Document:

2007 NICOR GAS ANNUAL INCENTIVE PLAN FOR OFFICERS

    2007
      NICOR GAS ANNUAL INCENTIVE COMPENSATION PLAN FOR
      OFFICERS

    

    
      	 	
              The
                2007 Nicor Gas Annual Incentive Compensation Plan for Officers is
                designed
                to link participant incentive compensation to the accomplishment
                of
                corporate and operating unit financial performance as well as
                non-financial measures of operating performance across the Company
                and
                operating units. It ties the pay an individual receives to Company
                performance and non-financial goals. This plan is intended to provide
                a
                framework for a performance-based bonus program for Nicor
                Gas.

            

    

    

    
      	 	
              Purpose

            

    

    The
      purpose of this Plan is to provide meaningful annual incentive award opportunity
      to the participants. Awards will be directly tied to the achievement of
      corporate financial and operating goals and non-financial objectives. The Plan
      has been structured to encourage teamwork among business units and encourage
      the
      achievement of both shareholder and ratepayer oriented goals.

    

    
      	 	
              Eligible
                Group

            

    

    Officers
      of Nicor Gas in Salary Bands 1 or higher are eligible for participation. As
      such, participation is limited to employees in positions which enable them
      to
      make significant contributions to the performance and growth of the
      Company.

    

    Compensation
      Objective

    Base
      Salary + Bonus Target = Short-Term Compensation Objective

    

    An
      individual's short-term compensation objective will be based on salary plus
      a
      bonus, expected to be earned if established performance targets are met.
      Short-term compensation above (or below) target levels may be paid in the event
      performance exceeds (or falls short of) goals.

    

    Base
      Salary

    Standards
      for base salaries will be targeted to the 50th
      percentile of the appropriate industry survey data. Base salaries are reviewed
      annually by the Compensation Committee of the Board of Directors.

    

    Bonus
      Targets

    The
      bonus
      target amount varies according to pay, job responsibilities and ability to
      impact the organization and is consistent with the bonus opportunity ranges
      set
      by officer salary bands. Higher responsibility and impact levels result in
      greater dollars at risk.

    

    Performance
      Targets

    Performance
      criteria focus on the achievement of established and documented strategic goals.
      Performance targets may include measures of corporate financial and operating
      performance, defined group objectives or individual performance objectives.
      Each
      particular performance target will be assigned weighting reflected as a
      percentage of bonus target.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Goal
      Setting Guidelines

    The
      most
      important aspect of this Plan will be the establishment of effective goals.
      In
      addition to measures of corporate financial and operating performance, other
      non-financial measures of performance will also be established. The goals should
      be realistic and measurable wherever possible by quantifiable performance
      criteria. It is recognized that measurement of some goals will require
      subjective assessments of performance. Goals must be consistent with the
      longer-term strategic plan.

    

    A
      set of
      guidelines will be devised by the Nicor Human Resources Department to aid in
      this process. These guidelines will provide direction as to the formulation
      and
      reporting of non-financial goals.

    

    Amount
      of
      bonus payment for financial/budget related goals can vary above and below target
      based upon results achieved. For targets met, bonus amount will be 100% of
      bonus
      target. When targets are exceeded or are not reached, bonus will be
      proportionately more or less than the target.

    

    The
      Compensation Committee may make appropriate upward or downward adjustments
      if,
      after taking into consideration all of the facts and circumstances of the
      performance period, it determines that adjustments are warranted.

    

    Plan
      Schedule

    The
      2007
      Nicor Gas Incentive Compensation Plan runs on a calendar year basis, with the
      strategic planning cycle and budgeting process serving as the primary link
      to
      performance and bonus targets. The Accounting Department is responsible for
      the
      determination of actual financial results. Performance will be reviewed at
      least
      twice a year to monitor progress and adjust accruals.

    

    Year-end
      results should be available and evaluated as early as possible in the following
      year. No bonus shall be paid until the Compensation Committee of the Board
      of
      Directors (the “Compensation Committee”) approves such payment. Following
      approval by the Compensation Committee, bonuses will be paid to participants
      by
      March 15 of the year in which such approval is given, unless payment by March
      15
      is not administratively practicable, in which case payment shall be made by
      December 31.

    

    Form
      of Payment

    All
      awards will be paid in cash, except that a participant in the Stock Deferral
      Plan may elect to defer up to 50% of their award into that plan and a
      participant in the Salary Deferral Plan may elect to defer 10% to 20% of their
      award into that plan. Deferral elections must meet the guidelines and timing
      of
      the Stock Deferral and/or Salary Deferral Plans to be effective. Appropriate
      taxes for the entire award amount will be withheld from the portion of the
      award
      being paid in cash.

    

    
      	 	
              Integration
                with Existing Programs

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Base
      salaries will be managed with range bands at the appropriate blend of general
      and industry data for comparable positions, with total compensation objectives
      to be managed at a level appropriate with the performance of the company, as
      determined by the Compensation Committee. Salaries will be monitored each year
      and increases granted based on merit and range bands. Bonus targets will be
      set
      as a percentage of base salary. A change, other than the annual salary review,
      in the compensation objective will customarily occur during the year only
      through promotion to various levels, at which time the base salary and bonus
      target are also likely to change. 

    

    Promotion
      of an employee during the year or reassignment to responsibilities in which
      new
      performance objectives apply will result in proration of the existing
      performance objectives and bonus target and assignment of new performance
      objectives and if appropriate, a new bonus target as determined by the
      Compensation Committee. Promotion into an Executive Salary Band would create
      eligibility for bonus at a prorated amount, based on the effective date of
      the
      promotion.

    

    If
      a
      participant voluntarily terminates or is terminated for cause prior to the
      end
      of the performance period, then no award shall be granted. In the event a
      participant shall die, become disabled, or retire before the end of the
      performance period, an award is payable prorated or the Compensation Committee
      may authorize payment of an award to the participant, or beneficiary, in such
      other amount as the Committee deems appropriate.

    

    
      	 	
              Responsibility

            

    

    The
      Human
      Resources Department will be responsible for the administration of the process
      for the company. This will include:

    

    1)    
      monitoring
      market salary and total compensation levels;

     

    2)    
recommending
      structural
      changes in base salary and compensation objective adjustments;

     

    3)    
assisting
      the Nicor Gas CEO
      in progress and exception reporting to the Compensation Committee;

     

    4)    
assist
      the Nicor Gas CEO in
      monitoring financial performance targets through the Accounting Department
      and
      communicating progress reports to the participants;

     

    5)    
monitoring
      compliance with
      related financial controls; and

     

    6)    
maintaining
      the accuracy of
      plan document(s) governing the plan.

     

    The
      Nicor
      Gas CEO shall be responsible for:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              1)

            	
              reviewing
                market salary and compensation levels and approving recommendations
                before
                presentation to the Compensation
                Committee;

            

    

    

    
      	 	
              2)

            	
              approving
                structural changes in base salary and compensation objective adjustments
                before presentation to the Compensation
                Committee;

            

    

    

    
      	 	
              3)

            	
              recommending
                eligibility, performance targets and goals to the Compensation
                Committee;

            

    

    

    
      	 	
              4)

            	
              monitoring
                performance targets through the Accounting Department and other sources
                of
                necessary documentation;

            

    

    

    
      	 	
              5)

            	
              communicating
                progress reports to the participants;
                and,

            

    

    

    
      	 	
              6)

            	
              reporting
                performance results and making award recommendations to the Compensation
                Committee.

            

    

    

    The
      Company's 2007 Nicor Gas Annual Incentive Compensation Plan for Officers and
      changes to its performance targets and measurement criteria will be reviewed
      and
      approved by the Compensation Committee.

    

    In
      determining the actual bonus awards to be made, the Compensation Committee
      may
      take into account all of the facts and circumstances which exist during the
      year
      and may make appropriate upward or downward revisions in performance criteria,
      add or delete objectives, or change the relative percentages assigned to the
      various performance objectives.

    

    
      	 	
              Amendment
                and Termination

            

    

    The
      Board
      of Directors may amend or terminate the Plan at any time without the consent
      of
      the participants. No such amendment or termination shall negatively impact
      any
      participant's amount which accrued under the Plan prior to the calendar year
      in
      which the amendment is made.

