Document:

Bonus Pool Policy

Applied
  Signal Technology, Inc. Bonus Pool Policy

 

1.0 Plan

   The bonus
    pool is based upon the Company's cumulative annual net income. Any bonus amounts
    will be paid annually. This plan applies to all regular employees and educational
    casual employees, as defined by the Human Resources Employee Handbook.

  

2.0
    Disbursement

   The bonus
    pool amount will be evaluated once per year in December in accordance with
    the criteria stated in Section 3.0. The disbursement (if any) will be made
    in check form with appropriate income tax withheld. The disbursement will
    be made the last week of December (approximate) and will be based on the cumulative
    12 months earnings ending 31 October.

  

 3.0
    Criteria

  The bonus
    pool amount is based upon two things: 

      1. The employee's cumulative
        earnings (excluding overtime pay) for the disbursement period.

      2. The Company's net
        income at 31 October (adjusted to add back the bonus expense used to develop
        the plan).

     The
    relationship to the Company's net income is shown in Figure 1. The two defining
    points in Figure 1 are (1) the target net income needed to earn a bonus pool
    of 4% of total payroll (TARGET) and (2) the minimum target net income needed
    to earn a bonus pool of 1% of total payroll (TARGET--$x). These defining points
    will be set by the Board of Directors at the beginning of each fiscal year.
    There will be no bonus if net income is less than the minimum target net income.

 One-half
    of the bonus pool earned will be paid to all eligible employees as a percent
    of their cumulative earnings. To be eligible for a bonus, an employee must
    be employed by the Company on the day of disbursement. The remaining half
    will be distributed to each division director on a pro-rata basis per the
    division payroll. They will distribute bonuses on a discretionary basis. For
    purposes of the plan, "earnings" are defined as an employee's base
    salary.

   The percentage
    shall be calculated as shown in Figure 1.

Figure 1. Bonus Pool
  vs. Net IncomeEXHIBIT 10.1

                                 EXECUTION COPY

                                 THIRD AMENDMENT

               THIRD  AMENDMENT,  dated as of  December  20,  2001 (this  "THIRD
AMENDMENT"), to the Credit Agreement, dated as of February 13, 1998 (as amended,
supplemented,  or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among NBC ACQUISITION CORP., a Delaware corporation ("HOLDINGS"),  NEBRASKA BOOK
COMPANY,  INC., a Kansas  corporation  (the  "BORROWER"),  the several banks and
other financial  institutions or entities from time to time parties thereto (the
"LENDERS")  and JPMORGAN CHASE BANK, a New York banking  corporation  (f/k/a The
Chase  Manhattan  Bank),  as  administrative  agent  for the  Lenders  (in  such
capacity, the "ADMINISTRATIVE AGENT").

                              W I T N E S S E T H:
                              - - - - - - - - - -

               WHEREAS,   Holdings,   the   Borrower,   the   Lenders   and  the
Administrative Agent are parties to the Credit Agreement;

               WHEREAS,  the Borrower has  requested  that the Required  Lenders
amend the Credit Agreement as set forth herein;

               WHEREAS,  the Required Lenders and the  Administrative  Agent are
willing to agree to such amendment to the Credit Agreement, subject to the terms
and conditions set forth herein;

               NOW,  THEREFORE,  in  consideration  of the  premises  and mutual
covenants contained herein, Holdings, the Borrower, the Required Lenders and the
Administrative Agent hereby agree as follows:

               1. DEFINED TERMS.  Unless otherwise  defined herein,  capitalized
terms  which are  defined in the  Credit  Agreement  are used  herein as therein
defined.

               2. AMENDMENT TO SECTION 7.8 (LIMITATION ON INVESTMENTS, LOANS AND
ADVANCES).  Section  7.8(h) is hereby  amended by deleting  clauses (i) and (ii)
therefrom and substituting  therefor the following:  "(i) the aggregate purchase
price for all such  acquisitions  shall not exceed  $20,000,000,  excluding  any
amounts  attributed  to  acquisitions  made prior to  December  20,  2001,  (ii)
[INTENTIONALLY OMITTED],".

               3.  REPRESENTATIONS  AND  WARRANTIES.  Each of  Holdings  and the
Borrower  hereby  confirms,  reaffirms  and  restates  the  representations  and
warranties set forth in Section 4 of the Credit Agreement.  Each of Holdings and
the Borrower  represents  and warrants  that,  after giving effect to this Third
Amendment, no Default or Event of Default has occurred and is continuing.

