Exhibit 10.2
 
Aether Holdings, Inc.

 
2006 Management Bonus Plan
 

Purpose Aether Holdings, Inc., a Delaware corporation (the “Company”), wishes to
motivate, reward and retain key management employees of the Company and its
subsidiaries. To further these objectives, the Company hereby sets forth this
Aether Holdings, Inc. 2006 Management Bonus Plan (the “Plan”), effective as of
June 6, 2006, to provide participants with opportunities to earn
performance-based bonus awards (“Awards”).   Participants For each Performance
Period, the Chief Executive Officer will be eligible for Awards under this Plan.
In addition, the Compensation Committee (the “Committee”), as described below,
may designate key management employees of the Company (including those of any
subsidiary, operating unit or division), who, in addition to the Chief Executive
Officer, will be eligible for Awards under this Plan (the “Participants”).  
Administrator The Plan’s administrator shall be the Committee. The Committee,
which shall be comprised solely of two or more outside directors, is responsible
for the general operation and administration of the Plan and for carrying out
its provisions and has full discretion in interpreting and administering the
provisions of the Plan. Subject to the express provisions of the Plan, the
Committee may exercise such powers and authority of the Board of Directors as
the Committee may find necessary to carry out its functions. The Committee shall
exercise its power under the Plan in a manner that preserves the Company’s
federal income tax deduction for payments made under the Plan, in accordance
with the requirements of Section 162(m) (“Section 162(m)”) of the Internal
Revenue Code of 1986, as amended (the “Code”). (All references to Section 162(m)
or any other code section include successor provisions, related regulations and
amendments).   General Responsibilities Subject to the terms herein, for each
Performance Period, the Committee will:   (i) determine the size of the Bonus
Pool;   (ii) establish performance objectives for Awards;   (iii) designate the
key management employees who, in addition to the Chief Executive Officer, will
be Participants in the Plan;   (iv) define Award terms and conditions, including
the Bonus Pool Percentage, for each Participant;   (v) determine and certify the
Award amounts earned;   (vi) determine and make permitted discretionary
reductions to Awards otherwise earned; and

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(vii) decide whether, under what circumstances, and subject to what terms Awards
may be paid on a deferred basis.   All designations, determinations,
interpretations and other decisions made under or with respect to the Plan and
all Awards made under the Plan are within the sole and absolute discretion of
the Committee and will be final, conclusive and binding on all persons,
including the Company, Participants and Beneficiaries or other persons having or
claiming any rights under the Plan.   Performance Objectives (i) Establishment.
Performance objectives for Awards may be expressed in terms of (i) earnings per
share, (ii) share price, (iii) pre-tax profits, (iv) net earnings, (v) return on
equity or assets, (vi) sales, or (vii) any combination of the foregoing.
Performance objectives may be absolute or relative (to prior performance of the
Company or to the performance of one or more other entities or external indices)
and may be expressed in terms of a progression within a specified range. The
performance objectives with respect to a Performance Period shall be established
in writing by the Committee by the earlier of (x) the date on which a quarter of
the Performance Period has elapsed or (y) the date which is ninety (90) days
after the commencement of the Performance Period, and in any event while the
performance relating to the performance objectives remain substantially
uncertain.   (ii) Effect of certain events. At the time of the granting of a
performance award, or at any time thereafter, in either case to the extent
permitted under Section 162(m) and the regulations thereunder without adversely
affecting the treatment of the performance award as performance-based
compensation, the Committee may provide for the manner in which performance will
be measured against the performance objectives (or may adjust the performance
objectives) to reflect the impact of specified corporate transactions,
accounting or tax law changes and other extraordinary or nonrecurring events.  
(iii) Determination of performance. Prior to the payment of any Award to a
Participant who is subject to Section 162(m), the Committee shall certify in
writing that the applicable performance objectives have been satisfied to the
extent necessary for such Award to qualify as performance based compensation.  
Limitation on Awards Notwithstanding any other provisions of this Plan, the
aggregate amount of Awards payable under this Plan in any one fiscal year shall
equal 5% of the annual net income of the Company, as determined based on the
Company’s audited financial statements (the “Bonus Pool”).   Designation of
Participants and Bonus Pool Percentages At the time the Committee establishes
performance objectives, the Committee shall (i) designate the key management
employees who, in addition to the Chief Executive Officer, are eligible for
Awards and (ii) determine the percentage of the Bonus Pool (a “Bonus Pool
Percentage”) which shall comprise the Award to each Participant. The Bonus Pool
Percentage of the Chief Executive Officer always shall be at least 50%. The sum
of all Bonus Pool Percentages shall not exceed 100%.

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Payment of Awards Subject to the limitations set forth in this section, Awards
determined under the Plan for a Performance Period will be paid to Participants
in cash and, if the Company’s equity plans allow, in shares of the Company’s
stock or other equity-based awards. Except as provided below, awards will be
paid as soon as practicable following the end of the Performance Period, but in
any event in accordance with Section 409A of the Code (“Section 409A”).

