Document:

EXHIBIT
10.8

TOROTEL,
INC.

SHORT-TERM CASH INCENTIVE PLAN

Article 1:  Administration

1.01:  Purpose.  The purpose of the Torotel Products Short-Term Incentive Plan (Plan) is to promote the long-term financial
performance of Torotel Products, Inc. (the Company) by providing officers and
key employees of the Company and its present or future subsidiaries, with the
opportunity to earn cash awards for accomplishing annual goals that promote the
Company’s long-term financial performance.

1.02:  Administration.  The Board of Directors (“Board”) of the Company shall supervise and
administer the Plan.  Any questions of
interpretation of the Plan or of any Awards issued under it shall be determined
by the Board and such determination shall be final and binding upon all
persons.  Any or all powers and
discretion vested in the Board under the Plan (except the power to amend or
terminate the Plan) may be exercised by the standing Compensation Committee of
the Board (“Committee”).  A majority of
the members of the Committee shall constitute a quorum, and all determinations
of the Committee shall be made by a majority of its members.  Any determination of the Committee under the
Plan may be made without meeting of the Committee, by written notice signed by
a majority of the Committee members.

1.03:  Participants. 
Participants will
consist of such key employees, including officers of the Company or any of its
present or future subsidiaries, as the Board, in its sole discretion,
determines to be mainly responsible for the success and future growth and
profitability of the Company and who have been full-time employees of the
Company for at least six (6) months of the Plan period. Awards may be granted
under this Plan to persons who have previously received Awards or other benefits
under this or other plans of the Company.

1.04: Eligibility for Awards. (a) Participants
will be eligible to receive
Awards under the Plan if they are full-time
employees at the time of payout,
except as indicated in Section 1.04(b) and Section 1.11 below.

(b) If Participants have been full-time
employees of the Company for at least six (6) months of the Plan period, and
they are not full-time employees at the time of payout as a result of their
death, disability or normal retirement as defined in the Company’s qualified
benefit plans, the Participants or their designated beneficiaries on the
Designation of Beneficiary Form, included by reference herein, will receive
100% of the Awards Participants would otherwise be entitled to under the terms
and conditions of the Plan.

 (c)
Independent contractors are ineligible to participate in the Plan, regardless
of whether or not they are later reclassified as common law employees.

1.05:  Stakeholder Safeguard.  (a) Awards earned under the Plan will not be
paid if the Company’s return on capital employed (ROCE) is less than the
threshold level of performance defined in Article 2 below.  (b) To optimize the incentive value of Awards
earned under the Plan, 

the Committee will communicate its decision
regarding threshold, target and optimum ROCE performance for the Plan period as
soon as practical following the Board’s review and approval of the proposed
ROCE performance range, but no later than one (1) month after the beginning of
the Plan period.

1.06:  Plan Period.  The plan period will coincide with the
Company’s fiscal year.

1.07:  Duration of the Plan.  The policies and procedures described in the
Plan apply to successive one-year periods beginning May 1, 2007, and ending
when changed.

1.08: Debts.  To the extent permitted by law, the right of
any participant or any beneficiary to any payment hereunder shall not be
subject in any manner to attachment or other legal process for the debts of the
Participant or beneficiary; and any such payment shall not be subject to
anticipation, alienation, sale, transfer, assignment or encumbrance.

1.09:  Absence of Liability.  Neither members of
the Committee nor members of the Board shall be liable to any person for any
action taken or omitted in connection with the administration of this Plan
unless attributable to the member’s own fraud or willful misconduct; nor shall
the Company be liable to any person for any such action unless attributable to
fraud or willful misconduct on the part of an officer or employee of the
Company.

1.10:  Amendment of the Plan.  (a)  The Plan may be
amended or terminated by the Board at the end of any Plan period when, in its
sole judgment, such amendment or termination is necessary or desirable.  No such termination or amendment shall affect
the rights of any Participant who is entitled to an Award under the Plan at the
time of its termination or amendment. (b) The Plan may also be amended by the
Board from time to time during a Plan period so long as such amendments do not
adversely impact Participants’ Award opportunities under the Plan at the time
of amendment.

1.11:  Change of Control.  (a)  A change of control shall have occurred if (1) individuals who are
members of the Board on the first day of the Plan period no longer constitute a
majority of the Board; or (2) the Corporation merges or consolidates with any other entity
and is, itself, not a surviving entity; or (3) substantially all of the assets
of the Corporation have been sold, liquidated or dissolved; or (4) any person
or group of persons other the shareholders of record on the first day of the
Plan period become the beneficial owner, directly or indirectly, of 51% or more
of the voting power of the Corporation’s stock.

