Document:

Exhibit 10.2

 

ROLLER BEARING HOLDING COMPANY, INC.

 

STOCK OPTION PLAN

 

1.                                       Purpose. The Roller Bearing Holding Company, Inc.
Stock Option Plan (the “Plan”) is intended to provide incentives which will
attract and retain highly competent persons as officers and employees of Roller
Bearing Holding Company, Inc. and its designated subsidiaries (the “Company”),
as well as independent contractors providing consulting or advisory services to
the Company, by providing them opportunities to acquire shares of Class A
voting stock of the Company (“Common Shares”) pursuant to Options, as described
herein.

 

2.                                       Administration.

 

(a)                                  The Plan will be administered by the Board of
Directors of the Company (the “Board”) unless and until the Board delegates, or
is required to delegate, administration to a Committee, as provided in Sections
2(b) or 2(c) below. The Board is authorized, subject to the
provisions of the Plan, to establish such rules and regulations as it
deems necessary or appropriate for the proper administration of the Plan and to
make such determinations and interpretations and to take such action in
connection with the Plan and any Options granted hereunder as it deems
necessary or advisable. All determinations and interpretations made by the
Board shall be binding and conclusive on all participants and their legal
representatives. No member of the Board, and no employee of the Company shall
be liable for any act or failure to act hereunder, by any other member or
employee or by any agent to whom duties in connection with the administration
of this Plan have been delegated or, except in circumstances involving his bad
faith, gross negligence or fraud, for any act or failure to act by the member
or employee.

 

(b)                                 The Board may delegate all or any portion of
administration of the Plan to a committee composed of not fewer than two (2) members
of the Board (the “Committee”). If administration is delegated to a Committee,
the Committee shall have, in connection with the administration of the Plan,
the powers theretofore possessed by the Board (and references in this Plan to
the Board shall thereafter be to the Committee, as applicable), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may terminate all
or any portion of the Committee’s authority under the Plan at any time and
revest in the Board all or any portion of the administration of the Plan.

 

 

(c)                                  The Board shall be required to delegate
administration of the Plan to a Committee, all of whose members shall be “nonemployee
directors,” effective on and after the date of the first registration of an
equity security of the Company under Section 12 of the Securities Exchange
Act of 1934 (the “Exchange Act”). Any “nonemployee director” shall otherwise
comply with the requirements of Rule 16b-3 of the Exchange Act as in
effect at the relevant time and, to the extent necessary, Internal Revenue Code
Section 162(m).

 

3.                                       Participants. Participants will consist of
such officers and employees of the Company, and independent contractors
providing consulting or advisory services to the Company (including members of
the Board), as the Board, in its sole discretion, determines to be
significantly responsible for the success and future growth and profitability
of the Company and whom the Board may designate from time to time to receive
Options under the Plan. Designation as a participant in any year shall not
require the Board to designate such person to receive an Option in any other year
or, once designated, to receive the same type or amount of Options as granted
to the participant, or any other participant, in any year. The Board shall
consider such factors as it deems pertinent in selecting participants and in
determining the type and amount of their respective Options.

 

4.                                       Shares Reserved under the Plan. Subject to
adjustments as provided in Section 6, there is hereby reserved for
issuance under the Plan an aggregate of 3,365,596 Common Shares, which may be
authorized but unissued shares or shares held by the Company in its treasury.
Any shares subject to any form of Option hereunder may thereafter be subject to
new Options under this Plan if there is a lapse, expiration or termination of
any such Options granted prior to issuance of the shares, or if shares are
issued under Options and thereafter are reacquired by the Company pursuant to
rights reserved by the Company upon issuance thereof.

 

5.                                       Options. Options will consist of awards from
the Company that will enable the holder to purchase a specific number of Common
Shares, at set terms and at a fixed purchase price. Options may be “incentive
stock options” within the meaning of Section 422 of the Internal Revenue
Code (“Incentive Stock Options”) or Options that do not constitute Incentive
Stock Options (“Nonqualified Stock Options,” and together with Incentive Stock
Options, “Options”). The Board will have the authority to grant to any
participant one or more Incentive Stock Options, Nonqualified Stock Options, or
both types of Options. Each Option shall be evidenced by a written option
agreement in such form and shall be subject to such terms and conditions as the
Board may approve from time to time, including without limitation the
following:

 

(a)                                  Exercise Price. Each Option granted hereunder
shall have such per-share exercise price as the Board may determine at the date
of grant; provided, however, that the per-share exercise price for Options
shall not be less than 100% of the Fair Market Value of the Common Shares on
the date the option is granted, as reasonably determined by the Board.

 

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(b)                                 Payment of Exercise Price. The option exercise
price may be paid by check or, in the discretion of the Board, by the delivery
(or certification of ownership) of Common Shares of the Company then owned by
the participant; provided, however, that payment of the exercise price by
delivery of Common Shares of the Company then owned by the participant may be
made only if such payment does not result in a charge to earnings for financial
accounting purposes as determined by the Board. In the discretion of the Board,
if Common Shares are readily tradeable on a national securities exchange or
other market system at the time of option exercise, payment may also be made by
delivering a properly executed exercise notice to the Company together with a
copy of irrevocable instructions to a broker to deliver promptly to the Company
the amount of sale or loan proceeds to pay the exercise price. To facilitate the
foregoing, the Company may enter into agreements for coordinated procedures
with one or more brokerage firms.

 

(c)                                  Exercise Period. Options granted under the
Plan shall be exercisable at such times and subject to such terms and
conditions as shall be determined by the Board; provided, however, that Options
shall not be exercisable more than 10 years after the date they are granted.
All Options shall terminate at such earlier times and upon such conditions or
circumstances as the Board shall in its sole discretion set forth in such
option at the date of grant, including but not limited to limitations on
exercisability following termination of the participant’s employment or
consulting relationship.

 

(d)                                 Limitations on Incentive Stock Options.
Incentive Stock Options may be granted only to participants who are employees
of the Company or one of its subsidiaries (within the meaning of Section 424(f) of
the Internal Revenue Code) at the date of grant. The aggregate Fair Market
Value (determined as of the time the option is granted) of the Common Shares
with respect to which Incentive Stock Options are exercisable for the first
time by a participant during any calendar year (under all option plans of the
Company) shall not exceed $100,000. Incentive Stock Options may not be granted
to any participant who, at the time of grant, owns stock possessing (after the
application of the attribution rules of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company, unless the option price is fixed at not less than 110% of the
Fair Market Value of the Common Shares on the date of grant and the exercise of
such option is prohibited by its terms after the expiration of five years from
the date of grant of such option.

 

(e)                                  Redesignation as Nonqualified Stock Options.
Options designated as Incentive Stock Options that fail to meet the
requirements of Section 422 of the Internal Revenue Code shall be
redesignated as nonqualified options for Federal income tax purposes automatically
without further action by the Board on the date of such failure to continue to
meet the requirements of Section 422 of the Code.

 

(f)                                    Limitation of Rights in Shares. The recipient
of an Option shall not be deemed for any purpose to be a shareholder of the
Company with respect to any of the

 

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shares subject thereto except
to the extent that the Option shall have been exercised and, in addition, a
certificate shall have been issued and delivered to the participant.

