K & F Industries, Inc. Executive Deferred Bonus Plan

Summary

K & F Industries, Inc. has established an Executive Deferred Bonus Plan to attract and retain key senior executives. Participation is determined annually at the sole discretion of the Chairman. Bonuses are only awarded if the company achieves at least 10% growth in operating income, and the Chairman may still choose not to allocate awards. Once granted, awards vest over three years, with payments made in equal annual installments, provided the executive remains employed. Executives may defer payments, and interest accrues on deferred, vested amounts. Unvested awards are forfeited if employment ends, except in cases of death or disability.

EX-10.14 11 y67435exv10w14.txt EXECUTIVE DEFERRED BONUS PLAN EXHIBIT 10.14 K & F Industries, Inc. EXECUTIVE DEFERRED BONUS PLAN PURPOSE: To retain and attract key executives of the Company. PARTICIPATION: A limited number of senior executives of the Company selected by the Chairman of the Board in his sole and exclusive discretion, will be designated for participation each fiscal year. No employee shall be entitled to participation because of past participation, representations, employment agreements or otherwise. THRESHOLD TO AWARD: No awards shall be allocated to any participant for a fiscal year unless the Company has had at least a 10% growth in operating income as reported in its audited financial statements. Notwithstanding any such growth, the Chairman may determine, in his discretion, not allocate awards for any fiscal year. Once awards are allocated, however, they are irrevocable subject only to the vesting provisions of this Plan. Executive Deferred Bonus Plan Page -2- ALLOCATION OF GRANT: The Chairman will allocate for each participant a maximum incentive bonus and such individual goals, if any, as the Chairman deems appropriate for each individual participant. VESTING AND PAYMENT: The amount of an individual's deferred bonus award for a particular fiscal year shall be final and fixed with the publication of the Company's audited reports for that fiscal year. After such date neither the Company's performance nor, the employees participation or, lack thereof, in subsequent awards will effect his receipt of the fixed award for that fiscal year. All that is necessary in order to receive payment is to remain in the Company's employ on the vesting dates - that is January 15th of the three years following the award. Accordingly, amounts awarded will vest and be paid (unless deferred) in three equal annual installments starting on the January 15th following each fiscal year award. Executive Deferred Bonus Plan Page -3- FORFEITURE: All non-vested amounts allocated to an executive are forfeited if his or her employment terminates for any reason other than death or disability prior to the vesting date. OPTIONAL DEFERRAL: Executive will be allowed to defer payments of a grant if such if such election is made at least three months prior to the end of a fiscal year for which bonus are to be allocated. For example, the award for fiscal 1991 and paid starting January 1992 must be deferred prior to December 31, 1990. If a payment is deferred, the executive must elect the period of deferral. Deferred amounts will be paid at the earlier of (a) the time specified at the time of such election, or (b) in the discretion of the Chairman at death or permanent disability. Executive Deferred Bonus Plan Page -4- INTEREST: Interest accrues only on vested amounts that are deferred and accrues for each calendar year at the prime rate in effect on each January 15th as determined by the Chief Financial Officer of the Company. ASSIGNMENT: No assignment or transfer of any interest in the Plan whether or not vested, will be valid or recognized. LIMITATIONS: Amounts paid or accrued in connection with the Plan are limited by existing and future applicable law or Government policy. TERM: Continuation of the Plan to be determined annually by the Board of Directors.