Exhibit 10.1(i)

SPY INC.

2004 STOCK INCENTIVE PLAN

(AMENDED AND RESTATED SEPTEMBER 13, 2011)

STOCK APPRECIATION RIGHTS AGREEMENT

SPY Inc., a Delaware corporation (the “Company”), hereby grants a Stock
Appreciation Right with respect to its Shares to the Participant named below.
The terms and conditions of the SAR are set forth in this cover sheet, in the
attachment and in the Company’s 2004 Stock Incentive Plan (the “Plan”).

Award Date:                     , [YEAR]

Name of Participant and Address:

_____________________________________________

Participant’s Social Security Number:             -            -            

Number of Shares Subject to SAR:                             

Exercise Price per Share: $            .            

Fair Market Value of a Share on Date of SAR Grant: $            .            

Expiration Date:             , [YEAR]

Vesting Calculation Date:             , [YEAR]

 

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Vesting Schedule.

Subject to all the terms of the attached Agreement, your right to exercise this
SAR incrementally vests as to [PROPORTION] of the total Number of Shares subject
to this SAR, as shown above, on each of the first [NUMBER] anniversaries of the
Vesting Calculation Date, subject in all cases to your continued Service. Your
right to exercise this SAR on each such date shall be rounded down to the
nearest whole number of Shares. Upon termination of your Service for any reason,
no further vesting shall occur and any then unvested portion of this SAR shall
be forfeited without consideration. This SAR may also vest on accelerated basis
as described in the Vesting section below in the Agreement.

By signing this cover sheet, you agree to all of the terms and conditions
described in this cover sheet, the attached Agreement and in the Plan, a copy of
which is also enclosed.

 

Participant:
__________________________________________________________________________________________

(Signature)

 

Company:
__________________________________________________________________________________________

(Signature)

 

Title:
__________________________________________________________________________________________

 

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ATTACHMENT

 

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SPY INC.

2004 STOCK INCENTIVE PLAN

STOCK APPRECIATION RIGHTS AGREEMENT

 

The Plan and

Other Agreements

  

The text of the Plan is incorporated in this Agreement by reference. You and the
Company agree to execute such further instruments and to take such further
action as may reasonably be necessary to carry out the intent of this Agreement.
Unless otherwise defined in this Agreement or the attached cover sheet, certain
capitalized terms used in this Agreement are defined in the Plan.

 

This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this SAR. Any prior agreements, commitments or
negotiations concerning this Award are superseded. Should any provision of this
Agreement be determined to be illegal or unenforceable, the other provisions
shall nevertheless remain effective and shall remain enforceable.

 

This SAR is not intended to be deferred compensation under section 409A of the
Code and will be interpreted accordingly.

Vesting   

This SAR is only exercisable before it expires and then only with respect to the
vested portion of the SAR. This SAR will vest according to the Vesting Schedule
on the attached cover sheet, Section 9 in the Plan and in the following
paragraphs of this section.

 

If Participant’s Service is either (i) terminated without Cause (as defined
below) by the Company (or its successor) either on the date of a Change in
Control or during the 12 month period following a Change in Control, or (ii) by
Participant for Good Reason (as defined below) during the 14 month period
following a Change in Control, then the outstanding unvested portion of this
Option shall fully vest on an accelerated basis and become exercisable on the
date of termination of Participant’s Service.

 

For purposes of this Agreement, “Cause” will be determined by the Committee or
by the Company’s Chief Executive Officer in his/her sole discretion and shall
consist of one or more of the following: (i) Commission by Participant of a
felony or any lesser crime or offense involving fraud, embezzlement, dishonesty,
breach of trust, or breach of fiduciary duty; or (ii) Conduct by Participant
that has caused demonstrable and serious injury to the Company or any of its
affiliates, monetary or otherwise; or (iii) The order of a regulatory agency
that Participant be removed from any office, authority, or employment with the
Company; or (iv) Willful misconduct, refusal to perform, or substantial
disregard of duties properly assigned to Participant by the Company; or (v)
Breach by Participant of duty of loyalty to the Company or any of its affiliates
or other act of fraud or dishonesty with respect to the Company or any of its
affiliates; or (vi) Breach by Participant of the terms of any agreement between
or among Participant and the Company; or (vii) Participant’s violation of any
policy of the Company.

