any date from the date of the public notice of an arrangement that
could result in a Change of Control until the end of the 60-day period
following public notice of the occurrence of the Change of Control (which
60-day period shall be extended so long as the rating of the Notes is under
publicly announced consideration for possible downgrade by any of the Rating
Agencies).

“Capital Stock” means: (1) in the case of a corporation, corporate
stock; (2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock; (3) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person, but excluding from all of the foregoing any debt securities
convertible into Capital Stock, whether or not such debt securities include any
right of participation with Capital Stock.

“Change of Control” means the occurrence of any of the following: (1)
the direct or indirect sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Company and the Company’s subsidiaries taken as a whole to any “person” (as
that term is used in Section 13(d)(3) of the Exchange Act) other than the
Company or one of the Company’s subsidiaries; (2) the adoption of a plan
relating to a liquidation or dissolution of the Company; (3) the consummation
of any transaction (including, without limitation, any merger or consolidation)
the result of which is that any Person (as defined below) becomes the
beneficial owner, directly or indirectly, of more than 50% of the then
outstanding number of shares of the Company’s Voting Stock; or (4) the first
day on which a majority of the members of the Board of Directors are not
Continuing Directors.  “Person” means any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated

 R-3
 

 

organization,
limited liability company, government or any agency or political subdivision
thereof or any other entity.

“Continuing Directors” means a director who either was a member of the
Board of Directors on August 15, 2006 or who becomes a director subsequent to
that date and whose nomination for election by the Company’s stockholders,
appointment or other election, is duly approved by a majority of the continuing
directors on the Board of Directors at the time of such approval, either by a
specific vote or by approval of the proxy statement issued by the Company on
behalf of the entire Board of Sirectors in which such individual is named as
nominee for director.

“Investment Grade Rating” means a rating equal to or higher than Baa3
(or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P.

“Rating Agency” means each of S&P and Moody’s, or if S&P or
Moody’s or both shall not make a rating on the Notes publicly available, a
nationally recognized statistical rating agency or agencies, as the case may
be, selected by the Company (as certified by a resolution of the Board of
Directors) which shall be substituted for S&P or Moody’s, or both, as the
case may be. “Moody’s” means Moody’s Investors Service, Inc.  “S&P” means Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc.

“Voting Stock” of any specified Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote generally in the
election of the board of directors of such Person.

If an Event of Default shall occur with respect to the Securities and
be continuing, the principal of all the Securities may be declared due and
payable in the manner and with the effect provided in the Indenture.

The Indenture contains provisions for defeasance of (a) the entire
indebtedness of this Security and (b) certain restrictive covenants and Events
of Default with respect to this Security, in each case upon compliance by the
Company with certain conditions set forth in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding.  The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences.  Any such consent or
waiver by the holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
thereof, whether or not notation of such consent or waiver is made upon this
Security.

No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.

This Global Security or portion hereof may not be exchanged for
Definitive Securities except in the limited circumstances provided in the
Indenture.

 R-4
 

 

The Securities are issuable only in registered form without coupons in
denominations of $2,000 and any integral multiple of $1,000 in excess
thereof.  As provided in the Indenture
and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by a Holder surrendering the same.

No service charge shall be made for any such registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.

In the event that (i) the Depositary or another
depositary in respect of the Securities of this series, as the case may
be, notifies the Company that it
is unwilling or unable to continue as a depository and a successor depository
is not appointed by the Company within 60 days of such notice, (ii) the
Depositary with respect to such Global Securities so requests following an
Event of Default under this Indenture or (iii) the owner of a beneficial
interest in the Global Securities requests such exchange in writing delivered
through the Depositary or the Company following an Event of Default under this
Indenture, then the Holder hereof shall
surrender this Global Security to the Trustee for cancellation and whereupon, in accordance with Section 3.05 of
the Indenture, the Company will execute and the Trustee will authenticate and
deliver Securities of this series in definitive registered form without
coupons, in denominations of $2,000
and any integral multiple of $1,000 in excess thereof, and in an aggregate principal amount equal to the principal
amount of this Global Security at the time outstanding in exchange for this
Global Security.

Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not any amount due in respect
to this Security be overdue, and none of the Company, the Trustee or any such
agent shall be affected by notice to the contrary.

