8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

March 6, 2006

CERADYNE, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-13059	33-0055414
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3169 Red Hill Avenue, Costa Mesa, CA	92626
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (714) 549-0421

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On March 6, 2006, our Board of Directors approved, upon the recommendation of the Compensation Committee of the Board, base salaries for our executive officers for 2006. The base salaries for our executive officers are set forth in Exhibit 10.1 filed with this report, and are incorporated herein by reference. Ceradyne is an “at will” employer and the expression of these base salaries in annual amounts does not imply that there is an agreement to employ any executive officer for any specific period of time.

On March 6, 2006, our Board of Directors also approved, upon the recommendation of the Compensation Committee of the Board, a cash bonus plan for our executive officers. The cash bonus plan for our executive officers is described in Exhibit 10.2 filed with this report, and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

Exhibit Number	Description
10.1	Base Salaries Payable to Executive Officers during 2006.
10.2	Cash Bonus Plan for Executive Officers for 2006.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CERADYNE, INC.
March 9, 2006	By:	/s/ Jerrold J. Pellizzon
		Jerrold J. Pellizzon Chief Financial Officer, Vice President and Secretary

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EXHIBIT INDEX

Exhibit Number	Description
10.1	Base Salaries Payable to Executive Officers during 2006.
10.2	Cash Bonus Plan for Executive Officers for 2006.

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EX-10.1

EXHIBIT 10.1

2006 Base Salaries

For Executive Officers of

Ceradyne, Inc.

Name	Title	2006 Base Salary*
Joel P. Moskowitz	Chairman of the Board, Chief Executive Officer and President	$	475,000
David P. Reed	Vice President, and President of North American Operations	$	257,000
Jerrold J. Pellizzon	Chief Financial Officer and Corporate Secretary	$	234,000
Bruce Lockhart	Vice President, and President of Thermo Materials Division	$	121,000
Jeffrey J. Waldal	Vice President, and President of Semicon Associates Division	$	121,000
Marc A. King	Vice President of Armor Operations	$	148,000
Michael A. Kraft	Vice President of Sales, Marketing and Business Development	$	186,000
Alvin Gerk	Vice President Operations	$	166,000

* Ceradyne is an “at will” employer. The expression of base salaries in annual amounts does not imply that there is an agreement to employ any executive officer for any specific period of time.

EX-10.2

EXHIBIT 10.2

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