    

    

    Nicor
      Human Resources

    February
      2007Regal Beloit Exhibit 10.6

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        Return
          to Form 10-K

      

    

     

    EXHIBIT
      10.6

     

    FORM
      OF

     

    KEY
      EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT

     

    THIS
      AGREEMENT,
      made
      and entered into as of the ____ day of ________, 200_, by and between Regal
      Beloit Corporation, a Wisconsin corporation (hereinafter referred to as the
      “Company”), and ____________________ (hereinafter referred to as the
“Executive”).

     

    W I T N E S S E T H

     

    WHEREAS,
      the
      Executive is employed by the Company and/or a subsidiary of the Company
      (hereinafter referred to collectively as the “Employer”) in a key executive
      capacity and the Executive’s services are valuable to the conduct of the
      business of the Company;

     

    WHEREAS,
      the
      Company desires to continue to attract and retain dedicated and skilled
      management employees in a period of industry consolidation, consistent with
      achieving the best possible value for its shareholders in any change in control
      of the Company;

     

    WHEREAS,
      the
      Company recognizes that circumstances may arise in which a change in control
      of
      the Company occurs, through acquisition or otherwise, thereby causing a
      potential conflict of interest between the Company’s needs for the Executive to
      remain focused on the Company’s business and for the necessary continuity in
      management prior to and following a change in control, and the Executive’s
      reasonable personal concerns regarding future employment with the Employer
      and
      economic protection in the event of loss of employment as a consequence of
      a
      change in control;

     

    WHEREAS,
      the
      Company and the Executive are desirous that any proposal for a change in control
      or acquisition of the Company will be considered by the Executive objectively
      and with reference only to the best interests of the Company and its
      shareholders; 

     

    WHEREAS,
      the
      Executive will be in a better position to consider the Company’s best interests
      if the Executive is afforded reasonable economic security, as provided in this
      Agreement, against altered conditions of employment which could result from
      any
      such change in control or acquisition; 

     

    WHEREAS,
      the
      Executive possesses intimate knowledge of the business and affairs of the
      Company and has acquired certain confidential information and data with respect
      to the Company; and

     

    WHEREAS,
      the
      Company desires to insure, insofar as possible, that it will continue to have
      the benefit of the Executive’s services and to protect its confidential
      information and goodwill.

     

    NOW,
      THEREFORE,
      in
      consideration of the foregoing and of the mutual covenants and agreements
      hereinafter set forth, the parties hereto mutually covenant and agree as
      follows:

     

    
      	1.  	
              Definitions.

            

    

    

    (a) Accrued
      Benefits.
      The
      term “Accrued Benefits” shall include the following amounts, payable as
      described herein: (i) all base salary for the time period ending with the
      Termination Date; (ii) reimbursement for any and all monies advanced in
      connection with the Executive’s employment for reasonable and necessary expenses
      incurred by the Executive on behalf of the Employer for the time period ending
      with the Termination Date; (iii) any and all other cash earned through the
      Termination Date and deferred at the election of the Executive or pursuant
      to
      any deferred compensation plan then in effect; (iv) notwithstanding any
      provision of any bonus or incentive compensation plan applicable to the
      Executive, a lump sum amount, in cash, equal to the sum of (A) any bonus or
      incentive compensation that has been allocated or awarded to the Executive
      for a
      fiscal year or other measuring period under the plan that ends prior to the
      Termination Date but has not yet been paid (pursuant to Section 5(f)
      or
      otherwise) and (B) a pro rata portion to the Termination Date of the
      aggregate value of all contingent bonus or incentive compensation awards to
      the
      Executive for all uncompleted periods under the plan calculated as to each
      such
      award as if the Goals with respect to such bonus or incentive compensation
      award
      had been attained; and (v) all other payments and benefits to which the
      Executive (or in the event of the Executive’s death, the Executive’s surviving
      spouse or other beneficiary) may be entitled on the Termination Date as
      compensatory fringe benefits or under the terms of any benefit plan of the
      Employer, excluding severance payments under any Employer severance policy,
      practice or agreement in effect on the Termination Date. Payment of Accrued
      Benefits shall be made promptly in accordance with the Company’s prevailing
      practice with respect to clauses (i)
      and
(ii)
      or, with
      respect to clauses (iii),
      (iv)
      and
(v),
      pursuant to the terms of the benefit plan or practice establishing such
      benefits.

    

    (b) Act.
      The
      term “Act” means the Securities Exchange Act of 1934, as amended.

    

    (c) Affiliate
      and Associate.
      The
      terms “Affiliate” and “Associate” shall have the respective meanings ascribed to
      such terms in Rule l2b-2 of the General Rules and Regulations under the
      Act.

    
      
        
        

      

      
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        Return
          to Form 10-K

      

    

    

    (d) Annual
      Cash Compensation.
      The
      term “Annual Cash Compensation” shall mean the sum of (i) the Executive’s
      Annual Base Salary (determined as of the time of the Change in Control of the
      Company or, if higher, immediately prior to the date the Notice of Termination
      is given) plus (ii) an amount equal to the greater of the Executive’s
      annual incentive target bonus for the fiscal year in which the Termination
      Date
      occurs or the annual incentive bonus the Executive received for the fiscal
      year
      prior to the Change in Control of the Company plus (iii) an amount equal to
      the
      greater of the Executive’s Fringe Benefits for the fiscal year in which the
      Termination Date occurs or the annual amount of Fringe Benefits the Executive
      received for the fiscal year prior to the Change in Control of the Company
      (the
      aggregate amount set forth in clause (i),
      clause (ii)
      and
clause
      iii
      shall
      hereafter be referred to as the “Annual Cash Compensation”).

    

    
      	(e)  	
              Beneficial
                Owner.
                A
                Person shall be deemed to be the “Beneficial Owner” of any
                securities:

            

    

    

    (i) which
      such Person or any of such Person’s Affiliates or Associates has the right to
      acquire (whether such right is exercisable immediately or only after the passage
      of time) pursuant to any agreement, arrangement or understanding, or upon the
      exercise of conversion rights, exchange rights, rights, warrants or options,
      or
      otherwise; provided,
      however,
      that a
      Person shall not be deemed the Beneficial Owner of, or to beneficially own,
      (A) securities tendered pursuant to a tender or exchange offer made by or
      on behalf of such Person or any of such Person’s Affiliates or Associates until
      such tendered securities are accepted for purchase, or (B) securities
      issuable upon exercise of Rights issued pursuant to the terms of the Company’s
      Rights Agreement, dated as of January 28, 2000, between the Company and Firstar
      Bank, N.A., as amended from time to time (or any successor to such Rights
      Agreement), at any time before the issuance of such securities;

    

    (ii) which
      such Person or any of such Person’s Affiliates or Associates, directly or
      indirectly, has the right to vote or dispose of or has “beneficial ownership” of
      (as determined pursuant to Rule l3d-3 of the General Rules and Regulations
      under the Act), including pursuant to any agreement, arrangement or
      understanding; provided,
      however,
      that a
      Person shall not be deemed the Beneficial Owner of, or to beneficially own,
      any
      security under this clause
      (ii) as
      a result of an agreement, arrangement or understanding to vote such security
      if
      the agreement, arrangement or understanding: (A) arises solely from a
      revocable proxy or consent given to such Person in response to a public proxy
      or
      consent solicitation made pursuant to, and in accordance with, the applicable
      rules and regulations under the Act and (B) is not also then reportable on
      a Schedule l3D under the Act (or any comparable or successor report);
      or

    

    (iii) which
      are
      beneficially owned, directly or indirectly, by any other Person with which
      such
      Person or any of such Person’s Affiliates or Associates has any agreement,
      arrangement or understanding for the purpose of acquiring, holding, voting
      (except pursuant to a revocable proxy as described in clause
      (ii)
      above)
      or disposing of any voting securities of the Company.