The Securities
shall be governed by and construed in accordance with the laws of the State of
New York.

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SCHEDULE A

 

SCHEDULE
OF PRINCIPAL SUM REDUCTIONS

 

Principal Sum outstanding
as of August 18, 2006: $150,000,000  

 

Thereafter, the following decreases have been made:   

 

	
  Date of

  Redemption or

  Repurchase

  	
  Principal Amount

  Redeemed or

  Repurchased

  	
  Principal Amount

  Remaining

  	
  Notation Made by or on

  Behalf of

  the Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

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EXHIBIT 1

OPTION OF HOLDER TO ELECT PURCHASE

The
undersigned hereby elects optional redemption of Carlisle Companies
Incorporated, 6 1/8 % Notes due 2016, No. 1, CUSIP No. 142339AC4 (the
portion thereof specified below) with the effect provided in said Security by
delivering this form of “Option of Holder to Elect Purchase” duly completed by
the Holder of said Security to the Trustee at The Bank of New York Trust Company, N.A., 10161 Centurion Parkway,
Jacksonville, FL 32256, Attention: Corporate Trust Administration or
such other address of which Carlisle Companies Incorporated shall from time to
time notify the Holders of the Securities.

Specify
the portion of said Security (which shall be U.S. $2,000 or an integral
multiple of U.S. $1,000 in excess thereof, which may be all or part of the
Holder’s interest in said Security) as to which the Holder elects optional
redemption:

U.S.$___________________.

Dated: 
______________________________

Signature:___________________________________

NOTE:  The signature to this
notice must correspond with the name as written upon the face of the within
Global Security in every particular without alteration or enlargement or any
change whatsoever and must be guaranteed by a commercial bank or trust company
having its principal office or correspondent in The City of New York or by a
member of the New York Stock Exchange.

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FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers

unto___________________________________________________________________________

_______________________________________________________________________________

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

_______________________________________________________________________________

(Print or Type Name and Address including Zip Code of Assignee)

the within Global Security, and all rights thereunder, hereby
irrevocably constituting and appointing

________________________________________________________________attorney
to transfer said Global Security on the books of the Company, with full power
of substitution in the premises.

Dated__________________

NOTE:  The signature to this
assignment must correspond with the name as written upon the face of the within
Global Security in every particular without alteration or enlargement or any
change whatsoever and must be guaranteed by a commercial bank or trust company
having its principal office or correspondent in The City of New York or by a
member of the New York Stock Exchange.

 R-8Exhibit 10.1

UNITED INDUSTRIAL CORPORATION

EMPLOYMENT AGREEMENT

FREDERICK M. STRADER

EMPLOYMENT
AGREEMENT (this “Agreement”) made as of this 16th day of August, 2006 by
and between UNITED INDUSTRIAL CORPORATION, a Delaware corporation having an
address 124 Industry Lane, Hunt Valley, Maryland 21030 (hereinafter called “Employer”),
and FREDERICK M. STRADER, having an address at 501 Whithorn Court, Timonium, MD
21093 (hereinafter called “Employee”).

W I T N E S S E T
H:

           In consideration of the mutual
covenants hereinafter contained, the parties hereto agree as follows:

1.             Employment. 
Employer agrees to employ Employee and Employee agrees to serve Employer
upon the terms and conditions hereinafter set forth.

2.             Term.  The
term of Employee’s employment under this Agreement shall commence on August 1,
2006 (the “Effective Date”) and, subject to the provisions of Sections 5
and 6 hereof, terminate as of the close of business on March 31, 2010 (the “Scheduled
Termination Date”, and such year, the “Initial Term”); provided,
that the term of this Agreement shall automatically renew for successive one
(1) year terms (each, a “Renewal Term”, and each of the Initial Term and
each Renewal Term, a “Compensation Year”) unless either party gives
written notice of non-renewal to the other at least sixty (60) days prior to
the end of the Initial Term or Renewal Term, as applicable.  The period from the Effective Date through
the date of termination of Employee’s employment hereunder is referred to as
the term of this Agreement.  This
Agreement shall be of no force or effect if Employee’s current employment by
AAI Corporation (“AAI”), a subsidiary of Employer, is terminated for any
reason whatsoever prior to the Effective Date.

