Exhibit 10.2

 

COBRA ELECTRONICS CORPORATION

 

2010 EQUITY INCENTIVE PLAN

 

I. INTRODUCTION

 

1.1  Purposes.  The purposes of the Cobra Electronics Corporation 2010 Equity
Incentive Plan (this “Plan”) are (i) to align the interests of the Company’s
stockholders and the recipients of awards under this Plan by increasing the
proprietary interest of such recipients in the Company’s growth and success,
(ii) to advance the interests of the Company by attracting and retaining
directors, officers and other employees and (iii) to motivate such persons to
act in the long-term best interests of the Company and its stockholders. As of
the effective date of the Plan, no further awards shall be granted under the
Prior Plans, as defined in Section 1.2.

 

1.2  Certain Definitions.

 

“Agreement” shall mean the written agreement evidencing an award hereunder
between the Company and the recipient of such award.

 

“Board” shall mean the Board of Directors of the Company.

 

“Change in Control” shall have the meaning set forth in Section 6.8(b).

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Committee” shall mean the Committee designated by the Board, consisting of two
or more members of the Board, each of whom may be (i) a “Non-Employee Director”
within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside
director” within the meaning of Section 162(m) of the Code and
(iii) “independent” within the meaning of the rules of NASDAQ or, if the Common
Stock is not listed on NASDAQ, within the meaning of the rules of the principal
national stock exchange on which the Common Stock is then traded.

 

“Common Stock” shall mean the common stock, par value $0.331/3 per share, of the
Company, and all rights appurtenant thereto.

 

“Company” shall mean Cobra Electronics Corporation, a Delaware corporation, or
any successor thereto.

 

“Corporate Transaction” shall have the meaning set forth in Section 6.8(b).

 

“Directors Option” shall mean the grant of a Nonqualified Stock Option to a
Non-Employee Director pursuant to Article V.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” shall mean the closing transaction price of a share of
Common Stock as reported on NASDAQ on the date as of which such value is being
determined or, if the Common Stock is not listed on NASDAQ, the closing
transaction price of a share of Common Stock on the principal national stock
exchange on which the Common Stock is traded on the date as of which such value
is being determined or, if there shall be no reported transactions for such
date, on the next preceding date for which transactions were
reported; provided, however, that if the Common Stock is not listed on a
national stock exchange or if Fair Market Value for any date cannot be so
determined, Fair Market Value shall be determined by the Committee by whatever
means or method as the Committee, in the good faith exercise of its discretion,
shall at such time deem appropriate and in compliance with Section 409A of the
Code.

 

“Free-Standing SAR” shall mean an SAR which is not granted in tandem with, or by
reference to, an option, which entitles the holder thereof to receive, upon
exercise, shares of Common Stock (which may be Restricted Stock) with an
aggregate value equal to the excess of the Fair Market Value of one share of
Common Stock on the date of exercise over the base price of such SAR, multiplied
by the number of such SARs which are exercised.

 

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“Incentive Stock Option” shall mean an option to purchase shares of Common Stock
that meets the requirements of Section 422 of the Code, or any successor
provision, which is intended by the Committee to constitute an Incentive Stock
Option.

 

“NASDAQ” shall mean the Nasdaq Stock Market of the National Association of
Securities Dealers, Inc. Automated Quotation System.

 

“Non-Employee Director” shall mean any director of the Company who is not an
officer or employee of the Company or any Subsidiary.

 

“Nonqualified Stock Option” shall mean an option to purchase shares of Common
Stock which is not an Incentive Stock Option.

 

“Outstanding Voting Securities” shall have the meaning set forth in
Section 6.8(b).

 

“Performance Measures” shall mean the criteria and objectives, established by
the Committee, which shall be satisfied or met (i) as a condition to the grant
or exercisability of all or a portion of an option or SAR or (ii) during the
applicable Restriction Period or Performance Period as a condition to the
vesting of the holder’s interest, in the case of a Restricted Stock Award, of
the shares of Common Stock subject to such award, or, in the case of a
Restricted Stock Unit Award, to the holder’s receipt of the shares of Common
Stock subject to such award or of payment with respect to such award. To the
extent necessary for an award to be qualified performance-based compensation
under Section 162(m) of the Code and the regulations thereunder, such criteria
and objectives shall include one or more of the following corporate-wide or
subsidiary, division, operating unit or individual measures, stated in either
absolute terms or relative terms, such as rates of growth or improvement: the
attainment by a share of Common Stock of a specified Fair Market Value for a
specified period of time, earnings per share, return to stockholders (including
dividends), return on assets, return on equity, earnings of the Company before
or after taxes and/or interest, revenues, expenses, market share, cash flow or
cost reduction goals, interest expense after taxes, return on investment, return
on investment capital, return on operating costs, economic value created,
operating margin, gross margin, net income before or after taxes, pretax
earnings before interest, depreciation and/or amortization, pretax operating
earnings after interest expense and before incentives, and/or extraordinary or
special items, operating earnings, net cash provided by operations, and
strategic business criteria, consisting of one or more objectives based on
meeting specified market penetration, geographic business expansion goals, cost
targets, days sales outstanding goals, customer satisfaction, reductions in
errors and omissions, reductions in lost business, management of employment
practices and employee benefits, supervision of litigation and information
technology, quality and quality audit scores, productivity, efficiency, and
goals relating to acquisitions or divestitures, or any combination of the
foregoing. In the sole discretion of the Committee, but subject to
Section 162(m) of the Code, the Committee may amend or adjust the Performance
Measures or other terms and conditions of an outstanding award in recognition of
unusual or nonrecurring events affecting the Company or its financial statements
or changes in law or accounting principles.