    

    (f) Cause.
“Cause”
      for termination by the Employer of the Executive’s employment in connection with
      a Change in Control of the Company shall be limited to (i) the engaging by
      the Executive in intentional conduct not taken in good faith that the Company
      establishes, by clear and convincing evidence, has caused demonstrable and
      serious financial injury to the Employer, as evidenced by a determination in
      a
      binding and final judgment, order or decree of a court or administrative agency
      of competent jurisdiction, in effect after exhaustion or lapse of all rights
      of
      appeal, in an action, suit or proceeding, whether civil, criminal,
      administrative or investigative; (ii) conviction of a felony (as evidenced
      by binding and final judgment, order or decree of a court of competent
      jurisdiction, in effect after exhaustion of all rights of appeal), which
      substantially impairs the Executive’s ability to perform his duties or
      responsibilities; or (iii) continuing willful and unreasonable refusal by
      the Executive to perform the Executive’s duties or responsibilities (unless
      significantly changed without the Executive’s consent).

    

    
      	(g)  	
              Change
                in Control of the Company.
                A
                “Change in Control of the Company” shall be deemed to have occurred if an
                event set forth in any one of the following paragraphs shall have
                occurred:

            

    

    

    (i) any
      Person (other than (A) the Company or any of its subsidiaries, (B) a trustee
      or
      other fiduciary holding securities under any employee benefit plan of the
      Company or any of its subsidiaries, (C) an underwriter temporarily holding
      securities pursuant to an offering of such securities or (D) a corporation
      owned, directly or indirectly, by the shareholders of the Company in
      substantially the same proportions as their ownership of stock in the Company
      (“Excluded Persons”) is or becomes the Beneficial Owner, directly or indirectly,
      of securities of the Company (not including in the securities beneficially
      owned
      by such Person any securities acquired directly from the Company or its
      Affiliates after ____________, 200_, pursuant to express authorization by the
      Board that refers to this exception) representing 20% or more of either the
      then
      outstanding shares of common stock of the Company or the combined voting power
      of the Company’s then outstanding voting securities; or

    
      
        
        

      

      
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        Return
          to Form 10-K

      

    

    

    (ii) the
      following individuals cease for any reason to constitute a majority of the
      number of directors of the Company then serving: (A) individuals who, on
      __________, 200_ constituted the Board and (B) any new director (other than
      a
      director whose initial assumption of office is in connection with an actual
      or
      threatened election contest, including but not limited to a consent
      solicitation, relating to the election of directors of the Company) whose
      appointment or election by the Board or nomination for election by the Company’s
      shareholders was approved by a vote of at least two-thirds (2/3) of the
      directors then still in office who either were directors on ___________, 200_,
      or whose appointment, election or nomination for election was previously so
      approved (collectively the “Continuing Directors”); provided,
      however,
      that
      individuals who are appointed to the Board pursuant to or in accordance with
      the
      terms of an agreement relating to a merger, consolidation, or share exchange
      involving the Company (or any direct or indirect subsidiary of the Company)
      shall not be Continuing Directors for purposes of this Agreement until after
      such individuals are first nominated for election by a vote of at least
      two-thirds (2/3) of the then Continuing Directors and are thereafter elected
      as
      directors by the shareholders of the Company at a meeting of shareholders held
      following consummation of such merger, consolidation, or share exchange;
and,
      provided further,
      that in
      the event the failure of any such persons appointed to the Board to be
      Continuing Directors results in a Change in Control of the Company, the
      subsequent qualification of such persons as Continuing Directors shall not
      alter
      the fact that a Change in Control of the Company occurred; or

    

    (iii) the
      shareholders of the Company approve a merger, consolidation or share exchange
      of
      the Company with any other corporation or approve the issuance of voting
      securities of the Company in connection with a merger, consolidation or share
      exchange of the Company (or any direct or indirect subsidiary of the Company)
      pursuant to applicable stock exchange requirements, other than (A) a merger,
      consolidation or share exchange which would result in the voting securities
      of
      the Company outstanding immediately prior to such merger, consolidation or
      share
      exchange continuing to represent (either by remaining outstanding or by being
      converted into voting securities of the surviving entity or any parent thereof)
      at least 50% of the combined voting power of the voting securities of the
      Company or such surviving entity or any parent thereof outstanding immediately
      after such merger, consolidation or share exchange, or (B) a merger,
      consolidation or share exchange effected to implement a recapitalization of
      the
      Company (or similar transaction) in which no Person (other than an Excluded
      Person) is or becomes the Beneficial Owner, directly or indirectly, of
      securities of the Company (not including in the securities beneficially owned
      by
      such Person any securities acquired directly from the Company or its Affiliates
      after ___________, 200_, pursuant to express authorization by the Board that
      refers to this exception) representing 20% or more of either the then
      outstanding shares of common stock of the Company or the combined voting power
      of the Company’s then outstanding voting securities; or

    

    (iv) the
      shareholders of the Company approve of a plan of complete liquidation or
      dissolution of the Company or an agreement for the sale or disposition by the
      Company of all or substantially all of the Company’s assets (in one transaction
      or a series of related transactions within any period of 24 consecutive months),
      other than a sale or disposition by the Company of all or substantially all
      of
      the Company’s assets to an entity at least 75% of the combined voting power of
      the voting securities of which are owned by Persons in substantially the same
      proportions as their ownership of the Company immediately prior to such
      sale.

    

    Notwithstanding
      the foregoing, no “Change in Control of the Company” shall be deemed to have
      occurred if there is consummated any transaction or series of integrated
      transactions immediately following which the record holders of the common stock
      of the Company immediately prior to such transaction or series of transactions
      continue to own, directly or indirectly, in the same proportions as their
      ownership in the Company, an entity that owns all or substantially all of the
      assets or voting securities of the Company immediately following such
      transaction or series of transactions.

    

    (h) Code.
      The
      term “Code” means the Internal Revenue Code of 1986, including any amendments
      thereto or successor tax codes thereof.

    

    (i) Covered
      Termination.
      Subject
      to Section 2(b),
      the
      term “Covered Termination” means any termination of the Executive’s employment
      during the Employment Period where the Termination Date, or the date Notice
      of
      Termination is delivered, is any date prior to the end of the Employment
      Period.

    

    (j) Employment
      Period.
      Subject
      to Section 2(b),
      the
      term “Employment Period” means a period commencing on the date of a Change in
      Control of the Company, and ending at 11:59 p.m. Central Time on the
      earlier of the second anniversary of such date or the Executive’s Normal
      Retirement Date.

    
      
        
        

      

      
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        Return
          to Form 10-K

      

    

    

    (k) Fringe
      Benefits.
      The
      term “Fringe Benefits” means the fair market value of the fringe benefits
      payable to Executive by the Company (determined as of the time of the Change
      in
      Control of the Company or, if higher, immediately prior to the date the Notice
      of Termination is given). For these purposes, Fringe Benefits include, but
      are
      not limited to club dues or automobile reimbursement and do not include welfare
      benefits, such as medical coverage (including prescription drug coverage),
      dental coverage, life insurance, disability insurance and accidental death
      and
      dismemberment benefits.

