Document:

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                                                                 Exhibit 10.14

                                 Stephen G. Taub
                         Executive Employment Agreement

TERM.  August 1, 2000 - December 31, 2003.

END-OF-TERM. After 12/31/2002, Company may give notice of non-renewal; term
extends for 12 months. After 12/31/02, term extends on one-day-at-a-time basis
until notice of non-renewal given; then, term extends for 12 months.

BASE SALARY. $640,000 per year in 2000; if adjusted upward at sole discretion of
Company, increased amount becomes Base Salary.

BONUS. If Company achieves the percentage of business plan set forth below,
Employee receives performance bonus of the corresponding percentage of Base
Salary.

               Percentage of                      Percentage of
          EBITDA in Business Plan                  Base Salary
          -----------------------                 -------------
                     80%                                60%
                     85                                 75
                     90                                 90
                     95                                100
                    100                                105
                    105                                110
                    110                                125
                    115                                150

DEATH. Base Salary paid until death; prorated performance bonus paid if
otherwise due for the year in which Employee dies.

DISABILITY. Company may terminate Agreement after six months. Base salary,
reduced by any disability benefits received by Employee, paid until Company
terminates; prorated performance bonus paid if otherwise due for the year in
which Agreement is terminated.

BENEFITS. Standard Company officer benefits.

CAUSE. Upon gross neglect, conviction of felony, conviction of any crime
relating to Company property, willful misconduct or material breach by employee
or material prejudice to Company, Company can terminate without further
liability.

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COMPANY BREACH. Employee receives Base Salary, performance bonuses and all
benefits for longer of balance of term or 12 months; if end-of-term provisions
are in effect, for balance of 12 month period; prorated performance bonus paid
if otherwise due for balance of term; employee obligated to mitigate.

OTHER PROVISIONS. Protection of confidential information, non-compete during
term, assignment of inventions, legal fees to employee if he prevails in action
for breach or injunction; legal fees to Company if it prevails in action for
injunction.

THIS SUMMARY PAGE IS FOR CONVENIENCE OF REFERENCE ONLY. IT SHALL NOT CONSTITUTE
A PART OF THE AGREEMENT

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                              Employment Agreement

                  EMPLOYMENT AGREEMENT, dated as of August 1, 2000, between
Pneumo Abex Corporation, a Delaware corporation (the "Company") and Stephen G.
Taub (the "Executive").

                  WHEREAS, the Company wishes to employ the Executive, and the
Executive wishes to accept such employment, on the terms and conditions set
forth in this Agreement;

         Accordingly, the Company and the Executive hereby agree as follows:

                  1.       Employment, Duties and Acceptance.

                          1.1 Employment, Duties. The Company hereby employs the
Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company as President and Chief Executive Officer or in
such other executive position as may be mutually agreed upon by the Company and
the Executive, and to perform such other duties consistent with such position as
may be assigned to the Executive by the Board of Directors or any officer of the
Company senior to the Executive.

                          1.2 Acceptance. The Executive hereby accepts such
employment and agrees to render the services described above. During the Term,
the Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment, and to use the Executive's best efforts, skill and
ability to promote the Company's interests. The Executive further agrees to
accept election, and to serve during all or any part of the Term, as an officer
or director of the Company and of any subsidiary or affiliate of the Company,
without any compensation therefor other than that specified in this Agreement,
if elected to any such position by the shareholders or by the Board of Directors
of the Company or of any subsidiary or affiliate, as the case may be.

                          1.3 Location. The duties to be performed by the
Executive hereunder shall be performed primarily at the office of the Company in
Camden, New Jersey, subject to reasonable travel requirements on behalf of the
Company.

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                  2.       Term of Employment; Certain Post-Term Benefits.

                          2.1 The Term. The term of the Executive's employment
under this Agreement (the "Term") shall commence on August 1, 2000 and shall end
on December 31, 2003 or such later date to which the Term is extended pursuant
to Section 2.2.

                          2.2 End-of-Term Provisions. At any time on or after
December 31, 2002 the Company shall have the right to give written notice of
non-renewal of the Term. In the event the Company gives such notice of
non-renewal, the Term automatically shall be extended so that it ends twelve
months after the last day of the month in which the Company gives such notice.
From and after December 31, 2003, unless and until the Company gives written
notice of non-renewal as provided in this Section 2.2, the Term automatically
shall be extended day-by-day; upon the giving of such notice by the Company, the
Term automatically shall be extended so that it ends twelve months after the
last day of the month in which the Company gives such notice.

                          2.3 Special Curtailment. The Term shall end earlier
than the original December 31, 2003 termination date provided in Section 2.1 or
any extended termination date provided in Section 2.2, in either case if sooner
terminated pursuant to Section 4. Non-extension of the Term shall not be deemed
to be a wrongful termination of the Term or this Agreement by the Company
pursuant to Section 4.4.

                  3.       Compensation; Benefits.

                          3.1 Salary. As compensation for all services to be
rendered pursuant to this Agreement, the Company agrees to pay the Executive a
base salary, payable semi-monthly in arrears, at the annual rate of not less
than $640,000 less such deductions or amounts to be withheld as required by
applicable law and regulations (the "Base Salary"). In the event that the
Company, in its sole discretion, from time to time determines to increase the
Base Salary, such increased amount shall, from and after the effective date of
the increase, constitute "Base Salary" for purposes of this Agreement.

                          3.2 Bonus. In addition to the amounts to be paid to
the Executive pursuant to Section 3.1, the Executive will be eligible to receive
a bonus with respect to each calendar year included within the Term computed in

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accordance with the provisions of the next two succeeding sentences. If, with
respect to any calendar year, the Company achieves EBITDA of at least the
percentage set forth in the table below of its business plan for such year, such
bonus shall be the percentage set forth in the table below of Base Salary with
respect to the year for which the bonus (any such bonus, a "performance bonus")
was earned:

               Percentage of                 Percentage of
          EBITDA in Business Plan             Base Salary

                   80%                            60%
                   85                             75
                   90                             90
                   95                            100
                  100                            105
                  105                            110
                  110                            125
                  115                            150

In the event that the Term or this Agreement is terminated other than pursuant
to Section 4.3, the Executive shall be entitled to receive a prorated
performance bonus (if such a bonus is otherwise payable) with respect to (A) the
year in which the Term or this Agreement terminated or, (B) in the event of a
termination pursuant to Section 4.4, the year in which the Executive was last
entitled to receive any payments of Base Salary, in an amount equal to (x) the
percentage of Base Salary otherwise payable as a performance bonus with respect
to such year multiplied by (y) a fraction, the numerator of which is the number
of whole months elapsed from the beginning of such year to the date as of which
the Term or this Agreement terminated or the last day as of which the Executive
is entitled to receive payments of Base Salary, as applicable and the
denominator of which is 12. A performance bonus or other bonus, if either or
both are earned in accordance with this Agreement, shall be paid no later than
March 31st of the year next following the year with respect to which such bonus
was earned. The maximum bonus payable pursuant to this Section 3.2 shall be
$1,000,000 with respect to any calendar year.

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                          3.3 Minimum Compensation. If, during any calendar year
(a "Current Year"), EBITDA for such year at least equals EBITDA for the
immediately prior year (a "Prior Year"), then the sum of Base Salary and bonus
payable to the Executive on account of the Current Year ("Total Current Year
Compensation") shall be no less than the sum of Base Salary and bonus paid to
the Executive on account of the Prior Year ("Total Prior Year Compensation"). In
any case described in the preceding sentence in which Total Prior Year
Compensation was greater than Total Current Year Compensation computed pursuant
to Sections 3.1 and 3.2, then the difference shall be paid to the Executive no
later than March 31st of the year next following the Current Year.

                          3.4 Business Expenses. The Company shall pay or
reimburse the Executive for all reasonable expenses actually incurred or paid by
the Executive during the Term in the performance of the Executive's services
under this Agreement, upon presentation of expense statements or vouchers or
such other supporting information as the Company customarily may require of its
officers provided, however, that the maximum amount available for such expenses
during any period may be fixed in advance by the Chairman, the Vice Chairman or
the Chief Executive Officer of the Company.

                          3.5 Vacation. During the Term, the Executive shall be
entitled to a vacation period or periods of four (4) weeks taken in accordance
with the vacation policy of the Company during each year of the Term. Vacation
time not used by the end of a year shall be forfeited, except that one week of
vacation pay may be "banked" in accordance with Company policy.

                          3.6 Fringe Benefits. During the Term, the Executive
shall be entitled to all benefits for which the Executive shall be eligible
under any qualified pension plan, 401(k) plan, non-qualified benefit restoration
plan, group insurance or other so-called "fringe" benefit plan which the Company
provides to its executive employees generally. In addition, the Company shall
"gross up" the income imputed to the Executive under federal and any applicable
state income tax laws for any life insurance furnished to the Executive, such
that the Executive effectively will suffer no personal cost for such fringe
benefit.

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                  4.       Termination.

                          4.1 Death. If the Executive dies during the Term, the
Term shall terminate forthwith upon the Executive's death and the Company shall
have no obligation hereunder to make any payments to the Executive's
beneficiaries on account of any period of time after such termination. After
such termination, the Executive's beneficiaries shall receive any benefits to
which the Executive or such beneficiaries may be entitled under any fringe
benefit program that may have been provided by the Company pursuant to
Section 3.6.