 

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   For purposes of this Agreement, “Good Reason” means the occurrence of any of
the following events or conditions (and the initial existence of the Good Reason
event must have occurred on or after a Change in Control) unless consented to by
the Participant (and the Participant shall be deemed to have consented to any
such event or condition unless the Participant provides written notice to the
Company of the Participant’s non-acquiescence within 30 days of the initial
occurrence of such event or condition and such notice must describe in detail
the basis and underlying facts supporting Participant’s belief that a Good
Reason event has occurred (the “Good Reason Notice”)): (i) a change in the
Participant’s responsibilities or duties which represents a material and
substantial diminution in the Participant’s responsibilities or duties as in
effect immediately preceding the consummation of a Change in Control; (ii) a
reduction in the Participant’s base salary to a level below that in effect at
any time within six (6) months preceding the consummation of a Change in Control
or at any time thereafter; provided that an across-the-board reduction in the
salary level of substantially all other individuals in positions similar to the
Participant’s by the same percentage amount shall not constitute such a salary
reduction; or (iii) requiring the Participant to be based at any place outside a
50-mile radius from the Participant’s job location prior to the Change in
Control except for reasonably required travel on business which is not
materially greater than such travel requirements prior to the Change in Control.
After its receipt of the Good Reason Notice, the Company shall then have thirty
(30) days to cure or remedy the alleged Good Reason event. Executive’s
resignation for Good Reason can only be effective if the Company has not cured
or remedied the Good Reason event within thirty (30) days after the Company’s
receipt of the Good Reason Notice and in such case Executive’s Service shall
terminate for Good Reason upon the expiration of the 30 day cur/remedy period.
If the Company does timely cure or remedy the Good Reason event, then
Participant may either resign his/her Service without Good Reason or Participant
may continue to remain in Service in an at-will capacity with the Company.

 

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Term    Your SAR will expire in any event at the close of business at Company
headquarters on the Expiration Date, as shown on the cover sheet. Your SAR will
expire earlier if your Service terminates, as described in this Agreement.
Termination - General    If your Service terminates for any reason (except in
the case of death or Total and Permanent Disability), other than for Cause, then
your vested SAR will expire at the close of business at Company headquarters on
the date that is three (3) months after your termination date. Termination for
Cause    If your Service is terminated for Cause or if you commit an act(s) of
Cause while this SAR is outstanding, as determined by the Committee in its sole
discretion, then you shall immediately forfeit all rights to your SAR and the
SAR shall immediately expire. Death or Total and Permanent Disability    If your
Service terminates because of your death or Total and Permanent Disability, then
your vested SAR will expire at the close of business at Company headquarters on
the date twelve (12) months after the date of your death or Total and Permanent
Disability. During that twelve (12) month period, your estate or heirs may
exercise the vested portion of your SAR.

 

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Leaves of Absence   

For purposes of this Award, your Service does not terminate when you go on a
bona fide leave of absence that was approved by the Company (or its Parent,
Subsidiary or Affiliate) in writing, if the terms of the leave provide for
continued Service crediting, or when continued Service crediting is required by
applicable law. Your Service terminates in any event when the approved leave
ends, unless you immediately return to active work.

 

If you go on a leave of absence, then the vesting schedule specified above may
be adjusted in accordance with the Company’s leave of absence policy or the
terms of your leave. If you commence working on a part-time basis, then the
vesting schedule specified above be adjusted in accordance with the Company’s
part-time work policy or the terms of an agreement between you and the Company
pertaining to your part-time schedule.