    

    (l) Good
      Reason.
      The
      Executive shall have “Good Reason” for termination of employment in connection
      with a Change in Control of the Company in the event of:

    

    (i) any
      breach of this Agreement by the Employer, including specifically any breach
      by
      the Employer of the agreements contained in Section 3(b),
      Section 4,
      Section 5,
      or
Section 6,
      other
      than an isolated, insubstantial and inadvertent failure not occurring in bad
      faith that the Employer remedies promptly after receipt of notice thereof given
      by the Executive;

    

    (ii) any
      reduction in the Executive’s base salary, percentage of base salary available as
      incentive compensation or bonus opportunity or benefits, in each case relative
      to those most favorable to the Executive in effect at any time during the
      180-day period prior to the Change in Control of the Company or, to the extent
      more favorable to the Executive, those in effect at any time during the
      Employment Period;

    

    (iii) the
      removal of the Executive from, or any failure to reelect or reappoint the
      Executive to, any of the positions held with the Employer on the date of the
      Change in Control of the Company or any other positions with the Employer to
      which the Executive shall thereafter be elected, appointed or assigned, except
      in the event that such removal or failure to reelect or reappoint relates to
      the
      termination by the Employer of the Executive’s employment for Cause or by reason
      of disability pursuant to Section 12;

    

    (iv) a
      good
      faith determination by the Executive that there has been a material adverse
      change, without the Executive’s written consent, in the Executive’s working
      conditions or status with the Employer relative to the most favorable working
      conditions or status in effect during the 180-day period prior to the Change
      in
      Control of the Company, or, to the extent more favorable to the Executive,
      those
      in effect at any time during the Employment Period, including but not limited
      to
      (A) a significant change in the nature or scope of the Executive’s
      authority, powers, functions, duties or responsibilities, or (B) a
      significant reduction in the level of support services, staff, secretarial
      and
      other assistance, office space and accoutrements, but in each case excluding
      for
      this purpose an isolated, insubstantial and inadvertent event not occurring
      in
      bad faith that the Employer remedies within ten (10) days after receipt of
      notice thereof given by the Executive;

    

    (v) the
      relocation of the Executive’s principal place of employment to a location more
      than 50 miles from the Executive’s principal place of employment on the date 180
      days prior to the Change in Control of the Company;

    

    (vi) the
      Employer requires the Executive to travel on Employer business 20% in excess
      of
      the average number of days per month the Executive was required to travel during
      the 180-day period prior to the Change in Control of the Company;
      or

    

    
      	(vii)  	
              failure
                by the Company to obtain the Agreement referred to in Section 17(a)
                as
                provided therein.

            

    

    

    (m) Normal
      Retirement Date.
      The
      term “Normal Retirement Date” means “Normal Retirement Date” as defined in the
      primary qualified defined benefit pension plan applicable to the Executive,
      or
      any successor plan, as in effect on the date of the Change in Control of the
      Company.

    

    (n) Person.
      The
      term “Person” shall mean any individual, firm, partnership, corporation or other
      entity, including any successor (by merger or otherwise) of such entity, or
      a
      group of any of the foregoing acting in concert.

     

    
      
        
        

      

      
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        Return
          to Form 10-K

      

    

    

    (o) Termination
      Date.
      Except
      as otherwise provided in Section 2(b),
      Section 10(b),
      and
Section 17(a),
      the
      term “Termination Date” means (i) if the Executive’s employment is
      terminated by the Executive’s death, the date of death; (ii) if the
      Executive’s employment is terminated by reason of voluntary early retirement, as
      agreed in writing by the Employer and the Executive, the date of such early
      retirement which is set forth in such written agreement; (iii) if the
      Executive’s employment is terminated for purposes of this Agreement by reason of
      disability pursuant to Section 12,
      the
      earlier of thirty days after the Notice of Termination is given or one day
      prior
      to the end of the Employment Period; (iv) if the Executive’s employment is
      terminated by the Executive voluntarily (other than for Good Reason), the date
      the Notice of Termination is given; and (v) if the Executive’s employment
      is terminated by the Employer (other than by reason of disability pursuant
      to
Section 12)
      or by
      the Executive for Good Reason, the earlier of thirty days after the Notice
      of
      Termination is given or one day prior to the end of the Employment Period.
      Notwithstanding the foregoing,

    

    (A) If
      termination is for Cause pursuant to Section 1(f)(iii)
      and if
      the Executive has cured the conduct constituting such Cause as described by
      the
      Employer in its Notice of Termination within such thirty-day or shorter period,
      then the Executive’s employment hereunder shall continue as if the Employer had
      not delivered its Notice of Termination.

    

    (B) If
      the
      Executive shall in good faith give a Notice of Termination for Good Reason
      and
      the Employer notifies the Executive that a dispute exists concerning the
      termination within the fifteen-day period following receipt thereof, then the
      Executive may elect to continue his or her employment during such dispute and
      the Termination Date shall be determined under this paragraph. If the Executive
      so elects and it is thereafter determined that Good Reason did exist, the
      Termination Date shall be the earliest of (1) the date on which the dispute
      is finally determined, either (x) by mutual written agreement of the
      parties or (y) in accordance with Section 22,
      (2) the date of the Executive’s death or (3) one day prior to the end
      of the Employment Period. If the Executive so elects and it is thereafter
      determined that Good Reason did not exist, then the employment of the Executive
      hereunder shall continue after such determination as if the Executive had not
      delivered the Notice of Termination asserting Good Reason and there shall be
      no
      Termination Date arising out of such Notice. In either case, this Agreement
      continues, until the Termination Date, if any, as if the Executive had not
      delivered the Notice of Termination except that, if it is finally determined
      that Good Reason did exist, the Executive shall in no case be denied the
      benefits described in Section 9
      (including a Termination Payment) based on events occurring after the Executive
      delivered his Notice of Termination.

     

    (C)
      Except as provided in Section 1(n)(B),
      if the
      party receiving the Notice of Termination notifies the other party that a
      dispute exists concerning the termination within the appropriate period
      following receipt thereof and it is finally determined that the reason asserted
      in such Notice of Termination did not exist, then (1) if such Notice was
      delivered by the Executive, the Executive will be deemed to have voluntarily
      terminated his employment and the Termination Date shall be the earlier of
      the
      date fifteen days after the Notice of Termination is given or one day prior
      to
      the end of the Employment Period and (2) if delivered by the Company, the
      Company will be deemed to have terminated the Executive other than by reason
      of
      death, disability or Cause.

     

    
      	2.  	
              Termination
                or Cancellation Prior to Change in Control.

            

    

    

    (a) Subject
      to Section 2(b),
      the
      Employer and the Executive shall each retain the right to terminate the
      employment of the Executive at any time prior to a Change in Control of the
      Company. Subject to Section 2(b),
      in the
      event the Executive’s employment is terminated prior to a Change in Control of
      the Company, this Agreement shall be terminated and cancelled and of no further
      force and effect, and any and all rights and obligations of the parties
      hereunder shall cease.

    

    (b) Anything
      in this Agreement to the contrary notwithstanding, if a Change in Control of
      the
      Company occurs and if the Executive’s employment with the Employer is terminated
      (other than a termination due to the Executive’s death or as a result of the
      Executive’s disability) during the period of 180 days prior to the date on
      which the Change in Control of the Company occurs, and if it is reasonably
      demonstrated by the Executive that such termination of employment (i) was
      at the request of a third party who has taken steps reasonably calculated to
      effect a Change in Control of the Company or (ii) otherwise arose in
      connection with or in anticipation of a Change in Control of the Company, then
      for all purposes of this Agreement such termination of employment shall be
      deemed a “Covered Termination,” “Notice of Termination” shall be deemed to have
      been given, and the “Employment Period” shall be deemed to have begun on the
      date of such termination which shall be deemed to be the “Termination Date” and
      the date of the Change of Control of the Company for purposes of this
      Agreement.

    
      
        
        

      

      
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        Return
          to Form 10-K

      

    

    

    
      	3.  	
              Employment
                Period; Vesting of Certain Benefits.

            

    

    

    (a) If
      a
      Change in Control of the Company occurs when the Executive is employed by the
      Employer, the Employer will continue thereafter to employ the Executive during
      the Employment Period, and the Executive will remain in the employ of the
      Employer in accordance with and subject to the terms and provisions of this
      Agreement. Any termination of the Executive’s employment during the Employment
      Period, whether by the Company or the Employer, shall be deemed a termination
      by
      the Company for purposes of this Agreement.

    

    (b) If
      a
      Change in Control of the Company occurs when the Executive is employed by the
      Employer, (i) the Company shall cause all restrictions on restricted stock
      awards made to the Executive prior to the Change in Control of the Company
      to
      lapse such that the Executive is fully and immediately vested in the Executive’s
      restricted stock upon such a Change in Control of the Company; and (ii) the
      Company shall cause all stock options granted to the Executive prior to the
      Change in Control of the Company pursuant to the Company’s stock option plan(s)
      to be fully and immediately vested upon such a Change in Control of the
      Company.

    

    4. Duties.
      During
      the Employment Period, the Executive shall, in the same capacities and positions
      held by the Executive at the time of the Change in Control of the Company or
      in
      such other capacities and positions as may be agreed to by the Employer and
      the
      Executive in writing, devote the Executive’s best efforts and all of the
      Executive’s business time, attention and skill to the business and affairs of
      the Employer, as such business and affairs now exist and as they may hereafter
      be conducted.