(b)  In the event of a change of control and coincident decision to either
amend or terminate the Plan, the Committee or its designee shall (i) prorate
the Company’s ROCE threshold, target and optimum performance goals for the Plan
period, (ii) prorate the Participants’ Award opportunities for the Company’s
threshold, target and optimum ROCE performance over a full twelve (12) month
Plan period as defined in Article 2 below, (iii) calculate the Company’s ROCE
to the point of change of control, and (iv) using their base pay at the time of
change of control, calculate any prorated Awards due Participants.  Awards due Participants shall be paid within
ninety (120) days of change of control.

(c) In the event of a change of control and coincident decision to
neither amend nor terminate the Plan, Participants who leave the Company for reasons
other than cause during the twelve (12) 

months subsequent to change of control and are not full-time employees
at the time of payout shall be eligible to receive a prorated Award.  Upon departure from the Plan, the Committee
or its designee shall (i) prorate the Company’s threshold, target and optimum
performance goals for all Plan metrics identified in Section 2.01 below for the
Plan period, (ii) prorate the Participants’ Award opportunities for the Company’s
threshold, target and optimum performance on all Plan metrics over a full five
(5) year Plan period, (iii) calculate the Company’s performance on all Plan
metrics from the beginning of the Plan period to the point of departure from
the Company, and (iv) using their base pay at the time of departure from the
Plan, calculate any prorated Awards due Participants pursuant to the terms and
conditions of the Plan.  Awards due
Participants shall be paid within ninety (120) of departure from the Company.

(d) Participants who leave the Company for cause include Participants
who leave because of their (i) convictions of any criminal violation involving
dishonesty, fraud, or breach of trust, (ii) willful engagement in any
misconduct in the performance of their duties that materially injure the
Company, in the opinion of a majority of the Board, (iii) performance of any
act which, if known to the customers, clients or stockholders of the Company,
would materially and adversely impact the business of the Company in the
opinion of a majority of the Board, or (iv) willful and substantial
nonperformance of assigned duties; provided that such nonperformance continues
more than 10 days after the Company has given written notice of such
nonperformance and of its intention to terminate the participants’ employment
because of such nonperformance.

1.12: Beneficiaries.  If Participants who are otherwise due Awards
under the terms and conditions of the Plan die before the date of payment, 100%
of their Awards shall be paid to the Participants’ designated beneficiaries on the
Designation of Beneficiary form, included by reference herein.

1.13: Limitations.  This Plan is not to be construed as
constituting a contract of employment. 
The Plan does not limit or impair the right of the Company to terminate
any employee of the Company with or without cause at any time.  No rights to an Award shall be deemed to
accrue to any employee whether or not he/she is selected to participate herein,
and no person shall, because of the Plan acquire any right to an accounting or
to examine the books or the affairs of the Company.

1.14:  Governance.  This Plan shall be governed by the laws of
Kansas.

Article 2:  Awards

2.01:  Performance Range.   Under the Plan, Participants will be eligible
for Awards if the Company’s ROCE for the Plan period is within the performance
range specified below.

	
  

  	
   

  	
  Performance Level

  	
   

  
	
   

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Optimum

  	
   

  
	
  ROCE

  	
   

  	
  20%

  	
   

  	
  25%

  	
   

  	
  30%

  	
   

  

 

2.02:  Awards.  (a)
Under the Plan, the size of Participants’ Awards will vary depending upon the
size of the Company’s ROCE, as specified below.

	
  

  	
   

  	
  ROCE Performance Level

  	
   

  
	
   

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Optimum

  	
   

  
	
  Award

  	
   

  	
  15%
  of Base

  	
   

  	
  30%
  of Base

  	
   

  	
  45%
  of Base

  	
   

  

 

(b) Awards will be calculated as a percent of Participants’ base pay at
the end of the Plan period, except as specified in Section 1.10(b) above.  Linear interpolation will be used to
calculate Awards for levels of ROCE between threshold and target levels or
target and optimum levels.

(c) Awards will not be paid for levels of ROCE smaller than
Threshold.  Awards may be paid for ROCE
above optimum.  The Committee will
evaluate the circumstances producing ROCE in excess of optimum and, in its sole
discretion, decide whether or not to pay Participants additional Awards for
such ROCE.