3.             Duties and Extent of Services.

(a)  Employee agrees to serve Employer and,
consistent with his position, its subsidiaries faithfully and to the best of
his ability under the direction of the Board of Directors of Employer, devoting
his entire business time, energy and skill to his full time employment duties
hereunder; provided, that subject to the approval of the Board of
Directors of Employer, Employee may serve on the board of directors of
companies other than Employer and its subsidiaries.  The principal place of employment of Employee
shall be at the offices of AAI, which are currently located in Hunt Valley,
Maryland.  Employee understands and
agrees, however, that in connection with his employment hereunder, he may be
required from time to time to travel on behalf of Employer.

(b)  The principal duties of Employee shall be to
serve as President and Chief Executive Officer of Employer and AAI and, in such
capacity, to render such managerial, administrative and other services to
Employer and AAI and their subsidiaries as normally are associated with and
incident to such positions as Employer from time to time may require of
him.  If, during the term of this
Agreement, the Board of Directors of Employer so determines, in 

 1
 

 

its absolute discretion,
to elect Employee to any additional office of Employer or its subsidiaries
consistent with his position, or a director of Employer or its subsidiaries,
Employee agrees to accept and serve in such office or capacity, for no
additional compensation or remuneration. 
Employee hereby acknowledges that as of the Effective Date, Employee
currently serves as a director of Employer and Employee shall not be entitled
to any additional compensation for such service.  If Employee is elected a director of
Employer, he agrees to resign as a director if so requested by the Board of
Directors of Employer, following the termination of his employment by Employer
for any reason.

4.             Compensation.

(a)  Base
Compensation.  Employer agrees
to pay to Employee, as compensation for all of the services to be rendered by
Employee under or pursuant to this Agreement, a salary (“Base Compensation”)
at the annual rate of $550,000, which amount shall be payable in accordance
with the normal payroll practices of Employer. 
Employee shall be reviewed annually (with the first such review to be in
March 2007) and shall be entitled to such increases in Base Compensation as the
Board of Directors may determine in its discretion.

(b)  Incentive
Compensation.  Employee shall
also be entitled to participate in Employer’s Performance Sharing Plan (or such
other similar bonus or incentive plan approved by Employer’s Board of Directors
and its Compensation Committee), that will afford Employee an opportunity to
earn incentive compensation (“Incentive Compensation”) of (x) up to 100%
(with a target of 50%) of his Base Compensation, based upon meeting certain
goals and benchmarks (the “Base Incentive Compensation”), or, in lieu
thereof, (y) such greater amount as the Board of Directors may determine in its
discretion (the “Increased Incentive Compensation”).  It is the intent of Employer that any
incentive compensation awarded pursuant to this Section 4(b) shall be paid
under a plan that complies with the requirements of the “performance-based
compensation” exception under Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”).

(c)  Employee
Benefit Plans.  During the
term of this Agreement, Employee shall be eligible to participate in any life
insurance, medical, retirement, pension, profit sharing, disability or other
benefit plans or arrangements now or hereafter generally made available by
Employer to executive employees of Employer to the extent Employee qualifies
under the provisions of any such plans; provided, that the amount and
quality of employee benefits shall not, individually or in the aggregate,
decrease to an amount and quality that is less than those existing for Employee’s
benefit on the Effective Date.  Subject
to the foregoing, Employer shall have the right to change insurance companies
and modify insurance policies covering employees of Employer.

(d)  Stock
Option Grant.  Simultaneously
with the approval and effectiveness of this Agreement, Employee shall, subject
to the approval of the Compensation Committee of the Board of Directors of
Employer, be entitled to receive a grant of a nonqualified stock option to
purchase 41,000 shares of Employer’s common stock under Employer’s 2006 Long
Term Incentive Plan.  Such stock option
shall have an exercise price per share equal to the fair market value of a
share of Employer’s common stock on the date of grant (as determined in
accordance with the terms of Employer’s 2006 Long Term Incentive Plan) and
shall be subject to similar vesting provisions and other conditions as provided
for the incentive awards described in Section 4(e) hereof.