 

The Company determines which leaves count for this purpose (along with
determining the effect of a leave of absence on vesting of the Award), and when
your Service terminates for all purposes under the Plan.

Notice of Exercise   

When you wish to exercise this SAR, you must notify the Company by properly
completing and filing the attached “Notice of Exercise” form with the Company.
Your notice must specify the whole number of Shares with respect to which you
wish to exercise this SAR. The notice can only become effective after it is
received by the Company.

 

If someone else wants to exercise this SAR after your death, that person must
prove to the Company’s satisfaction that he or she is entitled to do so.

Form of Payment    Following exercise of a vested SAR, you will receive payment
for the difference between the aggregate Fair Market Value of the Shares with
respect to which the SAR is exercised and the aggregate Exercise Price. This
payment will be made as soon as reasonably practicable following your exercise
and the receipt or retention of applicable withholding taxes by the Company. The
form of payment will either be in cash and/or in Shares in the discretion of the
Company having an aggregate equivalent fair market value.

 

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Taxes and Withholding   

You will not be allowed to exercise this SAR unless you make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of the grant, exercise, vesting or dispositions of this SAR or the underlying
Shares. These arrangements may include withholding Shares that otherwise would
be issued to you when you exercise this SAR. The value of these Shares,
determined as of the effective date of the SAR exercise, will be applied to the
withholding taxes.

 

You will be solely responsible for payment of any and all applicable taxes
associated with this SAR.

Restrictions on Exercise and Resale or Transfer   

By signing this Agreement, you agree not to exercise this SAR or sell any Shares
acquired under this SAR at a time when applicable laws, regulations or Company
or underwriter trading policies prohibit exercise, sale or issuance of Shares.
The Company will not permit you to exercise this SAR if the issuance of Shares
or payment of cash at that time would violate any law or regulation.

 

The Company shall have the right to designate one or more periods of time, each
of which generally will not exceed one hundred eighty (180) days in length,
during which this SAR shall not be exercisable, and any Shares acquired under
his SAR shall not be sold, if the Company determines (in its sole discretion)
that such limitation on exercise could in any way facilitate a lessening of any
restriction on transfer pursuant to the Securities Act or any state securities
laws with respect to any issuance of securities by the Company, facilitate the
registration or qualification of any securities by the Company under the
Securities Act or any state securities laws, or facilitate the perfection of any
exemption from the registration or qualification requirements of the Securities
Act or any applicable state securities laws for the issuance or transfer of any
securities. Such limitation on exercise shall not alter the vesting schedule set
forth in this Agreement other than to limit the periods during which this SAR
shall be exercisable.

 

If the sale of Shares under the Plan is not registered under the Securities Act,
but an exemption is available which requires an investment or other
representation, you shall represent and agree at the time of exercise that the
Shares being acquired upon exercise of this SAR are being acquired for
investment, and not with a view to the sale or distribution thereof, and shall
make such other representations as are deemed necessary or appropriate by the
Company and its counsel.

 

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You will also be required, as a condition of exercise of this SAR, to enter into
any Company stockholders agreement or other agreements that are applicable to
stockholders.

 

In order to ensure compliance with any restrictions on transfer set forth in
this Agreement or in the Plan, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and, if the Company transfers its
own securities, it may make appropriate notations to the same effect in its own
records. The Company shall not be required (i) to transfer on its books any
Shares that have been sold or otherwise transferred in violation of any of the
provisions of this Agreement or (ii) to treat as owner of such Shares or to
accord the right to vote or pay dividends to any purchaser or other transferee
to whom such Shares shall have been so transferred.