                          4.2 Disability. If, during the Term the Executive
becomes disabled or incapacitated to the extent he is unable to perform his
duties hereunder ("Totally Disabled") for a period of six (6) consecutive
months, the Company shall have the right at any time thereafter, so long as the
Executive is then still Totally Disabled, to terminate the Term upon sending
written notice of termination to the Executive. If the Company elects to
terminate the Term by reason of the Executive becoming Totally Disabled, the
Company shall have no obligation hereunder to make any payments to the Executive
on account of any period of time after such termination. After such termination,
the Executive shall receive any benefits to which he may be entitled under any
fringe benefit program that may have been provided by the Company pursuant to
Section 3.6. While the Executive is Totally Disabled prior to the Term being
terminated, Base Salary payable pursuant to Section 3.1 shall be reduced by any
other benefits payable to the Executive under any disability plan provided for
hereunder or otherwise furnished to the Executive by the Company.

                          4.3 Cause. In the event of gross neglect by the
Executive of the Executive's duties hereunder, conviction of the Executive of
any felony, conviction of the Executive of any lesser crime or offense involving
the property of the Company or any of its subsidiaries or affiliates, willful
misconduct by the Executive in connection with the performance of any material
portion of the Executive's duties hereunder, breach by the Executive of any
material provision of this Agreement or any other conduct on the part of the
Executive which would make the Executive's continued employment by the Company
materially prejudicial to the best interests of the Company, the Company may at
any time by written notice to the Executive terminate the Term and, upon such
termination, this Agreement shall terminate and the Executive shall be entitled
to

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receive no further amounts or benefits hereunder, except any as shall have been
earned to the date of such termination.

                          4.4 Company Breach. In the event of the breach of any
material provision of this Agreement by the Company, the Executive shall be
entitled to terminate the Term upon 60 days' prior written notice to the
Company. Upon such termination, or in the event the Company terminates the Term
or this Agreement other than pursuant to the provisions of Section 4.2 or 4.3,
the Company shall continue to provide the Executive (i) payments of Base Salary,
in the manner and amount specified in Section 3.1, (ii) performance bonuses, in
the manner and amount specified in Section 3.2, (iii) minimum compensation in
the manner and amount specified in Section 3.3 and (iv) fringe benefits and
additional benefits in the manner and amounts specified in Section 3.6 until the
end of the Term (as in effect immediately prior to such termination) or, if the
Company has not then given written notice of non-renewal pursuant to Section
2.2, for a period of twelve months after the last day of the month in which
termination described in this Section 4.4 occurred, whichever is longer (the
"Damage Period"). The Company's obligations pursuant to this Section 4.4 are
subject to the Executive's duty to mitigate damages by seeking other employment
provided, however, that the Executive shall not be required to accept a position
of lesser importance or of substantially different character than the position
held with the Company immediately prior to the effective date of termination or
in a location outside of the Philadelphia, Pennsylvania metropolitan area. To
the extent that the Executive shall earn compensation during the Damage Period
(without regard to when such compensation is paid), the Base Salary, bonus and
minimum compensation payments to be made by the Company pursuant to this Section
4.4 shall be correspondingly reduced.

                          4.5 Litigation Expenses. Except as provided for in
Section 5.7, if the Company and the Executive become involved in any action,
suit or proceeding relating to the alleged breach of this Agreement by the
Company or the Executive, and if a judgment in such action, suit or proceeding
is rendered in favor of the Executive, the Company shall reimburse the Executive
for all expenses (including reasonable attorneys' fees) incurred by the
Executive in connection with such action, suit or proceeding. Such costs shall
be paid to the Executive promptly upon presentation of expense statements or
other supporting information evidencing the incurrence of such expenses.

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                  5.       Protection of Confidential Information;
                             Non-Competition.

                          5.1 In view of the fact that the Executive's work for
the Company will bring the Executive into close contact with many confidential
affairs of the Company not readily available to the public, and plans for future
developments, the Executive agrees:

                          5.1.1 To keep and retain in the strictest confidence
all confidential matters of the Company, including, without limitation, "know
how", trade secrets, customer lists, pricing policies, operational methods,
technical processes, formulae, inventions and research projects, and other
business affairs of the Company, learned by the Executive heretofore or
hereafter, and not to disclose them to anyone outside of the Company, either
during or after the Executive's employment with the Company, except in the
course of performing the Executive's duties hereunder or with the Company's
express written consent. The foregoing prohibitions shall include, without
limitation, directly or indirectly publishing (or causing, participating in,
assisting or providing any statement, opinion or information in connection with
the publication of) any diary, memoir, letter, story, photograph, interview,
article, essay, account or description (whether fictionalized or not) concerning
any of the foregoing, publication being deemed to include any presentation or
reproduction of any written, verbal or visual material in any communication
medium, including any book, magazine, newspaper, theatrical production or movie,
or television or radio programming or commercial; and

                          5.1.2 To deliver promptly to the Company on
termination of the Executive's employment by the Company, or at any time the
Company may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints and other documents (and all copies thereof) relating to
the Company's business and all property associated therewith, which the
Executive may then possess or have under the Executive's control.

                          5.2 During the Term, the Executive shall not, directly
or indirectly, enter the employ of, or render any services to, any person, firm
or corporation engaged in any business competitive with the business of the
Company or of any of its subsidiaries or affiliates; the Executive shall not
engage in such business on the Executive's own

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account; and the Executive shall not become interested in any such business,
directly or indirectly, as an individual, partner, shareholder, director,
officer, principal, agent, employee, trustee, consultant, or in any other
relationship or capacity provided, however, that nothing contained in this
Section 5.2 shall be deemed to prohibit the Executive from acquiring, solely as
an investment, up to five percent (5%) of the outstanding shares of capital
stock of any public corporation.

                          5.3 If the Executive commits a breach, or threatens to
commit a breach, of any of the provisions of Sections 5.1 or 5.2 hereof, the
Company shall have the following rights and remedies:

                          5.3.1 The right and remedy to have the provisions of
this Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company; and

                          5.3.2 The right and remedy to require the Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits (collectively "Benefits") derived or
received by the Executive as the result of any transactions constituting a
breach of any of the provisions of the preceding paragraph, and the Executive
hereby agrees to account for and pay over such Benefits to the Company.

Each of the rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.

                          5.4 If any of the covenants contained in Sections 5.1
or 5.2, or any part thereof, hereafter are construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portions.

                          5.5 If any of the covenants contained in Sections 5.1
or 5.2, or any part thereof, are held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court making such determination shall have the power to reduce the duration
and/or area of such provision and, in its reduced form, said provision shall
then be enforceable.

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                          5.6 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 5.1 and 5.2 upon the
courts of any state within the geographical scope of such covenants. In the
event that the courts of any one or more of such states shall hold such
covenants wholly unenforceable by reason of the breadth of such covenants or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the Company's right to the relief provided above in the
courts of any other states within the geographical scope of such covenants as to
breaches of such covenants in such other respective jurisdictions, the above
covenants as they relate to each state being for this purpose severable into
diverse and independent covenants.

                          5.7 In the event that any action, suit or other
proceeding in law or in equity is brought to enforce the covenants contained in
Sections 5.1 and 5.2 or to obtain money damages for the breach thereof, and such
action results in the award of a judgment for money damages or in the granting
of any injunction in favor of the Company, all expenses (including reasonable
attorneys' fees) of the Company in such action, suit or other proceeding shall
(on demand of the Company) be paid by the Executive. In the event the Company
fails to obtain a judgment for money damages or an injunction in favor of the
Company, all expenses (including reasonable attorneys' fees) of the Executive in
such action, suit or other proceeding shall (on demand of the Executive) be paid
by the Company.

                  6.       Inventions and Patents.

                          6.1 The Executive agrees that all processes,
technologies and inventions (collectively, "Inventions"), including new
contributions, improvements, ideas and discoveries, whether patentable or not,
conceived, developed, invented or made by him during the Term shall belong to
the Company, provided that such Inventions grew out of the Executive's work with
the Company or any of its subsidiaries or affiliates, are related in any manner
to the business (commercial or experimental) of the Company or any of its
subsidiaries or affiliates or are conceived or made on the Company's time or
with the use of the Company's facilities or materials. The Executive shall
further: (a) promptly disclose such Inventions to the Company; (b) assign to the
Company, without additional compensation, all patent and other rights to such
Inventions for the United

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States and foreign countries; (c) sign all papers necessary to carry out the
foregoing; and (d) give testimony in support of the Executive's inventorship.

                          6.2 If any Invention is described in a patent
application or is disclosed to third parties, directly or indirectly, by the
Executive within two years after the termination of the Executive's employment
by the Company, it is to be presumed that the Invention was conceived or made
during the Term.

                          6.3 The Executive agrees that the Executive will not
assert any rights to any Invention as having been made or acquired by the
Executive prior to the date of this Agreement, except for Inventions, if any,
disclosed to the Company in writing prior to the date hereof.

                  7.       Intellectual Property.

                  The Company shall be the sole owner of all the products and
proceeds of the Executive's services hereunder, including, but not limited to,
all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Executive may acquire, obtain, develop or create in connection with and during
the Term, free and clear of any claims by the Executive (or anyone claiming
under the Executive) of any kind or character whatsoever (other than the
Executive's right to receive payments hereunder). The Executive shall, at the
request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title or interest in or to any such properties.

                  8.       Indemnification.

                  The Company will indemnify the Executive, to the maximum
extent permitted by applicable law, against all costs, charges and expenses
incurred or sustained by the Executive in connection with any action, suit or
proceeding to which the Executive may be made a party by reason of the Executive
being an officer, director or employee of the Company or of any subsidiary or
affiliate of the Company.