<PAGE>
                                                                               2

               4. EFFECTIVENESS.  This Third Amendment shall become effective as
of the date upon which the  Administrative  Agent receives  counterparts of this
Third  Amendment  duly  executed by  Holdings,  the  Borrower  and the  Required
Lenders.

               5.  CONTINUING  EFFECT  OF  THE  CREDIT  AGREEMENT.   This  Third
Amendment shall not constitute an amendment of any other provision of the Credit
Agreement  not  expressly  referred  to herein and shall not be  construed  as a
waiver or consent to any further or future  action on the part of any Loan Party
that  would  require a waiver or consent  of the  Lenders or the  Administrative
Agent.  Except  as  expressly  amended  hereby,  the  provisions  of the  Credit
Agreement are and shall remain in full force and effect.

               6.  COUNTERPARTS.  This Third  Amendment  may be  executed by the
parties  hereto in any number of separate  counterparts,  each of which shall be
deemed to be an  original,  and all of which taken  together  shall be deemed to
constitute one and the same instrument. This Third Amendment may be delivered by
facsimile transmission of the relevant signature pages hereof.

               7. GOVERNING LAW. THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

<PAGE>
                                                                               3

               IN WITNESS  WHEREOF,  the  parties  hereto have caused this Third
Amendment  to be duly  executed  and  delivered  in New York,  New York by their
respective  proper  and duly  authorized  officers  as of the day and year first
above written.

                                        NBC ACQUISITION CORP.

                                        By:  /s/  Alan G. Siemek
                                          ----------------------------------
                                           Name:  Alan G. Siemek
                                           Title: Vice President and Treasurer

                                        NEBRASKA BOOK COMPANY, INC.

                                        By:  /s/  Alan G. Siemek
                                          ----------------------------------
                                           Name:  Alan G. Siemek
                                           Title: Treasurer and CFO

                                        JPMORGAN CHASE BANK,
                                         as Administrative Agent and as a Lender

                                        By:  /s/  Robert A. Krasnow
                                          ----------------------------------
                                           Name:  Robert A. Krasnow
                                           Title: Vice President

<PAGE>
                                                                               4

                                        VAN KAMPEN
                                        PRIME RATE INCOME TRUST

                                        By: Van Kampen Investment Advisory Corp.

                                        By:  /s/  Darvin D. Pierce
                                        ----------------------------------
                                           Name:  Darvin D. Pierce
                                           Title: Executive Director

<PAGE>

                                       TRYON CLO LTD. 2000-I, as a Lender

                                       By:  Institutional Debt Management, Inc.,
                                       as Collateral Manager

                                       By:  /s/  Michael Audino
                                       ----------------------------------
                                          Name:  Michael Audino
                                          Title: Vice President

<PAGE>

                                       ELC (CAYMAN) LTD.,  as a Lender

                                       By:  Institutional Debt Management, Inc.,
                                       as Collateral Manager

                                       By:  /s/  Michael Audino
                                       ----------------------------------
                                          Name:  Michael Audino
                                          Title: Vice President

<PAGE>

                                       ELC (CAYMAN) LTD. 1999-II,  as a Lender

                                       By:  Institutional Debt Management, Inc.,
                                       as Collateral Manager

                                       By:  /s/  Michael Audino
                                       ----------------------------------
                                          Name:  Michael Audino
                                          Title: Vice President

<PAGE>

                                        ELC (CAYMAN) LTD. 1999-III,  as a Lender

                                        By: Institutional Debt Management, Inc.,
                                        as Collateral Manager

                                        By:  /s/  Michael Audino
                                        ----------------------------------
                                           Name:  Michael Audino
                                           Title: Vice President

<PAGE>

                                       HELLER FINANCIAL, INC.

                                       By: HELLER FINANCIAL ASSET MANAGEMENT LLC
                                             Authorized Agent

                                        By:  /s/  Julia F. Maslanka
                                        ----------------------------------
                                           Name:  Julia F. Maslanka
                                           Title: Vice President

<PAGE>

                                          National City Bank
                                          ----------------------------------
                                          Name of Lender

                                          By:  /s/  Peter W. Richer
                                          ----------------------------------
                                             Name:  Peter W. Richer
                                             Title: Vice President

<PAGE>

                                           -------------------------------------
                                           Name of Lender
                                           Wells Fargo Bank, N.A.

                                           By:  /s/  Reginald M. Goldsmith, III
                                           ------------------------------------
                                              Name:  Reginald M. Goldsmith, III
                                              Title: Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}]]