Document:

Ex-10.2

 

Exhibit
10.2

Sanderson Farms, Inc.

Guaranty Agreement

Bank of Montreal

Chicago, Illinois

The Banks and L/C Issuers from time to time parties to the Credit Agreement (as hereinafter
defined)

Ladies and Gentlemen:

     Reference is made to that certain Credit Agreement dated as of May 1, 2008 (such Credit
Agreement, as the same may be modified or amended from time to time, being hereinafter referred to
as the “Credit Agreement”) by and among Sanderson Farms, Inc., a Mississippi corporation (the
“Company”), and Bank of Montreal, individually and in its capacity as agent thereunder (“BMO”), and
the lenders and letter of credit issuers from time to time parties thereto (all of said lenders
being referred to collectively as the “Banks” and individually as a “Bank”, and such letter of
credit issuers being referred to collectively as “L/C Issuers” and individually as an “L/C Issuer”;
and said BMO as agent for the Banks and L/C Issuers under the Credit Agreement being hereinafter
referred to in such capacity as the “Agent”; the Banks, the L/C Issuers and the Agent being
referred to collectively as the “Guaranteed Creditors” and individually as a “Guaranteed
Creditor”), pursuant to which said Banks agree to make available to the Company a Revolving Credit,
with all loans thereunder to be evidenced by the Revolving Notes of the Company and pursuant to
which BMO agrees to make available to the Company a Swingline with all loans thereunder to be
evidenced by the Swing Note of the Company (all such Revolving Notes and the Swing Note being
hereinafter referred to collectively as the “Notes” and individually as a “Note”). In addition the
Company may request the L/C Issuers to issue letters of credit for the Company’s account and the
other Banks will acquire risk participations in such letters of credit and all obligations of the
Company with request thereto (the “Reimbursement Obligations”). All of the Company’s indebtedness,
obligations and liabilities to the Guaranteed Creditors under the Credit Agreement and the other
Loan Documents, including, without limitation, all such indebtedness, obligations and liabilities
evidenced by the Notes and the Reimbursement Obligations, and all extensions or renewals of any of
the foregoing, are hereinafter collectively referred to as the “Indebtedness”. All defined terms
used herein shall have the meanings set forth in the Credit Agreement unless expressly defined
herein.

     The undersigned are wholly-owned subsidiaries of the Company. As an inducement to each of you
to accept and enter into said Credit Agreement, and in consideration of credit extended and to be
extended by the Guaranteed Creditors to the Company under said Credit Agreement, the undersigned
(hereinafter collectively referred to as the “Guarantors”), acknowledging that the Guaranteed
Creditors have informed the Company that said credit would not be extended but for this guarantee,
hereby jointly and severally guarantee the full and prompt

 

 

payment to each Guaranteed Creditor at maturity (whether by acceleration, lapse of time or
otherwise) and at all times thereafter of principal of and interest on all Indebtedness of the
Company under the Credit Agreement, and all extensions or renewals of all or any part thereof and
all other indebtedness, liabilities and obligations of the Company to the Guaranteed Creditors
under the Credit Agreement. Notwithstanding anything in this Guaranty to the contrary, the right
of recovery against each Guarantor under this Guaranty shall not exceed $1.00 less than the lowest
amount which would render such Guarantor’s obligations under this Guaranty void or voidable under
applicable law, including fraudulent conveyance law.

     The undersigned further jointly and severally acknowledge and agree with the Guaranteed
Creditors that this Guaranty and the undertaking of the Guarantors in connection therewith shall be
on and subject to the following terms and conditions:

        1. This Guaranty of payment by the Guarantors shall be a continuing, absolute and
unconditional guaranty and shall remain in full force and effect until all Indebtedness of
the Company to the Guaranteed Creditors shall be fully paid and satisfied and all
commitments of the Guaranteed Creditors under the Credit Agreement to extend credit to or
for the account of the Company shall have terminated. The dissolution, liquidation or
insolvency (howsoever evidenced) of, or the institution of bankruptcy or receivership
proceedings against any one or more of the Guarantors or the Company shall not terminate
this Guaranty.