Transfer of SAR    Prior to your death, only you may exercise this SAR. You
cannot transfer or assign this SAR. For instance, you may not sell this SAR or
use it as security for a loan. If you attempt to do any of these things, this
SAR will immediately become invalid and forfeited. You may, however, dispose of
this SAR in your will. Regardless of any marital property settlement agreement,
the Company is not obligated to honor a notice of exercise from your spouse or
former spouse, nor is the Company obligated to recognize such individual’s
interest in your SAR in any other way. Retention Rights    Your SAR or this
Agreement does not give you the right to be retained by the Company (or any
Parent or any Subsidiaries or Affiliates) in any capacity. The Company (or any
Parent and any Subsidiaries or Affiliates) reserves the right to terminate your
Service at any time and for any reason. Stockholder Rights    You, or your
estate or heirs, have no rights as a stockholder of the Company until a
certificate for your SAR’s Shares (if any) has been issued. No adjustments are
made for dividends or other rights if the applicable record date occurs before
your stock certificate is issued, except as described in the Plan. Extraordinary
Compensation    This Award and the Shares subject to the Award are not intended
to constitute or replace any pension rights or compensation and are not to be
considered compensation of a continuing or recurring nature, or part of your
normal or expected compensation, and in no way represent any portion of your
salary, compensation or other remuneration for any purpose, including but not
limited to, calculating any severance, resignation, termination, redundancy,
dismissal, end of Service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments.

 

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Adjustments    In the event of a stock split, a stock dividend or a similar
change in the Company stock, the number of Shares covered by this SAR (rounded
down to the nearest whole number) and the Exercise Price per Share may be
adjusted pursuant to the Plan. Your SAR shall be subject to the terms of the
agreement of merger, liquidation or reorganization in the event the Company is
subject to such corporate activity. Legends   

All certificates representing the Shares issued (if any) upon exercise of this
SAR shall, where applicable, have endorsed thereon the following legends and any
other legend the Company determines appropriate:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT
BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN
INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

 

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS
NOT REQUIRED.”

Venue    The parties agree that any suit, action, or proceeding arising out of
or relating to the Notice, the Plan or this Agreement shall be brought in the
United States District Court for the Southern District of California (or should
such court lack jurisdiction to hear such action, suit or proceeding, in a
California state court in the County of San Diego) and that the parties shall
submit to the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection the party may have to the laying
of venue for any such suit, action or proceeding brought in such court. If any
one or more provisions of this paragraph shall for any reason be held invalid or
unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its application
valid and enforceable.

 

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Notice    Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery, upon deposit for
delivery by an internationally recognized express mail courier service or upon
deposit in the United States mail by certified mail (if the parties are within
the United States), with postage and fees prepaid, addressed to the other party
at its address as shown in these instruments, or to such other address as such
party may designate in writing from time to time to the other party. The
Participant agrees to promptly notify the Company upon any change in his/her
residence address. Applicable Law    This Agreement is to be construed in
accordance with and governed by the internal laws of the State of Delaware
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
Delaware to the rights and duties of the parties. Voluntary Participant    You
acknowledge that you are voluntarily participating in the Plan. No Rights to
Future Awards    Your rights, if any, in respect of or in connection with this
SAR or any other Awards are derived solely from the discretionary decision of
the Company to permit you to participate in the Plan and to benefit from a
discretionary future Award. By accepting this SAR, you expressly acknowledge
that there is no obligation on the part of the Company to continue the Plan
and/or grant any additional Awards to you or benefits in lieu of SARs or any
other Awards even if Awards have been granted repeatedly in the past. All
decisions with respect to future Awards, if any, will be at the sole discretion
of the Committee. Future Value    The future value of the underlying Shares is
unknown and cannot be predicted with certainty. If the underlying Shares do not
increase in value after the Award Date, the SAR will have little or no value. If
you exercise the SAR and obtain Shares, the value of the Shares acquired upon
exercise may increase or decrease in value, even below the Exercise Price.

