Maintaining a Passion for Continuous Improvement LORD CORPORATION WILL HINKSTON

Founded in 1924 Privately-held company with sales approaching $1 Billion World Headquarters in Cary, NC; Regional Headquarters: Geneva, Hong Kong 3,000 employees, 16 manufacturing facilities (8 countries) and 8 R&D centers worldwide 9% of revenue is spent on technology, resulting in 1 new product per week Exports are 4x more than imports Equal distribution of process and discreet manufacturing comprised of 10,000 different products 2 | © 2014 LORD Corporation Introduction to LORD Corporation

Oil & Gas and Industrial Equipment Automotive, Industrial and Electronic Assembly 3 | © 2014 LORD Corporation Unique Offerings Across Diverse Industries Aerospace & Defense

1.Metrics 2.Incentives 3.Collaboration & Innovation 4.Leadership Essentials for Sustained Continuous Improvement 4 | © 2014 LORD Corporation

A TRUE STORY ABOUT DELIVERY PERFORMANCE 97% - Current Promise Date 85% - Original Promise Date 70% - Customer Request Date ($) 60% - Customer Request Date (quantity) 50% - Customer Request Date (line item) 5 | © 2014 LORD Corporation Metrics

Utilize measures that incentivize the desired behavior Must be easily understood by all and have ability to impact results 6 | © 2014 LORD Corporation Metrics Emphasize broad, cross-functional measures to foster teamwork and broaden perspectives (i.e. value add ratios) Target year over year improvements / Avoid competition between plants

7 | © 2014 LORD Corporation Essentials for Sustained Continuous Improvement 1.Metrics 2.Incentives 3.Collaboration & Innovation 4.Leadership

Achievement of total corporate results 50% is net income 30% is operating cash flow 20% is sales growth “Spot” awards are available Production employees earn 5.5% of W-2 earnings if enterprise goals are achieved Education and training strongly encouraged 8 | © 2014 LORD Corporation Incentives

9 | © 2014 LORD Corporation Essentials for Sustained Continuous Improvement 1.Metrics 2.Incentives 3.Collaboration & Innovation 4.Leadership

Establish processes for sharing best practices Set stretch goals that require new approaches Engage the technical organization Provide capital/process funding to improvement teams Learn from mistakes/celebrate successes 10 | © 2014 LORD Corporation Collaboration & Innovation

11 | © 2014 LORD Corporation Essentials for Sustained Continuous Improvement 1.Metrics 2.Incentives 3.Collaboration & Innovation 4.Leadership

Employee Engagement Establish Need for Change Be Ambitious for the Company Accessible – keep the personal ego in check Exude Enthusiasm and Resilience 12 | © 2014 LORD Corporation Leadership

It’s a race without a finish line… 13 | © 2014 LORD Corporation