 

6.                                       Adjustment Provisions.

 

(a)                                  If the Company shall at any time change the
number of issued Common Shares without new consideration to the Company by
stock dividend, stock split, recapitalization, reorganization, exchange of
shares, liquidation, combination or other change in corporate structure
affecting the Common Shares, the total number of shares available for Options
under this Plan shall be appropriately adjusted and the number of shares
covered by each outstanding Option and the exercise price thereunder shall be
adjusted so that the net value of such Option shall not be changed, all of the
foregoing, including the appropriations of any such adjustment to be as
determined by the Board, in its discretion. It is specifically understood that
the provisions of this subsection (a) are intended to apply solely to
capital events that are independent of, and unrelated to, any transaction
involving the direct or indirect sale or issuance of securities of the Company
for value (and irrespective of the adequacy of the consideration so paid).

 

(b)                                 In the case of any sale of assets, merger,
consolidation, combination or other corporate reorganization or restructuring
of the Company with or into another corporation which results in the
outstanding Common Shares being converted into or exchanged for different
securities, cash or other property, or any combination thereof (an “Acquisition”),
subject to the provisions of this Plan and any limitation applicable to the
Option, any participant to whom an Option has been granted shall have the right
thereafter and during the term of the Option, to receive upon exercise thereof
the Acquisition Consideration (as defined below) receivable upon the
Acquisition by a holder of the number of Common Shares that might have been
obtained upon exercise of the Option or portion thereof, as the case may be,
immediately prior to the Acquisition. The term “Acquisition Consideration”
shall mean the kind and amount of securities, cash or other property or any
combination thereof receivable in respect of one Common Share upon consummation
of an Acquisition.

 

(c)                                  Notwithstanding any other provision of this
Plan, the Board may authorize the issuance, continuation or assumption of
Options or provide for other equitable adjustments after changes in the Common
Shares resulting from any other merger, consolidation, sale of assets,
acquisition of property or stock, recapitalization, reorganization or similar
occurrence upon such terms and conditions as it may deem equitable and appropriate.

 

(d)                                 In the event that another corporation or
business entity is being acquired by the Company, and the Company assumes
outstanding employee stock options and/or the obligation to make future grants
of options to employees of the acquired entity, the aggregate

 

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number of Common Shares
available for Options under this Plan shall be increased accordingly.

 

7.                                       Nontransferability.

 

(a)                                  Each Option granted under the Plan to a
participant shall not be transferable by him otherwise than by will or the laws
of descent and distribution, and shall be exercisable, during the participant’s
lifetime, only by him. In the event of the death of a participant while the
participant is rendering employment, consulting or advisory services to the
Company, each Option theretofore granted to him shall be exercisable during
such period after his death as the Board shall in its discretion set forth in
such option at the date of grant (but not beyond the stated duration of the option)
and then only:

 

(i)                                     By the executor or administrator of the estate
of the deceased participant or the person or persons to whom the deceased
participant’s rights under the Option shall pass by will or the laws of descent
and distribution; and

 

(ii)                                  To the extent that the deceased participant
was entitled to do so at the date of his death.

 

(b)                                 Notwithstanding Section 7(a), in the
discretion of the Board, Options granted hereunder may be transferred to
members of the participant’s immediate family (which for purposes of this Plan
shall be limited to the participant’s children, grandchildren and spouse), or
to one or more trusts for the benefit of such family members, or to
partnerships or limited liability companies in which such family members and/or
trusts are the only partners or members, but only if the Option expressly so
provides.

 

8.                                       Other Provisions. Options granted under the
Plan may also be subject to such other provisions (whether or not applicable to
any other Options awarded under the Plan to the participant or to any other
participant) as the Board determines appropriate, including without limitation,
provisions for the installment purchase of Common Shares, provisions to assist
the participant in financing the acquisition of Common Shares, provisions for
the forfeiture of, or restrictions on resale or other disposition of, Common
Shares acquired under any form of Option, provisions for the deferral of option
gains, provisions for the acceleration of exercisability or vesting of Options
in the event of a change of control of the Company, provisions for the payment
of the value of Options to participants in the event of a change of control of
the Company, provisions for the forfeiture of the Options, or provisions to
comply with Federal and state securities laws, or understandings or conditions
as to the participant’s employment in addition to those specifically provided
for under the Plan.

 

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9.                                       Fair Market Value. For purposes of this Plan
and any Options awarded hereunder, the Fair Market Value of Common Shares shall
be the mean between the highest and lowest sale prices for the Company’s Common
Shares as reported on the Nasdaq National Market (or such other consolidated
transaction reporting system on which such Common Shares are primarily traded)
on the date of calculation (or on the next preceding trading date if Common
Shares were not traded on the date of calculation); provided, however, that if
the Company’s Common Shares are not at any time readily tradeable on a national
securities exchange or other market system, Fair Market Value shall mean the
amount determined in good faith by the Board as the fair market value of the
Common Shares of the Company.

 

10.                                 Withholding. All payments or distributions
made pursuant to the Plan shall be net of any amounts required to be withheld
pursuant to applicable federal, state and local income and/or employment tax
withholding requirements. If the Company proposes or is required to distribute
Common Shares pursuant to the exercise of Options, it may require the recipient
to remit to it an amount sufficient to satisfy such tax withholding
requirements prior to the delivery of any certificates for such Common Shares.
The Board may, in its discretion and subject to such rules as it may
adopt, permit an optionee to pay all or a portion of the federal, state and
local withholding taxes arising in connection with the exercise of an Option,
by electing to have the Company withhold Common Shares having a Fair Market
Value equal to the amount of taxes required to be withheld.

 

11.                                 Tenure. A participant’s right, if any, to
continue to serve the Company as an officer, employee, consultant, advisor, or
otherwise, shall not be enlarged or otherwise affected by his designation as a
participant under the Plan, nor shall this Plan in any way interfere with the
right of the Company, subject to the terms of any separate agreement to the
contrary, at any time to terminate such employment, consulting or advisory
relationship, or to increase or decrease the compensation of the participant
from the rate in existence at the time of the grant of an Option.

 

12.                                 Duration, Amendment and Termination. No Option
shall be granted after December 31, 2008; provided, however, that the
terms and conditions applicable to any Option granted prior to such date may
thereafter be amended or modified by mutual agreement between the Company and
the participant or such other persons as may then have an interest therein.
Also, by mutual agreement between the Company and a participant hereunder,
under this Plan or under any other present or future plan of the Company,
Options may be granted to such participant in substitution and exchange for,
and in cancellation of, any Options previously granted such participant under
this Plan, or any other present or future plan of the Company. The Board may
amend the Plan from time to time or terminate the Plan at any time, subject to
any requirement of stockholder approval required by applicable law, rule or
regulation. However, no action authorized by this Section 12 shall reduce
the amount of any outstanding Option or change the terms or conditions thereof
without the participant’s consent.

 

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13.                                 Governing Law. This Plan and actions taken in
connection herewith shall be governed and construed in accordance with the laws
of the State of Delaware (regardless of the law that might otherwise govern
under applicable Delaware principles of conflict of laws).

 

14.                                 Approval. The Plan was adopted by the Board on
February 18, 1998 and the shareholders of the Company on February 18,
1998.

 

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ROLLER BEARING HOLDING COMPANY, INC.