        2. The obligations and liabilities of the Guarantors, or any of them, hereunder shall
not be affected or impaired by any irregularity, invalidity or unenforceability of or in any
of the Notes or of any agreement, instrument or other document evidencing or creating or
providing for the same.

        3. The obligations and liabilities of the Guarantors, or any of them, hereunder shall
not be affected or impaired by (and the Guaranteed Creditors are hereby expressly authorized
to make from time to time without notice to the Guarantors) any sale, pledge, surrender,
compromise, settlement, release, renewal, extension, indulgence, amendment, alteration,
substitution, exchange, change in, modification or other disposition of any of the Credit
Agreement, the Notes, any other Loan Documents (as defined in the Credit Agreement), any
other guaranty thereof, or of any security or collateral therefor.

        4. The obligations and liabilities of the Guarantors or any of them hereunder shall not
be affected or impaired by any acceptance by the Guaranteed Creditors, or any of them, of
any security or collateral for, or other guarantors upon any of the Indebtedness or by any
failure, neglect, omission, delay or partial action on the part of the Guaranteed Creditors,
or any of them, in the administration of the Indebtedness or to realize upon or protect any
of the Indebtedness or any security or collateral therefor, or to exercise any lien upon or
right of appropriation of any moneys, credits or property of the Company possessed by any of
the Guaranteed Creditors toward the liquidation of the Indebtedness or by any application of
payments or credits thereon or by any other circumstances whatsoever (with or without notice
to or the knowledge of the Guarantors,

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or any of them) which may in any manner or to any extent vary the risk of the Guarantors, or
any of them, hereunder or may otherwise constitute a legal or equitable discharge of a
surety or guarantor; it being the purpose and intent that this guaranty of payment and the
obligations and liability of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances and shall not be discharged except by payment and
performance as herein provided.

        5. In order to hold the Guarantors, or any of them, liable hereunder, there shall be no
obligation on the part of any Guaranteed Creditor, at any time, to resort for payment to any
person directly liable in respect of the Indebtedness or to any other guaranty, or to any
other person, their properties or estates, or to resort to any collateral, security,
property, liens or other rights or remedies whatsoever, and the Guaranteed Creditors shall
have the right to enforce this guaranty of payment irrespective of whether or not other
proceedings or steps are pending seeking resort to or realization upon or from any of the
foregoing. The Guarantors jointly and severally agree to pay all reasonable out-of-pocket
expenses, including court costs and reasonable attorneys’ fees, paid or incurred by the
Guaranteed Creditors or any of them in endeavoring to collect on the Indebtedness or any
part thereof and in enforcing this Guaranty.

        6. The granting of credit to the Company by any Guaranteed Creditor from time to time
in addition to the Indebtedness under the Credit Agreement without notice to the Guarantors,
or any of them, is hereby authorized and shall in no way affect or impair the obligations
and liability of the Guarantors, or any of them, hereunder.

        7. The payment by any Guarantor of any amount or amounts under this guaranty of payment
shall not entitle it, either at law, in equity or otherwise, to any right, title or interest
(whether by way of subrogation or otherwise) in and to any of the Indebtedness, or in and to
any security or collateral therefor, or in or to any amounts at any time paid or payable
under or pursuant to any guaranty by any other person of all or part of Indebtedness, or in
and to any amounts theretofore, then or thereafter paid or applicable to the payment of the
Indebtedness, howsoever such payment or payments may arise, until all of the Indebtedness
has been fully paid and all obligations of the Guaranteed Creditors to extend credit to or
for the benefit of the Company shall have terminated or expired.