 2
 

 

(e)  Long Term
Incentive Program.  Employee
shall be eligible to receive long-term incentive awards previously approved by
Employer’s Board of Directors under Employer’s 2006 long term incentive
program, subject to its terms and conditions. 
Employee shall also be eligible to participate in future long term
incentive programs adopted by Employer from time to time.  The level of Employee’s participation in any
such plan and the terms and conditions of such participation shall be
determined in the sole discretion of the Board of Directors of Employer or a
duly appointed committee thereof.

(f)   Automobile
Allowance.  Employer shall pay
to Employee an automobile allowance of twelve thousand dollars ($12,000) per
annum, commencing as of the Effective Date, payable in accordance with Employer’s
normal payroll practices.

(g)  Vacation.  Employee shall be entitled to four (4) weeks
vacation with pay per year.

(h)  Taxes.  Employee understands that any and all
payments described in this Agreement will be subject to such tax treatment as
applies thereto, and to such withholding as may be required under applicable
tax laws.

5.             Termination.

(a)  Termination
by Employer for Cause. 
Employer shall have the right to terminate the employment of Employee
under this Agreement under the following circumstances (any such termination, a
termination for “Cause”), upon written notice to Employee describing the
Cause:

(i)           Employee shall have committed any
material breach of any of the provisions or covenants set forth herein; provided,
that, except where such breach is willful, Employer shall provide written
notice of such breach to Employee, and Employee shall have 10 days after
receipt of such notice to cure such breach;

(ii)          Employee shall have committed any act
of gross negligence in the performance of his duties or obligations hereunder;

(iii)         Employee shall have committed any
material act of dishonesty or breach of trust against Employer or any of its
subsidiaries;

(iv)        Employee’s conviction of, or plea of
guilty or nolo  contendere to, a felony; or

(v)         Employee shall have committed any
material breach of any of the provisions of Employer’s Standards of Business
Conduct Policy; provided, that, except where such breach is willful,
Employer shall provide written notice of such breach to Employee, and Employee
shall have 10 days after receipt of such notice to cure such breach.

(b)  Resignation
by Employee for Good Reason. 
Employee shall have the right to terminate his employment under this
Agreement under the following circumstances (any such termination, a
termination for “Good Reason”); provided, that Employee shall
provide written 

 3
 

 

notice of such
circumstances to Employer, and Employer shall have 10 days after receipt of
such notice to cure such circumstances:

(i)           a change in the location of the
primary worksite of Employee that is more than 25 miles from its present
location;

(ii)          the assignment to Employee of any
duties or responsibilities materially inconsistent with Employee’s position as
set forth in Section 3 hereof, Employee’s removal from such position or a
substantial diminution in such position, duties or responsibilities (except,
after a Change of Control of Employer (as defined below), if Employee remains
the Chief Executive Officer of AAI); provided that Employee ceasing to
be member of Employer’s Board of Directors for any reason shall not constitute “Good
Reason” under this Section 5(b)(ii);

(iii)         a material reduction in Employee’s Base
Compensation pursuant to Section 4(a) hereof or in Employee’s target percentage
for the Incentive Compensation under Section 4(b) hereof as in effect on the
Effective Date or as increased from time to time; or

(iv)        a failure of Employer to continue to
provide Employee with benefits substantially as contemplated by Section 4(c)
hereof.

(c)  Disability.  If Employee shall be incapacitated by reason
of mental or physical disability or otherwise during the term of this Agreement
so that he is prevented from performing his principal duties and services
hereunder for a period of three (3) consecutive months or one or more periods
aggregating three (3) months during any twelve (12) month period, Employer
shall have the right to terminate this Agreement by sending written notice of
termination to Employee, and thereupon his employment pursuant to this
Agreement shall terminate.

(d)  Death.  In the event of the death of Employee during
the term hereof, this Agreement shall automatically terminate.

6.             Effect of Termination.  Upon the termination of Employee’s employment
with Employer, pursuant to Section 5 or otherwise (e.g., upon the Scheduled
Termination Date, by Employer without Cause, by Employee without Good Reason or
at the election of either Employer or Employee following the term of this
Agreement), no further payments or compensation of any type shall be made or
shall be payable to Employee hereunder notwithstanding any other provision of
this Agreement, except as follows, subject to the provisions of Section 6(l)
hereof:

(a)  Outstanding
Base Compensation.  In the
case of any termination, Employee shall be entitled to any compensation due
pursuant to Section 4(a) hereof through the date of termination.