 

NON-QUALIFIED STOCK OPTION

 

THIS
OPTION is granted this      day of    , 199 ,
by Roller Bearing Holding Company, Inc. a           corporation
(“RBC”) to                  (the
“Employee”);

 

WHEREAS,
the Board of Directors of RBC is of the opinion that the interests of RBC and
its subsidiaries (collectively, the “Company”) will be advanced by encouraging
and enabling those officers and key employees of the Company, as well as
independent contractors providing consulting or advisory services to the
Company, upon whose judgment, initiative and efforts the Company is largely
dependent for the successful conduct of the business of the Company to acquire
or increase their proprietary interest in the Company, thus providing them with
a more direct stake in its welfare and assuring a closer identification of
their interests with those of the Company; and

 

WHEREAS,
the Board believes that the acquisition of such an interest in the Company will
stimulate the efforts of such officers, key employees and independent
contractors;

 

NOW,
THEREFORE, in consideration of the premises and of the services required under Section 2
in order to receive benefits hereunder, the Company hereby grants this option
to the Employee on the terms hereinafter expressed:

 

1.                                       Option Grant. 
The Company hereby grants to the Employee a non- qualified stock option
to purchase a total of      shares (the “Option
Shares”) of

 

 

class A voting stock of RBC (“Common
Shares”) at the option price of $514 per Common Share. This option is not
intended to qualify as an incentive stock option within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended.

 

2.                                       Time of Exercise. This option may be exercised
(in the manner provided in Section 3 hereof) in whole or in part, from
time to time after the date hereof, subject to the following limitations:

 

(a)                                  This option may be exercised (to the extent
not previously exercised) to the maximum cumulative extent set forth below,
i.e. depending upon the date of such exercise:

 

	
   

  	
   

  	
  Permitted Exercise (Stated

  
	
   

  	
   

  	
  as a Percentage of the Total

  
	
  Date of Exercise

  	
   

  	
  Option Shares)

  
	
   

  	
   

  	
   

  
	
  [From and after the date
  hereof]

  	
   

  	
         %

  
	
   

  	
   

  	
   

  
	
  [From and after]

  	
   

  	
         %

  
	
   

  	
   

  	
   

  
	
  [From and after hereof]

  	
   

  	
         %

  
	
   

  	
   

  	
   

  
	
  [From and after hereof]

  	
   

  	
         %

  

 

Notwithstanding
the foregoing, this option may not be exercised for fractional Common Shares
and this option may not be exercised for less than       Common
Shares at a time unless it is for the balance of the Option Shares available
hereunder.

 

(b)                                 Notwithstanding Section 2(a) hereof,
in the event of the Employee’s termination of employment with the Company due
to “Permanent Disability” (as defined below) or death, this option shall
immediately become exercisable (to the extent not previously exercised) to the
extent of 100% of the total Option Shares.

 

2

 

(c)                                  This option shall terminate as to any then
unexercised options (and shall then forever lapse) on the tenth anniversary of
the date hereof, or, if earlier, upon the first to occur of any of the
following:

 

(i)                                     the effective date of the termination of the
Employee’semployment by the Company for “cause,” which for purposes of this option
shall have the same meaning as set forth in any separate employment agreement
between the Employer and the Company or, in the absence of any such separate
employment agreement, “cause” means termination because of

 

(1)                                  any act of fraud, embezzlement, theft or
commission of a crime involving moral turpitude by the Employee;

 

(2)                                  any breach by the Employee of any material
covenant, condition, or agreement in any employment agreement entered into with
the Company;

 

(3)                                  any good faith finding by the Company that the
Employee repeatedly failed to perform the Employee’s required duties; provided
that the Company shall have provided the Employee with notice of such failure
to perform and shall have afforded the Employee a reasonable opportunity to
cure (it being understood that compliance with the notice or cure provisions
set forth in any written employment agreement with the Employee shall constitute
reasonable actions on behalf of the Company); or

 

3

 

(4)                                  any chemical dependency by the Employee (other
than in connection with medicines prescribed for the Employee).

 

(ii)                                  90 days following the termination of the
Employee’s employment by the Company for any reason other than death, Permanent
Disability or “cause” (and, in any such case, then only to the extent the
Employee could have exercised this option on the date of such termination); or

 

(iii)                               one year following the termination of the
Employee’s employment due to death or Permanent Disability.

 

(d)                                 For purposes of this option, the Employee’s
employment will be deemed to have been terminated due to Permanent Disability
if such termination is due to Employee’s inability to perform his or her stated
duties with the Company, as confirmed by a physician acceptable to the Company
specializing in the area of medicine that is the subject of such disability, by
reason of illness, accident or other incapacity, for a period of more than 90
consecutive days or 180 days during any consecutive 360 day period.

 

(e)                                  This option shall not be affected by leaves of
absence approved in writing by the CEO of the Company or by any change of
employment status so long as the Employee continues to be an employee of the
Company. Nothing in this option shall confer on the Employee any right to
continue in the employ of the Company or to interfere with the right of the
Company, subject to the terms of any separate employment contract, if any, to
the contrary, to terminate Employee’s employment at any time.

 

4

 

3.                                       Exercise of Option.

 

(a)                                  This option may be exercised only by
appropriate notice in writing delivered to the Secretary of RBC at its
corporate headquarters in Fairfield, Connecticut, and accompanied by:

 

(i)                                     The full purchase price of the Option Shares
purchased payable by a certified or cashier’s check made payable to the order
of the Company;

 

(ii)                                  An executed Stock Transfer Restriction
Agreement (the “Stock Restriction Agreement”) between the Company and the
Employee or his successor in interest, whether determined by will or the laws
of descent and distribution or otherwise, in the form attached hereto as Exhibit A,
as the same may be modified from time to time, in RBC’s discretion; and

 

(iii)                               Such other documents or representations
(including without limitation representations as to the intention of the
Employee or his successor, or other purchaser under Section 6, to acquire
the Option Shares for investment) as the Company may reasonably request in
order to comply with securities, tax or other laws then applicable to the exercise
of the option.

 

(b)                                 Payment of the option exercise price hereunder
may, in the sole discretion of the Company, be made by delivering (or
certifying as to ownership) certificates for Common Shares which have been held
by Employee for at least six

 

5

 

months (or such longer period
as RBC may deem necessary in order to avoid a charge to earnings for financial
reporting purposes) which are equal in value (based on their Fair Market Value
on the date of surrender) to such purchase price or the portion thereof so
paid). In addition, in the event Option Shares are registered under the
Securities Exchange Act of 1934, payment of the option exercise price hereunder
may, in the sole discretion of RBC, also be made by delivering a properly
executed exercise notice to RBC together with a copy of irrevocable
instructions to a broker to promptly deliver to RBC the necessary amount of
sale or loan proceeds to pay the exercise price. To facilitate the foregoing,
RBC may enter into agreements for coordinated procedures with one or more
brokerage firms.

 

(c)                                  The exercise of this option is conditioned
upon the Employee making arrangements satisfactory to the Company relating to
any required withholding taxes attributable to such exercise. The Company may,
in its sole discretion and subject to such rules and procedures as it may
adopt, permit the Employee to satisfy any tax withholding obligation, in whole
or in part, by electing to have the Company withhold Option Shares received in
connection with the exercise of this option having a Fair Market Value equal to
the amount required to be withheld.