        8. This Guaranty Agreement may be enforced by the Guaranteed Creditors acting jointly,
or it may be enforced by any Guaranteed Creditor acting alone or separately with respect to
the Indebtedness which it holds. Any Guaranteed Creditor may, without any notice to the
Guarantors, sell, assign or transfer, to the extent permitted in the Credit Agreement, the
Indebtedness held by it, or any part thereof, or grant participations therein; and in that
event, each and every immediate and successive assignee, transferee or holder of or
participant in all or any part of the Indebtedness shall, to the extent permitted in the
Credit Agreement, have the right to enforce this Guaranty, by suit or otherwise, for the
benefit of such assignee, transferee, holder or participant as fully as if such assignee,
transferee, holder or participant were herein by name specifically given such rights, powers
and benefits; but each Guaranteed Creditor shall

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have an unimpaired right to enforce this Guaranty Agreement for its own benefit or for the
benefit of any such participant as to so much of the Indebtedness that it has not sold,
assigned or transferred.

        9. If any payment applied by any Guaranteed Creditor to any of the Indebtedness is
thereafter set aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of the Company
or any other obligor), the Indebtedness to which such payment was applied shall for the
purposes of this Guaranty be deemed to have continued in existence, notwithstanding such
application, and this Guaranty shall be enforceable as to such of the Indebtedness as fully
as if such application had never been made.

        10. This Guaranty Agreement shall be construed according to the internal laws of the
state of Illinois, in which State it shall be performed by the Guarantors. This Guaranty
Agreement and every part hereof shall be binding upon the Guarantors jointly and severally
and upon their respective legal representatives, successors and assigns of each and all of
the undersigned, and shall inure to the benefit of the Guaranteed Creditors and their
respective successors, legal representatives and assigns.

        11. This writing is intended by the parties to be a complete and final expression of
this Guaranty Agreement and is also intended as a complete and exclusive statement of the
terms of that agreement. No course of dealing, course of performance or trade usage, and no
parole evidence of any nature, shall be used to supplement or modify any terms hereof, nor
are there any conditions to the full effectiveness of this Guaranty Agreement.

        12. Each Guarantor and, by their acceptance of this Guaranty, each Guaranteed
Creditor hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or relative to this Guaranty or the transactions contemplated
hereby.

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Dated as of this 1st day of May, 2008.

	 	 	 	 	 
	 

	 	Sanderson Farms, Inc. (Foods Division) 	 
	Attest:
	 	 	 	 
	 

	 	By
	 	/s/ D. Michael Cockrell  
	 

	 	 	 	 
	/s/ James
A. Grimes

	 	Its	 	Treasurer & Chief Financial Officer 
	 

	 	 	 	 

	 	 	 	 	 
	 

	 	Sanderson Farms, Inc. (Production Division)	 
	Attest:
	 	 	 	 
	 

	 	By
	 	/s/ D. Michael Cockrell 
	 

	 	 	 	 
	/s/ James
A. Grimes

	 	Its	 	Treasurer & Chief Financial Officer 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Sanderson Farms, Inc. (Processing Division)
	Attest:
	 	 	 	 
	 

	 	By
	 	/s/ D. Michael Cockrell 
	 

	 	 	 	 
	/s/ James
A. Grimes

	 	Its	 	Treasurer & Chief Financial Officer 
	 

	 	 	 	 

-5-Exhibit 10.1

 

Exhibit 10.1

ENPRO INDUSTRIES, INC.

DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

(as amended and restated effective February 12, 2008)

     1. INTRODUCTION. EnPro Industries, Inc. (the “Company”) maintains the EnPro
Industries, Inc. Deferred Compensation Plan for Non-Employee Directors (the “Plan”). The Company
is hereby amending and restating the Plan effective as of February 12, 2008 (the “Restatement
Date”) to reflect certain design changes in order for the Plan to comply with the requirements of
Section 409A of the Code and to otherwise meet current needs. It is the intent of the Company that
amounts deferred under the Plan for a Non-Employee Director shall not be taxable to the
Non-Employee Director for income tax purposes until the time they are actually received by the
Non-Employee Director. The provisions of the Plan shall be construed and interpreted to give
effect to this intent.

     2. DEFINITIONS.

     “Accounts” of a Participant mean collectively the Participant’s Cash Account and Stock
Account.

     “Board” means the members of the Board of Directors of the Company.

     “Cash Account” means the account maintained in dollars on the books of the Company to record a
Participant’s interest under the Plan attributable to any amounts deferred by the Participant into
the Cash Account pursuant to Section 6(b) below, as adjusted from time to time pursuant to the
terms of the Plan.