 

“Performance Option” shall mean an Incentive Stock Option or Nonqualified Stock
Option, the grant of which or the exercisability of all or a portion of which is
contingent upon the attainment of specified Performance Measures within a
specified Performance Period.

 

“Performance Period” shall mean any period designated by the Committee during
which (i) the Performance Measures applicable to an award shall be measured and
(ii) the conditions to vesting applicable to an award shall remain in effect.

 

“Performance Unit” shall mean a right to receive, contingent upon the attainment
of specified Performance Measures within a specified Performance Period, a
specified cash amount or, in lieu thereof, shares of Common Stock having a Fair
Market Value equal to such cash amount.

 

“Performance Unit Award” shall mean an award of Performance Units under this
Plan.

 

“Prior Plans” shall mean the Company’s 1995 Key Employees Nonqualified and
Incentive Stock Option Plan, 1998 Stock Option Plan, 2000 Stock Option Plan,
2000 Outside Directors Stock Option Plan and 2002 Outside Directors Stock Option
Plan.

 

“Restricted Stock” shall mean shares of Common Stock which are subject to a
Restriction Period and which may, in addition thereto, be subject to the
attainment of specified Performance Measures within a specified Performance
Period.

 

“Restricted Stock Award” shall mean an award of Restricted Stock under this
Plan.

 

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“Restricted Stock Unit” shall mean a right to receive one share of Common Stock
or, in lieu thereof, the Fair Market Value of such share of Common Stock in
cash, which shall be contingent upon the expiration of a specified Restriction
Period and which may, in addition thereto, be contingent upon the attainment of
specified Performance Measures within a specified Performance Period.

 

“Restricted Stock Unit Award” shall mean an award of Restricted Stock Units
under this Plan.

 

“Restriction Period” shall mean any period designated by the Committee during
which (i) the Common Stock subject to a Restricted Stock Award may not be sold,
transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed
of, except as provided in this Plan or the Agreement relating to such award, or
(ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall
remain in effect.

 

“SAR” shall mean a stock appreciation right which may be a Free-Standing SAR or
a Tandem SAR.

 

“Stock Award” shall mean a Restricted Stock Award, an Unrestricted Stock Award
or a Restricted Stock Unit Award.

 

“Subsidiary” shall mean any corporation, limited liability company, partnership,
joint venture or similar entity in which the Company owns, directly or
indirectly, an equity interest possessing more than 50% of the combined voting
power of the total outstanding equity interests of such entity.

 

“Tandem SAR” shall mean an SAR which is granted in tandem with, or by reference
to, an option (including a Nonqualified Stock Option granted prior to the date
of grant of the SAR), which entitles the holder thereof to receive, upon
exercise of such SAR and surrender for cancellation of all or a portion of such
option, shares of Common Stock (which may be Restricted Stock) with an aggregate
value equal to the excess of the Fair Market Value of one share of Common Stock
on the date of exercise over the base price of such SAR, multiplied by the
number of shares of Common Stock subject to such option, or portion thereof,
which is surrendered.

 

“Tax Date” shall have the meaning set forth in Section 6.5.

 

“Ten Percent Holder” shall have the meaning set forth in Section 2.1(a).

 

“Unrestricted Stock Award” shall mean an award of Unrestricted Stock under this
Plan.

 

1.3  Administration.  This Plan shall be administered by the Committee. Any one
or a combination of the following awards may be made under this Plan to eligible
persons: (i) options to purchase shares of Common Stock in the form of Incentive
Stock Options or Nonqualified Stock Options (which may include Performance
Options), (ii) SARs in the form of Tandem SARs or Free-Standing SARs,
(iii) Stock Awards in the form of Restricted Stock or Restricted Stock Units and
(iv) Performance Units. The Committee shall, subject to the terms of this Plan,
select eligible persons for participation in this Plan and determine the form,
amount and timing of each award to such persons and, if applicable, the number
of shares of Common Stock, the number of SARs, the number of Restricted Stock
Units and the number of Performance Units subject to such an award, the exercise
price or base price associated with the award, the time and conditions of
exercise or settlement of the award and all other terms and conditions of the
award, including, without limitation, the form of the Agreement evidencing the
award. The Committee may, in its sole discretion and for any reason at any time,
subject to the requirements of Section 162(m) of the Code and regulations
thereunder in the case of an award intended to be qualified performance-based
compensation, take action such that (i) any or all outstanding options and SARs
shall become exercisable in part or in full, (ii) all or a portion of the
Restriction Period applicable to any outstanding Restricted Stock or Restricted
Stock Units shall lapse, (iii) all or a portion of the Performance Period
applicable to any outstanding Restricted Stock, Restricted Stock Units or
Performance Units shall lapse and (iv) the Performance Measures (if any)
applicable to any outstanding award shall be deemed to be satisfied at the
target or any other level. The Committee shall, subject to the terms of this
Plan, interpret this Plan and the application thereof, establish rules and
regulations it deems necessary or desirable for the administration of this Plan
and may impose, incidental to the grant of an award, conditions with respect to
the award, such as limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be conclusive and
binding on all parties.