 

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No Advice Regarding Grant    The Company has not provided any tax, legal or
financial advice, nor has the Company made any recommendations regarding your
participation in the Plan, or your acquisition or sale of the underlying Shares.
You are hereby advised to consult with your own personal tax, legal and
financial advisors regarding your participation in the Plan before taking any
action related to the Plan or this SAR. No Right to Damages    You will have no
right to bring a claim or to receive damages if any portion of the SAR is
cancelled or expires unexercised. The loss of existing or potential profit in
the SAR will not constitute an element of damages in the event of the
termination of your Service for any reason, even if the termination is in
violation of an obligation of the Company or a Parent or a Subsidiary or an
Affiliate to you. Data Privacy    You hereby explicitly and unambiguously
consent to the collection, use and transfer, in electronic or other form, of
your personal data as described in this document by the Company for the
exclusive purpose of implementing, administering and managing your participation
in the Plan. You understand that the Company holds certain personal information
about you, including, but not limited to, name, home address and telephone
number, date of birth, social security or insurance number or other
identification number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all Awards or any other
entitlement to Shares awarded, cancelled, purchased, exercised, vested, unvested
or outstanding in your favor for the purpose of implementing, managing and
administering the Plan (“Data”). You understand that the Data may be transferred
to any third parties assisting in the implementation, administration and
management of the Plan, that these recipients may be located in your country or
elsewhere and that the recipient country may have different data privacy laws
and protections than your country. You authorize the recipients to receive,
possess, use, retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing your participation in the
Plan, including any requisite transfer of such Data, as may be required to a
broker or other third party with whom you may elect to deposit any Shares
acquired under the Plan. Construction    The captions used in this Agreement are
inserted for convenience and shall not be deemed a part of the Award for
construction or interpretation. Except when otherwise indicated by the context,
the singular shall include the plural and the plural shall include the singular.
Use of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.

 

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Other Information    You agree to receive stockholder information, including
without limitation copies of any annual report, proxy statement and/or any
current/periodic report, from the Company’s website at
http://www.orangetwentyone.com, if the Company wishes to provide such
information through its website.

By signing the cover sheet of this Agreement, you agree to all of the terms and
conditions described above and in the Plan and Plan prospectus. Any
inconsistency between this Agreement and the Plan shall be resolved by reference
to the Plan.

 

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SPY INC.

NOTICE OF EXERCISE OF STOCK APPRECIATION RIGHT (“SAR”) BY PARTICIPANT

SPY Inc.

2070 Las Palmas Drive, Carlsbad, CA 92011

Attention: Secretary

 

Re: Exercise of SAR

 

  ______________________________________

[PRINT NAME OF PARTICIPANT]

Pursuant to the SAR Agreement dated             ,              between SPY Inc.,
a Delaware corporation, (the “Company”) and me, made pursuant to the 2004 Stock
Incentive Plan (the “Plan”), I hereby request to exercise my SAR with respect to
             shares (whole number only) of common stock of the Company (the
“Shares”), at the exercise price of $             per Share. I further
understand and agree that I will timely satisfy any and all applicable tax
withholding obligations as a condition of this SAR exercise.

If Shares will be issued to me as a result of this exercise of my SAR, with the
number of any Shares determined by the Committee, then please issue such Shares
as follows:

 

Check one: ¨ The Shares certificate is to be issued and registered in my name
only.

 

     ¨ The Shares certificate is to be issued and registered in my name and my
spouse’s name.

 

          _______________________________________

          [PRINT SPOUSE’S NAME, IF CHECKING SECOND BOX]

 

          Check one (if checked second box above):

 

          ¨ Community Property or ¨ Joint Tenants With Right of Survivorship

I acknowledge that I have received, understand and continue to be bound by all
of the terms and conditions set forth in the Plan and in the SAR Agreement.

 

Dated:             

              (Participant’s Signature)     (Spouse’s Signature)**     **Spouse
must sign this Notice of Exercise if listed above.                     (Full
Address)     (Full Address)

 

* THIS NOTICE OF EXERCISE MAY BE REVISED BY THE COMPANY AT ANY TIME WITHOUT
NOTICE.

 

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