 

4.                                       Change of Control.

 

(a)                                  In the event of a Change of Control, the Board
may, in its sole discretion by providing at least 30-days prior written
notice to the Employee (i) elect to cancel this option, unless theretofore
(or concurrently with such Change of Control) exercised, on the effective date
of the Change of Control, and/or (ii) accelerate the

 

6

 

exercisability of this option
with respect to all or any portion of the Option Shares that were not
theretofore exercisable by operation of Section 2 above, and/or (iii) require,
in lieu of the exercise of this option, that the Employee be provided with a
cash payment as set forth in Section 4(c) hereof.

 

(b)                                 For purposes of this option, a “Change of
Control” shall occur:

 

(i)                                     upon the consummation of a sale, lease,
exchange or other transfer or disposition by the Company of all or
substantially all of the assets of the Company on a consolidated basis;
provided, however, that the mortgage, pledge or hypothecation of all or
substantially all of the assets of the Company on a consolidated basis, in
connection with a bona fide financing shall not constitute a Change of Control;
or

 

(ii)                                  when any “person,” other than any shareholder
having Voting Control as of June 23,
1997, (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 but excluding any Company sponsored employee benefit plan)
becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Securities Exchange Act of 1934 as in effect on date hereof), directly or
indirectly, of Voting Control.
For the purposes hereof “Voting Control” means owning more than 50% of the “voting power” of those of RBC’s
(or, for purposes of (iii) below
of a corporation with which RBC shall have merged or consolidated) securities that have the right
to elect the Board of Directors
of RBC or such other corporation and otherwise direct the governance of RBC or such other corporation;
or

 

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(iii)                               upon the consummation of a merger or
consolidation in which any person
(other than any shareholder having voting control as of June 23, 1997) will beneficially own
immediately after the effective time
of the merger or consolidation Voting Control of the surviving or new corporation; or

 

(c)                                  Pursuant to Section 4(a)(iii) hereof,
in the event of a Change of Control, the Company may, at its option, elect to
pay in cash an amount equal to the excess, if any, of (i) the Fair Market
Value of each Option Share on the date of exercise over (ii) the exercise
price as provided herein, multiplied by the number of Option Shares for which
the option is exercised, less any required withholding taxes. In the event of
such election, the Company will make a payment to the Employee, his estate, the
person to whom the option passes by will or by the laws of descent or
distribution or the Employee’s legal representative or guardian, upon the
effective date of the Change of Control and the Company shall have no further liability
of any kind to Employee.

 

5.                                       Transferability of Option.

 

(a)                                  Except as provided in Sections 5(b), this
option is not transferable by the Employee otherwise than by will or the laws
of descent and distribution, and is exercisable, during the Employee’s
lifetime, only by him or her.

 

(b)                                 Subject to the prior written consent of the
Company, this option may transferred, in whole or in part, only under the
circumstances, and subject to the terms and conditions, set forth in Section 2.5
of the Stock Restriction Agreement.

 

6.                                       Death of Employee. If the Employee dies while
in the employ of the

 

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Company, this option may be
exercised in whole or in part and from time to time, in the manner described in
Section 3 hereof, by his estate or the person to whom the option passes by
will or the laws of descent and distribution, but only to the extent that the
Employee could have exercised it on the date of his death, and only within a
period of (a) twelve months next succeeding the Employee’s termination of
employment due to death, or (b) ten years from the date hereof, whichever
period is shorter.

 

7.                                       Delivery of Certificates. If at any time
during the term of this option the Company shall be advised by its counsel that
Option Shares deliverable upon exercise of this option are required to be
registered under the Federal Securities Act of 1933, as amended, or under
applicable state securities laws, or that delivery of the Option Shares must be
accompanied or preceded by a prospectus meeting the requirements of the Act or
of any applicable state securities laws, delivery of Option Shares by the
Company may be deferred until registration is effected or a prospectus is
available or until an appropriate exemption from registration is secured. The
Employee shall have no interest in the Option Shares covered by this option
unless and until certificates for the Option Shares are issued following the
exercise of this option.

 

8.                                       Adjustment Provisions.

 

(a)                                  If RBC shall at any time change the number of
issued Common Shares without new consideration to RBC by stock dividend, stock
split, recapitalization, reorganization, exchange of shares, liquidation,
combination or other change in corporate structure affecting the Common Shares,
the total number of shares available for options under this option shall be
appropriately adjusted and the exercise price hereunder shall

 

9

 

be adjusted so that the net
value of such option shall not be changed, all of the foregoing, including the
appropriations of any such adjustment to be as determined by the Board, in its
sole discretion. It is specifically understood that the provisions of this subsection (a) are
intended to apply solely to capital events that are independent of, and
unrelated to, any transaction involving the direct or indirect sale or issuance
of securities of RBC for value (and irrespective of the adequacy of the
consideration so paid).

 

(b)                                 In the case of any sale of assets, merger, consolidation,
combination or other corporate reorganization or restructuring of the Company
with or into another corporation which results in the outstanding Common Shares
being converted into or exchanged for different securities, cash or other
property, or any combination thereof (an “Acquisition”), subject to the
provisions of this option, the Employee shall have the right thereafter and
during the term of the option, to receive upon exercise thereof the Acquisition
Consideration (as defined below) receivable upon the Acquisition by a holder of
the number of Common Shares that might have been obtained upon exercise of the
option or portion thereof, as the case may be, immediately prior to the
Acquisition. The term “Acquisition Consideration” shall mean the kind and
amount of securities, cash or other property or any combination thereof
receivable in respect of one Option Share upon consummation of an Acquisition.

 

9.                                       Applicable Plan. This option is granted under
and is subject to the terms and conditions of the Roller Bearing Holding
Company, Inc. Stock Option Plan (the “Plan”) attached hereto as Exhibit B.
Any capitalized terms not defined herein shall be subject to the definitions
set forth in the Plan.

 

10

 

IN
WITNESS WHEREOF, the Company has caused this option to be executed on the date
first above written.

 

	
  ROLLER BEARING HOLDING
  COMPANY, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Its: President

  	
   

  
	
   

  
	
  ACCEPTED:

  
	
   

  	
   

  
	
  Employee

  	
   

  
	
   

  
	
   

  	
  , 199

  	
   

  	
   

  
					

 

11Exhibit 10.3

 

FORM OF STOCK TRANSFER RESTRICTION AGREEMENT

 

Stock
Transfer Restriction Agreement, dated this       
day of              ,
1998 by and among Roller Bearing Holding Company, Inc., a Delaware
corporation (“Holdings”),               
(the “Initial Party”), Dr. Michael J. Hartnett (“Hartnett”) and the
Persons who by operation of Section 2.5 hereof become a party hereto
(collectively with the Initial Party, the “Stockholders” and individually a “Stockholder”).