    

    
      	5.  	
              Compensation.
                During the Employment Period, the Executive shall be compensated
                as
                follows:

            

    

    

    (a)
       The
      Executive shall receive, at reasonable intervals (but not less often than
      monthly) and in accordance with such standard policies as may be in effect
      immediately prior to the Change in Control of the Company, an annual base salary
      in cash equivalent of not less than twelve times the Executive’s highest monthly
      base salary for the twelve-month period immediately preceding the month in
      which
      the Change in Control of the Company occurs or, if higher, an annual base salary
      at the rate in effect immediately prior to the Change in Control of the Company
      (which base salary shall, unless otherwise agreed in writing by the Executive,
      include the current receipt by the Executive of any amounts which, prior to
      the
      Change in Control of the Company, the Executive had elected to defer, whether
      such compensation is deferred under Section 401(k) of the Code or
      otherwise), subject to adjustment as hereinafter provided in Section 6
      (such
      salary amount as adjusted upward from time to time is hereafter referred to
      as
      the “Annual Base Salary”).

    

    (b) The
      Executive shall receive Fringe Benefits at least equal in value to the highest
      value of such benefits provided for the Executive at any time during the 180-day
      period immediately prior to the Change in Control of the Company or, if more
      favorable to the Executive, those provided generally at any time during the
      Employment Period to any executives of the Employer of comparable status and
      position to the Executive; and shall be reimbursed, at such intervals and in
      accordance with such standard policies that are most favorable to the Executive
      that were in effect at any time during the 180-day period immediately prior
      to
      the Change in Control of the Company, for any and all monies advanced in
      connection with the Executive’s employment for reasonable and necessary expenses
      incurred by the Executive on behalf of the Employer, including travel
      expenses.

    

    (c) The
      Executive and/or the Executive’s family, as the case may be, shall be included,
      to the extent eligible thereunder (which eligibility shall not be conditioned
      on
      the Executive’s salary grade or on any other requirement which excludes persons
      of comparable status to the Executive unless such exclusion was in effect for
      such plan or an equivalent plan at any time during the 180-day period
      immediately prior to the Change in Control of the Company), in any and all
      plans
      providing benefits for the Employer’s salaried employees in general, including
      but not limited to group life insurance, hospitalization, medical (including
      prescription drug coverage), dental, profit sharing and stock bonus plans;
      provided,
      that,
      (i) in
      no event shall the aggregate level of benefits under such plans in which the
      Executive is included be less than the aggregate level of benefits under plans
      of the Employer of the type referred to in this Section 5(c)
      in which
      the Executive was participating at any time during the 180-day period
      immediately prior to the Change in Control of the Company and (ii) in no event
      shall the aggregate level of benefits under such plans be less than the
      aggregate level of benefits under plans of the type referred to in this
Section 5(c)
      provided
      at any time after the Change in Control of the Company to any executive of
      the
      Employer of comparable status and position to the Executive.

    

    (d) The
      Executive shall annually be entitled to not less than the amount of paid
      vacation and not fewer than the highest number of paid holidays to which the
      Executive was entitled annually at any time during the 180-day period
      immediately prior to the Change in Control of the Company or such greater amount
      of paid vacation and number of paid holidays as may be made available annually
      to other executives of the Employer of comparable status and position to the
      Executive at any time during the Employment Period.

    
      
        
        

      

      
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        Return
          to Form 10-K

      

    

    

    (e) The
      Executive shall be included in all plans providing additional benefits to
      executives of the Employer of comparable status and position to the Executive,
      including but not limited to deferred compensation, split-dollar life insurance,
      supplemental retirement, stock option, stock appreciation, stock bonus and
      similar or comparable plans; provided,
      that,
      (i) in
      no event shall the aggregate level of benefits under such plans be less than
      the
      highest aggregate level of benefits under plans of the Employer of the type
      referred to in this Section 5(e)
      in which
      the Executive was participating at any time during the 180-day period
      immediately prior to the Change in Control of the Company; (ii) in no event
      shall the aggregate level of benefits under such plans be less than the
      aggregate levels of benefits under plans of the type referred to in this
Section 5(e)
      provided
      at any time after the Change in Control of the Company to any executive of
      the
      Employer comparable in status and position to the Executive; and (iii) the
      Employer’s obligation to include the Executive in bonus or incentive
      compensation plans shall be determined by Section 5(f).

    

    (f) To
      assure
      that the Executive will have an opportunity to earn incentive compensation
      after
      a Change in Control of the Company, the Executive shall be included in a bonus
      plan of the Employer which shall satisfy the standards described below (such
      plan, the “Bonus Plan”). Bonuses under the Bonus Plan shall be payable with
      respect to achieving such financial or other goals reasonably related to the
      business of the Employer as the Employer shall establish (the “Goals”), all of
      which Goals shall be attainable, prior to the end of the Employment Period,
      with
      approximately the same degree of probability as the most attainable goals under
      the Employer’s bonus plan or plans as in effect at any time during the 180-day
      period immediately prior to the Change in Control of the Company (whether one
      or
      more, the “Company Bonus Plan”) and in view of the Employer’s existing and
      projected financial and business circumstances applicable at the time. The
      amount of the bonus (the “Bonus Amount”) that the Executive is eligible to earn
      under the Bonus Plan shall be no less than the amount of the Executive’s maximum
      award provided in such Company Bonus Plan (such bonus amount herein referred
      to
      as the “Targeted Bonus”), and in the event the Goals are not achieved such that
      the entire Targeted Bonus is not payable, the Bonus Plan shall provide for
      a
      payment of a Bonus Amount equal to a portion of the Targeted Bonus reasonably
      related to that portion of the Goals which were achieved. Payment of the Bonus
      Amount shall not be affected by any circumstance occurring subsequent to the
      end
      of the Employment Period, including termination of the Executive’s
      employment.

    

    6. Annual
      Compensation Adjustments.
      During
      the Employment Period, the Board of Directors of the Company (or an appropriate
      committee thereof) will consider and appraise, at least annually, the
      contributions of the Executive to the Company, and in accordance with the
      Company’s practice prior to the Change in Control of the Company, due
      consideration shall be given to the upward adjustment of the Executive’s Annual
      Base Salary, at least annually, (a) commensurate with increases generally
      given to other executives of the Company of comparable status and position
      to
      the Executive, and (b) as the scope of the Company’s operations or the
      Executive’s duties expand.

    

    7. Termination
      For Cause or Without Good Reason.
      If
      there is a Covered Termination for Cause or due to the Executive’s voluntarily
      terminating his or her employment other than for Good Reason (any such
      terminations to be subject to the procedures set forth in Section 13),
      then
      the Executive shall be entitled to receive only Accrued Benefits.

    

    8. Termination
      Giving Rise to a Termination Payment.
      If
      there is a Covered Termination by the Executive for Good Reason, or by the
      Company other than by reason of (i) death, (ii) disability pursuant to
Section 12,
      or
      (iii) Cause (any such terminations to be subject to the procedures set
      forth in Section 13),
      then
      the Executive shall be entitled to receive, and the Company shall promptly
      pay,
      Accrued Benefits and, in lieu of further base salary for periods following
      the
      Termination Date, as liquidated damages and additional severance pay and in
      consideration of the covenant of the Executive set forth in Section 14(a),
      the
      Termination Payment pursuant to Section 9(a).

    

    9. Payments
      Upon Termination.

    

    (a) Termination
      Payment.
      The
“Termination Payment” shall be an amount equal to the Annual Cash Compensation
      times two (2). The Termination Payment shall be paid to the Executive in cash
      equivalent ten (10) business days after the Termination Date. Such lump sum
      payment shall not be reduced by any present value or similar factor, and the
      Executive shall not be required to mitigate the amount of the Termination
      Payment by securing other employment or otherwise, nor will such Termination
      Payment be reduced by reason of the Executive securing other employment or
      for
      any other reason. The Termination Payment shall be in lieu of, and acceptance
      by
      the Executive of the Termination Payment shall constitute the Executive’s
      release of any rights of the Executive to, any other cash severance payments
      under any Company severance policy, practice or agreement.