                  9.       Notices.

                  All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given

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if delivered personally, sent by overnight courier or mailed first class,
postage prepaid, by registered or certified mail (notices mailed shall be deemed
to have been given on the date mailed), as follows (or to such other address as
either party shall designate by notice in writing to the other in accordance
herewith):

                  If to the Company, to:

                  Pneumo Abex Corporation
                  c/o M & F Worldwide Corp.
                  35 East 62nd Street
                  New York, New York  10021
                  Attn:  General Counsel

                  If to the Executive, to:

                  Stephen G. Taub
                  2100 Bay Avenue
                  P.O. Box 930
                  Ocean City, NJ  08226

                  10.      General.

                          10.1 This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely in New York.

                          10.2 The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

                          10.3 This Agreement sets forth the entire agreement
and understanding of the parties relating to the Executive's employment by the
Company, and supersedes all prior agreements, arrangements and understandings,
written or oral, relating to the Executive's employment by the Company,
including, without limitation, the Employment Agreement dated as of September 1,
1996 (the "Prior Agreement") between the Company and the Executive, which Prior
Agreement is deemed terminated hereby and of no further force or effect. No
representation, promise or inducement has been made by either party that is not
embodied in this Agreement, and neither party shall be bound by or liable for
any alleged representation, promise or inducement not so set forth.

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<PAGE>

                          10.4 This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations, hereunder (i) to any affiliate
or (ii) to third parties in connection with any sale, transfer or other
disposition of all or substantially all of the business or assets of the
Company; in any event the obligations of the Company hereunder shall be binding
on its successors or assigns, whether by merger, consolidation or acquisition of
all or substantially all of its business or assets.

                          10.5 This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both of the parties hereto,
or in the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.

                  11.       Subsidiaries and Affiliates.

                  11.1 As used herein, the term "subsidiary" shall mean any
corporation or other business entity controlled directly or indirectly by the
corporation or other business entity in question, and the term "affiliate" shall
mean and include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.

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

                             PNEUMO ABEX CORPORATION

                             By: /s/ Peter W. Grace
                                 ------------------------------
                                 Peter W. Grace
                                 Senior Vice President

                                 /s/ Stephen G. Taub
                                 ------------------------------
                                 Stephen G. Taub

<PAGE>

                               Pramathesh S. Vora
                         Executive Employment Agreement

TERM.  August 1, 2000 - December 31, 2003.

END-OF-TERM. After 12/31/2002, Company may give notice of non-renewal; term
extends for 12 months. After 12/31/02, term extends on one-day-at-a-time basis
until notice of non-renewal given; then, term extends for 12 months.

BASE SALARY. $233,000 per year; if adjusted upward at sole discretion of
Company, increased amount becomes Base Salary.

BONUS. If Company achieves the percentage of business plan set forth below,
Employee receives performance bonus of the corresponding percentage of Base
Salary.

           Percentage of                  Percentage of
      EBITDA in Business Plan              Base Salary

                80%                             60%
                85                              75
                90                              90
                95                             100
               100                             105
               105                             110
               110                             125
               115                             150

DEATH. Base Salary paid until death; prorated performance bonus paid if
otherwise due for the year in which Employee dies.

DISABILITY. Company may terminate Agreement after six months. Base salary,
reduced by any disability benefits received by Employee, paid until Company
terminates; prorated performance bonus paid if otherwise due for the year in
which Agreement is terminated.

BENEFITS. Standard Company officer benefits.

CAUSE. Upon gross neglect, conviction of felony, conviction of any crime
relating to Company property, willful misconduct or material breach by employee
or material prejudice to Company, Company can terminate without further
liability.

<PAGE>

COMPANY BREACH. Employee receives Base Salary, performance bonuses and all
benefits for longer of balance of term or 12 months; if end-of-term provisions
are in effect, for balance of 12 month period; prorated performance bonus paid
if otherwise due for balance of term; employee obligated to mitigate.

OTHER PROVISIONS. Protection of confidential information, non-compete during
term, assignment of inventions, legal fees to employee if he prevails in action
for breach or injunction; legal fees to Company if it prevails in action for
injunction.

THIS SUMMARY PAGE IS FOR CONVENIENCE OF REFERENCE ONLY. IT SHALL NOT CONSTITUTE
A PART OF THE AGREEMENT

<PAGE>

                              Employment Agreement

                  EMPLOYMENT AGREEMENT, dated as of August 1, 2000, between
Pneumo Abex Corporation, a Delaware corporation (the "Company") and Pramathesh
S. Vora (the "Executive").

                  WHEREAS, the Company wishes to employ the Executive, and the
Executive wishes to accept such employment, on the terms and conditions set
forth in this Agreement;

         Accordingly, the Company and the Executive hereby agree as follows:

                  1.       Employment, Duties and Acceptance.

                          1.1 Employment, Duties. The Company hereby employs the
Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company as Senior Vice President and or in such other
executive position as may be mutually agreed upon by the Company and the
Executive, and to perform such other duties consistent with such position as may
be assigned to the Executive by the Board of Directors or any officer of the
Company senior to the Executive.

                          1.2 Acceptance. The Executive hereby accepts such
employment and agrees to render the services described above. During the Term,
the Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment, and to use the Executive's best efforts, skill and
ability to promote the Company's interests. The Executive further agrees to
accept election, and to serve during all or any part of the Term, as an officer
or director of the Company and of any subsidiary or affiliate of the Company,
without any compensation therefor other than that specified in this Agreement,
if elected to any such position by the shareholders or by the Board of Directors
of the Company or of any subsidiary or affiliate, as the case may be.

                          1.3 Location. The duties to be performed by the
Executive hereunder shall be performed primarily at the office of the Company in
Camden, New Jersey, subject to reasonable travel requirements on behalf of the
Company.

<PAGE>

                  2.       Term of Employment; Certain Post-Term Benefits.

                          2.1 The Term. The term of the Executive's employment
under this Agreement (the "Term") shall commence on August 1, 2000 and shall end
on December 31, 2003 or such later date to which the Term is extended pursuant
to Section 2.2.

                          2.2 End-of-Term Provisions. At any time on or after
December 31, 2002 the Company shall have the right to give written notice of
non-renewal of the Term. In the event the Company gives such notice of
non-renewal, the Term automatically shall be extended so that it ends twelve
months after the last day of the month in which the Company gives such notice.
From and after December 31, 2003, unless and until the Company gives written
notice of non-renewal as provided in this Section 2.2, the Term automatically
shall be extended day-by-day; upon the giving of such notice by the Company, the
Term automatically shall be extended so that it ends twelve months after the
last day of the month in which the Company gives such notice.

                          2.3 Special Curtailment. The Term shall end earlier
than the original December 31, 2003 termination date provided in Section 2.1 or
any extended termination date provided in Section 2.2, in either case if sooner
terminated pursuant to Section 4. Non-extension of the Term shall not be deemed
to be a wrongful termination of the Term or this Agreement by the Company
pursuant to Section 4.4.

                  3.       Compensation; Benefits.

                          3.1 Salary. As compensation for all services to be
rendered pursuant to this Agreement, the Company agrees to pay the Executive
during the Term a base salary, payable semi-monthly in arrears, at the annual
rate of not less than $233,000, less such deductions or amounts to be withheld
as required by applicable law and regulations (the "Base Salary"). In the event
that the Company, in its sole discretion, from time to time determines to
increase the Base Salary, such increased amount shall, from and after the
effective date of the increase, constitute "Base Salary" for purposes of this
Agreement.

                          3.2 Bonus. In addition to the amounts to be paid to
the Executive pursuant to Section 3.1, the Executive will be eligible to receive
a bonus with respect to each calendar year included within the Term computed in
accordance with the provisions of the next two succeeding sentences. If, with
respect to any calendar year, the

                                       2

<PAGE>

Company achieves EBITDA of at least the percentage set forth in the table below
of its business plan for such year, such bonus shall be the percentage set forth
in the table below of Base Salary with respect to the year for which the bonus
(any such bonus, a "performance bonus") was earned:

           Percentage of                  Percentage of
      EBITDA in Business Plan              Base Salary

               80%                             60%
               85                              75
               90                              90
               95                             100
              100                             105
              105                             110
              110                             125
              115                             150

In the event that the Term or this Agreement is terminated other than pursuant
to Section 4.3, the Executive shall be entitled to receive a prorated
performance bonus (if such a bonus is otherwise payable) with respect to (A) the
year in which the Term or this Agreement terminated or, (B) in the event of a
termination pursuant to Section 4.4, the year in which the Executive was last
entitled to receive any payments of Base Salary, in an amount equal to (x) the
percentage of Base Salary otherwise payable as a performance bonus with respect
to such year multiplied by (y) a fraction, the numerator of which is the number
of whole months elapsed from the beginning of such year to the date as of which
the Term or this Agreement terminated or the last day as of which the Executive
is entitled to receive payments of Base Salary, as applicable and the
denominator of which is 12. A performance bonus or other bonus, if either or
both are earned in accordance with this Agreement, shall be paid no later than
March 31st of the year next following the year with respect to which such bonus
was earned. The maximum bonus payable pursuant to this Section 3.2 shall be
$1,000,000 with respect to any calendar year.

                          3.3 Minimum Compensation. If, during any calendar year
(a "Current Year"), EBITDA for such year at least equals EBITDA for the
immediately prior year (a "Prior Year"), then the sum of Base Salary and bonus
payable to the Executive on account of the Current Year ("Total Current Year
Compensation") shall be no less than the sum of Base Salary and bonus paid to
the Executive on account of the Prior Year ("Total Prior Year Compensation"). In
any case described in the preceding

                                       3
<PAGE>

sentence in which Total Prior Year Compensation was greater than Total Current
Year Compensation computed pursuant to Sections 3.1 and 3.2, then the difference
shall be paid to the Executive no later than March 31st of the year next
following the Current Year.

