DIRECTORS RESTRICTED STOCK PLAN
The purpose of this Directors Restricted Stock Plan is to further align the interest of the Directors of Kadant Inc.
(the "Company") with its stockholders, by enabling the Directors to acquire and hold shares of the Company's
common stock in lieu of receiving cash compensation for their service as Directors, subject to certain conditions
contained in the Plan.
(a) "Board" means the Board of Directors of the Company.
(b) "Change in Control" means an event or occurrence set forth in any one or more of subsections (1) through (4)
below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is
specifically exempted from another such subsection):
(1) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule
13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following
acquisitions shall not constitute a Change in Control: (i) any acquisition by the Company, (ii) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (iii) any acquisition by any corporation pursuant to a transaction which complies
with clauses (i) and (ii) of subsection (3) of this Section (b); or
(2) such time as the Continuing Directors (as defined below) do not