 

WHEREAS,
the Initial Party is the owner of
[                         
shares (the “Shares”) of Class A Voting Common Stock of Holdings, par
value $.01 per share (“Class A Common Stock” and collectively with any
other common stock of any class or series issued by Holdings, the “Common Stock”)
and warrants to purchase                  
shares of Class A Common Stock at $100.00 per share (the “Warrants”)];

 

WHEREAS,
Holdings, Hartnett and the Stockholders desire to set forth their agreement
regarding certain matters relating to the Stockholders’ ownership of the
[Shares and the Warrants], as well as (i) any shares of capital stock or
Derivative Securities that may be issued by Holdings and owned by any of the
Stockholders and (ii) any shares of Common Stock that may be issued by
Holdings to any of the Stockholders upon conversion, exchange or exercise of
any [Warrants or other] Derivative Securities, in each case whether currently
owned or hereinafter acquired, being collectively the “Securities”).

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth and other good and valuable consideration, the
receipt and

 

 

sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:

 

1.                                       DEFINITIONS

 

As
used herein, the following terms shall have the meanings indicated:

 

1.1                                 “Affiliate” shall mean a Person controlled by,
in control of, or under common control with, another Person. For purposes of
this definition, “control” (including the correlative terms “controlled by”, “in
control of” and “under common control with”), with respect to any Person, shall
mean possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.

 

1.2                                 “Derivative Securities” shall mean options,
warrants (including the Warrants) and other rights to subscribe for, and
securities convertible into or exchangeable or exercisable for, shares of
Common Stock.

 

1.3                                 “Fair Market Value” shall mean as to any
property on any date, the fair market value of such property on such date
(without regard to any liabilities to which such property may be subject) as
determined in good faith by the Board of Directors of Holdings, which
determination shall, absent manifest error and except as otherwise set forth in
Section 2.3, be binding on the Stockholders.

 

1.4                                 “Initial Public Offering” shall mean the first
underwritten public offering of equity securities of Holdings pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the “Act”), for which Holdings received not less than $25

 

2

 

million in gross proceeds and
following which there is a public market for the securities so offered.

 

1.5                                 “Outstanding Shares” shall mean, at any given
time, the sum of (i) all outstanding shares of Common Stock and (ii) the
aggregate number of shares of Common Stock issuable upon the exercise,
conversion or exchange, as applicable, of outstanding Derivative Securities.
Whenever in this Agreement reference is made to ownership of Outstanding
Shares, such phrase shall mean ownership of the applicable underlying Common
Stock and Derivative Securities in respect thereof.

 

1.6                                 “Permitted Transferee” shall mean, with
respect to any Person, (a) if such Person is an individual, (i) a
member of the Immediate Family of such Person, or (ii) a trust or other
similar legal entity for the primary benefit of such Person and/or one or more
members of his Immediate Family, or (iii) a partnership, limited
partnership, limited liability company, corporation or other entity in which
such Person and members of his Immediate Family possess 100% of the outstanding
voting securities, (b) if such Person is a partnership or limited
liability company, the general partners, limited partners or members thereof to
whom securities of Holdings are Transferred on a pro rata basis in accordance
with the terms of the underlying partnership agreement or limited liability
company agreement and (c) if such Person is a corporation, any wholly
owned subsidiary of such corporation or parent of such corporation that wholly
owns such corporation. For purposes of this definition, “Immediate Family”,
with respect to any individual, shall mean his brothers, sisters, spouse,
children (including adopted children), parents, parents-in-law, grandchildren,
great grandchildren and other lineal descendants and spouses of any of the
foregoing.

 

3

 

1.7                                 “Person” shall mean any natural person,
corporation, organization, partnership, association, joint-stock company,
limited liability company, joint venture, trust or government, or any agency or
political subdivision of any government.

 

1.8                                 “Transfer” shall mean any direct or indirect,
voluntary or involuntary, sale assignment, gift, encumbrance or other direct or
indirect transfer (whether outright or conditional) of any Securities or any
interest therein.

 

1.9  Defined Terms

 

The
following terms are defined elsewhere in this Agreement in the Sections and on
the pages indicated:

 

	
  Defined Term

  	
   

  	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Act

  	
   

  	
  1.4

  	
   

  	
  3

  
	
  Affiliate

  	
   

  	
  1.1

  	
   

  	
  2

  
	
  Board

  	
   

  	
  2.3(c)(i)

  	
   

  	
  9

  
	
  Cause

  	
   

  	
  2.3(b)(ii)

  	
   

  	
  8

  
	
  Class A Common Stock

  	
   

  	
  Recitations

  	
   

  	
  1

  
	
  Common Stock

  	
   

  	
  Recitations

  	
   

  	
  1

  
	
  Compelled Sale

  	
   

  	
  2.4(a)

  	
   

  	
  12

  
	
  Compelled Sale Notice

  	
   

  	
  2.4(b)

  	
   

  	
  12

  
	
  Compelled Sale Purchaser

  	
   

  	
  2.4(a)

  	
   

  	
  11

  
	
  controlled by

  	
   

  	
  1.1

  	
   

  	
  2

  
	
  Credit Restriction

  	
   

  	
  2.3(c)(ii)

  	
   

  	
  10

  
	
  Derivative Securities

  	
   

  	
  1.2

  	
   

  	
  2

  
	
  Fair Market Value

  	
   

  	
  1.3

  	
   

  	
  2

  
	
  Hartnett

  	
   

  	
  Introduction

  	
   

  	
  1

  
	
  Holdings

  	
   

  	
  Introduction

  	
   

  	
  1

  
	
  Immediate Family

  	
   

  	
  1.6(c)

  	
   

  	
  4

  
	
  in control of

  	
   

  	
  1.1

  	
   

  	
  2

  
	
  Initial Party

  	
   

  	
  Introduction

  	
   

  	
  1

  
	
  Initial Public Offering

  	
   

  	
  1.4

  	
   

  	
  3

  
	
  Joinder Agreement

  	
   

  	
  2.5(b)

  	
   

  	
  14

  
	
  Objecting Party

  	
   

  	
  2.3(a)

  	
   

  	
  6

  
	
  Outstanding Shares

  	
   

  	
  1.5

  	
   

  	
  3

  
	
  Permitted Transferee

  	
   

  	
  1.6

  	
   

  	
  3

  
	
  Person

  	
   

  	
  1.7

  	
   

  	
  4

  

 

4

 

	
  Defined Term

  	
   

  	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Proposed Transferors

  	
   

  	
  2.4(a)

  	
   

  	
  11

  
	
  Repurchase Offer Notice

  	
   

  	
  2.3(a)

  	
   

  	
  6

  
	
  Securities

  	
   

  	
  Recitations

  	
   

  	
  1

  
	
  Shares

  	
   

  	
  Recitations

  	
   

  	
  1

  
	
  Stockholder

  	
   

  	
  Introduction

  	
   

  	
  1

  
	
  Stockholders

  	
   

  	
  Introduction

  	
   

  	
  1

  
	
  Transfer

  	
   

  	
  1.8

  	
   

  	
  4

  
	
  under common control with

  	
   

  	
  1.1

  	
   

  	
  2

  
	
  Warrants

  	
   

  	
  Recitations

  	
   

  	
  1

  

 

2.                                       TRANSFER RESTRICTIONS

 

2.1                                 Legends. None of the Securities, including
shares of Common Stock underlying the Warrants, has been (or will have been at
the time of issuance) registered under the Act. Certificates representing the
Shares, the Warrants, and upon exercise of the Warrants, the shares of Common
Stock issuable at such time, shall bear the following legend:

 

The
securities represented by this certificate have not been registered  under the Securities Act of 1933, as amended (“Act”),
and may not be offered or sold
except pursuant to (i) an effective registration statement under the Act or (ii) an exemption from
registration under such Act (which, if requested by the issuer, shall be accompanied by an opinion of
counsel to such effect reasonably
satisfactory to the issuer).