(b)  Outstanding
Expenses.  In the case of any
termination, Employee shall be entitled to any reimbursement, pursuant to
Section 11 hereof, of expenses incurred by Employee through the date of
termination.

(c)  Outstanding
Incentive Compensation. 
Subject to the provisions of Section 6(g) hereof, in the case of any
termination other than by Employer for Cause, including termination by Employee
without Good Reason, prior to the end of any Compensation Year, Employee shall
be entitled to receive a pro rata portion of his Incentive Compensation for
such Compensation 

 4
 

 

Year due pursuant to
Section 4(b) hereof, based on the number of days employed during such
Compensation Year.

(d)  Severance
Compensation.  Subject to the
provisions of Section 6(g) hereof, in the case of any termination (whether
during the term of this Agreement or thereafter) other than by Employer for
Cause, death, or by Employee without Good Reason, then Employee shall be
entitled to severance compensation (“Severance Compensation”) equal to
(x) one hundred fifty percent (150%) of Employee’s annualized salary at the
time of termination (the “Base Severance Compensation”) plus (y) fifty percent
(50%) of the amount calculated pursuant to the foregoing clause (x) (the “Incentive
Severance Compensation”), payable in equal installments at such times and
in accordance with the normal payroll practices of Employer over a period of
eighteen months following the date of termination or, following a Change of
Control, in a lump sum; provided, that in the case of a termination for
disability, the Severance Compensation shall be reduced by amounts payable to
Employee under Employer sponsored Short Term and Long Term Disability insurance
policies in respect of the period of eighteen (18) months following the date of
termination.

(e)  Completion
Bonus.  Subject to the
provisions of Section 6(g) hereof, in the case of any termination (whether
during the term of this Agreement or thereafter) other than by Employer for
Cause or by Employee without Good Reason, then Employee shall be entitled to
receive a lump-sum payment in the amount of $200,000.

(f)   Benefits.  In the case of any termination (whether
during the term of this Agreement or thereafter) other than by Employer for
Cause, death, or by Employee without Good Reason, then Employee shall be
entitled to continuation of the same or equivalent employee health benefits as
in effect on the date of termination for a period of eighteen months following
termination.  The foregoing
eighteen-month period shall be deemed to run concurrently with the applicable
post-termination coverage period required under COBRA.  Employee acknowledges that if Employer is
restricted from providing such coverage under any of its health plans due to
tax, underwriting or other issues, Employer will use commercially reasonable
efforts to provide or facilitate coverage through other means, provided
that it does not cost materially more to Employer than the cost of providing
such coverage under Employer’s then current health plans.

(g)  Section
409A Compliance.

(i)           To the extent required by Section
409A of the Code, in the event that Employee is deemed a “specified employee”
(within the meaning of Section 409A of the Code) at the time of Employee’s
termination hereunder, the payment of the amounts described in Sections 6(c)
through 6(e) hereof shall be delayed for a period of six months following such
termination of employment (the “409A Delay Period”).  In such event, payments relating to the 409A
Delay Period shall be made in a lump sum at the expiration of the 409A Delay
Period and any remaining payments shall be made in accordance with the terms
specified herein.  In addition, to the
extent required by Section 409A of the Code, any health benefits to which
Employee shall become entitled following termination pursuant to Section 6(f)
hereof that are treated as nonqualified deferred compensation under Section
409A of the Code shall be provided to Employee during the 409A Delay Period
only to the extent that Employee pays the full cost for such benefits during
the 409A Delay Period.  At the end of the
409A Delay Period, Employer shall promptly reimburse Employee for such paid
costs.  Employee shall not be entitled to
any 

 5
 

 

interest on or in respect
of any amounts under Sections 6(c) through 6(e) hereof not paid during the 409
Delay Period or any costs advanced by Employee for benefits under Section 6(f)
hereof during the 409A Delay Period.

(ii)          To the extent applicable, it is
intended that this Agreement comply with the provisions of Section 409A of the
Code, and this Agreement shall be construed and applied in a manner consistent
with this intent.  In the event that any
of the severance benefits under this Agreement are determined by Employer to be
in the nature of nonqualified deferred compensation payments, Employer and
Employee hereby agree to take such actions as may be mutually agreed between
the parties to ensure that such payments comply with the applicable provisions
of Section 409A of the Code and the treasury regulations and other official
guidance promulgated thereunder.