     “Code” means the Internal Revenue Code of 1986, as amended. References to the Code include
the valid and binding governmental regulations, court decisions and other regulatory and judicial
authority issued or rendered thereunder.

     “Common Stock” means the common stock of the Company.

     “Company” means EnPro Industries, Inc. and includes any successor thereto.

     “Fair Market Value” of a share of Common Stock means the mean of the high and low prices of
Common Stock on the relevant date (as of 4:00 P.M. Eastern Standard Time) as reported on the New
York Stock Exchange — Composite Transactions listing (or similar report), or, if no sale was made
on such date, then on the next preceding day on which such a sale was made.

     “Meeting Fees” means the fees a Non-Employee Director receives for attending meetings of the
Board and any committee of the Board, as well as any fee a Non-Employee Director receives for
serving as chairman of any committee of the Board.

     “Non-Employee Director” means a member of the Board who is not an employee of the Company or
any affiliate of the Company.

 

 

     “Participant” means any Non-Employee Director who has an Account under the Plan. Participant
shall also include any former Non-Employee Director who continues to have an Account maintained
under the Plan.

     “Phantom Shares” means Phantom Shares awarded under the EnPro Industries, Inc. 2002 Equity
Compensation Plan.

     “Phantom Units” means the Stock Units awarded to Non-Employee Directors under Section 4(b).

     “Plan” means the EnPro Industries, Inc. Deferred Compensation Plan for Non-Employee Directors,
as the same may be amended from time to time.

     “Plan Administrator” means a committee consisting of the Chief Executive Officer of the
Company and two other officers of the Company selected by him.

     “Plan Year” means a calendar year.

     “Retainer” means the cash portion of the annual retainer paid by the Company to a Non-Employee
Director, and does not include the portion of the annual retainer (if any) paid in the form of
Phantom Units or Phantom Shares.

     “Stock Account” means the account maintained in Stock Units on the books of the Company to
record a Participant’s interest under the Plan attributable to any amounts deferred by the
Participant into the Stock Account pursuant to Section 6(b) or credited by the Company pursuant to
Section 4(b), as adjusted from time to time pursuant to the terms of the Plan. If applicable, a
Participant’s Stock Account will have two subaccounts, one to record amounts deferred pursuant to
Section 4(a), and one to record amounts credited by the Company pursuant to Section 4(b).

     “Stock Unit” means a unit having a value as of a given date equal to the Fair Market Value of
one (1) share of Common Stock on such date.

     3. ADMINISTRATION. The Plan shall be administered by the Plan Administrator. The
Plan Administrator shall be empowered to interpret the provisions of the Plan and to perform and
exercise all of the duties and powers granted to it under the terms of the Plan. The Plan
Administrator may adopt such rules and regulations for the administration of the Plan as are
consistent with the terms hereof and shall keep adequate records of its proceedings and acts. All
interpretations and decisions made (both as to law and fact) and other action taken by the Plan
Administrator with respect to the Plan shall be conclusive and binding upon all parties having or
claiming to have an interest under the Plan. Not in limitation of the preceding provisions of this
Section, the Plan Administrator shall have the discretion to decide any factual or interpretative
issues that may arise in connection with its administration of the Plan (including without
limitation any determination as to claims for benefits hereunder), and the Plan Administrator’s
exercise of such discretion shall be conclusive and binding on all affected parties as long as it
is not arbitrary or capricious. The Plan Administrator may delegate any of its duties and powers
hereunder to the extent permitted by applicable law.

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     4. PARTICIPATION.

     (a) Elective Deferrals. Each Non-Employee Director may elect to defer compensation
under the Plan by filing the written Election Form described in Section 5 with the Plan
Administrator with respect to Retainers and Meeting Fees payable to the Non-Employee Director for
such Non-Employee Director’s services as a member of the Board. If a person ceases to be a
Non-Employee Director but continues to serve as a Director, the person shall no longer be eligible
to make deferral elections under the Plan.