 

2.2                                 Restrictions on Transfer of Securities. Except
as otherwise provided for in this Article 2, no Stockholder shall Transfer
any Securities without the prior written consent of Holdings.

 

2.3                                 Purchase on Death or Termination of
Employment. Upon the death of the Initial Party or the termination of the
employment of the Initial Party by Holdings or any subsidiary of Holdings
(provided that the Initial Party is not, following such employment termination,
an employee of Holdings or any subsidiary of Holdings) for any reason
whatsoever, Holdings shall have the right (but not the obligation), exercisable
upon notice given not more than one hundred and twenty (120) days following the
date of such death or

 

5

 

termination of employment, to
repurchase all, but not less than all, of the Securities (whether owned by the
Initial Party or any Permitted Transferee of the Initial Party) at the Fair
Market Value therefor as of the last day of the fiscal quarter immediately
preceding such date of termination or death.

 

(a)                                  If Holdings elects to exercise its rights to
repurchase Securities under this Section 2.3, it shall deliver to each
Stockholder (or the administrator of the estate of any deceased Stockholder) a
notice of its election to so exercise (the “Repurchase Offer Notice”), which
notice shall set forth Holdings’ determination of the Fair Market Value of the
Securities. If, within five (5) business days following delivery of the
Repurchase Offer Notice, the Initial Party (or the administrator of the Initial
Party’s estate, the “Objecting Party”) delivers a notice to Holdings disputing
Holdings’ determination of Fair Market Value, Holdings and the Objecting Party
shall endeavor in good faith to agree upon a mutually acceptable determination
of Fair Market Value of the Securities. Failure by the Objecting Party to
object within such five (5) business day period shall be deemed to be
acceptance of Holdings’ determination of Fair Market Value and a waiver of any
right to object thereto. If, within ten (10) days following delivery of a
notice disputing Holdings’ determination of Fair Market Value, Holdings and the
Objecting Party are not able to agree upon the Fair Market Value of the
Securities, Holdings shall retain a nationally recognized accounting,
investment banking or other firm, reasonably acceptable to the Objecting Party,
experienced in the valuation of assets similar to the Securities, to value the
Securities. The determination of such expert shall be binding upon Holdings and
the Stockholders and the expenses of retaining such expert shall be borne
equally by Holdings and the Objecting Party, provided,

 

6

 

however, that, within ten (10) days
following delivery of the determination of such expert to Holdings, Holdings
shall have the right to withdraw its offer to repurchase the Securities and
elect not to exercise its rights under this Section 2.3. If Holdings’
offer to repurchase the Securities is not withdrawn as provided above, the
closing of the repurchase by Holdings of the Securities shall take place on the
date specified in the Repurchase Offer Notice, which date shall not be earlier
than ten (10), or later than ninety (90), days following delivery of the
Repurchase Offer Notice, provided, however, that, if the Objecting Party shall
have objected to Holdings’ determination of Fair Market Value of the
Securities, the closing of the repurchase of the Securities shall take place on
a date specified by Holdings that shall be not less than ten (10), nor more
than sixty (60), days following the final determination of such Fair Market
Value, and provided further, however, that, if the closing of the repurchase of
Securities shall be deferred by operation of Section 2.3(c) hereof,
the closing of the repurchase of Securities shall take place on a date
specified by Holdings that shall be not less than ten (10), nor more than sixty
(60), days following the date such deferral terminates.

 

(b)                                 (i)                                     Payment for the Securities repurchased by
Holdings pursuant to this Section 2.3 shall be as follows:

 

(A)                              If the event giving rise to Holdings’ right torepurchase under this Section 2.3
shall be a termination of the Initial
Party’s employment for Cause, payments shall be made in five equal annual payments on the first
through the fifth anniversaries
of the date of the closing of such repurchase (or such shorter period as Holdings may choose and
set forth in the Repurchase Offer
Notice) with interest thereon as set forth in Section 2.3(d) hereof; or

 

7

 

(B)                                If the event giving rise to Holdings’ right torepurchase under this Section 2.3
shall be anything other than a termination
of the Initial Party’s employment for Cause, payments shall be made in three equal annual payments
on the first, second and third
anniversaries of the date of the closing of such repurchase (or such shorter period as Holdings may choose and setforth in the Repurchase Offer Notice)
with interest thereon as set
forth in Section 2.3(d) hereof;

 

provided, however, that
Holdings shall have the right to prepay any such amounts, in whole or in part,
at any time without penalty or premium.

 

(ii)                                  As used herein “Cause” shall mean:

 

(A)                              any act of fraud, embezzlement, theft or
commission of a crime involving moral turpitude by the Initial Party;

 

(B)                                any breach by the Initial Party of any
material covenant, condition, or agreement in any employment agreement entered
into with Holdings or any subsidiary of Holdings;

 

(C)                                any good faith finding by Holdings (or the
subsidiary of Holdings that employed the Initial Party) that the Initial Party repeatedly
failed to perform the Initial Party’s required duties; provided that Holdings
(or such employing subsidiary) shall have provided the Initial Party with notice of such failure to performand have afforded the Initial Party a
reasonable opportunity to cure
(it being understood that compliance with the notice or cure provisions set forth in any written employment
agreement with the Initial Party
shall

 

8

 

constitute
reasonable actions on behalf of Holdings (or such employing subsidiary)); or

 

(D)                               any chemical dependency by the Initial Party
(other than in connection with medicines prescribed for the Initial Party).

 

(c)                                  (i)                                     Holdings’ obligation to close the repurchase
of, or make any payments (including any payments of interest) for, the
Securities repurchased pursuant to this Section 2.3 shall be qualified, as
hereinafter provided, in the event of the existence of a Credit Restriction. In
the event of a Credit Restriction, Holdings may, at its option, defer (without
penalty or premium) the closing of the repurchase of the Securities or all or
any portion of any payments otherwise due, until such time as such closing or
payment, in the opinion of the Board of Directors of Holdings (the “Board”) is
no longer subject to such Credit Restriction. The obligation to close the
repurchase of, or make payments for, the Securities repurchased pursuant to
this Section 2.3 shall be tolled during any period of deferral provided for
above, and such repurchase shall be closed or such payments shall (re)commence
following such deferral on the same schedule as provided in Section 2.3(b) hereof
(but with all time frames for payments extended for the period of deferral,
i.e. with no acceleration of payments in respect of payments that were due
during such period of deferral); provided that interest on the purchase price
for the Securities repurchased (or to be repurchased if the closing of the
repurchase is deferred by reason of the Credit Restriction) pursuant to this Section 2.3
shall accrue during such period of deferral at the rate set forth in Section 2.3(d) hereof
and shall be paid as set forth in said Section 2.3(d). If the closing of
the repurchase was deferred by

 

9

 

reason of the Credit
Restriction, interest shall accrue, as aforesaid, beginning on the 91st day
following delivery of the Repurchase Offer Notice.