(h)  Stock
Options.  In the case of any
termination (whether during the term of this Agreement or thereafter) other than
by Employer for Cause, death, or by Employee without Good Reason, then any and
all unexercised and unexpired stock options awarded to Employee shall fully
vest.

(i)   Success
Bonus.  If so provided by
Section 7, Employee shall be entitled to receive the Success Bonus in
accordance with Section 7.

(j)   Vacation.  In the case of any termination, Employee
shall be entitled to be paid for any accrued and unused vacation time at the
rate of Base Compensation then in effect.

(k)  Death
Benefits.  In the case of Employee’s
termination as a result of death, Employer shall pay to Employee’s spouse (if
she is then living) or Employee’s estate Employee’s then-Base Compensation for
a period of eighteen (18) months following such termination.

(l)   General
Release.  The receipt of the
benefits described in this Section 6 (other than the benefits under Sections
6(a), (b), (i) and (j) hereof) shall be conditioned upon the execution and
non-revocation by Employee of a release agreement based on Employer’s standard
form of release agreement for terminating employees.

7.             Change of Control.

(a)  Success
Bonus.  In addition to any
other compensation payable to Employee hereunder, Employer shall pay to
Employee upon the closing date of a Change of Control of Employer (as defined
below) an amount equal to 50% of the annual Base Compensation in effect on the
closing date of the Change of Control (or, if Employee’s employment hereunder
is then terminated (other than as specified in the following proviso), the Base
Compensation in effect on the date of such termination), net of reduction for
any applicable withholding taxes (the “Success Bonus”); provided,
that the Success Bonus shall not be paid if, prior to the closing date of the
Change of Control, Employee’s employment hereunder has been terminated by
Employer for Cause or by Employee without Good Reason.  “Change of Control” shall mean (i) any
person or other entity (other than any of the Employer’s subsidiaries),
including any person as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended, becomes the beneficial owner, as defined in Rule 13d-3
of such Act, directly or indirectly, of more than fifty percent (50%) of the
total combined voting power of all classes of capital stock of Employer
normally 

 6
 

 

entitled to vote for the
election of directors of Employer (the “Voting Stock”), (ii) the sale of
all or substantially all of the property or assets of Employer, (iii) the
consolidation or merger of Employer with another corporation or other entity
(other than with any of Employer’s subsidiaries), the consummation of which
would result in the stockholders of Employer immediately before the occurrence
of the consolidation or merger owning, in the aggregate, less than 50% of the
Voting Stock of the surviving entity, or (iv) a change in the Board of
Directors occurs with the result that the members of the Board of Directors on
the Effective Date (the “Incumbent Directors”) no longer constitute a
majority of such Board of Directors, provided that any person becoming a director
whose election or nomination for election was supported by a majority of the
Incumbent Directors shall be considered an Incumbent Director for purposes
hereof.

(b)  Stock
Options.  On the closing date
of a Change of Control, any and all unexercised and unexpired stock options
awarded to Employee shall fully vest (except if Employee had theretofore been
terminated by Employer for Cause, due to his death or by Employee without Good
Reason).

(c)  No Excess
Parachute Payments. 
Notwithstanding any other provision contained herein, Employee shall not
receive any payment that would result in Employee receiving an “excess
parachute payment” as defined in Section 280G of the Code.

8.             No Competition. 
Employee agrees that, during the period of Employee’s employment with
Employer and for a period of eighteen (18) months following termination of
employment for any reason, he will not, within the continental United States,
directly or indirectly, engage or participate or make any financial investments
in or become employed by or render advisory or other services to or for any
person, firm or corporation, or in connection with any business activity, other
than that of Employer and its subsidiaries, directly or indirectly in
competition with any of the business operations or activities of Employer and
its subsidiaries.  Nothing herein
contained, however, shall restrict Employee from making any investments in any
company whose stock is listed on a national securities exchange or actively
traded in the over the counter market, so long as such investment does not give
him the right to control or influence the policy decisions of any such business
or enterprise which is or might be directly or indirectly in competition with
any of such business operations or activities of Employer or any of its
subsidiaries.