                          3.4 Business Expenses. The Company shall pay or
reimburse the Executive for all reasonable expenses actually incurred or paid by
the Executive during the Term in the performance of the Executive's services
under this Agreement, upon presentation of expense statements or vouchers or
such other supporting information as the Company customarily may require of its
officers provided, however, that the maximum amount available for such expenses
during any period may be fixed in advance by the Chairman, the Vice Chairman or
the Chief Executive Officer of the Company.

                          3.5 Vacation. During the Term, the Executive shall be
entitled to a vacation period or periods of four (4) weeks taken in accordance
with the vacation policy of the Company during each year of the Term. Vacation
time not used by the end of a year shall be forfeited, except that one week of
vacation pay may be "banked" in accordance with Company policy.

                          3.6 Fringe Benefits. During the Term, the Executive
shall be entitled to all benefits for which the Executive shall be eligible
under any qualified pension plan, 401(k) plan, non-qualified benefit restoration
plan, group insurance or other so-called "fringe" benefit plan which the Company
provides to its executive employees generally. In addition, the Company shall
"gross up" the income imputed to the Executive under federal and any applicable
state income tax laws for any life insurance furnished to the Executive, such
that the Executive effectively will suffer no personal cost for such fringe
benefit.

                  4.       Termination.

                          4.1 Death. If the Executive dies during the Term, the
Term shall terminate forthwith upon the Executive's death and the Company shall
have no obligation hereunder to make any payments to the Executive's
beneficiaries on account of any period of time after such termination. After
such termination, the Executive's beneficiaries shall receive any benefits to
which the Executive or such beneficiaries may be entitled under any fringe
benefit program that may have been provided by the Company pursuant to
Section 3.6.

                                       4
<PAGE>

                          4.2 Disability. If, during the Term the Executive
becomes disabled or incapacitated to the extent he is unable to perform his
duties hereunder ("Totally Disabled") for a period of six (6) consecutive
months, the Company shall have the right at any time thereafter, so long as the
Executive is then still Totally Disabled, to terminate the Term upon sending
written notice of termination to the Executive. If the Company elects to
terminate the Term by reason of the Executive becoming Totally Disabled, the
Company shall have no obligation hereunder to make any payments to the Executive
on account of any period of time after such termination. After such termination,
the Executive shall receive any benefits to which he may be entitled under any
fringe benefit program that may have been provided by the Company pursuant to
Section 3.6. While the Executive is Totally Disabled prior to the Term being
terminated, Base Salary payable pursuant to Section 3.1 shall be reduced by any
other benefits payable to the Executive under any disability plan provided for
hereunder or otherwise furnished to the Executive by the Company.

                          4.3 Cause. In the event of gross neglect by the
Executive of the Executive's duties hereunder, conviction of the Executive of
any felony, conviction of the Executive of any lesser crime or offense involving
the property of the Company or any of its subsidiaries or affiliates, willful
misconduct by the Executive in connection with the performance of any material
portion of the Executive's duties hereunder, breach by the Executive of any
material provision of this Agreement or any other conduct on the part of the
Executive which would make the Executive's continued employment by the Company
materially prejudicial to the best interests of the Company, the Company may at
any time by written notice to the Executive terminate the Term and, upon such
termination, this Agreement shall terminate and the Executive shall be entitled
to receive no further amounts or benefits hereunder, except any as shall have
been earned to the date of such termination.

                          4.4 Company Breach. In the event of the breach of any
material provision of this Agreement by the Company, the Executive shall be
entitled to terminate the Term upon 60 days' prior written notice to the
Company. Upon such termination, or in the event the Company terminates the Term
or this Agreement other than pursuant to the provisions of Section 4.2 or 4.3,
the Company shall continue to provide the Executive (i) payments of Base Salary,
in the manner and amount specified in Section 3.1, (ii)

                                       5
<PAGE>

performance bonuses, in the manner and amount specified in Section 3.2, (iii)
minimum compensation in the manner and amount specified in Section 3.3 and (iv)
fringe benefits and additional benefits in the manner and amounts specified in
Section 3.6 until the end of the Term (as in effect immediately prior to such
termination) or, if the Company has not then given written notice of non-renewal
pursuant to Section 2.2, for a period of twelve months after the last day of the
month in which termination described in this Section 4.4 occurred, whichever is
longer (the "Damage Period"). The Company's obligations pursuant to this Section
4.4 are subject to the Executive's duty to mitigate damages by seeking other
employment provided, however, that the Executive shall not be required to accept
a position of lesser importance or of substantially different character than the
position held with the Company immediately prior to the effective date of
termination or in a location outside of the Philadelphia, Pennsylvania
metropolitan area. To the extent that the Executive shall earn compensation
during the Damage Period (without regard to when such compensation is paid), the
Base Salary, bonus and minimum compensation payments to be made by the Company
pursuant to this Section 4.4 shall be correspondingly reduced.

                          4.5 Litigation Expenses. Except as provided for in
Section 5.7, if the Company and the Executive become involved in any action,
suit or proceeding relating to the alleged breach of this Agreement by the
Company or the Executive, and if a judgment in such action, suit or proceeding
is rendered in favor of the Executive, the Company shall reimburse the Executive
for all expenses (including reasonable attorneys' fees) incurred by the
Executive in connection with such action, suit or proceeding. Such costs shall
be paid to the Executive promptly upon presentation of expense statements or
other supporting information evidencing the incurrence of such expenses.

                  5.       Protection of Confidential Information;
                             Non-Competition.

                          5.1 In view of the fact that the Executive's work for
the Company will bring the Executive into close contact with many confidential
affairs of the Company not readily available to the public, and plans for future
developments, the Executive agrees:

                                       6
<PAGE>

                          5.1.1 To keep and retain in the strictest confidence
all confidential matters of the Company, including, without limitation, "know
how", trade secrets, customer lists, pricing policies, operational methods,
technical processes, formulae, inventions and research projects, and other
business affairs of the Company, learned by the Executive heretofore or
hereafter, and not to disclose them to anyone outside of the Company, either
during or after the Executive's employment with the Company, except in the
course of performing the Executive's duties hereunder or with the Company's
express written consent. The foregoing prohibitions shall include, without
limitation, directly or indirectly publishing (or causing, participating in,
assisting or providing any statement, opinion or information in connection with
the publication of) any diary, memoir, letter, story, photograph, interview,
article, essay, account or description (whether fictionalized or not) concerning
any of the foregoing, publication being deemed to include any presentation or
reproduction of any written, verbal or visual material in any communication
medium, including any book, magazine, newspaper, theatrical production or movie,
or television or radio programming or commercial; and

                          5.1.2 To deliver promptly to the Company on
termination of the Executive's employment by the Company, or at any time the
Company may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints and other documents (and all copies thereof) relating to
the Company's business and all property associated therewith, which the
Executive may then possess or have under the Executive's control.

                          5.2 During the Term, the Executive shall not, directly
or indirectly, enter the employ of, or render any services to, any person, firm
or corporation engaged in any business competitive with the business of the
Company or of any of its subsidiaries or affiliates; the Executive shall not
engage in such business on the Executive's own account; and the Executive shall
not become interested in any such business, directly or indirectly, as an
individual, partner, shareholder, director, officer, principal, agent, employee,
trustee, consultant, or in any other relationship or capacity provided, however,
that nothing contained in this Section 5.2 shall be deemed to prohibit the
Executive from acquiring, solely as an investment, up to five percent (5%) of
the outstanding shares of capital stock of any public corporation.

                          5.3 If the Executive commits a breach, or threatens to
commit a breach, of any of the provisions of

                                       7

<PAGE>

Sections 5.1 or 5.2 hereof, the Company shall have the following rights and
remedies:

                          5.3.1 The right and remedy to have the provisions of
this Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company; and

                          5.3.2 The right and remedy to require the Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits (collectively "Benefits") derived or
received by the Executive as the result of any transactions constituting a
breach of any of the provisions of the preceding paragraph, and the Executive
hereby agrees to account for and pay over such Benefits to the Company.

Each of the rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.

                          5.4 If any of the covenants contained in Sections 5.1
or 5.2, or any part thereof, hereafter are construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portions.

                          5.5 If any of the covenants contained in Sections 5.1
or 5.2, or any part thereof, are held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court making such determination shall have the power to reduce the duration
and/or area of such provision and, in its reduced form, said provision shall
then be enforceable.

                          5.6 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 5.1 and 5.2 upon the
courts of any state within the geographical scope of such covenants. In the
event that the courts of any one or more of such states shall hold such
covenants wholly unenforceable by reason of the breadth of such covenants or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the Company's right to the relief provided above in the
courts of any other states within the geographical scope of such covenants as to
breaches of such

                                       8

<PAGE>

covenants in such other respective jurisdictions, the above covenants as they
relate to each state being for this purpose severable into diverse and
independent covenants.

                          5.7 In the event that any action, suit or other
proceeding in law or in equity is brought to enforce the covenants contained in
Sections 5.1 and 5.2 or to obtain money damages for the breach thereof, and such
action results in the award of a judgment for money damages or in the granting
of any injunction in favor of the Company, all expenses (including reasonable
attorneys' fees) of the Company in such action, suit or other proceeding shall
(on demand of the Company) be paid by the Executive. In the event the Company
fails to obtain a judgment for money damages or an injunction in favor of the
Company, all expenses (including reasonable attorneys' fees) of the Executive in
such action, suit or other proceeding shall (on demand of the Executive) be paid
by the Company.

                  6.       Inventions and Patents.

                          6.1 The Executive agrees that all processes,
technologies and inventions (collectively, "Inventions"), including new
contributions, improvements, ideas and discoveries, whether patentable or not,
conceived, developed, invented or made by him during the Term shall belong to
the Company, provided that such Inventions grew out of the Executive's work with
the Company or any of its subsidiaries or affiliates, are related in any manner
to the business (commercial or experimental) of the Company or any of its
subsidiaries or affiliates or are conceived or made on the Company's time or
with the use of the Company's facilities or materials. The Executive shall
further: (a) promptly disclose such Inventions to the Company; (b) assign to the
Company, without additional compensation, all patent and other rights to such
Inventions for the United States and foreign countries; (c) sign all papers
necessary to carry out the foregoing; and (d) give testimony in support of the
Executive's inventorship.