 

(ii)                                  As used herein, a “Credit Restriction” shall
be deemed to exist if any provision of any agreement with lenders to Holdings
or holders of debt securities of Holdings (or lenders to, or holders of debt
securities of, any subsidiary of Holdings), (A) restricts or limits
Holdings’ right to effect such repurchase or make any such payment, (B) restricts
or limits the right of Holdings’ subsidiaries to transfer (by way of dividend
or otherwise) to Holdings the funds necessary to make such repurchase or
payment, or (C) provides that the closing of such repurchase or making of
any such payment would (x) restrict the right of Holdings or any of its
subsidiaries to borrow any funds under such agreements, (y) result in a default
thereunder or (z) otherwise result in an adverse affect on Holdings or any of
its subsidiaries under such agreements, in each case as reasonably determined
by the Board, whose determination shall be binding on the parties hereto.

 

(d)                                 Interest on the unpaid portion of the purchase
price for the Securities repurchased pursuant to this Section 2.3 shall
accrue at a variable rate constituting the prime rate published by Holding’s
primary bank lender (from time to time) from the date of the closing of such
repurchase until payment therefor is made. Each payment by Holdings pursuant to
this Section 2.3 shall include all accrued and unpaid interest to the date
of such payment on the then unpaid portion of the purchase price for the
Securities repurchased pursuant to this Section 2.3. Interest accrued
during any period of deferral (pursuant to (c) above) shall be paid as
follows:

 

10

 

(i)                                     If the closing of the repurchase is deferred,
such accrued interest shall be
added to the purchase price for the Securities otherwise established hereunder, and shall be paid, together withaccrued interest thereon, as set forth
in Section 2.3(b) hereof;

 

(ii)                                  If the closing of the repurchase had
previously taken place, but
payments under Section 2.3(b) hereof are deferred, such accruedinterest shall effectively be
capitalized over the remaining term of repayment set forth in Section 2.3(b) hereof, to be repaid,
together with interest thereon,
in the same fashion as the then balance of the original principal amount. (e) Notwithstanding anything else in
this Agreement to the contrary,

 

Holdings shall have the right
to assign, in whole or in part, to any other party its right to repurchase
Securities under this Section 2.3.

 

2.4                                 Right to Compel Sale.

 

(a)                                  If Hartnett and his Permitted Transferees (the
“Proposed Transferors”), wish to sell all, and not less than all, of the Common
Stock or Derivative Securities then owned by the Proposed Transferors on such
date, to any bona fide independent third party other than an Affiliate or a
Permitted Transferee of such Proposed Transferors (the “Compelled Sale
Purchaser”), and if such Compelled Sale Purchaser requires, as a condition to
acquiring such Common Stock or Derivative Securities upon terms acceptable to
the Proposed Transferors, that the Stockholders sell to such Compelled Sale
Purchaser all, and not less than all, of the Securities, then each Stockholder
shall be obligated to join and fully cooperate in the sale together with the
concurrent sale by the Proposed Transferors (a

 

11

 

“Compelled Sale”) of all of
its respective Securities to the Compelled Sale Purchaser, subject to the
following:

 

(i)                                     The terms and conditions applicable to the
sale of the Securities shall be
identical to those applicable to the sale of the securities by the Proposed Transferors, including, without limitation,the amount and nature of consideration
and the same representations, indemnities
and the like required of the Proposed Transferors.

 

(ii)                                  Notwithstanding the foregoing, any liability
of any Stockholder in connection
with such sale shall be (A) several and not joint and several, (B) shall be limited to the proceeds actuallyreceived by such Stockholder, and, (C) in
any event except for any liability
occasioned by the specific wrongdoing of any Person, the liability of the Proposed Transferors and the
Stockholders shall be further
limited to damages occasioned by the breach of the representations and warranties made by them
(which, in the case of the Stockholders,
shall only include representations and warranties as to their ownership of the Securities being sold
and other matters specifically
applicable to them and their Securities) and damages arising under any indemnity or escrow
provisions that are limited to their
proportion of the aggregate proceeds received by all of them.

 

(b)                                 The Proposed Transferors shall notify each
Stockholder in writing of a Compelled Sale (a “Compelled Sale Notice”), which
Compelled Sale Notice shall set forth all of the material terms and conditions
of the Compelled Sale, including, without limitation, the proposed amount and
nature of consideration and all other material terms and conditions, including
the date of the proposed Transfer and all applicable representations,
indemnities and other contract provisions. Each Stockholder shall execute and
deliver to the Proposed

 

12

 

Transferors within five (5) business
days after delivery to such Stockholder for such execution, all documents
required to be executed by such Stockholder in order to consummate such
Compelled Sale, subject to the limitations on liability contained in Section 2.4(a)(ii) hereof.
Further, and in any event, each Stockholder hereby appoints the Secretary of
Holdings as its attorney-in-fact to execute any and all documents and instruments
and take all actions reasonably necessary to Transfer the Securities owned by
such Stockholder in order to effect the terms of this Section 2.4, which
power of attorney may only be exercised if the Compelled Sale complies with all
of the terms of this Section 2.4. It is understood and agreed that the
appointment of the Secretary of Holdings as the attorney-in-fact of each
Stockholder for the purposes set forth above is coupled with an interest and is
irrevocable.

 

(c)                                  Upon consummation of the sale of the
Securities to the Compelled Sale Purchaser pursuant to the Compelled Sale, the
Compelled Sale Purchaser shall (i) notify each Stockholder of such
completion and shall furnish such evidence of said sale (including time of
completion) and of the terms thereof as any of the Stockholders may reasonably
request, and (ii) remit to each Proposed Transferor and each Stockholder
the consideration for the total sales price of Common Stock and Derivative
Securities of such party sold pursuant thereto, against delivery by such party
of such evidences of ownership of such party’s Common Stock and Derivative
Securities as may be requested by the Compelled Sale Purchaser, and the
compliance by such party with any other conditions to closing generally
applicable to all Proposed Transferors and Stockholders.

 

(d)                                 If any Compelled Sale Offer is withdrawn, or
terminated for any reason, prior to consummation, the Proposed Transferors
shall, without prejudice to their (or any

 

13

 

other Proposed Transferor’s)
rights hereunder to deliver a subsequent Compelled Sale Notice, return to each
Stockholder all documentation which such Stockholder had previously delivered
to the Proposed Transferor in connection with such Compelled Sale Offer.

 

2.5                                 Transfers to Permitted Transferees. (a) Notwithstanding
anything contained in this Article 2 to the contrary, each Stockholder may
Transfer any or all Common Stock or Derivative Securities owned by such Person
to Permitted Transferees of the Initial Party.

 

(b)                                 Any Transfer to a Permitted Transferee
pursuant to Section 2.6(a) hereof, shall be conditioned in each such
case upon any such Transferee first entering into a joinder agreement (a “Joinder
Agreement”), in the form attached hereto as Exhibit A, pursuant to which
such Transferee, and the Common Stock or Derivative Securities acquired, shall
become subject to the terms and conditions of this Agreement, including those
contained in Section 2.5(c) hereof.