    
      
        
        

      

      
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        Return
          to Form 10-K

      

    

    

    (b) Certain
      Additional Payments by the Company.

    

    (i) Notwithstanding
      any other provision of this Agreement, if any portion of the Termination Payment
      or any other payment under this Agreement, or under any other agreement with
      or
      plan of the Employer (in the aggregate, “Total Payments”), would constitute an
“excess parachute payment,” then the Company shall pay the Executive an
      additional amount (the “Gross-Up Payment”) such that the net amount retained by
      the Executive after deduction of any excise tax imposed under Section 4999
      of the Code (or any successor provision) and any interest charges or penalties
      in respect of the imposition of such excise tax (but not any federal, state
      or
      local income tax, or employment tax) on the Total Payments, and any federal,
      state and local income tax, employment tax, and excise tax upon the payment
      provided for by this Section 9(b)(i),
      shall
      be equal to the Total Payments. For purposes of determining the amount of the
      Gross-Up Payment, the Executive shall be deemed to pay federal income tax and
      employment taxes at the highest marginal rate of federal income and employment
      taxation in the calendar year in which the Gross-Up Payment is to be made and
      state and local income taxes at the highest marginal rate of taxation in the
      state and locality of the Executive’s domicile for income tax purposes on the
      date the Gross-Up Payment is made, net of the maximum reduction in federal
      income taxes that may be obtained from the deduction of such state and local
      taxes.

     

    (ii) For
      purposes of this Agreement, the terms “excess parachute payment” and “parachute
      payments” shall have the meanings assigned to them in Section 280G of the
      Code (or any successor provision) and such “parachute payments” shall be valued
      as provided therein. Present value for purposes of this Agreement shall be
      calculated in accordance with Section 1274(b)(2) of the Code (or any
      successor provision). Promptly following a Covered Termination or notice by
      the
      Company to the Executive of its belief that there is a payment or benefit due
      the Executive which will result in an “excess parachute payment” as defined in
      Section 280G of the Code (or any successor provision), the Executive and
      the Company, at the Company’s expense, shall obtain the opinion (which need not
      be unqualified) of nationally recognized tax counsel (“National Tax Counsel”)
      selected by the Company’s independent auditors and reasonably acceptable to the
      Executive (which may be regular outside counsel to the Company), which opinion
      sets forth (A) the amount of the Base Period Income, (B) the amount and present
      value of Total Payments, (C) the amount and present value of any excess
      parachute payments, and (D) the amount of any Gross-Up Payment. As used in
      this
      Agreement, the term “Base Period Income” means an amount equal to the
      Executive’s “annualized includable compensation for the base period” as defined
      in Section 280G(d)(1) of the Code. For purposes of such opinion, the value
      of any noncash benefits or any deferred payment or benefit shall be determined
      by the Company’s independent auditors in accordance with the principles of
      Section 280G(d)(3) and (4) of the Code (or any successor provisions), which
      determination shall be evidenced in a certificate of such auditors addressed
      to
      the Company and the Executive. The opinion of National Tax Counsel shall be
      addressed to the Company and the Executive and shall be binding upon the Company
      and the Executive. If such National Tax Counsel so requests in connection with
      the opinion required by this Section 9(b),
      the
      Executive and the Company shall obtain, at the Company’s expense, and the
      National Tax Counsel may rely on, the advice of a firm of recognized executive
      compensation consultants as to the reasonableness of any item of compensation
      to
      be received by the Executive solely with respect to its status under
      Section 280G of the Code and the regulations thereunder. Within five (5)
      days after the National Tax Counsel’s opinion is received by the Company and the
      Executive, the Company shall pay (or cause to be paid) or distribute (or cause
      to be distributed) to or for the benefit of the Executive such amounts as are
      then due to the Executive under this Agreement.

     

    (iii) In
      the
      event that upon any audit by the Internal Revenue Service, or by a state or
      local taxing authority, of the Total Payments or Gross-Up Payment, a change
      is
      finally determined to be required in the amount of taxes paid by the Executive,
      appropriate adjustments shall be made under this Agreement such that the net
      amount which is payable to the Executive after taking into account the
      provisions of Section 4999 of the Code (or any successor provision) shall
      reflect the intent of the parties as expressed in this Section 9,
      in the
      manner determined by the National Tax Counsel.

     

    (iv) The
      Company agrees to bear all costs associated with, and to indemnify and hold
      harmless, the National Tax Counsel of and from any and all claims, damages,
      and
      expenses resulting from or relating to its determinations pursuant to this
      Section 9(b),
      except
      for claims, damages or expenses resulting from the gross negligence or willful
      misconduct of such firm.

     

    (c) Additional
      Benefits.
      If
      there is a Covered Termination and the Executive is entitled to Accrued Benefits
      and the Termination Payment, then the Company shall provide to the Executive
      the
      following additional benefits:

    
      
        
        

      

      
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        Return
          to Form 10-K

      

    

    

    (i) The
      Executive shall receive, at the expense of the Company, outplacement services,
      on an individualized basis at a level of service commensurate with the
      Executive’s status with the Company immediately prior to the date of the Change
      in Control of the Company (or, if higher, immediately prior to the termination
      of the Executive’s employment), provided by a nationally recognized executive
      placement firm selected by the Company; provided
      that
      the cost
      to the Company of such services shall not exceed 10% of the Executive’s Annual
      Base Salary.

    

    (ii) Until
      the
      earlier of the end of the Employment Period or such time as the Executive has
      obtained new employment and is covered by benefits which in the aggregate are
      at
      least equal in value to the following benefits, the Executive shall continue
      to
      be covered, at the expense of the Company, by the same or equivalent life
      insurance, hospitalization, medical and dental coverage as was required
      hereunder with respect to the Executive immediately prior to the date the Notice
      of Termination is given.

    

    (iii) The
      Company shall bear up to $15,000 in the aggregate of fees and expenses of
      consultants and/or legal or accounting advisors engaged by the Executive to
      advise the Executive as to matters relating to the computation of benefits
      due
      and payable under this Section 9.

    

    (iv) The
      Company shall cause the Executive to be fully and immediately vested in his
      accrued benefit under any supplemental executive retirement plan of the Employer
      providing benefits for the Executive (the “SERP”) and in any defined
      contribution retirement plan of the Employer. In addition, the Company shall
      cause the Executive to be deemed to have satisfied any minimum years of service
      requirement under the SERP for subsidized early retirement benefits regardless
      of the Executive’s age and service at the Termination Date; provided,
      however,
      that
      SERP benefits will be based on service to date with no additional credit for
      service or age beyond such Termination Date.

    

    (v) On
      the
      Termination Date, for purposes of determining Executive’s eligibility for
      post-retirement benefits under any welfare benefit plan (as defined in Section
      3(1) of the Employee Retirement Security Act of 1974, as amended) maintained
      by
      the Company immediately prior to the Change in Control of the Company and in
      which Executive participated, immediately prior to the Change in Control of
      the
      Company, Executive shall be credited with the excess of two (2) years of
      participation in the applicable medical plan and two (2) years of age over
      the
      actual years and fractional years of participation and age credited to Executive
      as of the Change in Control of the Company. If after taking into account such
      participation and age, Executive would have been eligible to receive such
      post-retirement benefits had Executive retired immediately prior to the Change
      in Control of the Company, Executive shall receive, commencing on the
      Termination Date, post-retirement benefits based on the terms and conditions
      of
      the applicable plans in effect immediately prior to the Change in Control of
      the
      Company.

    

    (vi) For
      purposes of determining the Executive’s retirement benefits under the various
      retirement benefits plans of the Company, Executive shall be deemed to be an
      active employee receiving his Annual Base Salary and shall accordingly continue
      to earn service and accrue benefits under such plans for an additional period
      of
      two (2) years following the Termination Date.

    

    (vii) The
      Company shall cause all performance plan awards granted to the Executive
      pursuant to any long-term incentive plan maintained by the Company to be paid
      out at target, as if all performance requirements had been satisfied, on a
      pro
      rata basis based on the completed portion of each award cycle.