     (b) Nonelective Deferrals. Effective beginning on the date of the first Board meeting
in 2008, and on the date of the first Board meeting in each calendar year thereafter, the Company
will award each Non-Employee Director Phantom Units having a value of $50,000. If a person ceases
to be a Non-Employee Director but continues to serve as a Director, the person shall no longer be
eligible for awards of Phantom Units under the Plan.

     5. DEFERRAL ELECTIONS.

     (a) Elections to Defer. Each Participant may elect to defer receipt of all or a
portion of such Participant’s Retainer and Meeting Fees at such times and pursuant to such
procedures as set forth in paragraph (b) of this Section, such amounts to be credited to the
Participant’s Accounts as described in Section 6 and to become payable in accordance with the
provisions of Section 7.

     (b) Form and Timing of Elections. To be effective, elections to defer all or any
portion of the Retainer or Meeting Fees for a Plan Year must be made on such form and pursuant to
such procedures as the Plan Administrator may establish from time to time and shall be irrevocable
for the Plan Year. The election must be made prior to the start of the applicable Plan Year;
provided, however, that an individual who first becomes a Non-Employee Director after the start of
a Plan Year may make such deferral election within thirty (30) days after first becoming a
Non-Employee Director solely with respect to the Retainer and Meeting Fees for services performed
after such deferral election. An election to defer for a Plan Year shall continue in effect for
each subsequent Plan Year unless revoked or modified by the Participant in accordance with
procedures established by the Plan Administrator; provided, however, that with respect to any
Retainer and Meeting Fees for any subsequent Plan Year, the election to defer becomes irrevocable
no later than December 31 of the preceding Plan Year.

     6. ESTABLISHMENT OF AND ADJUSTMENT OF ACCOUNTS.

     (a) Establishment of Accounts. The Company shall establish and maintain a Cash
Account and a Stock Account for each Participant. Each Account shall be designated by the name of
the Participant for whom established. Each Account shall be maintained on the books of the Company
until full payment of the balance thereof has been made to the applicable Participant (or the
beneficiaries of a deceased Participant). No funds shall be set aside or earmarked for any
Account, which shall be purely a bookkeeping device.

     (b) Direction of Elective Deferrals into Cash Account or Stock Account. Any elective
deferrals by a Participant under Section 4(a) shall be credited to the Participant’s Cash Account
or Stock Account as the Participant shall elect at such times, on such forms and

3

 

pursuant to such procedures as the Plan Administrator may establish from time to time in
accordance with Section 5(b). If no election is made, any amount deferred shall be credited to the
Participant’s Cash Account. To the extent any amount is to be credited to a Participant’s Cash
Account, such amount shall be credited to the Cash Account as of the date the amount would have
otherwise been paid to the Participant. To the extent any amount is to be credited to a
Participant’s Stock Account, the Stock Account shall be credited as of the date the amount would
have otherwise been paid to the Participant with the number of whole and fractional Stock Units
equal to the applicable dollar amount divided by the Fair Market Value of a share of Common Stock
on such date. Except as otherwise provided in Section 6(e) below, a Participant may not
subsequently reallocate amounts between the Cash Account and Stock Account after the deferrals have
been credited.

     (c) Account Adjustments: Cash Account. The Plan Administrator shall designate from
time to time one or more investment vehicle(s) in which the Cash Accounts of Participants shall be
deemed to be invested. The investment vehicle(s) may be designated by reference to the deemed
investments available under the management deferred compensation plan. Each Participant shall
designate the investment vehicle(s) in which his or her Cash Account shall be deemed to be invested
according to the procedures developed by the Plan Administrator, except as otherwise required by
the terms of the Plan. The Company shall not be under any obligation to acquire or invest in any
of the deemed investment vehicle(s) under this subparagraph, and any acquisition of or investment
in a deemed investment vehicle by the Company shall be made in the name of the Company and shall
remain the sole property of the Company. The Plan Administrator shall also establish from time to
time a default fund into which a Participant’s Cash Account shall be deemed to be invested if the
Participant fails to provide investment instructions pursuant to this Section 6(c).

