EXHIBIT 10.1

 
LOJACK CORPORATION
CASH INCENTIVE PLAN
 
THE PLAN
 
LoJack Corporation, a Massachusetts corporation (the “Company”), has established
the LoJack Corporation Cash Incentive Plan (the “Plan”).
 
1.  Purpose
 
The purpose of this Plan is to advance the interests of the Company by providing
a means to pay performance-based short-term and long-term incentive cash
compensation to those employees upon whose judgment and efforts the Company is
largely dependent for the successful conduct of its operations.  It is
anticipated that the opportunity to earn such cash compensation will stimulate
the efforts of such employees on behalf of the Company, strengthen their desire
to continue in the service of the Company, and will prove attractive to
promising new employees and will assist the Company in attracting such
employees.
 
2.  Definitions
 
As used in this Plan and in connection with any Award, the terms set forth below
shall have the following meanings:
 
(a)  “Award” means the opportunity to earn cash compensation under this Plan,
subject to the achievement of one or more Performance Goals with respect to a
Performance Period and such other terms and conditions as the Committee may
impose in its sole discretion.
 
(b)  “Board” means the Board of Directors of the Company.
 
(c)  “Committee” has the meaning specified in Section 3(a).
 
(d)  “Company” has the meaning specified in the first paragraph.
 
(e)  “Participant” means any employee of the Company or its Subsidiaries who has
been granted an Award.
 
(f)  “Performance Goal(s)” means one or more measures determined with respect to
one or more of the following metrics as applied to the Company and its
Subsidiaries as a whole or solely to the Company or a Subsidiary or a division
or other unit of the Company or a Subsidiary:  revenue; operating income; net
income; basic or diluted earnings per share; return on revenue; return on
assets; return on equity; return on total capital; or total shareholder return.
 
(g)  The “Performance Period” for an Award means the period of time for the
measurement of the extent to which the applicable Performance Goals are
attained.
 

 
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(h)  “Plan” means this LoJack Corporation 2009 Cash Incentive Plan, as amended
and in effect from time to time.
 
(i)  “Subsidiary” means a corporation in which the Company directly or
indirectly owns 25% or more of the total combined voting power or value of all
classes of stock or, in the case of an unincorporated entity, a 25% or more
interest in the capital and/or profits.  A Subsidiary may be a U.S. domestic or
foreign entity.
 
(j)  “Termination of Employment” of a Participant means the termination of the
Participant’s employment with the Company and the Subsidiaries.
 
3.  Administration
 
(a)  Unless the Board provides otherwise, this Plan shall be administered by the
Compensation Committee of the Board (the “Committee”).  The Committee shall have
full and final authority, in its discretion but subject to the express
provisions of this Plan, to determine the eligibility for Awards among all
Company and Subsidiary employees, establish the terms and conditions of Awards
including, without limitation, Performance Goals and the related Performance
Period, determine the extent to which Awards are actually earned, interpret this
Plan, and make all determinations necessary or advisable for the administration
of this Plan.
 
(b)  The determination of the Committee on all matters relating to this Plan and
all Awards shall be made in its sole discretion, and shall be conclusive and
final.  No member of the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any Award.
 
4.  Eligibility
 
Awards may be granted to any employee of the Company or any Subsidiary.
 
5.  Establishment of Awards
 
(a)  Basic Terms of Awards.  In connection with the grant of each Award, the
Committee shall (i) determine the Performance Goals and Performance Period
applicable to the Award, (ii) establish the formula for determining the amounts
payable based upon achievement of the applicable Performance Goals, (iii)
determine the consequences for the Award of the Participant’s Termination of
Employment for various reasons or the Participant’s demotion or promotion during
the Performance Period, and (iv) establish such other terms and conditions for
the Award as it may deem appropriate.
 
(b)  Establishment of Performance Goals.  Performance Goals may take the form of
absolute goals or goals relative to the performance of one or more other
companies comparable to the Company or of an index covering multiple
companies.  In establishing Performance Goals, the Committee may exclude the
effect of acquisitions or dispositions of business units, restructuring charges,
discontinued operations, extraordinary items, cumulative effects of accounting
changes, and
 

 
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other unusual or nonrecurring items, and asset impairment and the effect of
foreign currency fluctuations, in each case as those terms are defined under
generally accepted accounting principles.  If Performance Goals are not fully
achieved, the Committee may provide that less than 100% of an Award may be
paid.  The Committee may also, in its discretion, reduce (including to $0) an
Award based on any of the following criteria:  extent to which objective
financial measurements achieved for the fiscal year satisfied the Company’s
short-term or long-term goals; shareholder confidence in the Company, as
evidenced in part by the Company’s stock price; and the overall performance and
financial health of the Company and its Subsidiaries.
 
(c)  Payment of Award.  Payment of an Award shall only be made after
determination by the Committee of the Participant’s entitlement thereto under
the Plan, except that the Committee may at any time provide that achievement of
Performance Goals will be waived in whole or in part upon the death or
disability of the Participant or other Termination of Employment.  Any payment
made to a Participant pursuant to an Award shall be made no later than March 15
of the calendar year following the last day of the applicable Performance Period
provided the Participant remains employed on the payment date (or the
Participant’s death or disability or other Termination of Employment, if
applicable) and shall be subject to all applicable federal, state, local, and
foreign tax withholding.  The Committee may, in its discretion, waive the
requirement that the Participant remain employed on the actual payment date.
 
6.  Miscellaneous Provisions
 
(a)  Non-Uniform Awards.  The Committee’s Awards hereunder, including the terms
and conditions applicable thereto, need not be uniform and the Committee need
not treat similarly situated employees in a similar manner.
 
(b)  Nontransferability.  Awards granted hereunder shall not be assignable or
transferable other than by will or the laws of descent and distribution.
 
(c)  Funding.  The Company shall not be required to fund, or otherwise segregate
assets to be used for payment of, benefits under this Plan.
 
(d)  No Employment Rights.  Neither the establishment of this Plan, nor the
granting of any Award, shall be construed to (i) give any Participant the right
to remain employed by the Company or any of its Subsidiaries or to any benefits
not specifically provided by this Plan or (ii) in any manner modify the right of
the Company or any of its Subsidiaries to modify, amend or terminate any of its
employee benefit plans.
 
(e)  Controlling Law.  The law of the Commonwealth of Massachusetts, except its
law with respect to choice of law, shall be controlling in all matters relating
to this Plan.
 

 
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7.  Amendment and Termination of this Plan and Awards
 
The Board may from time to time in its discretion amend or modify this Plan or
terminate the Plan without the approval of the stockholders of the Company;
provided that except as provided in the next sentence, no such amendment or
termination shall adversely affect any previously-granted Award without the
consent of the Participant.  Notwithstanding the foregoing, the Board may from
time to time amend this Plan, and the Committee may from time to time amend
Awards, without the consent of affected Participants  to comply with applicable
law, stock exchange rules or accounting rules.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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