2.03: Evaluation
of Performance.   Except as
specified in Section 1.10(b) above, the Committee or its designee shall (i)
calculate the Company’s ROCE for the Plan period, and (ii) calculate
Participants’ awards as specified in Section 2.02.

2.04: Timing of
Awards.   The entire awards due Participants under the
terms and conditions of the Plan shall be paid within 120 days of the close of
the Plan period.

2.05:  Form of Awards.  Awards shall be paid wholly in cash.

2.06:  Forfeiture of Awards. All rights to
Awards earned by Participants under this Plan shall be immediately forfeited if
Participants are not full time employees of the Company on the date of payment
for any reason except their (i) death, (ii) disability, or (iii) normal
retirement as defined in the Company’s qualified benefit plan, pursuant to
Section 1.04, or (iv) departure from the Company for reasons other than cause
during the twelve (12) months following change of control, pursuant to Section
1.11.EXHIBIT
10.9

TOROTEL,
INC.

LONG-TERM INCENTIVE PLANS

Stock Award Plan

1.               Purpose.  The Stock Award Plan (the “Plan”) is intended
to provide incentives that will attract and retain highly competent persons as
officers and key employees of Torotel, Inc. (the “Company”) and its present or
future subsidiaries, by providing them with opportunities to acquire common
stock of the Company (“Common Stock”) pursuant to awards (“Awards”) described
herein.

2.               Administration. The Board of
Directors (the “Board”) of the Company shall supervise and administer the
Plan.  Any questions of interpretation of
the Plan or of any Awards issued under it shall be determined by the Board and
such determination shall be final and binding upon all persons.  Any or all powers and discretion vested in
the Board under the Plan (except the power to amend or terminate the Plan) may
be exercised by the standing Compensation and Nominating Committee of the Board
(the “Committee”).  A majority of the
members of the Committee shall constitute a quorum, and all determinations of
the Committee shall be made by a majority of its members.  Any determination of the Committee under the
Plan may be made without meeting of the Committee, by written notice signed by
a majority of the Committee members.

3.               Participants. Participants will
consist of such key employees, including officers of the Company or any of its
present or future subsidiaries, as the Board, in its sole discretion,
determines to be mainly responsible for the success and future growth and
profitability of the Company and whom the Board may designate from time to time
to receive Awards under the Plan.  Awards
may be granted under this Plan to persons who have previously received Awards
or other benefits under this or other plans of the Company.

4.               Shares Reserved
Under the Plan. (a) There is hereby reserved an aggregate of 623,410 shares of Common
Stock, $ .01 par value per share, which may be authorized but unissued or
treasury shares.  (b) Any shares subject
to Awards under the Plan may subsequently be subject to new Awards if they are
reacquired by the Company pursuant to rights reserved by the Company upon the
initial issuance of such shares.

5.               Awards. Awards will
consist of Common Stock transferred to Participants as a bonus for service
rendered to the Company without other payment thereof.

6.               Adjustment
Provisions. (a) If the Company shall at any time change the number of shares of
issued Common Stock by stock split, stock dividends, or similar transactions,
the total number of shares reserved for issuance under the Plan and the total
number of shares covered by each outstanding Award shall be adjusted so that
the value of each such Award shall not be changed.  (b) Awards may also contain provisions for
equitable adjustments after changes in the Common Stock resulting from
reorganization, sale, merger, consolidation or similar occurrences.

7.               Non-transferability. Each Award
granted under the Plan to a Participant shall not be transferable by him except
by his will or the laws of descent and distribution.  In the event of the death of a Participant
during employment or prior to the termination of any Award held by him
hereunder, each Award theretofore granted to him shall be payable not later
than one year after his death.  Any such
payment shall be made only to (a) the executor or administrator of the estate
of the deceased Participant or the person or persons to whom the deceased
Participant’s rights under the Award shall pass by will or the laws of descent
and distribution, and (b) the extent, if any, that the deceased Participant was
entitled at the date of his death.

8.               Other Provisions. Any Award under
the Plan may also be subject to such other provisions, whether or not
applicable to an Award to any other Participant, as the Board determines
appropriate including, but not limited to, provisions for the forfeiture of and
restrictions on the sale, resale or other disposition of shares acquired under
any Award, provisions giving the Company the right to repurchase shares
acquired under any Award, provisions to comply with federal and state security
laws, or understandings or conditions as to the Participant’s employment, in
addition to those specifically provided for under the Plan.

9.               Tenure. A Participant’s
right, if any, to continue to serve the Company and its subsidiaries as an
officer, employee or otherwise, shall not be affected by his designation as a
Participant under the Plan.