     The intervals at which each Cash Account shall be adjusted shall be as determined by the Plan
Administrator from time to time. The Plan Administrator may determine the frequency of Cash
Account adjustments by reference to the frequency of account adjustments under the management
deferred compensation plan. The amount of the adjustment shall equal the amount that the
Participant’s Cash Account would have earned (or lost) for the period since the last adjustment had
the Cash Account actually been invested in the deemed investment vehicle(s) designated by the
Participant for such period pursuant to this Section 6(c).

     (d) Account Adjustments: Stock Account. Each Stock Account shall be credited
additional whole or fractional Stock Units for cash dividends paid on the Common Stock based on the
number of Stock Units in the Stock Account on the applicable dividend record date and calculated
based on the Fair Market Value of the Common Stock on the applicable dividend payment date. Each
Stock Account shall also be equitably adjusted as determined by the Plan Administrator in the event
of any stock dividend, stock split or similar change in the capitalization of the Company.

     (e) Reallocation to Stock Account. Notwithstanding anything in the Plan to the
contrary, during the period from February 21, 2006 through March 14, 2006 only, a Participant may
elect to reallocate all or any portion of amounts allocated to the Cash Account to the Stock
Account. To the extent any amount is to be credited to a Participant’s Stock Account pursuant to a
reallocation election, the Stock Account shall be credited as of March 31, 2006 with the

4

 

number of whole and fractional Stock Units equal to the applicable dollar amount the
Participant has elected to reallocate divided by the Fair Market Value of a share of Common Stock
on such date. A Participant may not elect to reallocate any amounts between the Cash Account and
the Stock Account other than as provided in this Section 6(e).

     7. PAYMENT.

     (a) Special Payment Elections

     (i) Special Payments Elections for 2006. Each Participant who is a
Non-Employee Director as of a date specified by the Plan Administrator prior to December 31,
2006 shall be given the opportunity during an election window specified by the Plan
Administrator and ending no later than December 31, 2006 to make a payment election
applicable to the aggregate balance of the Participant’s Accounts. The Participant may
elect from the payment options set forth in Subsection (b) of this Section, and such
election shall be immediately effective; provided, however, that a Participant may not elect
to receive during 2006 any payment that would otherwise be payable in a future year; and
provided further, that a Participant may not make a new payment election with respect to
payments the Participant is otherwise scheduled to receive during 2006. In the event a
Participant covered by this Section fails to make a payment election on or before December
31, 2006 under this Section, the payment method shall be (X) the payment method most
recently elected by the Participant under the Plan according to the records of the Plan
Administrator, even if that prior payment election had not yet become effective, or (Y) in
the absence of any such prior payment election, a single payment following termination of
service as a member of the Board as set forth in Subsection (b) of this Section. Any
subsequent change to such payment election must comply with the requirements of Subsection
(c) of this Section. Payments pursuant to such election shall otherwise be subject to the
requirements of this Section.

     (ii) Special Payments Elections for 2007. Each Participant who is a
Non-Employee Director as of a date specified by the Plan Administrator prior to December 31,
2007 shall be given the opportunity during an election window specified by the Plan
Administrator and ending no later than December 31, 2007 to make a payment election
applicable to the Participant’s Accounts. For each of the Participant’s Accounts, the
Participant may elect (A) a single payment of the Participant’s Accounts payable between
January 1, 2008 and January 31, 2008, as set forth in Subsection (b) of this Section
treating 2007 as the year of the Participant’s termination of services as a member of the
Board, (B) from the payment options set forth in Subsection (b) of this Section, or (C) a
combination of (A) and (B); provided, however, that the portion of the Participant’s
Accounts payable in accordance with (A) must be at least 25% of the Participant’s Accounts
calculated on December 31, 2007. Such election shall be immediately effective; provided,
however, that a Participant may not make a new payment election with respect to payments the
Participant is otherwise scheduled to receive during 2007. In the event a Participant
covered by this paragraph fails to make a payment election on or before December 31, 2007
under this paragraph, the payment method shall be (X) the payment method most recently
elected by the Participant under the Plan according to the records of the Plan
Administrator, even if that prior payment election had not yet become

5

 

effective, or (Y) in the absence of any such prior payment election, a single payment
following termination of service as a member of the Board as set forth in Subsection (b) of
this Section. Any subsequent change to such payment election must comply with the
requirements of Subsection (c) of this Section. Payments pursuant to such election shall
otherwise be subject to the requirements of this Section.