 

The Committee may delegate some or all of its power and authority hereunder to
the Board or, subject to applicable law, to the Chief Executive Officer or other
executive officer of the Company as the Committee deems
appropriate; provided, however, that (i) the Committee may not delegate its
power and authority to the Board or the Chief Executive Officer or other
executive officer of the Company with regard to the grant of an award to any
person who is a “covered employee” within the meaning of Section 162(m) of the
Code or who, in the Committee’s judgment, is likely to be a covered employee at
any time during the period an award hereunder to such employee would be
outstanding and (ii) the Committee may not delegate its power and authority to
the Chief Executive Officer or other executive officer of the Company with
regard to the selection for participation in this Plan of an officer,

 

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director or other person subject to Section 16 of the Exchange Act or decisions
concerning the timing, pricing or amount of an award to such an officer,
director or other person.

 

No member of the Board or Committee, and neither the Chief Executive Officer nor
any other executive officer to whom the Committee delegates any of its power and
authority hereunder, shall be liable for any act, omission, interpretation,
construction or determination made in connection with this Plan in good faith,
and the members of the Board and the Committee and the Chief Executive Officer
or other executive officer shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including attorneys’ fees) arising therefrom to the full extent permitted by
law (except as otherwise may be provided in the Company’s Certificate of
Incorporation and/or By-laws) and under any directors’ and officers’ liability
insurance that may be in effect from time to time.

 

A majority of the Committee shall constitute a quorum. The acts of the Committee
shall be either (i) acts of a majority of the members of the Committee present
at any meeting at which a quorum is present or (ii) acts approved in writing by
all of the members of the Committee without a meeting.

 

1.4  Eligibility.  Participants in this Plan shall consist of such officers,
other employees and nonemployee directors, and persons expected to become
officers, other employees and nonemployee directors, of the Company and its
Subsidiaries as the Committee in its sole discretion may select from time to
time. The Committee’s selection of a person to participate in this Plan at any
time shall not require the Committee to select such person to participate in
this Plan at any other time. For purposes of this Plan, references to employment
by the Company shall also mean employment by a Subsidiary.

 

1.5  Shares Available.  Subject to adjustment as provided in Section 6.7 and to
all other limits set forth in this Section 1.5, 800,000 shares of Common Stock
shall be available for all awards under this Plan, reduced by the sum of the
aggregate number of shares of Common Stock under this Plan which become subject
to outstanding options, outstanding Free-Standing SARs and outstanding Stock
Awards and delivered upon the settlement of Performance Units Awards. To the
extent that shares of Common Stock subject to an outstanding option, SAR or
stock award granted under the Plan are not issued or delivered by reason of
(i) the expiration, termination, cancellation or forfeiture of such award
(excluding shares subject to an option cancelled upon settlement in shares of a
related tandem SAR or shares subject to a tandem SAR cancelled upon exercise of
a related option) or (ii) the settlement of such award in cash, then such shares
of Common Stock shall again be available under this Plan.

 

Subject to adjustment as provided in Section 6.7 and all other limits set forth
in this Section 1.5, 800,000 shares of Common Stock shall be available for Stock
Awards and Performance Unit Awards settled with stock under this Plan, reduced
by the sum of the aggregate number of shares of Common Stock which become
subject to outstanding Stock Awards. To the extent that shares of Common Stock
subject to an outstanding restricted stock or restricted stock unit award
granted under the Plan are not issued or delivered by reason of (i) the
expiration, termination, cancellation or forfeiture of such award or (ii) the
settlement of such award in cash, then such shares of Common Stock shall again
be available for Stock Awards under this Plan.

 

Notwithstanding anything in this Section 1.5 to the contrary, shares of Common
Stock subject to an award under this Plan may not be made available for issuance
under this Plan if such shares are: (i) shares that were subject to a
stock-settled SAR and were not issued upon the net settlement or net exercise of
such SAR, (ii) shares used to pay the exercise price of an Incentive Stock
Option or Nonqualified Stock Option, (iii) shares delivered to or withheld by
the Company to pay withholding taxes related to an award under this Plan, or
(iv) shares repurchased on the open market with the proceeds of an option
exercise.

 

Shares of Common Stock to be delivered under this Plan shall be made available
from authorized and unissued shares of Common Stock, or authorized and issued
shares of Common Stock reacquired and held as treasury shares or otherwise or a
combination thereof.

 

To the extent necessary for an award to be qualified performance-based
compensation under Section 162(m) of the Code and the regulations thereunder
(i) the maximum number of shares of Common Stock with respect to which options
or SARs or a combination thereof may be granted during any fiscal year of the
Company to any person shall be 300,000, subject to adjustment as provided in
Section 6.7; (ii) the maximum number of shares of Common Stock with respect to
which Stock Awards subject to Performance Measures may be granted during any
fiscal year of the Company to any person shall be 100,000, subject to adjustment
as provided in Section 6.7, and (iii) the maximum amount that may be payable
with respect to Performance Units granted during any fiscal year of the Company
to any person shall be $1,000,000.

 

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II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

2.1  Stock Options.  The Committee may, in its discretion, grant options to
purchase shares of Common Stock to such eligible persons as may be selected by
the Committee. Each option, or portion thereof, that is not an Incentive Stock
Option, shall be a Nonqualified Stock Option. To the extent that the aggregate
Fair Market Value (determined as of the date of grant) of shares of Common Stock
with respect to which options designated as Incentive Stock Options are
exercisable for the first time by a participant during any calendar year (under
this Plan or any other plan of the Company, or any parent or Subsidiary) exceeds
the amount (currently $100,000) established by the Code, such options shall
constitute Nonqualified Stock Options.