                          6.2 If any Invention is described in a patent
application or is disclosed to third parties, directly or indirectly, by the
Executive within two years after the termination of the Executive's employment
by the Company, it is to be presumed that the Invention was conceived or made
during the Term.

                          6.3 The Executive agrees that the Executive will not
assert any rights to any Invention as having been made or acquired by the
Executive prior to the date of this Agreement, except for Inventions, if any,
disclosed to the Company in writing prior to the date hereof.

                                       9

<PAGE>

                  7.       Intellectual Property.

                  The Company shall be the sole owner of all the products and
proceeds of the Executive's services hereunder, including, but not limited to,
all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Executive may acquire, obtain, develop or create in connection with and during
the Term, free and clear of any claims by the Executive (or anyone claiming
under the Executive) of any kind or character whatsoever (other than the
Executive's right to receive payments hereunder). The Executive shall, at the
request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title or interest in or to any such properties.

                  8.       Indemnification.

                  The Company will indemnify the Executive, to the maximum
extent permitted by applicable law, against all costs, charges and expenses
incurred or sustained by the Executive in connection with any action, suit or
proceeding to which the Executive may be made a party by reason of the Executive
being an officer, director or employee of the Company or of any subsidiary or
affiliate of the Company.

                  9.       Notices.

                  All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):

                  If to the Company, to:

                  Pneumo Abex Corporation
                  c/o M & F Worldwide Corp.
                  35 East 62nd Street
                  New York, New York  10021
                  Attn:  General Counsel

                                       10

<PAGE>

                  If to the Executive, to:

                  Pramathesh S. Vora
                  12 Bunker Hill Road
                  Sewell, NJ  08080

                  10.      General.

                          10.1 This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely in New York.

                          10.2 The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

                          10.3 This Agreement sets forth the entire agreement
and understanding of the parties relating to the Executive's employment by the
Company, and supersedes all prior agreements, arrangements and understandings,
written or oral, relating to the Executive's employment by the Company,
including, without limitation, the Employment Agreement dated as of September 1,
1996, as amended (the "Prior Agreement") between the Company and the Executive,
which Prior Agreement is deemed terminated hereby and of no further force or
effect. No representation, promise or inducement has been made by either party
that is not embodied in this Agreement, and neither party shall be bound by or
liable for any alleged representation, promise or inducement not so set forth.

                          10.4 This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations, hereunder (i) to any affiliate
or (ii) to third parties in connection with any sale, transfer or other
disposition of all or substantially all of the business or assets of the
Company; in any event the obligations of the Company hereunder shall be binding
on its successors or assigns, whether by merger, consolidation or acquisition of
all or substantially all of its business or assets.

                                       11
<PAGE>

                          10.5 This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both of the parties hereto,
or in the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.

                  11.       Subsidiaries and Affiliates.

                  11.1 As used herein, the term "subsidiary" shall mean any
corporation or other business entity controlled directly or indirectly by the
corporation or other business entity in question, and the term "affiliate" shall
mean and include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.

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

                             PNEUMO ABEX CORPORATION

                             By:/s/ Stephen G. Taub
                                -----------------------------
                                Stephen G. Taub
                                President and Chief Executive
                                Officer

                                /s/ Pramathesh S. Vora
                                -----------------------------
                                Pramathesh S. Vora

<PAGE>

                                 Peter W. Grace
                         Executive Employment Agreement

TERM.  August 1, 2000 - December 31, 2003.

END-OF-TERM. After 12/31/2002, Company may give notice of non-renewal; term
extends for 12 months. After 12/31/02, term extends on one-day-at-a-time basis
until notice of non-renewal given; then, term extends for 12 months.

BASE SALARY. $192,000 per year; if adjusted upward at sole discretion of
Company, increased amount becomes Base Salary.

BONUS. If Company achieves the percentage of business plan set forth below,
Employee receives performance bonus of the corresponding percentage of Base
Salary.

            Percentage of            Percentage of
       EBITDA in Business Plan        Base Salary

                 80%                      60%
                 85                       75
                 90                       90
                 95                      100
                100                      105
                105                      110
                110                      125
                115                      150

DEATH. Base Salary paid until death; prorated performance bonus paid if
otherwise due for the year in which Employee dies.

DISABILITY. Company may terminate Agreement after six months. Base salary,
reduced by any disability benefits received by Employee, paid until Company
terminates; prorated performance bonus paid if otherwise due for the year in
which Agreement is terminated.

BENEFITS. Standard Company officer benefits.

CAUSE. Upon gross neglect, conviction of felony, conviction of any crime
relating to Company property, willful misconduct or material breach by employee
or material prejudice to Company, Company can terminate without further
liability.

<PAGE>

COMPANY BREACH. Employee receives Base Salary, performance bonuses and all
benefits for longer of balance of term or 12 months; if end-of-term provisions
are in effect, for balance of 12 month period; prorated performance bonus paid
if otherwise due for balance of term; employee obligated to mitigate.

OTHER PROVISIONS. Protection of confidential information, non-compete during
term, assignment of inventions, legal fees to employee if he prevails in action
for breach or injunction; legal fees to Company if it prevails in action for
injunction.

THIS SUMMARY PAGE IS FOR CONVENIENCE OF REFERENCE ONLY. IT SHALL NOT CONSTITUTE
A PART OF THE AGREEMENT

<PAGE>

                              Employment Agreement

                  EMPLOYMENT AGREEMENT, dated as of August 1, 2000, between
Pneumo Abex Corporation, a Delaware corporation (the "Company") and Peter W.
Grace (the "Executive").

                  WHEREAS, the Company wishes to employ the Executive, and the
Executive wishes to accept such employment, on the terms and conditions set
forth in this Agreement;

         Accordingly, the Company and the Executive hereby agree as follows:

                  1.       Employment, Duties and Acceptance.

                          1.1 Employment, Duties. The Company hereby employs the
Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company as Senior Vice President, Treasurer and
Controller or in such other executive position as may be mutually agreed upon by
the Company and the Executive, and to perform such other duties consistent with
such position as may be assigned to the Executive by the Board of Directors or
any officer of the Company senior to the Executive.

                          1.2 Acceptance. The Executive hereby accepts such
employment and agrees to render the services described above. During the Term,
the Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment, and to use the Executive's best efforts, skill and
ability to promote the Company's interests. The Executive further agrees to
accept election, and to serve during all or any part of the Term, as an officer
or director of the Company and of any subsidiary or affiliate of the Company,
without any compensation therefor other than that specified in this Agreement,
if elected to any such position by the shareholders or by the Board of Directors
of the Company or of any subsidiary or affiliate, as the case may be.

                          1.3 Location. The duties to be performed by the
Executive hereunder shall be performed primarily at the office of the Company in
Camden, New Jersey, subject to reasonable travel requirements on behalf of the
Company.

<PAGE>

                  2.       Term of Employment; Certain Post-Term Benefits.

                          2.1 The Term. The term of the Executive's employment
under this Agreement (the "Term") shall commence on August 1, 2000 and shall end
on December 31, 2003 or such later date to which the Term is extended pursuant
to Section 2.2.

                          2.2 End-of-Term Provisions. At any time on or after
December 31, 2002 the Company shall have the right to give written notice of
non-renewal of the Term. In the event the Company gives such notice of
non-renewal, the Term automatically shall be extended so that it ends twelve
months after the last day of the month in which the Company gives such notice.
From and after December 31, 2003, unless and until the Company gives written
notice of non-renewal as provided in this Section 2.2, the Term automatically
shall be extended day-by-day; upon the giving of such notice by the Company, the
Term automatically shall be extended so that it ends twelve months after the
last day of the month in which the Company gives such notice.

                          2.3 Special Curtailment. The Term shall end earlier
than the original December 31, 2003 termination date provided in Section 2.1 or
any extended termination date provided in Section 2.2, in either case if sooner
terminated pursuant to Section 4. Non-extension of the Term shall not be deemed
to be a wrongful termination of the Term or this Agreement by the Company
pursuant to Section 4.4.

                  3.       Compensation; Benefits.

                          3.1 Salary. As compensation for all services to be
rendered pursuant to this Agreement, the Company agrees to pay the Executive
during the Term a base salary, payable semi-monthly in arrears, at the annual
rate of not less than $192,000, less such deductions or amounts to be withheld
as required by applicable law and regulations (the "Base Salary"). In the event
that the Company, in its sole discretion, from time to time determines to
increase the Base Salary, such increased amount shall, from and after the
effective date of the increase, constitute "Base Salary" for purposes of this
Agreement.