9.             Confidentiality; etc.

(a)  Employee, during the term of this Agreement
and thereafter, will not divulge, furnish or make accessible to anyone (other
than in the regular course of business of Employer or any of its subsidiaries)
any knowledge or information with respect to confidential or secret methods,
processes, plans or materials of Employer or any of its subsidiaries, or with
respect to any other confidential or secret aspects of the business of Employer
or any of its subsidiaries (the “Confidential Information”).  The term “Confidential Information”
does not, however, include information which was or becomes generally available
to the public other than as a result of an unauthorized disclosure by Employee.

(b)  Employee agrees to communicate and to make
known to Employer all knowledge possessed by him relating to any methods,
developments, inventions and/or improvements, whether patented, patentable or
unpatentable which concerns in any way the business of 

 7
 

 

Employer or any of its
subsidiaries or the general industry of which they are a part, from the time of
entering upon employment until the termination thereof, and whether acquired by
Employee before or during the term of his employment; provided, that
nothing herein shall be construed as requiring any such communication where the
method, development, invention and/or improvement is lawfully protected from
disclosure as the trade secret of a third party, including, without limitation,
any former employer of Employee or by any other lawful bar to such
communication.

(c)  Any methods, developments, inventions and/or
improvements, whether patentable or unpatentable, along the lines of the
business of Employer or any of its subsidiaries, which Employee may conceive of
or make while in the employ of Employer, shall be and remain the property of
Employer.  Employee agrees promptly to
communicate and disclose all such methods, developments, inventions and/or
improvements to Employer and to execute and deliver to Employer any instruments
deemed necessary by Employer to effect disclosure and assignment thereof to
it.  Employee further agrees, on request
of Employer, to execute patent applications based on such methods,
developments, inventions and/or improvements, including any other instruments
deemed necessary by Employer for the prosecution of such patent applications or
the acquisition of Letters Patent in the United States and/or any foreign
countries.

(d)  Employee agrees that for a period of two (2)
years from and after the termination of his employment with Employer, whether
pursuant to the terms of this Agreement or otherwise, he will not:

(i)           directly or indirectly solicit, raid,
entice or induce any employee of Employer or of any of its subsidiaries to be
employed by any person, firm or corporation which is, directly or indirectly,
in competition with the business or activities of Employer or any of its
subsidiaries;

(ii)          directly or indirectly approach any
such employee for these purposes;

(iii)         authorize or knowingly approve the
taking of such actions by other persons on behalf of any such person, firm or
corporation, or assist any such person, firm or corporation in taking such
action;

(iv)        directly or indirectly solicit, raid,
entice or induce any person, firm or corporation (other than the U.S.
Government or its agencies) who or which on the date hereof is, or at any time
during the period of employment hereunder shall be, a customer of Employer or
of any of its subsidiaries to become a customer for the same or similar products
which it purchased from Employer or any of its subsidiaries, of any other
person, firm or corporation, and Employee shall, not approach any such customer
for such purpose or authorize or knowingly approve the taking of such actions
by any other person.

(e)  Employee agrees that during the term of his
employment by Employer, whether under this Agreement or otherwise, he will not,
unless authorized by Employer, at any time enter into, on behalf of Employer or
any of its subsidiaries, or cause Employer or any of its subsidiaries to enter
into, directly or indirectly, any transactions with any business organization
in which he or any member of his immediate family may be interested as a
partner, trustee, director, officer, employee, shareholder, lender of money or
guarantor (other than interests, solely as an investment, in publicly
registered securities of any business organization, which 

 8
 

 

interests are (i) not as
a controlling person of such business organization, (ii) not as a member of a
group that controls such business organization, and (iii) not as a direct or
indirect owner of 5% or more of any class of securities of such business
organization).

10.           Injunctive Relief.  Employee acknowledges that the services to be
rendered by him hereunder are of a special, unique and extraordinary character
and that it would be very difficult or impossible to replace such services and
further that irreparable injury would be sustained by Employer and its
subsidiaries in the event of a violation by Employee of any of the provisions
of this Agreement, and by reason thereof Employee consents and agrees that if
he violates any of the provisions of this Agreement, Employer shall be entitled
to an injunction to be issued by any court of competent jurisdiction restraining
him from committing or continuing any violation of this Agreement.

