2006 Cash Bonus Plan for

Executive Officers of

Ceradyne, Inc.

Executive Officers of Ceradyne, Inc. are entitled to receive a cash bonus for services rendered during 2006 based on a percentage of pre-tax profits as set forth in the following table, except as otherwise noted. Bonuses are calculated on a calendar quarter basis and are paid following completion of the quarter provided that the executive is still employed by the Company as of the date of payment. If there is a pre-tax loss in one quarter, that loss will be subtracted from the pre-tax profit in the subsequent quarter when calculating the bonus earned for the subsequent quarter. In no event will the bonus payable to any executive officer exceed 150% of such officer’s annual base salary.

 

 

 

 

 

 

Name

  

Title

  

2006 Bonus

Joel P. Moskowitz

  

Chairman of the Board, Chief Executive Officer and President

  

1.0% of consolidated pre-tax profit

 

 

 

David P. Reed

  

Vice President, and President of North American Operations

  

1.0% of North American pre-tax profit

 

 

 

Jerrold J. Pellizzon

  

Chief Financial Officer, Chief Administrative Officer and Corporate Secretary

  

0.5% of consolidated pre-tax profit

 

 

 

Bruce Lockhart

  

Vice President, and President of Thermo Materials Division

  

1.0% of Thermo Materials division pre-tax profit

 

 

 

Jeffrey J. Waldal

  

Vice President, and President of Semicon Associates Division

  

3.0% of Semicon Associates division pre-tax profit

 

 

 

Marc A. King

  

Vice President of Armor Operations

  

Director level Advanced Ceramics Operations division bonus

 

 

 

Michael A. Kraft

  

Vice President of Sales, Marketing and Business Development

  

0.2% of consolidated pre-tax profit

 

 

 

Alvin Gerk

  

Vice President Operations

  

Director level Advanced Ceramics Operations division bonus