                          3.2 Bonus. In addition to the amounts to be paid to
the Executive pursuant to Section 3.1, the Executive will be eligible to receive
a bonus with respect to each calendar year included within the Term computed in

                                       2
<PAGE>

accordance with the provisions of the next two succeeding sentences. If, with
respect to any calendar year, the Company achieves EBITDA of at least the
percentage set forth in the table below of its business plan for such year, such
bonus shall be the percentage set forth in the table below of Base Salary with
respect to the year for which the bonus (any such bonus, a "performance bonus")
was earned:

               Percentage of                 Percentage of
          EBITDA in Business Plan             Base Salary

                   80%                             60%
                   85                              75
                   90                              90
                   95                             100
                  100                             105
                  105                             110
                  110                             125
                  115                             150

In the event that the Term or this Agreement is terminated other than pursuant
to Section 4.3, the Executive shall be entitled to receive a prorated
performance bonus (if such a bonus is otherwise payable) with respect to (A) the
year in which the Term or this Agreement terminated or, (B) in the event of a
termination pursuant to Section 4.4, the year in which the Executive was last
entitled to receive any payments of Base Salary, in an amount equal to (x) the
percentage of Base Salary otherwise payable as a performance bonus with respect
to such year multiplied by (y) a fraction, the numerator of which is the number
of whole months elapsed from the beginning of such year to the date as of which
the Term or this Agreement terminated or the last day as of which the Executive
is entitled to receive payments of Base Salary, as applicable and the
denominator of which is 12. A performance bonus or other bonus, if either or
both are earned in accordance with this Agreement, shall be paid no later than
March 31st of the year next following the year with respect to which such bonus
was earned. The maximum bonus payable pursuant to this Section 3.2 shall be
$1,000,000 with respect to any calendar year.

                          3.3 Minimum Compensation. If, during any calendar year
(a "Current Year"), EBITDA for such year at least equals EBITDA for the
immediately prior year (a "Prior Year"), then the sum of Base Salary and bonus
payable to the Executive on account of the Current Year ("Total Current Year
Compensation") shall be no less than

                                       3

<PAGE>

the sum of Base Salary and bonus paid to the Executive on account of the Prior
Year ("Total Prior Year Compensation"). In any case described in the preceding
sentence in which Total Prior Year Compensation was greater than Total Current
Year Compensation computed pursuant to Sections 3.1 and 3.2, then the difference
shall be paid to the Executive no later than March 31st of the year next
following the Current Year.

                          3.4 Business Expenses. The Company shall pay or
reimburse the Executive for all reasonable expenses actually incurred or paid by
the Executive during the Term in the performance of the Executive's services
under this Agreement, upon presentation of expense statements or vouchers or
such other supporting information as the Company customarily may require of its
officers provided, however, that the maximum amount available for such expenses
during any period may be fixed in advance by the Chairman, the Vice Chairman or
the Chief Executive Officer of the Company.

                          3.5 Vacation. During the Term, the Executive shall be
entitled to a vacation period or periods of four (4) weeks taken in accordance
with the vacation policy of the Company during each year of the Term. Vacation
time not used by the end of a year shall be forfeited, except that one week of
vacation pay may be "banked" in accordance with Company policy.

                          3.6 Fringe Benefits. During the Term, the Executive
shall be entitled to all benefits for which the Executive shall be eligible
under any qualified pension plan, 401(k) plan, non-qualified benefit restoration
plan, group insurance or other so-called "fringe" benefit plan which the Company
provides to its executive employees generally. In addition, the Company shall
"gross up" the income imputed to the Executive under federal and any applicable
state income tax laws for any life insurance furnished to the Executive, such
that the Executive effectively will suffer no personal cost for such fringe
benefit.

                  4.       Termination.

                          4.1 Death. If the Executive dies during the Term, the
Term shall terminate forthwith upon the Executive's death and the Company shall
have no obligation hereunder to make any payments to the Executive's
beneficiaries on account of any period of time after such termination. After
such termination, the Executive's

                                       4
<PAGE>

beneficiaries shall receive any benefits to which the Executive or such
beneficiaries may be entitled under any fringe benefit program that may have
been provided by the Company pursuant to  Section 3.6.

                          4.2 Disability. If, during the Term the Executive
becomes disabled or incapacitated to the extent he is unable to perform his
duties hereunder ("Totally Disabled") for a period of six (6) consecutive
months, the Company shall have the right at any time thereafter, so long as the
Executive is then still Totally Disabled, to terminate the Term upon sending
written notice of termination to the Executive. If the Company elects to
terminate the Term by reason of the Executive becoming Totally Disabled, the
Company shall have no obligation hereunder to make any payments to the Executive
on account of any period of time after such termination. After such termination,
the Executive shall receive any benefits to which he may be entitled under any
fringe benefit program that may have been provided by the Company pursuant to
Section 3.6. While the Executive is Totally Disabled prior to the Term being
terminated, Base Salary payable pursuant to Section 3.1 shall be reduced by any
other benefits payable to the Executive under any disability plan provided for
hereunder or otherwise furnished to the Executive by the Company.

                          4.3 Cause. In the event of gross neglect by the
Executive of the Executive's duties hereunder, conviction of the Executive of
any felony, conviction of the Executive of any lesser crime or offense involving
the property of the Company or any of its subsidiaries or affiliates, willful
misconduct by the Executive in connection with the performance of any material
portion of the Executive's duties hereunder, breach by the Executive of any
material provision of this Agreement or any other conduct on the part of the
Executive which would make the Executive's continued employment by the Company
materially prejudicial to the best interests of the Company, the Company may at
any time by written notice to the Executive terminate the Term and, upon such
termination, this Agreement shall terminate and the Executive shall be entitled
to receive no further amounts or benefits hereunder, except any as shall have
been earned to the date of such termination.

                          4.4 Company Breach. In the event of the breach of any
material provision of this Agreement by the Company, the Executive shall be
entitled to terminate the Term upon 60 days' prior written notice to the
Company.

                                       5
<PAGE>

Upon such termination, or in the event the Company terminates the Term or this
Agreement other than pursuant to the provisions of Section 4.2 or 4.3, the
Company shall continue to provide the Executive (i) payments of Base Salary, in
the manner and amount specified in Section 3.1, (ii) performance bonuses, in the
manner and amount specified in Section 3.2, (iii) minimum compensation in the
manner and amount specified in Section 3.3 and (iv) fringe benefits and
additional benefits in the manner and amounts specified in Section 3.6 until the
end of the Term (as in effect immediately prior to such termination) or, if the
Company has not then given written notice of non-renewal pursuant to Section
2.2, for a period of twelve months after the last day of the month in which
termination described in this Section 4.4 occurred, whichever is longer (the
"Damage Period"). The Company's obligations pursuant to this Section 4.4 are
subject to the Executive's duty to mitigate damages by seeking other employment
provided, however, that the Executive shall not be required to accept a position
of lesser importance or of substantially different character than the position
held with the Company immediately prior to the effective date of termination or
in a location outside of the Philadelphia, Pennsylvania metropolitan area. To
the extent that the Executive shall earn compensation during the Damage Period
(without regard to when such compensation is paid), the Base Salary, bonus and
minimum compensation payments to be made by the Company pursuant to this Section
4.4 shall be correspondingly reduced.

                          4.5 Litigation Expenses. Except as provided for in
Section 5.7, if the Company and the Executive become involved in any action,
suit or proceeding relating to the alleged breach of this Agreement by the
Company or the Executive, and if a judgment in such action, suit or proceeding
is rendered in favor of the Executive, the Company shall reimburse the Executive
for all expenses (including reasonable attorneys' fees) incurred by the
Executive in connection with such action, suit or proceeding. Such costs shall
be paid to the Executive promptly upon presentation of expense statements or
other supporting information evidencing the incurrence of such expenses.

                  5.       Protection of Confidential Information;
                             Non-Competition.

                          5.1 In view of the fact that the Executive's work for
the Company will bring the Executive into close contact with many confidential
affairs of the

                                       6
<PAGE>

Company not readily available to the public, and plans for future developments,
the Executive agrees:

                          5.1.1 To keep and retain in the strictest confidence
all confidential matters of the Company, including, without limitation, "know
how", trade secrets, customer lists, pricing policies, operational methods,
technical processes, formulae, inventions and research projects, and other
business affairs of the Company, learned by the Executive heretofore or
hereafter, and not to disclose them to anyone outside of the Company, either
during or after the Executive's employment with the Company, except in the
course of performing the Executive's duties hereunder or with the Company's
express written consent. The foregoing prohibitions shall include, without
limitation, directly or indirectly publishing (or causing, participating in,
assisting or providing any statement, opinion or information in connection with
the publication of) any diary, memoir, letter, story, photograph, interview,
article, essay, account or description (whether fictionalized or not) concerning
any of the foregoing, publication being deemed to include any presentation or
reproduction of any written, verbal or visual material in any communication
medium, including any book, magazine, newspaper, theatrical production or movie,
or television or radio programming or commercial; and

                          5.1.2 To deliver promptly to the Company on
termination of the Executive's employment by the Company, or at any time the
Company may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints and other documents (and all copies thereof) relating to
the Company's business and all property associated therewith, which the
Executive may then possess or have under the Executive's control.

                          5.2 During the Term, the Executive shall not, directly
or indirectly, enter the employ of, or render any services to, any person, firm
or corporation engaged in any business competitive with the business of the
Company or of any of its subsidiaries or affiliates; the Executive shall not
engage in such business on the Executive's own account; and the Executive shall
not become interested in any such business, directly or indirectly, as an
individual, partner, shareholder, director, officer, principal, agent, employee,
trustee, consultant, or in any other relationship or capacity provided, however,
that nothing contained in this Section 5.2 shall be deemed to prohibit the
Executive from acquiring, solely as an investment, up to five percent (5%) of
the outstanding shares of capital stock of any public corporation.

                                       7
<PAGE>

                          5.3 If the Executive commits a breach, or threatens to
commit a breach, of any of the provisions of Sections 5.1 or 5.2 hereof, the
Company shall have the following rights and remedies:

                          5.3.1 The right and remedy to have the provisions of
this Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company; and

                          5.3.2 The right and remedy to require the Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits (collectively "Benefits") derived or
received by the Executive as the result of any transactions constituting a
breach of any of the provisions of the preceding paragraph, and the Executive
hereby agrees to account for and pay over such Benefits to the Company.

Each of the rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.