 

Options shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of this
Plan, as the Committee shall deem advisable:

 

(a)  Number of Shares and Purchase Price.  The number of shares of Common Stock
subject to an option and the purchase price per share of Common Stock
purchasable upon exercise of the option shall be determined by the
Committee; provided, however, that the purchase price per share of Common Stock
shall not be less than 100% of the Fair Market Value of a share of Common Stock
on the date of grant of such option; and provided further, that if an Incentive
Stock Option shall be granted to any person who, at the time such option is
granted, owns capital stock possessing more than ten (10) percent of the total
combined voting power of all classes of capital stock of the Company (or of any
parent or Subsidiary) (a “Ten Percent Holder”), the purchase price per share of
Common Stock shall not be less than the price (currently 110% of Fair Market
Value) required by the Code in order to constitute an Incentive Stock Option.

 

(b)  Option Period and Exercisability.  The period during which an option may be
exercised shall be determined by the Committee; provided, however, that no
option shall be exercised later than ten (10) years after its date of grant; and
provided further, that if an Incentive Stock Option shall be granted to a Ten
Percent Holder, such option shall not be exercised later than five (5) years
after its date of grant. The Committee may, in its discretion, determine that an
option is to be granted as a Performance Option and may establish an applicable
Performance Period and Performance Measures which shall be satisfied or met as a
condition to the grant of such option or to the exercisability of all or a
portion of such option. The Committee shall determine whether an option shall
become exercisable in cumulative or non-cumulative installments and in part or
in full at any time. An exercisable option, or portion thereof, may be exercised
only with respect to whole shares of Common Stock.

 

(c)  Method of Exercise.  An option may be exercised (i) by giving written
notice to the Company specifying the number of whole shares of Common Stock to
be purchased and accompanying such notice with payment therefor in full (or
arrangement made for such payment to the Company’s satisfaction) either (A) in
cash, (B) by delivery (either actual delivery or by attestation procedures
established by the Company) of previously owned whole shares of Common Stock
having an aggregate Fair Market Value, determined as of the date of exercise,
equal to the aggregate purchase price payable by reason of such exercise,
(C) authorizing the Company to withhold whole shares of Common Stock which would
otherwise be delivered having an aggregate Fair Market Value, determined as of
the date of exercise, equal to the amount necessary to satisfy such obligation,
(D) except as may be prohibited by applicable law, in cash by a broker-dealer
acceptable to the Company to whom the optionee has submitted an irrevocable
notice of exercise or (E) a combination of (A), (B) and (C), in each case to the
extent set forth in the Agreement relating to the option, (ii) if applicable, by
surrendering to the Company any Tandem SARs which are cancelled by reason of the
exercise of the option and (iii) by executing such documents as the Company may
reasonably request. Any fraction of a share of Common Stock which would be
required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the optionee. No shares of Common Stock
shall be issued and no certificate representing Common Stock shall be delivered
until the full purchase price therefor and any withholding taxes thereon, as
described in Section 6.5, have been paid (or arrangement made for such payment
to the Company’s satisfaction).

 

2.2  Stock Appreciation Rights.  The Committee may, in its discretion, grant
SARs to such eligible persons as may be selected by the Committee. The Agreement
relating to an SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.

 

SARs shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of this
Plan, as the Committee shall deem advisable:

 

(a)  Number of SARs and Base Price.  The number of SARs subject to an award
shall be determined by the Committee. Any Tandem SAR related to an Incentive
Stock Option shall be granted at the same time that such Incentive Stock Option
is granted. The base price of a Tandem SAR shall be the purchase price per share
of Common Stock of the related option. The base price of a Free-Standing SAR
shall be determined by the Committee; provided, however, that such base price
shall not be less than 100% of the Fair Market Value of a share of Common Stock
on the date of grant of such SAR.

 

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(b)  Exercise Period and Exercisability.  The period for the exercise of an SAR
shall be determined by the Committee; provided, however, that no Tandem SAR
shall be exercised later than the expiration, cancellation, forfeiture or other
termination of the related option and no Free-Standing SAR shall be exercised
later than ten (10) years after its date of grant. The Committee may, in its
discretion, establish Performance Measures which shall be satisfied or met as a
condition to the grant of an SAR or to the exercisability of all or a portion of
an SAR. The Committee shall determine whether an SAR may be exercised in
cumulative or non-cumulative installments and in part or in full at any time. An
exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem
SAR, only with respect to whole shares of Common Stock and, in the case of a
Free-Standing SAR, only with respect to a whole number of SARs. If an SAR is
exercised for shares of Restricted Stock, a certificate or certificates
representing such Restricted Stock shall be issued in accordance with
Section 3.2(c), or such shares shall be transferred to the holder in book entry
form with restrictions on the Shares duly noted, and the holder of such
Restricted Stock shall have such rights of a stockholder of the Company as
determined pursuant to Section 3.2(d). Prior to the exercise of an SAR, the
holder of such SAR shall have no rights as a stockholder of the Company with
respect to the shares of Common Stock subject to such SAR.