10.         Duration,
Amendment and Termination. (a) No Award shall be granted more than ten (10)
years after the date of adoption of the Plan. 
(b) Also, by mutual agreement between the Company and Participant or
under any future plan of the Company, Awards may be granted to the Participant
in substitution for, in exchange for, or in cancellation of any Awards previously
granted the Participant under the Plan.

                        (c) The Board may
amend the Plan from time to time, or terminate the Plan at any time.  However, no action authorized by Section 10
shall reduce the value of any existing Award, or change the terms and conditions
thereof without the Participant’s consent. 
And, no amendment of the Plan shall require the approval of the
stockholders of the Company except to the extent required by law, regulation or
stock exchange requirements.

Restricted Stock Agreement

This Agreement is made as of the         
day of                   ,
                
(“Date of Award”), between Torotel, Inc., a corporation (the “Company”), and                              ,
(the “Grantee”).  In consideration of the
agreements set forth, the Company and the Grantee agree as follows:

1.               Grant.  A restricted stock award (“Award”) of                 shares
(“Award Shares”) of the Company’s stock, $.01 par value per share (“Stock”),
and total fair market value equal to thirty five percent (35%) of the Grantee’s
base pay on the date of this agreement, is hereby granted by the Company to the
Grantee subject to the terms, conditions, 
and provisions of the Stock Award Plan (the “Plan”), the terms of which
are incorporated by reference herein.

2.               Restriction. None of the Award
Shares shall be sold, assigned, pledged or otherwise disposed of, voluntarily
or involuntarily, by the Grantee.

3.               Release of Restriction. (a) The restriction set
forth in Section 2 shall lapse on the fifth anniversary date of the Date of
Award if during the five (5) year restriction period the Company’s 1) average
annual growth in gross revenues is at least 20%, 2) average annual growth in
earnings before interest and taxes (EBIT) is at least 15%, 3) return on capital
employed (ROCE) is at least 25%, and 4) debt to equity ratio is not more than
fifty (50) percent.

(b) The restriction set forth in Section 2, to the
extent they have not yet lapsed in accordance with subsection (a) above shall
lapse on the first to happen of (i) the termination of Grantee’s employment
with the Company by reason of disability, (ii) the Grantee’s death, or (iii) an
action by the Compensation Committee of the Board of Directors that, in its
sole discretion, terminates such restrictions.

4.               Forfeiture. If the restrictions set
forth in Section 2 have not lapsed in accordance with any of the conditions set
forth in Section 3, the Award Shares shall be immediately forfeited to the
Company no later than the fifth anniversary date of the Date of Award.

5.               Tender Offer, Merger, Adjustment of Shares. Notwithstanding anything contained herein to the contrary, (a) Award
Shares (i) may be tendered in response to a tender offer or invitations to
tender of greater than fifty percent (50%) of the outstanding Common Stock of
the Company or (ii) may be surrendered in a merger, consolidation or share
exchange involving the Company; (b) In the event of any change in the
outstanding Common Stock resulting from a subdivision or consolidation of
shares, the Award Shares shall be treated in the same manner in any such
transaction as other Common Stock.  Any
Common Stock received by Grantee with respect to the Award Shares in any such
transaction shall be subject to the restrictions and conditions set forth
herein.

6.               Rights as Stockholder.  Grantee shall be entitled to all of the
rights of a stockholder with respect to the Award Shares including the right to
vote such shares and to receive dividends and other distributions payable with
respect to such shares since the Date of Award. 

7.               Escrow of Share
Certificates.  Certificates for the Award
Shares shall be issued in the Grantee’s name and shall be held in escrow by the
Company until all restrictions lapse or such shares are forfeited as provided
herein.  A certificate or certificates
representing the Award Shares as to which restrictions have lapsed shall be
delivered to the Grantee upon such lapse.

8.               Government
Regulations.  Notwithstanding anything
contained herein to the contrary, the Company’s obligation to issue or deliver
certificates evidencing the Award Shares shall be subject to all applicable
laws, rules and regulations and to such approvals by any government agencies or
national securities exchanges as may be required.

9.               Governing Law.  This Agreement shall be construed under the
laws of the State of Kansas.

IN WITNESS WHEREOF, the undersigned have
hereunto set their hands as of the day and year first above written.

	
  

  	
   

  	
  TOROTEL, INC.

  
	
   

  	
   

  	
   

  
	
  Grantee:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  	
   

  	
  Date:

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