                          5.4 If any of the covenants contained in Sections 5.1
or 5.2, or any part thereof, hereafter are construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portions.

                          5.5 If any of the covenants contained in Sections 5.1
or 5.2, or any part thereof, are held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court making such determination shall have the power to reduce the duration
and/or area of such provision and, in its reduced form, said provision shall
then be enforceable.

                          5.6 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 5.1 and 5.2 upon the
courts of any state within the geographical scope of such covenants. In the
event that the courts of any one or more of such states shall hold such
covenants wholly unenforceable by reason of the

                                       8

<PAGE>

breadth of such covenants or otherwise, it is the intention of the parties
hereto that such determination not bar or in any way affect the Company's right
to the relief provided above in the courts of any other states within the
geographical scope of such covenants as to breaches of such covenants in such
other respective jurisdictions, the above covenants as they relate to each state
being for this purpose severable into diverse and independent covenants.

                          5.7 In the event that any action, suit or other
proceeding in law or in equity is brought to enforce the covenants contained in
Sections 5.1 and 5.2 or to obtain money damages for the breach thereof, and such
action results in the award of a judgment for money damages or in the granting
of any injunction in favor of the Company, all expenses (including reasonable
attorneys' fees) of the Company in such action, suit or other proceeding shall
(on demand of the Company) be paid by the Executive. In the event the Company
fails to obtain a judgment for money damages or an injunction in favor of the
Company, all expenses (including reasonable attorneys' fees) of the Executive in
such action, suit or other proceeding shall (on demand of the Executive) be paid
by the Company.

                  6.       Inventions and Patents.

                          6.1 The Executive agrees that all processes,
technologies and inventions (collectively, "Inventions"), including new
contributions, improvements, ideas and discoveries, whether patentable or not,
conceived, developed, invented or made by him during the Term shall belong to
the Company, provided that such Inventions grew out of the Executive's work with
the Company or any of its subsidiaries or affiliates, are related in any manner
to the business (commercial or experimental) of the Company or any of its
subsidiaries or affiliates or are conceived or made on the Company's time or
with the use of the Company's facilities or materials. The Executive shall
further: (a) promptly disclose such Inventions to the Company; (b) assign to the
Company, without additional compensation, all patent and other rights to such
Inventions for the United States and foreign countries; (c) sign all papers
necessary to carry out the foregoing; and (d) give testimony in support of the
Executive's inventorship.

                          6.2 If any Invention is described in a patent
application or is disclosed to third parties, directly or indirectly, by the
Executive within two years after the termination of the Executive's employment
by the Company, it is to be presumed that the Invention was conceived or made
during the Term.

                                       9

<PAGE>

                          6.3 The Executive agrees that the Executive will not
assert any rights to any Invention as having been made or acquired by the
Executive prior to the date of this Agreement, except for Inventions, if any,
disclosed to the Company in writing prior to the date hereof.

                  7.       Intellectual Property.

                  The Company shall be the sole owner of all the products and
proceeds of the Executive's services hereunder, including, but not limited to,
all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Executive may acquire, obtain, develop or create in connection with and during
the Term, free and clear of any claims by the Executive (or anyone claiming
under the Executive) of any kind or character whatsoever (other than the
Executive's right to receive payments hereunder). The Executive shall, at the
request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title or interest in or to any such properties.

                  8.       Indemnification.

                  The Company will indemnify the Executive, to the maximum
extent permitted by applicable law, against all costs, charges and expenses
incurred or sustained by the Executive in connection with any action, suit or
proceeding to which the Executive may be made a party by reason of the Executive
being an officer, director or employee of the Company or of any subsidiary or
affiliate of the Company.

                  9.       Notices.

                  All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):

                  If to the Company, to:

                  Pneumo Abex Corporation
                  c/o M & F Worldwide Corp.
                  35 East 62nd Street
                  New York, New York  10021
                  Attn:  General Counsel

                                       10

<PAGE>

                  If to the Executive, to:

                  Peter W. Grace
                  440 Fairfax Road
                  Drexel Hill, PA  19026

                  10.      General.

                          10.1 This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely in New York.

                          10.2 The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

                          10.3 This Agreement sets forth the entire agreement
and understanding of the parties relating to the Executive's employment by the
Company, and supersedes all prior agreements, arrangements and understandings,
written or oral, relating to the Executive's employment by the Company,
including, without limitation, the Employment Agreement dated as of September 1,
1996, as amended (the "Prior Agreement") between the Company and the Executive,
which Prior Agreement is deemed terminated hereby and of no further force or
effect. No representation, promise or inducement has been made by either party
that is not embodied in this Agreement, and neither party shall be bound by or
liable for any alleged representation, promise or inducement not so set forth.

                          10.4 This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations, hereunder (i) to any affiliate
or (ii) to third parties in connection with any sale, transfer or other
disposition of all or substantially all of the business or assets of the
Company; in any event the obligations of the Company hereunder shall be binding
on its successors or assigns, whether by merger, consolidation or acquisition of
all or substantially all of its business or assets.

                                       11

<PAGE>

                          10.5 This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both of the parties hereto,
or in the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.

                  11.       Subsidiaries and Affiliates.

                  11.1 As used herein, the term "subsidiary" shall mean any
corporation or other business entity controlled directly or indirectly by the
corporation or other business entity in question, and the term "affiliate" shall
mean and include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.

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

                           MAFCO WORLDWIDE CORPORATION

                           By: /s/ Stephen G. Taub
                               -----------------------------
                               Stephen G. Taub
                               President and Chief Executive
                               Officer

                               /s/ Peter W. Grace
                               -----------------------------
                               Peter W. Grace

                                       12<PAGE>

                                                       Revised December 20, 1989
                                                        Revised January 31, 1996
                                                       Amended December 11, 2000

                                THE STANLEY WORKS

                         Deferred Compensation Plan For
                       Non-Employee Directors (the "Plan")

     1. Eligibility. Each member of the Board of Directors of The Stanley Works
(the "Corporation") who is not an employee of the Corporation or any of its
subsidiaries is eligible to participate in the Plan.

     2. Participation. (a) Time of Election. Prior to the beginning of any
calendar year, commencing with calendar year 1981, each eligible Director may
elect to participate in the Plan by directing that all or any part of the
compensation (including fees payable for services as chairman or a member of a
committee of the Board) which otherwise would have been payable currently for
services as a Director during such calendar year and succeeding calendar years
shall be credited to a deferred compensation account (the "Director's account").
Any person who shall become a Director during any calendar year, and who was not
a Director of the Corporation prior to the beginning of such calendar year, may
elect, before the Director's term begins, to defer payment of all or any part of
the Director's compensation for the remainder of such calendar year and for
succeeding calendar years.

          (b) Form and Duration of Election. An election to participate in the
Plan shall be made by written notice executed by the Director and filed with the
Secretary of the Corporation. Such election shall continue until the Director
terminates such election by written notice filed with the Secretary of the
Corporation. Any such termination shall become effective as of the end of the
calendar year in which such notice is given and only with respect to fees
payable for services as a Director thereafter. Amounts credited to the
Director's account prior to the effective date of termination shall not be
affected by such termination and shall be distributed only in accordance with
the terms of the Plan.

          (c) Adjustment of Amount Deferred. Prior to the beginning of any
calendar year, a Director participating in the Plan may file another written
notice with the Secretary of the Corporation electing to change the amount of
compensation to be credited to the Director's account for services as a Director
commencing with such calendar year. Amounts credited to the Director's account
prior to the effective date of such change shall not be affected by such change
and shall be distributed only in accordance with the terms of the Plan.

<PAGE>
                                       2

         (d) Renewal. A Director who has terminated his election to participate
may thereafter file another election to participate for the calendar year
subsequent to the filing of such election and succeeding calendar years.

     3. The Director's Account. All compensation which a Director has elected to
defer under the Plan shall be credited to the Director's account, either in cash
or in shares of the Corporation's Common Stock (valued for quarterly retainer
payments at the mean between the highest and lowest sales prices of the Common
Stock reported as New York Stock Exchange-Composite Transactions for the first
business day of the calendar quarter and valued for other compensation at such
mean for the date such compensation would otherwise have been paid), as elected
by the Director. The Director shall not have any interest in the cash or Common
Stock until distributed in accordance with the Plan.

     Cash amounts credited to the Director's account shall accrue interest
commencing on the date such fees would otherwise have been paid, at a rate for
each calendar quarter fixed by the Treasurer of the Corporation at the
commencement of each such calendar quarter based upon the yield for five-year
U.S. Treasury Notes as reported for the last business day of the preceding
calendar quarter. Interest so determined shall be compounded at the end of each
calendar quarter and credited to the Director's account. Amounts credited to the
Director's account shall continue to accrue interest until distributed in
accordance with the Plan.

     Shares credited to the Director's account shall accrue amounts equivalent
to cash or stock dividends. Such amounts shall accrue interest or amounts
equivalent to dividends in the same manner as other amounts which may be
credited to a Director's account.

     4. Distribution from Accounts. (a) Form of Election. A Director
participating in the Plan shall file with the Secretary of the Corporation a
written election with respect to the distribution of the aggregate amount of
cash and shares credited to the Director's account. A Director may elect to
receive such amount in one lump-sum payment or in a number of approximately
equal installments (provided the payout period does not exceed 10 years). The
lump-sum payment or the first installment shall be paid on any business day
elected by the Director within the twelve-month period immediately following the

<PAGE>
                                       3

date on which the Director ceases to be a Director of the Corporation.
Subsequent installments shall be paid on the first business day of each
succeeding calendar year during the installment period until the entire amount
credited to the Director's account shall have been paid. If shares have been
credited to the Director's account, cash payment will be made with the final
installment for any fraction of a share credited to the Director's account.