 

(c)  Method of Exercise.  A Tandem SAR may be exercised (i) by giving written
notice to the Company specifying the number of whole SARs which are being
exercised, (ii) by surrendering to the Company any options which are cancelled
by reason of the exercise of the Tandem SAR and (iii) by executing such
documents as the Company may reasonably request. A Free-Standing SAR may be
exercised (A) by giving written notice to the Company specifying the whole
number of SARs which are being exercised and (B) by executing such documents as
the Company may reasonably request.

 

2.3  Termination of Employment or Service.  All of the terms relating to the
exercise, cancellation or other disposition of an option or SAR upon a
termination of employment or service with the Company of the holder of such
option or SAR, as the case may be, whether by reason of disability, retirement,
death or any other reason, shall be determined by the Committee.

 

2.4  No Repricing.  Notwithstanding anything in this Plan to the contrary and
subject to Section 6.7, without the approval of the stockholders of the Company,
the Committee will not amend or replace any previously granted option or SAR in
a transaction that constitutes a “repricing,” as such term is used in IM-5635-1
of the NASDAQ Listing Rules.

 

III. STOCK AWARDS

 

3.1  Stock Awards.  The Committee may, in its discretion, grant Stock Awards to
such eligible persons as may be selected by the Committee. The Agreement
relating to a Stock Award shall specify whether the Stock Award is a Restricted
Stock Award, an Unrestricted Stock Award or a Restricted Stock Unit Award.

 

3.2  Terms of Restricted Stock Awards.  Restricted Stock Awards shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.

 

(a)  Number of Shares and Other Terms.  The number of shares of Common Stock
subject to a Restricted Stock Award and the Restriction Period, Performance
Period (if any) and Performance Measures (if any) applicable to a Restricted
Stock Award shall be determined by the Committee.

 

(b)  Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Award
shall provide, in the manner determined by the Committee, in its discretion, and
subject to the provisions of this Plan, for the vesting of the shares of Common
Stock subject to such award (i) if the holder of such award remains continuously
in the employment or service of the Company during the specified Restriction
Period and (ii) if specified Performance Measures (if any) are satisfied or met
during a specified Performance Period, and for the forfeiture of the shares of
Common Stock subject to such award (x) if the holder of such award does not
remain continuously in the employment or service of the Company during the
specified Restriction Period or (y) if specified Performance Measures (if any)
are not satisfied or met during a specified Performance Period.

 

(c)  Stock Issuance.  During the Restriction Period, the shares of Restricted
Stock shall be held by a custodian in book entry form with restrictions on such
shares duly noted or, alternatively, a certificate or certificates representing
a Restricted Stock Award shall be registered in the holder’s name and may bear a
legend, in addition to any legend which may be required pursuant to Section 6.6,
indicating that the ownership of the shares of Common Stock represented by such
certificate is subject to the restrictions, terms and conditions of this Plan
and the Agreement relating to the Restricted Stock Award. All such certificates
shall be deposited with the Company, together with stock powers or other
instruments of assignment (including a power of attorney), each endorsed in
blank with a guarantee of signature if deemed necessary or appropriate, which
would permit transfer to the Company of all or a portion of the shares of Common
Stock subject to the Restricted Stock Award in the event such award is forfeited
in whole or in part. Upon termination of any applicable Restriction Period (and
the satisfaction or attainment of applicable Performance Measures),

 

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subject to the Company’s right to require payment of any taxes in accordance
with Section 6.5, the restrictions shall be removed from the requisite number of
any shares of Common Stock that are held in book entry form, and all
certificates evidencing ownership of the requisite number of shares of Common
Stock shall be delivered to the holder of such award.

 

(d)  Rights with Respect to Restricted Stock Awards.  Unless otherwise set forth
in the Agreement relating to a Restricted Stock Award, and subject to the terms
and conditions of a Restricted Stock Award, the holder of such award shall have
all rights as a stockholder of the Company, including, but not limited to,
voting rights, the right to receive dividends and the right to participate in
any capital adjustment applicable to all holders of Common
Stock; provided, however, that (i) a distribution with respect to shares of
Common Stock, other than a regular cash dividend, and (ii) a regular cash
dividend with respect to shares of Common Stock that are subject to
performance-based vesting conditions, in each case, shall be deposited with the
Company and shall be subject to the same restrictions as the shares of Common
Stock with respect to which such distribution was made.

 

3.3  Terms of Restricted Stock Unit Awards.  Restricted Stock Unit Awards shall
be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem advisable.

 

(a)  Number of Shares and Other Terms.  The number of shares of Common Stock
subject to a Restricted Stock Unit Award and the Restriction Period, Performance
Period (if any) and Performance Measures (if any) applicable to a Restricted
Stock Unit Award shall be determined by the Committee.

 

(b)  Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Unit
Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of such
Restricted Stock Unit Award (i) if the holder of such award remains continuously
in the employment or service of the Company during the specified Restriction
Period and (ii) if specified Performance Measures (if any) are satisfied or met
during a specified Performance Period, and for the forfeiture of the shares of
Common Stock subject to such award (x) if the holder of such award does not
remain continuously in the employment or service of the Company during the
specified Restriction Period or (y) if specified Performance Measures (if any)
are not satisfied or met during a specified Performance Period.

