CASH INCENTIVE PLAN
(Effective beginning with the 2007 Fiscal Year)
The purposes of the Cash Incentive Plan of Kadant Inc. are (i) to enable the Company to attract, retain, motivate and reward
employees by providing an opportunity to earn incentive compensation under the Plan related to the performance of the
Company and its subsidiaries and (ii) to qualify such compensation paid as performance-based compensation within the
meaning of Section 162(m) of the Code, as required for employees subject to Section 162(m) of the Code.
Terms used in the Plan, and not otherwise defined, are defined as follows:
“Award” means a contingent award made to a Participant in accordance with the Plan that provides the Participant with the
opportunity to earn cash compensation based on the relative level of attainment of Performance Goals established by the
Committee for a Performance Period and on such other terms and conditions as the Committee shall determine.
“Board” means the Board of Directors of the Company.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Committee” means the Compensation Committee of the Board, or any other committee appointed by the Board to
administer the Plan, so long as the committee is comprised of solely of two or more members of the Board who are “outside
directors” within the meaning of Section 162(m).
“Company” means Kadant Inc., a Delaware corporation, or any successor to all or substantially all of the Company’s
“Eligible Employee” means each executive officer, officer, or other key employee of the Company or any Subsidiary
designated from time to time by the Committee as eligible to participate in the Plan.
“Participant” means any Eligible Employee who receives an Award under the Plan for a specified Performance Period.
“Performance Goals” means any one or a combination of the following: (i) earnings per share, (ii) return on average
shareholders’ equity or average assets, (iii) earnings, (iv) earning