     (b) Payment Options for Elective Deferrals. At the time a Participant first makes an
election to defer a Retainer or Meeting Fees under Section 4(a) of the Plan, the Participant shall
be given the opportunity to elect one of the following payment options for the distribution of the
Participant’s Accounts attributable to elective deferrals:

     (i) Single Payment Following Termination of Service as Board Member. If a
Participant to whom the single payment applies terminates service as a member of the Board,
such Participant’s Accounts shall continue to be adjusted under Section 6 through the end of
the calendar year in which such termination occurs. The final balance of the Participant’s
Accounts as of such date shall be paid in a single payment to the Participant (or to the
Participant’s designated beneficiary if the Participant dies prior to distribution of such
Participant’s Account) between January 1 and January 31 of the following calendar year. The
Cash Account shall be payable in cash, and the Stock Account shall be payable by delivery of
one share of Common Stock for each whole Stock Unit, with cash for any fractional Stock Unit
(based on the Fair Market Value of the Common Stock as of December 31 of the calendar year
in which termination occurs).

     (ii) Annual Installments Following Termination of Service as Board Member. A
Participant may elect to receive annual installments over a period of five or ten years. If
a Participant to whom the annual installments method applies terminates service as a member
of the Board, the amount of such annual installments shall be calculated and paid pursuant
to the provisions of this paragraph (b)(ii). The Participant’s Accounts shall continue to
be credited with adjustments under Sections 6 above until the Accounts are fully paid out.
The first installment shall be paid between January 1 and January 31 of the calendar year
immediately following the calendar year in which such termination of services occurs, and
each subsequent installment shall be paid between January 1 and January 31 of each
subsequent calendar year. Each payment shall be equal to (i) the sum of the Participant’s
balance in each Account as of December 31 of the calendar year immediately preceding the
calendar year of payment, multiplied by (ii) a fraction, the numerator of which is one and
the denominator is the number of installments remaining, including the current year’s
payment. The portion of each installment payable from the Cash Account shall be paid in
cash, and the portion of each installment payable from the Stock Account shall be payable by
delivery of one share of Common Stock for each whole Stock Unit, with cash for any
fractional Stock Unit (based on the Fair Market Value of the Common Stock as of December 31
of the calendar year immediately preceding the calendar year of payment).

     A Participant’s payment election shall be made on the election form used by the Participant
for making such Participant’s initial deferral election and shall be effective with respect to the
aggregate balance of the Participant’s Accounts attributable to elective deferrals. A Participant
who fails to make a payment election in accordance with the provisions of this

6

 

Subsection shall be deemed to have elected a single payment to be paid in accordance with the
requirements of paragraph (i) of this Subsection.

     (c) Subsequent Changes to Elective Deferral Payment Elections. A Participant whose
services as a Board member have not terminated may change the form of payment elected under Section
7(a) or (b) only if (i) such election is made at least 12 months prior to the date payment would
have otherwise commenced and (ii) the effect of such election is to defer commencement of such
payment by at least five years. For purpose of this Section, a series of installment payments over
five or ten years is treated as a single payment to be made in the year that the first installment
would otherwise be paid.

     (d) Payment Method for Phantom Units. When a Participant terminates service as a
member of the Board, the value of a Participant’s Stock Account attributable to Phantom Units will
continue to be adjusted under Section 6 through the end of the calendar year in which such
termination occurs. The final balance of this subaccount of the Participant’s Stock Account shall
be paid in a single cash payment to the Participant (or to the Participant’s designated
beneficiary, if the Participant dies prior to distribution of such Participant’s Account) between
January 1 and January 31 of the following calendar year. The amount paid will be based on the Fair
Market Value of the Common Stock as of December 31 of the calendar year in which termination
occurs.