 

(c)                                  Upon any Transfer by a Stockholder and the
execution of a Joinder Agreement, each Transferee, and the Securities acquired
by it, shall be subject to all of the limitations and obligations set forth in
this Article 2, and, except as set forth in clause (ii) below, shall
obtain the benefits and rights of a Stockholder hereunder, with respect to the
Securities so acquired, pursuant to this Article 2.

 

(d)                                 In the event that a Stockholder Transfers any
of its Securities hereunder, until notice thereof shall have been delivered by
such Stockholder to Holdings and Hartnett (i) any notices to be given to
such Transferees shall be deemed given if delivered to the Transferor
Stockholder, (ii) a notice from any such Transferee shall be deemed
delivered only if delivered by such Transferor Stockholder, (iii) Holdings
and Hartnett shall be permitted to

 

14

 

rely upon any notice given by
such Transferor Stockholder as containing the intentions of its Transferees,
and (iv) where applicable, such Transferees shall share any rights
contained in this Agreement as they shall deem appropriate, and as reflected by
any notices provided by such Transferor Stockholder. If the Initial Party
Transfers all of its Securities it may designate, by written notice to Holdings
and all other stockholders, a successor Person to give and accept notices, on
behalf of all Transferees of the Initial Party, as set forth herein.

 

2.6                                 Termination on Initial Public Offering. The
restrictions on Transfer of Common Stock and Derivative Securities and the
other rights, restrictions and obligations contained in this Article 2
shall terminate and be of no further force and effect following an Initial
Public Offering.

 

2.7                                 Transfers Not in Compliance Void. Any
purported Transfer of Securities owned by a Stockholder that is not in
compliance with this Agreement shall be null and void and of no force and
effect whatsoever. Accordingly, such Transfer shall not be reflected on the
books of Holdings and Holdings will not recognize any such proposed transferee
as the holder of any such Securities. 3. TERMINATION; AMENDMENT

 

3.1                                 Termination; Amendment.

 

(a)                                  This Agreement may be terminated and the terms
hereof amended at any time only by the execution of a written instrument signed
on behalf of Holdings, Hartnett and either (i) the Initial Party or (ii) the
Holders of not less than 67% of the aggregate Outstanding Shares held by the
Stockholders.

 

15

 

(b)                                 In the event of the termination of this
Agreement, this Agreement shall forthwith become void and have no effect,
without any liability on the part of any party hereto or any of their
directors, officers, partners or stockholders.

 

4.                                       MISCELLANEOUS

 

4.1                                 Notices.

 

Any
notice, request, instruction, or other communication to be given hereunder by
any party to another shall be in writing and shall be deemed to have given if
delivered by hand or sent by telecopier (transmission confirmed), certified or
registered mail (return receipt requested), postage prepaid, or by overnight
express service, addressed to the respective party or parties: (i) if to a
Stockholder or successor thereto, at the address for such party in the books
and records of Holdings, (ii) if to Holdings at the following address:

 

	
   

  	
   

  	
  Roller Bearing Holding
  Company, Inc.

  
	
   

  	
   

  	
  60 Round Hill Road

  
	
   

  	
   

  	
  P.O. Box 430

  
	
   

  	
   

  	
  Fairfield, Connecticut 06430-0430

  
	
   

  	
   

  	
  Telecopier: 203-256-0775

  
	
   

  	
   

  	
  Attention: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  with a copy (which shall not constitute notice) to:

  	
   

  	
  McDermott, Will &
  Emery

  
	
   

  	
   

  	
  50 Rockefeller Plaza

  
	
   

  	
   

  	
  New York, New York 10020

  
	
   

  	
   

  	
  Telecopier: 212-547-5444

  
	
   

  	
   

  	
  Attention: C. David Goldman, Esq.

  

 

16

 

and (iii) if to
Hartnett:

 

	
   

  	
   

  	
  Dr. Michael J.
  Hartnett

  
	
   

  	
   

  	
  c/o Roller Bearing Company
  of America, Inc.

  
	
   

  	
   

  	
  60 Round Hill Road

  
	
   

  	
   

  	
  P.O. Box 430

  
	
   

  	
   

  	
  Fairfield, Connecticut 06430-0430

  
	
   

  	
   

  	
  Telecopier: 203-256-0775

  
	
   

  	
   

  	
   

  
	
  with a copy (which shall not constitute notice) to:

  	
   

  	
  McDermott, Will &
  Emery

  
	
   

  	
   

  	
  50 Rockefeller Plaza

  
	
   

  	
   

  	
  New York, New York 10020

  
	
   

  	
   

  	
  Telecopier: 212-547-5444

  
	
   

  	
   

  	
  Attention: C. David Goldman, Esq.

  

 

or to such other address or
addresses as any party may designate to the others by like notice as set forth
above. Any notice given hereunder shall be deemed given and received on the
date of hand delivery or transmission by telecopier, three days after mailing
by certified or registered mail or one day after delivery to an overnight
express service for next day delivery, as the case may be.

 

4.2                                 Entire Agreement. This Agreement contains the
entire agreement between the parties hereto with respect to the subject matter
contemplated hereby.

 

4.3                                 Captions. The captions of the various Articles
and Sections of this Agreement have been inserted only for convenience of
reference and shall not be deemed to modify, explain, enlarge or restrict any
provision of this Agreement or affect the construction hereof.

 

4.4                                 No Third Party Beneficiary. Nothing expressed
or implied in this Agreement is intended, or shall be construed, to confer upon
or give any person other than the parties hereto and their respective heirs,
personal representatives, legal representatives, and successors, any rights or
remedies under or by reason of this Agreement.

 

17

 

4.5                                 Remedies Cumulative. No remedy made available
by any of the provisions of this Agreement is intended to be exclusive of any
other remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity.

 

4.6                                 Governing Law; Submission to Jurisdiction. (a) THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE WITHOUT GIVING EFFECT TO THE RULES OF SAID STATE GOVERNING THE
CONFLICTS OF LAWS.

 

(b)                                 The parties hereto hereby agree that any
action, proceeding or claim against it arising out of, or relating in any way
to, this Agreement may be brought and enforced in the courts of the State of
New York or of the United States of America for the Southern District of New
York, and irrevocably submits to such jurisdiction for such purpose. The
parties hereto hereby irrevocably waive any objection to such jurisdiction or
inconvenient forum. Any such process or summons to be served upon any of the
parties hereto (at the option of the party bringing such action, proceeding or
claim) may be served by transmitting a copy thereof, by registered or certified
mail, return receipt requested, postage prepaid, addressed to it at the address
set forth in Section 4.1 hereof. Such mailing shall be deemed personal
service and shall be legal and binding upon the party so served in any action,
proceeding or claim. Nothing herein shall affect the right of any party hereto
to serve process

 

18

 

in any other manner permitted
by law or to commence legal proceedings or otherwise proceed against any other
party in any other jurisdiction.

 

4.7                                 Assignment. Except as otherwise set forth in
this Agreement, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the
other parties. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.

 

4.8                                 Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be considered one and the same
agreement and shall become effective when a counterpart has been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.

 

19

 

IN
WITNESS WHEREOF, the parties hereto have executed this Stockholders’ Agreement
as of the date set forth above.

 

	
   

  	
   

  	
  ROLLER BEARING HOLDING
  COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dr. Michael J. Hartnett

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

20

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