 

(c)  Settlement of Vested Restricted Stock Unit Awards.  The Agreement relating
to a Restricted Stock Unit Award shall specify (i) whether such award may be
settled in shares of Common Stock or cash or a combination thereof and
(ii) whether the holder thereof shall be entitled to receive, on a current or
deferred basis, dividend equivalents, and, if determined by the Committee,
interest on, or the deemed reinvestment of, any deferred dividend equivalents,
with respect to the number of shares of Common Stock subject to such award.
Prior to the settlement of a Restricted Stock Unit Award, the holder of such
award shall have no rights as a stockholder of the Company with respect to the
shares of Common Stock subject to such award.

 

3.4  Termination of Employment or Service.  All of the terms relating to the
satisfaction of Performance Measures and the termination of the Restriction
Period or Performance Period relating to a Stock Award, or any forfeiture and
cancellation of such award upon a termination of employment or service with the
Company of the holder of such award, whether by reason of disability,
retirement, death or any other reason, shall be determined by the Committee.

 

IV. PERFORMANCE UNIT AWARDS

 

4.1  Performance Unit Awards.  The Committee may, in its discretion, grant
Performance Unit Awards to such eligible persons as may be selected by the
Committee.

 

4.2  Terms of Performance Unit Awards.  Performance Unit Awards shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.

 

(a)  Number of Performance Units and Performance Measures.  The number of
Performance Units subject to a Performance Unit Award and the Performance
Measures and Performance Period applicable to a Performance Unit Award shall be
determined by the Committee.

 

(b)  Vesting and Forfeiture.  The Agreement relating to a Performance Unit Award
shall provide, in the manner determined by the Committee, in its discretion, and
subject to the provisions of this Plan, for the vesting of such Performance Unit
Award if the specified Performance Measures are satisfied or met during the
specified Performance Period and for the forfeiture of such award if the
specified Performance Measures are not satisfied or met during the specified
Performance Period.

 

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(c)  Settlement of Vested Performance Unit Awards.  The Agreement relating to a
Performance Unit Award shall specify whether such award may be settled in shares
of Common Stock (including shares of Restricted Stock) or cash or a combination
thereof. If a Performance Unit Award is settled in shares of Restricted Stock,
such shares of Restricted Stock shall be issued to the holder in book entry form
or a certificate or certificates representing such Restricted Stock shall be
issued in accordance with Section 3.2(c) and the holder of such Restricted Stock
shall have such rights as a stockholder of the Company as determined pursuant to
Section 3.2(d). Prior to the settlement of a Performance Unit Award in shares of
Common Stock, including Restricted Stock, the holder of such award shall have no
rights as a stockholder of the Company.

 

4.3  Termination of Employment or Service.  All of the terms relating to the
satisfaction of Performance Measures and the termination of the Performance
Period relating to a Performance Unit Award, or any forfeiture and cancellation
of such award upon a termination of employment or service with the Company of
the holder of such award, whether by reason of disability, retirement, death or
any other reason, shall be determined by the Committee.

 

V. PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS

 

5.1  Eligibility.  Each Non-Employee Director may be granted options to purchase
shares of Common Stock in accordance with this Article V (a “Directors Option”).
All options granted under this Article V shall constitute Nonqualified Stock
Options.

 

5.2  Directors Options.  Each Directors Option shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem advisable:

 

(a)  Exercise Period and Exercisability.  The period during which a Director
Option may be exercised shall be determined by the Committee; provided, however,
that no Director Option shall be exercised later than ten (10) years after its
date of grant. The Committee may, in its discretion, determine that a Director
Option is to be granted as a Performance Option and may establish an applicable
Performance Period and Performance Measures which shall be satisfied or met as a
condition to the grant of such option or to the exercisability of all or a
portion of such option. The Committee shall determine whether a Director Option
shall become exercisable in cumulative or non-cumulative installments and in
part or in full at any time. An exercisable Director Option, or portion thereof,
may be exercised only with respect to whole shares of Common Stock.

 

(b)  Purchase Price.  The purchase price for the shares of Common Stock subject
to any Directors Option shall be equal to 100% of the Fair Market Value of a
share of Common Stock on the date of grant of such Directors Option. A Directors
Option, or portion thereof, may be exercised in whole or in part only with
respect to whole shares of Common Stock. Directors Options shall be exercisable
in accordance with Section 2.1(c).

 

VI. GENERAL

 

6.1  Effective Date and Term of Plan.  This Plan shall be submitted to the
stockholders of the Company for approval at the Company’s 2010 annual meeting of
stockholders and, if approved, shall become effective as of the date of such
approval. This Plan shall terminate as of the first annual meeting of the
Company’s stockholders to occur on or after the tenth anniversary of its
effective date, unless terminated earlier by the Board. Termination of this Plan
shall not affect the terms or conditions of any award granted prior to
termination.

 

Awards hereunder may be made at any time prior to the termination of this Plan,
provided that no award may be made later than ten (10) years after the effective
date of this Plan. In the event that this Plan is not approved by the
stockholders of the Company, this Plan and any awards hereunder shall be void
and of no force or effect. Upon the effective date of this Plan, no further
awards shall be granted under any of the Prior Plans.

 

6.2  Amendments.  The Board may amend this Plan as it shall deem advisable,
subject to any requirement of stockholder approval required by applicable law,
rule or regulation, including Section 162(m) of the Code and any rule of NASDAQ,
or, if the Common Stock is not listed on NASDAQ, any rule of the principal
national stock exchange on which the Common Stock is then
traded; provided, however, that no amendment may impair the rights of a holder
of an outstanding award without the consent of such holder.