    

    (viii) The
      Executive shall, after the Termination Date, retain all rights to
      indemnification under applicable law or under the Company’s Certificate of
      Incorporation or By-Laws, as they may be amended or restated from time to time,
      to the extent any such amendment or restatement expands the Executive’s rights
      to indemnification. In addition, the Company shall maintain Director’s and
      Officer’s liability insurance on behalf of the Executive, provided the Executive
      is eligible to be covered and has in fact been covered by such insurance, at
      the
      highest level in effect immediately prior to the date of the Change in Control
      of the Company (or, if higher, immediately prior to the termination of the
      Executive’s employment) including any such insurance that was reduced prior to a
      Change in Control of the Company at the request of the person or entity
      acquiring control of the Company or reasonably shown to be related to the Change
      in Control of the Company, for the seven (7) year period following the
      Termination Date.

    

    10. Death.

    

    (a) Except
      as
      provided in Section 10(b),
      in the
      event of a Covered Termination due to the Executive’s death, the Executive’s
      estate, heirs and beneficiaries shall receive all the Executive’s Accrued
      Benefits through the Termination Date.

    
      
        
        

      

      
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        Return
          to Form 10-K

      

    

    

    (b) In
      the
      event the Executive dies after a Notice of Termination is given (i) by the
      Company or (ii) by the Executive for Good Reason, the Executive’s estate,
      heirs and beneficiaries shall be entitled to the benefits described in
Section 10(a)
      and,
      subject to the provisions of this Agreement, to such Termination Payment as
      the
      Executive would have been entitled to had the Executive lived. For purposes
      of
      this Section 10(b),
      the
      Termination Date shall be the earlier of thirty days following the giving of
      the
      Notice of Termination, subject to extension pursuant to Section 1(n),
      or one
      day prior to the end of the Employment Period.

    

    11. Retirement.
      If,
      during the Employment Period, the Executive and the Employer shall execute
      an
      agreement providing for the early retirement of the Executive from the Employer,
      or the Executive shall otherwise give notice that he is voluntarily choosing
      to
      retire early from the Employer, the Executive shall receive Accrued Benefits
      through the Termination Date; provided,
      that
      if the
      Executive’s employment is terminated by the Executive for Good Reason or by the
      Company other than by reason of death, disability or Cause and the Executive
      also, in connection with such termination, elects voluntary early retirement,
      the Executive shall also be entitled to receive a Termination Payment pursuant
      to Section 8.

    

    12. Termination
      for Disability.
      If,
      during the Employment Period, as a result of the Executive’s disability due to
      physical or mental illness or injury (regardless of whether such illness or
      injury is job-related), the Executive shall have been absent from the
      Executive’s duties hereunder on a full-time basis for a period of six
      consecutive months and, within thirty days after the Company notifies the
      Executive in writing that it intends to terminate the Executive’s employment
      (which notice shall not constitute the Notice of Termination contemplated
      below), the Executive shall not have returned to the performance of the
      Executive’s duties hereunder on a full-time basis, the Company may terminate the
      Executive’s employment for purposes of this Agreement pursuant to a Notice of
      Termination given in accordance with Section 13.
      If the
      Executive’s employment is terminated on account of the Executive’s disability in
      accordance with this Section, the Executive shall receive Accrued Benefits
      through the Termination Date and shall remain eligible for all benefits provided
      by any long term disability programs of the Company in effect at the time of
      such termination.

    

    13. Termination
      Notice and Procedure.
      Any
      Covered Termination by the Company or the Executive (other than a termination
      of
      the Executive’s employment that is a Covered Termination by virtue of
Section 2(b))
      shall
      be communicated by a written notice of termination (“Notice of Termination”) to
      the Executive, if such Notice is given by the Company, and to the Company,
      if
      such Notice is given by the Executive, all in accordance with the following
      procedures and those set forth in Section 23:

    

    (a) If
      such
      termination is for disability, Cause or Good Reason, the Notice of Termination
      shall indicate in reasonable detail the facts and circumstances alleged to
      provide a basis for such termination.

    

    (b) Any
      Notice of Termination by the Company shall have been approved, prior to the
      giving thereof to the Executive, by a resolution duly adopted by a majority
      of
      the directors of the Company (or any successor corporation) then in
      office.

    

    (c) If
      the
      Notice is given by the Executive for Good Reason, the Executive may cease
      performing his duties hereunder on or after the date fifteen days after the
      delivery of Notice of Termination and shall in any event cease employment on
      the
      Termination Date. If the Notice is given by the Company, then the Executive
      may
      cease performing his duties hereunder on the date of receipt of the Notice
      of
      Termination, subject to the Executive’s rights hereunder.

    

    (d) The
      Executive shall have thirty days, or such longer period as the Company may
      determine to be appropriate, to cure any conduct or act, if curable, alleged
      to
      provide grounds for termination of the Executive’s employment for Cause under
      this Agreement pursuant to Section 1(f)(iii).

    

    (e) The
      recipient of any Notice of Termination shall personally deliver or mail in
      accordance with Section 23
      written
      notice of any dispute relating to such Notice of Termination to the party giving
      such Notice within fifteen days after receipt thereof; provided,
      however,
      that if
      the Executive’s conduct or act alleged to provide grounds for termination by the
      Company for Cause is curable, then such period shall be thirty days. After
      the
      expiration of such period, the contents of the Notice of Termination shall
      become final and not subject to dispute.

    

    14.
       Further
      Obligations of the Executive.

    

    (a) Competition.
      The
      Executive agrees that, in the event of any Covered Termination where the
      Executive is entitled to Accrued Benefits and the Termination Payment, the
      Executive shall not, for a period expiring one year after the Termination Date,
      without the prior written approval of the Company’s Board of Directors,
      participate in the management of, be employed by or own any business enterprise
      at a location within the United States that engages in substantial competition
      with the Company or its subsidiaries, where such enterprise’s revenues from any
      competitive activities amount to 10% or more of such enterprise’s net revenues
      and sales for its most recently completed fiscal year; provided,
      however,
      that
      nothing in this Section 14(a)
      shall
      prohibit the Executive from owning stock or other securities of a competitor
      amounting to less than five percent of the outstanding capital stock of such
      competitor.

    
      
        
        

      

      
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          10 -

        
          

        

      

      
        Return
          to Form 10-K

      

    

    

    (b)  Confidentiality.
      During
      and following the Executive’s employment by the Company, the Executive shall
      hold in confidence and not directly or indirectly disclose or use or copy or
      make lists of any confidential information or proprietary data of the Company
      (including that of the Employer), except to the extent authorized in writing
      by
      the Board of Directors of the Company or required by any court or administrative
      agency, other than to an employee of the Company or a person to whom disclosure
      is reasonably necessary or appropriate in connection with the performance by
      the
      Executive of duties as an executive of the Company. Confidential information
      shall not include any information known generally to the public or any
      information of a type not otherwise considered confidential by persons engaged
      in the same business or a business similar to that of the Company. All records,
      files, documents and materials, or copies thereof, relating to the business
      of
      the Company which the Executive shall prepare, or use, or come into contact
      with, shall be and remain the sole property of the Company and shall be promptly
      returned to the Company upon termination of employment with the
      Company.

    

    15. Expenses
      and Interest.
      If,
      after a Change in Control of the Company, (a) a dispute arises with respect
      to the enforcement of the Executive’s rights under this Agreement or
      (b) any legal or arbitration proceeding shall be brought to enforce or
      interpret any provision contained herein or to recover damages for breach
      hereof, in either case so long as the Executive is not acting in bad faith,
      then
      the Company shall reimburse the Executive for any reasonable attorneys’ fees and
      necessary costs and disbursements incurred as a result of the dispute, legal
      or
      arbitration proceeding (“Expenses”), and prejudgment interest on any money
      judgment or arbitration award obtained by the Executive calculated at the rate
      of interest announced by M&I Marshall & Ilsley Bank, from time to time
      at its prime or base lending rate from the date that payments to him or her
      should have been made under this Agreement. Within ten days after the
      Executive’s written request therefor, the Company shall pay to the Executive, or
      such other person or entity as the Executive may designate in writing to the
      Company, the Executive’s reasonable Expenses in advance of the final disposition
      or conclusion of any such dispute, legal or arbitration proceeding.