         (b) Adjustment of Method of Distribution. Whether or not a Director has
filed a notice pursuant to paragraph 2(c) electing to change the amount of
compensation to be credited to the Director's account, a Director participating
in the Plan may, prior to the beginning of any calendar year, file another
written notice with the Secretary of the Corporation electing to change the
method of distribution of the aggregate amount of cash and shares credited to
the Director's account for services as a Director commencing with such calendar
year (amounts credited to the Director's account prior to the effective date of
such change shall not be affected by such change and shall be distributed only
in accordance with the election in effect at the time such amounts were credited
to the Director's account). Once made, an election may not be changed either in
amount or method of payment if the effect of such change is to accelerate the
distribution of cash and shares credited to the Director's account; all other
changes to a previously filed election may be made by filing a written notice
with the Secretary of the Corporation setting forth in detail the change.

     5. Distribution on Death. If a Director should die before all amounts
credited to the Director's account shall have been paid in accordance with the
election referred to in paragraph 4, the balance in such account shall be paid
to the beneficiary designated in writing by the Director on any business day
elected by such beneficiary within the twelve-month period immediately following
the date of the Director's death. Such balance shall be paid to the estate of
the Director on the first business day of the calendar year following the year
of the Director's death if (a) no such designation has been made or (b) the
designated beneficiary shall have predeceased the Director and no further
designation has been made.

     6. Miscellaneous. (a) The right of a Director to receive any amount in the
Director's account shall not be transferable or assignable by the Director,
except by will or by the laws of descent and distribution, and no part of such
amount shall be subject to attachment or other legal process.

         (b) The Corporation shall not be required to reserve or otherwise set
aside funds or shares of Common Stock for the payment of its obligations

<PAGE>
                                       4

hereunder. The Corporation shall make available as and when required a
sufficient number of shares of Common Stock to meet the needs of the Plan. To
the extent that registration of such shares under the Securities Act of 1933
shall be required prior to their resale, the Corporation undertakes to either
file a registration statement relating to such shares or include such shares in
another registration statement to be filed within a reasonable time.

         (c) The General Counsel of the Corporation shall interpret the Plan and
make all determinations deemed necessary or desirable for the Plan's
implementation.

         (d) The Board of Directors may at any time amend or terminate the Plan.
The Plan may also be amended by the Corporation with the approval of its Chief
Executive Officer, provided that all such amendments shall be reported to the
Board. No amendment or termination shall impair the rights of a Director with
respect to amounts then in the Director's account.

         (e) Each Director participating in the Plan will receive an annual
statement indicating the amount of cash and number of shares credited to the
Director's account as of the end of the preceding calendar year.

         (f) If adjustments are made to outstanding shares of Common Stock or to
the capital structure of the Corporation as a result of stock dividends, stock
splits or combinations, recapitalizations, mergers, consolidations, exchange
offers, issuer tender offers, extraordinary cash dividends, or similar events or
transactions, an appropriate adjustment will also be made in the number of
shares credited to the Director's account.

     7. Definition of Change in Control. For purposes of this Plan, a "Change in
Control of the Corporation" shall be deemed to have occurred if

         (a) any "person," as such term is defined in Section 3(a)(9) and
modified and used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Corporation, any trustee
or other fiduciary holding securities under an employee benefit plan of the
Corporation (or of any subsidiary of the Corporation), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the corporation representing 25% or more of the
combined voting power of the Corporation's then outstanding securities;

         (b) during any period of two consecutive years (not including any
period prior to the adoption of this amendment to this Plan),

<PAGE>
                                       5

individuals who at the beginning of such period constitute the Board, and any
new director (other than a director designated by a person who has entered into
an agreement with the Corporation to effect a transaction described in clause
(a), (c), (d) or (e) of this definition) whose election by the Board or
nomination for election by the corporation'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 at the beginning of the period or whose election or nomination
for election was previously so approved cease for any reason to constitute at
least a majority thereof;

         (c) the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than (1) a
merger or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 75% of the combined voting power of the voting
securities of the Corporation or such surviving entity outstanding immediately
after such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Corporation (or similar transaction) in
which no "person" (with the exceptions specified in clause (a) of this
definition) acquires 25% or more of the combined voting power of the
Corporation's then outstanding securities;

         (d) the shareholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition by
the Corporation of all or substantially all of the Corporation's assets; or

         (e) the Corporation consummates a merger, consolidation, stock
dividend, stock split or combination, extraordinary cash dividend, exchange
offer, issuer tender offer or other transaction effecting a recapitalization of
the Corporation (or similar transaction) (the "Transaction") and, in connection
with the Transaction, a Designated Downgrading occurs with respect to the
unsecured general obligations of the Corporation (the "Securities"), as
described below:

                  (i) If the rating of the Securities by both Rating Agencies
         (defined hereinafter) on the date 60 days prior to the public
         announcement of the Transaction (a "Base Date") is equal to or higher
         than BBB Minus (as hereinafter defined), then a "Designated
         Downgrading" means that the rating of the Securities by either Rating
         Agency on the effective date of the Transaction (or, if later, the
         earliest date on which the rating shall reflect the effect of the
         Transaction) (as applicable, the "Transaction Date") is equal to or
         lower than BB Plus (as hereinafter defined); if the rating of the
         Securities by either Rating Agency on a Base Date is lower than BBB
         Minus, then a "Designated Downgrading" means that the rating of the
         Securities by either Rating Agency on the Transaction Date has
         decreased from the rating by such Rating Agency on the Base Date. In
         determining whether the rating of the securities has decreased, a
         decrease of one gradation (+ and - for S&P and 1, 2 and 3 for Moody's,
         or the equivalent thereof by any substitute rating agency referred to
         below) shall be taken into account;

<PAGE>
                                       6

                  (ii) "Rating Agency" means either Standard & Poor's
         Corporation or its successor ("S&P") or Moody's Investors Service, Inc.
         or its successor ("Moody's");

                  (iii) "BBB Minus" means, with respect to ratings by S&P, a
         rating of BBB- and, with respect to ratings by Moody's, a rating of
         Baa3, or the equivalent thereof by any substitute agency referred to
         below;

                  (iv) "BB Plus" means, with respect to ratings by S&P, a rating
         of BB+ and, with respect to ratings by Moody's, a rating of BBB3, or
         the equivalent thereof by any substitute agency referred to below; and

                  (v) The Corporation shall take all reasonable action necessary
         to enable each of the Rating Agencies to provide a rating for the
         Securities, but, if either or both of the Rating Agencies shall not
         make such a rating available, a nationally-recognized investment
         banking firm shall select a nationally-recognized securities rating
         agency or two nationally-recognized securities rating agencies to act
         as substitute rating agency or substitute rating agencies, as the case
         may be.

     8. Accelerated Payment Following a Change in Control.

         Notwithstanding any of the preceding provisions of this Plan, as soon
as possible following any Change in Control of the Corporation, a lump-sum
payment shall be made, in cash, of the entire account hereunder of any Director.
For purposes of calculating the amount of such payment, any shares of the
Corporation's common stock credited to, or accrued in, any Director's account
shall be valued at the higher of (i) the closing price of such shares as
reported on the New York Stock Exchange - Composite Transactions on the date

<PAGE>
                                       7

preceding and nearest the date the Change in Control occurred or (ii) the
highest per share price for the common stock of the Corporation actually paid in
connection with such Change in Control; provided, however, that such value shall
not exceed the amount necessary to provide a fully equitable payment of such
account, taking into consideration any adjustments made pursuant to paragraph
6(f) of the Plan with respect to any events or transactions constituting a
Change in Control of the Corporation, or a part thereof.

<PAGE>

                                THE STANLEY WORKS

              DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

                               NOTICE OF ELECTION

(1) PARTICIPATION ELECTION.

         Pursuant to the terms of the Deferred _____ Compensation Plan for
Non-Employee Directors of The Stanley Works, I hereby elect to defer receipt of
all* of my annual retainer, committee chairman fees and meeting fees for
calendar years commencing January 1,______.** Such election shall continue to be
effective until the end of the calendar year in which I file with the Secretary
of the Corporation (a) a written notice of termination or (b) a written notice
changing the amount to be deferred thereafter. Such amounts shall be credited to
my account in (check (a) or (b) or complete (c):

          (a) Cash___________________;

          (b) Shares of Common Stock___________; or

          (c) _______% cash and _______% Common Stock.

(2)  DISTRIBUTION ELECTION.

         I also hereby elect that all amounts credited to my account pursuant to
the election in paragraph (1) be distributed to me in (check one):

           (a) a lump-sum payment___________________;

           (b) in _______________(specify number not exceeding 10)
               approximately equal annual installments; or

           (c) other__________________________________________
               (provided payout period does not exceed 10 years).

The lump-sum payment or the first installment shall be paid on the first
business day of the calendar year immediately following the year in which I
cease to be a Director of the Corporation or on the first business day of such
later calendar year as I have designated above. Subsequent installments shall be
paid on the

--------------------------
 * If less than all, cross out "all" and specify portion
         (e.g., "half", "none" or $ amount):____________________ .

** A person electing to participate in the Plan prior to first
         being elected a Director should specify commencement date here:_______.

<PAGE>

first business day of each succeeding installment period until the entire amount
credited to my account pursuant to the election in paragraph (1) shall have been
paid.

(3)  BENEFICIARY DESIGNATION.

         If I should die before all amounts credited to my account pursuant to
the election in paragraph (1) shall have been paid, I direct that the amount
remaining in my account be paid pursuant to the Plan to_______________________

______________________________________________________________________________.

-------------------------------                  -------------------------------
(Witness)                                        (Signature)

                                                 -------------------------------
                                                 (Date)

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