 

6.3  Agreement.  Each award under this Plan shall be evidenced by an Agreement
setting forth the terms and conditions applicable to such award. No award shall
be valid until an Agreement is executed by the Company and the recipient of such
award and, upon execution by each party and delivery of the Agreement to the
Company within the time period specified by the Company, such award shall be
effective as of the effective date set forth in the Agreement.

 

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6.4  Non-Transferability.  No award shall be transferable other than by will,
the laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company or, to the extent expressly permitted in the
Agreement relating to such award, to the holder’s family members, a trust or
entity established by the holder for estate planning purposes or a charitable
organization designated by the holder. Except to the extent permitted by the
foregoing sentence or the Agreement relating to an award, each award may be
exercised or settled during the holder’s lifetime only by the holder or the
holder’s legal representative or similar person. Except as permitted by the
second preceding sentence, no award may be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law
or otherwise) or be subject to execution, attachment or similar process. Upon
any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or
otherwise dispose of any award, such award and all rights thereunder shall
immediately become null and void.

 

6.5  Tax Withholding.  The Company shall have the right to require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
pursuant to an award made hereunder, payment by the holder of such award of any
Federal, state, local or other taxes which may be required to be withheld or
paid in connection with such award. An Agreement may provide that (i) the
Company shall withhold whole shares of Common Stock which would otherwise be
delivered to a holder, having an aggregate Fair Market Value determined as of
the date the obligation to withhold or pay taxes arises in connection with an
award (the “Tax Date”), or withhold an amount of cash which would otherwise be
payable to a holder, in the amount necessary to satisfy any such obligation or
(ii) the holder may satisfy any such obligation by any of the following means:
(A) a cash payment to the Company, (B) delivery (either actual delivery or by
attestation procedures established by the Company) to the Company of previously
owned whole shares of Common Stock having an aggregate Fair Market Value,
determined as of the Tax Date, equal to the amount necessary to satisfy any such
obligation, (C) authorizing the Company to withhold whole shares of Common Stock
which would otherwise be delivered having an aggregate Fair Market Value,
determined as of the Tax Date, or withhold an amount of cash which would
otherwise be payable to a holder, equal to the amount necessary to satisfy any
such obligation, (D) in the case of the exercise of an option and except as may
be prohibited by applicable law, a cash payment by a broker-dealer acceptable to
the Company to whom the optionee has submitted an irrevocable notice of exercise
or (E) any combination of (A), (B) and (C), in each case to the extent set forth
in the Agreement relating to the award. Shares of Common Stock to be delivered
or withheld may not have an aggregate Fair Market Value in excess of the amount
determined by applying the minimum statutory withholding rate. Any fraction of a
share of Common Stock which would be required to satisfy such an obligation
shall be disregarded and the remaining amount due shall be paid in cash by the
holder.

 

6.6  Restrictions on Shares.  Each award made hereunder shall be subject to the
requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the delivery of shares
thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend indicating that the
sale, transfer or other disposition thereof by the holder is prohibited except
in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

 

6.7  Adjustment.  In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Common Stock other than a regular cash
dividend, the number and class of securities available under this Plan, the
number and class of securities subject to each outstanding option and the
purchase price per security, the terms of each outstanding SAR, the terms of
each outstanding Restricted Stock Award and Restricted Stock Unit Award,
including the number and class of securities subject thereto, the terms of each
outstanding Performance Unit, the maximum number of securities with respect to
which options or SARs may be granted during any fiscal year of the Company to
any one grantee and the maximum number of shares of Common Stock that may be
awarded during any fiscal year of the Company to any one grantee pursuant to a
Stock Award that is subject to Performance Measures shall be equitably adjusted
by the Committee, such adjustments to be made in the case of outstanding options
and SARs in accordance with Section 409A of the Code. The decision of the
Committee regarding any such adjustment shall be final, binding and conclusive.
If any such adjustment would result in a fractional security being (a) available
under this Plan, such fractional security shall be disregarded, or (b) subject
to an award under this Plan, the Company shall pay the holder of such award, in
connection with the first vesting, exercise or settlement of such award, in
whole or in part, occurring after such adjustment, an amount in cash determined
by multiplying (i) the fraction of such security (rounded to the nearest
hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on the
vesting, exercise or settlement date over (B) the exercise or base price, if
any, of such award.

 

6.8       Change in Control.

 

(a)           Notwithstanding any provision in this Plan or any Agreement, in
the event of a Change in Control, the Board (as constituted prior to such Change
in Control) may, in its discretion:

 

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(i)            provide that (A) some or all outstanding options and SARs shall
immediately become exercisable in full or in part, (B) the Restriction Period
applicable to some or all outstanding Restricted Stock Awards and Restricted
Stock Unit Awards shall lapse in full or in part, (C) the Performance Period
applicable to some or all outstanding awards shall lapse in full or in part, and
(D) the Performance Measures applicable to some or all outstanding awards shall
be deemed to be satisfied at the target or any other level;

 

(ii)           require that shares of stock of the corporation resulting from
such Change in Control, or a parent corporation thereof, be substituted for some
or all of the shares of Common Stock subject to an outstanding award, with an
appropriate and equitable adjustment to such award as shall be determined by the
Board in accordance with Section 6.7; and/or

 