     (e) Death. If a Participant dies after having commenced installment payments, any
remaining unpaid installment payments shall be paid to the Participant’s beneficiary as and when
they would have otherwise been paid to the Participant had the Participant not died. If a
Participant’s termination of service as a Board member is due to his death, the Participant’s
Accounts shall be payable to the Participant’s beneficiary in a single payment to be made as soon
as administratively practicable after the date of the Participant’s death. In this event, amounts
paid from the Participant’s Stock Account will be based on the Fair Market Value of the Common
Stock on the date of death. Participants shall designate a beneficiary under the Plan on a form
furnished by the Plan Administrator, and if a Participant does not have a beneficiary designation
in effect, the designated beneficiary shall be the Participant’s estate.

     (f) Other Payment Provisions. Subject to the provisions of Section 8, a Participant
shall not be paid any portion of the Participant’s Accounts prior to the Participant’s termination
of service as a member of the Board. Any payment hereunder shall be subject to applicable
withholding taxes. If any amount becomes payable under the provisions of the Plan to a
Participant, beneficiary or other person who is a minor or an incompetent, whether or not declared
incompetent by a court, such amount may be paid directly to the minor or incompetent person or to
such person’s legal representative (or attorney-in-fact in the case of an incompetent) as the Plan
Administrator, in its sole discretion, may decide, and the Plan Administrator shall not be liable
to any person for any such decision or any payment pursuant thereto.

     (g) Account Statements. Each Participant shall receive an annual statement of the
balance in the Participant’s Accounts.

7

 

     8. TERMINATION AND AMENDMENT.

     (a) The Corporation may amend or terminate the Plan at any time so that no further benefits
shall accrue under the Plan or may, from time to time, amend the Plan, without the consent of
Participants or Beneficiaries; provided, however, that no such amendment or termination shall
reduce the actual amount of the accrued benefit of a Participant under the Plan on the date of such
amendment or termination.

     (b) Notwithstanding Section 8(a) above, the Company may terminate the Plan and accelerate the
distribution of all benefits accrued hereunder to the extent permitted by Code Section 409A.

     9. APPLICABLE LAW. The Plan shall be construed, administered, regulated and governed
in all respects under and by the laws of the United States to the extent applicable, and to the
extent such laws are not applicable, by the laws of the state of North Carolina.

     10. COMPLIANCE WITH SECTION 409A OF THE CODE. The Plan is intended to comply with
Section 409A of the Code. Notwithstanding any provision of the Plan to the contrary, the Plan
shall be interpreted, operated and administered consistent with this intent.

     11. COMPLIANCE WITH LAWS AND REGULATIONS. Notwithstanding any other provisions of the
Plan, the issuance or delivery of any shares of Common Stock may be postponed for such period as
may be required to comply with any applicable requirements of any national securities exchange or
any requirements under any other law or regulation applicable to the issuance or delivery of such
shares, and the Company shall not be obligated to issue or deliver any such shares if the issuance
or delivery thereof shall constitute a violation of any provision of any law or any regulation of
any governmental authority, whether foreign or domestic, or any national securities exchange.

     12. MISCELLANEOUS. A Participant’s rights and interests under the Plan may not be
assigned or transferred by the Participant. The Plan shall be an unsecured, unfunded arrangement.
To the extent the Participant acquires a right to receive payments from the Company under the Plan,
such right shall be no greater than the right of any unsecured general creditor of the Company.
The Company shall not be required to segregate any amounts credited to any Accounts, which shall be
established merely as an accounting convenience. Nothing contained herein shall be deemed to
create a trust of any kind or any fiduciary relationship between the Company and any Participant.
The Plan shall be binding on the Company and any successor in interest of the Company.

     IN WITNESS WHEREOF, this instrument has been executed by an authorized officer of the Company
as of the 30th day of April, 2008.

	 	 	 	 	 	 	 
	 	 	ENPRO INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Richard L. Magee
 

Richard L. Magee
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

8

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