11.           Expenses.  Employer shall reimburse Employee for all
reasonable expenses incurred by him on behalf of Employer in the performance of
his duties hereunder, provided that proper vouchers are submitted to Employer
by Employee evidencing such expenses and the purposes for which the same were
incurred.

12.           No Conflicting Agreements.  Employee represents and warrants that he is
not a party to any agreement, contract or understanding, whether employment or
otherwise, which would in any way restrict or prohibit him from undertaking or
performing employment in accordance with the terms and conditions of this
Agreement.

13.           Entire Agreement.  This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof, and no
statement, representation, warranty or covenant has been made by either party
except as expressly set forth herein. 
This Agreement shall not be changed or terminated orally.  As of the Effective Date, this Agreement
supersedes and cancels all prior agreements between the parties or any
subsidiary of Employer whether written or oral, relating to the employment of
Employee, including, without limitation, that certain employment agreement by
and between Employer and Employee dated June 18, 2003.

14.           Applicable Law.  This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Maryland,
without regard to its conflict of laws principles, and all disputes hereunder
shall be resolved in the federal or state courts located in Maryland.  In any dispute relating to this Agreement,
the prevailing party shall be entitled to be reimbursed its reasonable
attorneys fees and costs from the nonprevailing party.

15.           Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered, telecopied or mailed, first class, postage
prepaid, certified mail, return receipt requested, to each of the parties at
its or his address or telecopy number above written or as set forth beneath
their signatures below or at such other address or telecopy number as either of
the parties may designate

in conformity with the
foregoing.

16.           Section Headings.  The Section headings set forth in this
Agreement are for convenience only and shall not be considered as part of this
Agreement in any respect nor shall they in any way affect the substance of any
provisions contained in this Agreement.

 9
 

 

17.           Successors and Assigns.  This Agreement shall not be assignable by
Employee.  All of the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective heirs and personal representatives of
Employee and the successors and assigns of Employer.

18.           Severability.  If, at any time subsequent to the date
hereof, any provision of this Agreement shall be held by any court of competent
jurisdiction to be illegal, void or unenforceable, such provision shall be of no
force and effect, but the illegality or unenforceability of such provision
shall have no effect upon and shall not impair the enforceability of any other
provisions of this Agreement.

19.           Indemnification.  Employer shall indemnify Employee to the
fullest extent provided for by the indemnification statutes of the General
Corporate Law of Delaware, 8 Del. C. § 145 (2002) (the “Indemnification
Section”) and, in addition, in accordance with any other rights such
persons may have under a resolution of the stockholders of the corporation, a
resolution of its Board of Directors or under Employer’s Certificate of
Incorporation or by-laws, as amended and restated from time to time, or
pursuant to any insurance policy, any agreement or otherwise.  During the term of this Agreement, Employer
shall continue to maintain in full force and effect directors and officers
liability insurance in amounts deemed reasonable by the Board of Directors,
provided that such coverage remains available at premium costs deemed reasonable
by the Board of Directors.

20.           Securities Law Filings.  Employer shall reimburse Employee for the
reasonable expenses, including attorneys fees, associated with the filings
Employee is required to make with the Securities and Exchange Commission from
time to time in connection with his purchase, sale and holding of Employer’s
stock in the public trading market, but only if Employer does not offer to have
its attorneys prepare such filings for Employee.

21.           Survival.  For the avoidance of doubt, it is understood
that the provisions of Sections 6, 7, 8, 9(a), (c) and (d) and 10 through 21
(other than the second sentence of Section 19) shall remain in effect following
and survive the termination of this Agreement and Employee’s employment
hereunder.

[Signatures
Follow]

 10
 

 

           IN WITNESS WHEREOF, the parties
hereto have duly executed this Employment Agreement as of the day and year
first above written.

	
  

  	
  UNITED INDUSTRIAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Jonathan
  Greenberg

  
	
   

  	
  Name:

  	
   Jonathan
  Greenberg

  
	
   

  	
  Title:

  	
   VP and
  General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Frederick M. Strader

  
	
   

  	
   

  	
  Frederick M. Strader

  

 

 11

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