(iii)          require outstanding awards, in whole or in part, to be
surrendered to the Company by the holder, and to be immediately cancelled by the
Company, and to provide for the holder to receive (A) a cash payment in an
amount equal to (i) in the case of an option or an SAR, the number of shares of
Common Stock then subject to the portion of such option or SAR surrendered
multiplied by the excess, if any, of the Fair Market Value of a share of Common
Stock as of the date of the Change in Control, over the purchase price or base
price per share of Common Stock subject to such option or SAR, (ii) in the case
of a Stock Award, the number of shares of Common Stock then subject to the
portion of such award surrendered multiplied by the Fair Market Value of a share
of Common Stock as of the date of the Change in Control, and (iii) in the case
of a Performance Unit Award, the value of the Performance Units then subject to
the portion of such award surrendered; (B) shares of capital stock of the
corporation resulting from such Change in Control, or a parent corporation
thereof, having a fair market value not less than the amount determined under
clause (A) above; or (C) a combination of the payment of cash pursuant to
clause (A) above and the issuance of shares pursuant to clause (B) above.

 

(b)           A “Change in Control” shall be deemed to have occurred if: (a) any
person, including a group within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, acquires beneficial ownership of,
and the right to vote, shares having at least 50% of the aggregate voting power
of the class or classes of capital stock of the Company having the ordinary and
sufficient voting power (not depending upon the happening of a contingency) to
elect at least a majority of the directors of the Board (the “Outstanding Voting
Securities”); (b) as a result of any tender or exchange offer, substantial
purchase of equity securities, merger, consolidation, sale of assets or
contested election, or any combination of the foregoing transactions, the
persons who were directors of the Company immediately prior to such transaction
or transactions shall not constitute a majority of the Board (or the board of
directors of any successor to or assign of the Company) immediately after the
next meeting of stockholders of the Company (or such successor or assign)
following such transaction; or (c) there is consummated a reorganization, merger
or consolidation of the Company or sale or other disposition of all or
substantially all of the assets of the Company (a “Corporate Transaction”),
excluding any Corporate Transaction pursuant to which (i) all or substantially
all of the individuals or entities who are the beneficial owners, respectively,
of the Outstanding Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of the
combined voting power of the outstanding securities entitled to vote generally
in the election of directors of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or indirectly) in substantially the same proportions
relative to each other as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Voting Securities; (ii) no person (other than:
the Company; any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company) will
beneficially own, directly or indirectly, 50% or more of the combined voting
power of the outstanding securities of the corporation resulting from such
Corporate Transaction entitled to vote generally in the election of directors
and (iii) the persons who were directors of the Company immediately prior to
such Corporate Transaction will constitute at least a majority of the board of
directors of the corporation resulting from such Corporate Transaction.

 

6.9  Deferrals.  The Committee may determine that the delivery of shares of
Common Stock or the payment of cash, or a combination thereof, upon the exercise
or settlement of all or a portion of any award (other than awards of Incentive
Stock Options, Nonqualified Stock Options and SARs) made hereunder shall be
deferred, or the Committee may, in its sole discretion, approve deferral
elections made by holders of awards. Deferrals shall be for such periods and
upon such terms as the Committee may determine in its sole discretion, subject
to the requirements of Section 409A of the Code.

 

6.10  No Right of Participation, Employment or Service.  Unless otherwise set
forth in an employment agreement, no person shall have any right to participate
in this Plan. Neither this Plan nor any award made hereunder shall confer upon
any person any right to continued employment by or service with the Company, any
Subsidiary or any affiliate of the Company or affect in any manner the right of
the Company, any Subsidiary or any affiliate of the Company to terminate the
employment of any person at any time without liability hereunder.

 

6.11  Rights as Stockholder.  No person shall have any right as a stockholder of
the Company with respect to any shares of Common Stock or other equity security
of the Company which is subject to an award hereunder unless and until such
person becomes a stockholder of record with respect to such shares of Common
Stock or equity security.

 

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6.12  Designation of Beneficiary.  A holder of an award may file with the
Committee a written designation of one or more persons as such holder’s
beneficiary or beneficiaries (both primary and contingent) in the event of the
holder’s death or incapacity. To the extent an outstanding option or SAR granted
hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to
exercise such option or SAR pursuant to procedures prescribed by the Committee.

 

Each beneficiary designation shall become effective only when filed in writing
with the Committee during the holder’s lifetime on a form prescribed by the
Committee. The spouse of a married holder domiciled in a community property
jurisdiction shall join in any designation of a beneficiary other than such
spouse. The filing with the Committee of a new beneficiary designation shall
cancel all previously filed beneficiary designations.

 

If a holder fails to designate a beneficiary, or if all designated beneficiaries
of a holder predecease the holder, then each outstanding option and SAR
hereunder held by such holder, to the extent exercisable, may be exercised by
such holder’s executor, administrator, legal representative or similar person.

 

6.13  Governing Law.  This Plan, each award hereunder and the related Agreement,
and all determinations made and actions taken pursuant thereto, to the extent
not otherwise governed by the Code or the laws of the United States, shall be
governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflicts of laws.

 

6.14  Foreign Employees.  Without amending this Plan, the Committee may grant
awards to eligible persons who are foreign nationals on such terms and
conditions different from those specified in this Plan as may in the judgment of
the Committee be necessary or desirable to foster and promote achievement of the
purposes of this Plan and, in furtherance of such purposes the Committee may
make such modifications, amendments, procedures, subplans and the like as may be
necessary or advisable to comply with provisions of laws in other countries or
jurisdictions in which the Company or its Subsidiaries operates or has
employees.

 

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