    

    16. Payment
      Obligations Absolute.
      The
      Company’s obligation during and after the Employment Period to pay the Executive
      the amounts and to make the benefit and other arrangements provided herein
      shall
      be absolute and unconditional and shall not be affected by any circumstances,
      including, without limitation, any setoff, counterclaim, recoupment, defense
      or
      other right which the Company may have against him or anyone else, except as
      provided in Section
      20.
      Executive shall not be required to mitigate damages or the amount of any payment
      provided for under this Agreement by seeking other employment or otherwise,
      and
      compensation earned from such employment or otherwise shall not reduce the
      amounts otherwise payable under this Agreement. Except as provided in
Section 15,
      all
      amounts payable by the Company hereunder shall be paid without notice or demand.
      Each and every payment made hereunder by the Company shall be final, and the
      Company will not seek to recover all or any part of such payment from the
      Executive, or from whomsoever may be entitled thereto, for any reason
      whatsoever.

    
      
        
        

      

      
        -
          11 -

        
          

        

      

      
        Return
          to Form 10-K

      

    

    

    
      	17.  	
              Successors.

            

    

    

    (a) If
      the
      Company sells, assigns or transfers all or substantially all of its business
      and
      assets to any Person or if the Company merges into or consolidates or otherwise
      combines (where the Company does not survive such combination) with any Person
      (any such event, a “Sale of Business”), then the Company shall assign all of its
      right, title and interest in this Agreement as of the date of such event to
      such
      Person, and the Company shall cause such Person, by written agreement in form
      and substance reasonably satisfactory to the Executive, to expressly assume
      and
      agree to perform from and after the date of such assignment all of the terms,
      conditions and provisions imposed by this Agreement upon the Company. Failure
      of
      the Company to obtain such agreement prior to the effective date of such Sale
      of
      Business shall be a breach of this Agreement constituting “Good Reason”
hereunder, except that for purposes of implementing the foregoing the date
      upon
      which such Sale of Business becomes effective shall be deemed the Termination
      Date. In case of such assignment by the Company and of assumption and agreement
      by such Person, as used in this Agreement, “Company” shall thereafter mean such
      Person which executes and delivers the agreement provided for in this
Section 17
      or which
      otherwise becomes bound by all the terms and provisions of this Agreement by
      operation of law, and this Agreement shall inure to the benefit of, and be
      enforceable by, such Person. The Executive shall, in his or her discretion,
      be
      entitled to proceed against any or all of such Persons, any Person which
      theretofore was such a successor to the Company and the Company (as so defined)
      in any action to enforce any rights of the Executive hereunder. Except as
      provided in this Section 17(a),
      this
      Agreement shall not be assignable by the Company. This Agreement shall not
      be
      terminated by the voluntary or involuntary dissolution of the
      Company.

    

    (b) This
      Agreement and all rights of the Executive shall inure to the benefit of and
      be
      enforceable by the Executive’s personal or legal representatives, executors,
      administrators, heirs and beneficiaries. All amounts payable to the Executive
      under Sections 7,
      8, 9, 10, 11, 12 and 15
      if the
      Executive had lived shall be paid, in the event of the Executive’s death, to the
      Executive’s estate, heirs and representatives; provided,
      however,
      that the
      foregoing shall not be construed to modify any terms of any benefit plan of
      the
      Employer, as such terms are in effect on the date of the Change in Control
      of
      the Company, that expressly govern benefits under such plan in the event of
      the
      Executive’s death.

    

    18. Severability.
      The
      provisions of this Agreement shall be regarded as divisible, and if any of
      said
      provisions or any part hereof are declared invalid or unenforceable by a court
      of competent jurisdiction, the validity and enforceability of the remainder
      of
      such provisions or parts hereof and the applicability thereof shall not be
      affected thereby.

    

    19. Contents
      of Agreement; Waiver of Rights; Amendment.
      This
      Agreement sets forth the entire understanding between the parties hereto with
      respect to the subject matter hereof and supercedes, and the Executive hereby
      waives all rights under, any prior or other agreement or understanding between
      the parties with respect to such subject matter between the Company and the
      Executive. This Agreement may not be amended or modified at any time except
      by
      written instrument executed by the Company and the Executive.

    

    20. Withholding.
      The
      Company shall be entitled to withhold from amounts to be paid to the Executive
      hereunder any federal, state or local withholding or other taxes or charges
      which it is from time to time required to withhold; provided,
      that
      the
      amount so withheld shall not exceed the minimum amount required to be withheld
      by law. The Company shall be entitled to rely on an opinion of the National
      Tax
      Counsel if any question as to the amount or requirement of any such withholding
      shall arise.

    

    21. Certain
      Rules of Construction.
      No
      party shall be considered as being responsible for the drafting of this
      Agreement for the purpose of applying any rule construing ambiguities against
      the drafter or otherwise. No draft of this Agreement shall be taken into account
      in construing this Agreement. Any provision of this Agreement which requires
      an
      agreement in writing shall be deemed to require that the writing in question
      be
      signed by the Executive and an authorized representative of the
      Company.

    

    22. Governing
      Law; Resolution of Disputes.
      This
      Agreement and the rights and obligations hereunder shall be governed by and
      construed in accordance with the laws of the State of Wisconsin. Any dispute
      arising out of this Agreement shall, at the Executive’s election, be determined
      by arbitration under the rules of the American Arbitration Association then
      in
      effect (in which case both parties shall be bound by the arbitration award)
      or
      by litigation. Whether the dispute is to be settled by arbitration or
      litigation, the venue for the arbitration or litigation shall be Milwaukee,
      Wisconsin or, at the Executive’s election, if the Executive is not then residing
      or working in the Milwaukee, Wisconsin metropolitan area, in the judicial
      district encompassing the city in which the Executive resides; provided,
      that,
      if the
      Executive is not then residing in the United States, the election of the
      Executive with respect to such venue shall be either Milwaukee, Wisconsin or
      in
      the judicial district encompassing that city in the United States among the
      thirty cities having the largest population (as determined by the most recent
      United States Census data available at the Termination Date) which is closest
      to
      the Executive’s residence. The parties consent to personal jurisdiction in each
      trial court in the selected venue having subject matter jurisdiction
      notwithstanding their residence or situs, and each party irrevocably consents
      to
      service of process in the manner provided hereunder for the giving of notices.
      

    

    23. Notice.
      Notices
      given pursuant to this Agreement shall be in writing and, except as otherwise
      provided by Section 13(d),
      shall
      be deemed given when actually received by the Executive or actually received
      by
      the Company’s Secretary or any officer of the Company other than the Executive.
      If mailed, such notices shall be mailed by United States registered or certified
      mail, return receipt requested, addressee only, postage prepaid, if to the
      Company, to Regal-Beloit Corporation, Attention: Secretary (or President, if
      the
      Executive is then Secretary), 200 State Street, Beloit, Wisconsin 53511-6254,
      or
      if to the Executive, at the address set forth below the Executive’s signature to
      this Agreement, or to such other address as the party to be notified shall
      have
      theretofore given to the other party in writing.

    

    24. No
      Waiver.
      No
      waiver by either party at any time of any breach by the other party of, or
      compliance with, any condition or provision of this Agreement to be performed
      by
      the other party shall be deemed a waiver of similar or dissimilar provisions
      or
      conditions at the same time or any prior or subsequent time.

     

    25. Headings.
      The
      headings herein contained are for reference only and shall not affect the
      meaning or interpretation of any provision of this Agreement..

     

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

     

    
      	 	 	 
	 	REGAL-BELOIT
              CORPORATION
	 
 	 
 	 
 
	 	
              By:  

            	 
	 	
              
                

                Name:

              Title:

            
	 	            
	
              Attest:

            	 
              
              
Name:

              Title:

            
	
               

            	 
	 	 EXECUTIVE:
	 	 
	 	
               (SEAL)

            
	 	 
	
                                                                                                                           
                    Address:

            	 
	 	 

    

     

    
 

    
      
        
        

      

      
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          12 -

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