 

Deferral.  The Committee may specify that all or a portion of an Award for any
given Performance Period will be paid on a deferred basis, in accordance with
any Award payment rules the Committee may establish for the Performance Period;
provided, however, that all such deferred payments must comply with
Section 409A.   Continued Employment.  The Committee may require that
Participants for a Performance Period must still be employed as of the end of
the Performance Period and/or as of the later date the Awards for the
Performance Period are announced to be eligible to receive an Awards for the
Performance Period. Any such requirement must be established and announced
within the Applicable Period and may be subject to such exceptions as the
Committee may specify within the Applicable Period.   Performance Period The
Performance Period shall be the applicable fiscal year (which may be prorated in
the Committee’s discretion).   Applicable Period The Applicable Period with
respect to any Performance Period shall be the period beginning on the first day
of the Performance Period and ending on the 90th day of the Performance Period.
  Forfeiture or Proration Within the Applicable Period and subject to the
Committee certificate required for payment of Awards, the Committee may adopt
such forfeiture, proration or other rules that it deems appropriate, in its sole
and absolute discretion, regarding the impact on Awards of (i) a Participant’s
death, disability, voluntary termination of employment, termination of
employment by the Company for cause or the termination of employment by the
Company for reasons other than cause, and (ii) a Change of Control (as defined
in the Company’s 2006 Long-Term Equity Incentive Plan).   Other Plans Awards
will not be treated as compensation for purposes of any other compensation or
benefit plan, program or arrangement of the Company or any subsidiary unless and
except to the extent that the Board of Directors or the Committee determines so
in writing.   Neither the adoption of this Plan nor the submission of the Plan
to the Company’s stockholders for approval shall be construed as limiting the
power of the Board of Directors or the Committee to adopt such other incentive
arrangements as either may deem appropriate.   Legal Compliance The Company will
not make payments of Awards until all applicable requirements imposed by federal
and state laws, rules and regulations, and by any applicable regulatory agency,
have been fully met. No provision in the Plan or action taken under it
authorizes any action that federal or state laws otherwise prohibit.

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The plan is intended to conform with all provisions of Section 162(m) and
Treasury Regulation 1.162-27 to the extent necessary to allow the Company a
federal income tax deduction for Awards as “qualified performance based
compensation.” Awards under the Plan are intended to comply with all of the
provisions of Section 409A and the regulations thereunder.   Notwithstanding
anything in the Plan to the contrary, the Committee must administer the Plan,
and Awards may be granted and paid, only in a manner that conforms to such laws,
rules and regulations. To the extent permitted by applicable law, the Plan will
be treated as amended to the extent necessary to conform to such laws, rules and
regulations.   Tax Withholding The Company may make all appropriate provisions
for the withholding of federal, state and local taxes imposed with respect to
Awards, which provisions may vary with the time and manner of payment.   No
Transfer of Rights Except as and to the extent the law requires, or as the Plan
expressly provides, a Participant’s rights under the Plan may not be assigned,
pledged or otherwise transferred in any way, whether by operation of law or
otherwise or through any legal or equitable proceeding (including bankruptcy),
by the Participant to any person.   Beneficiary Designations Each Participant
may designate in a written form filed with the Committee (or other designated
recipient) the person or persons (the “Beneficiary” or “Beneficiaries”) to
receive the amounts (if any) payable under the Plan if the Participant dies
before the Award payment date for a Performance Period. A Beneficiary
designation filed under this section will not be considered a prohibited
transfer of rights.   A Participant may change a Beneficiary designation at any
time without the Beneficiary’s consent (unless otherwise required by law) by
filing a new written Beneficiary designation with the Committee. A Beneficiary
designation will be effective only if the Company is in receipt of the
designation before the Participant’s death.   If no effective Beneficiary
designation is made, the beneficiary of any amounts due will be the
Participant’s estate.   Amendment or Termination of Plan Subject to the
limitations set forth in this section, the Board may amend, suspend or terminate
the Plan at any time, without the consent of the Participants or their
Beneficiaries.   Without the Participant’s written consent, no amendment or
termination may materially adversely affect the Award rights (if any) of any
already designated Participant for a given Performance Period once the Committee
has announced the Participant designations for such Performance Period.   The
Board or the Committee may make any amendments necessary to comply with
applicable regulatory requirements, including Section 162(m) and Section 409A
and any regulations thereunder.

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The Board must submit any Plan amendment to the Company’s stockholders for their
approval if and to the extent such approval is required under Section 162(m).  
Limitations on Liability No member of the Committee and no other individual
acting as a director, officer, other employee or agent of the Company will be
liable to any Participant, former Participant, spouse, Beneficiary, or any other
person for any claim, loss, liability, or expenses incurred in connection with
the Plan. No member of the Committee will be liable for any action or
determination (including, but not limited to, any decision not to act) made in
good faith with respect to the Plan or Award under the Plan. If a Committee
member intended to qualify as an “outside director” under Section 162(m) does
not in fact so qualify, the mere fact of such nonqualification will not
invalidate any Award or other action made by the Committee under the Plan that
otherwise was validly made under the Plan.   The Company will indemnify and hold
harmless each member of the Committee, director, officer, other employee or
agent of the Company to whom it or another has delegated or does delegate any
duty or power relating to the administration or interpretation of the Plan,
against any cost or expense (including attorneys’ fees) or liability (including
any sum paid in settlement of a claim with the Board’s approval) arising out of
any act or omission to act concerning this Plan unless arising out of such
person’s own fraud and bad faith.   No Employment Contract Nothing contained in
this Plan constitutes an employment contact between the Company and the
Participants. The Plan does not give any Participant any right to be retained in
the Company’s employ, and it does not enlarge or diminish the Company’s right to
end the Participant’s employment or other relationship with Company.  
Applicable Law The laws of the State of Delaware (other than its choice of law
provisions) govern this Plan and its interpretation.   Duration of the Plan The
Plan will remain effective until terminated by the Board, provided, however,
that the continued effectiveness of the Plan will be subject to the approval of
the Company’s stockholders at such times and in such manner as Section 162(m)
may require.   Disclosure and Approval of the Plan The Plan must be submitted to
the Company’s stockholders for their approval. The specific terms of the Plan,
including the class of employees eligible to be Participants and the terms of
payments of Awards, must be disclosed to the stockholders to the extent
Section 162(m) requires. The stockholders must approve the Plan by separate vote
after such disclosure. If the stockholders do not approve the Plan, the Plan
will be treated as void and of no effect.

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