**Exhibit 10.2**

 

**COBRAELECTRONICS CORPORATION**

 

**2010 EQUITYINCENTIVE PLAN**

 

**I. INTRODUCTION**

 

**1.1*** ***Purposes****.**  The purposes of the CobraElectronics Corporation 2010 Equity Incentive Plan (this “Plan”) are (i) toalign the interests of the Company’s stockholders and the recipients of awardsunder this Plan by increasing the proprietary interest of such recipients inthe Company’s growth and success, (ii) to advance the interests of theCompany by attracting and retaining directors, officers and other employees and(iii) to motivate such persons to act in the long-term best interests ofthe Company and its stockholders. As of the effective date of the Plan, nofurther awards shall be granted under the Prior Plans, as defined in Section 1.2.

 

**1.2*** ***CertainDefinitions****.**

 

**“Agreement”** shall mean the writtenagreement evidencing an award hereunder between the Company and the recipientof such award.

 

**“Board”** shall mean the Board ofDirectors of the Company.

 

**“Change in Control”** shall have themeaning set forth in Section 6.8(b).

 

**“Code”** shall mean the InternalRevenue Code of 1986, as amended.

 

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

 

**“Common Stock”** shall mean the commonstock, par value $0.331/3 per share, of the Company, and all rightsappurtenant thereto.

 

**“Company”** shall mean CobraElectronics Corporation, a Delaware corporation, or any successor thereto.

 

**“Corporate Transaction”** shall have themeaning set forth in Section 6.8(b).

 

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

 

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

 

**“Fair Market Value”** shall mean theclosing transaction price of a share of Common Stock as reported on NASDAQ onthe date as of which such value is being determined or, if the Common Stock isnot listed on NASDAQ, the closing transaction price of a share of Common Stockon the principal national stock exchange on which the Common Stock is traded onthe date as of which such value is being determined or, if there shall be no reportedtransactions for such date, on the next preceding date for which transactionswere reported; provided, however, that if the CommonStock is not listed on a national stock exchange or if Fair Market Value forany date cannot be so determined, Fair Market Value shall be determined by theCommittee by whatever means or method as the Committee, in the good faithexercise of its discretion, shall at such time deem appropriate and incompliance with Section 409A of the Code.

 

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

 

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

 

**“NASDAQ”** shall mean the Nasdaq StockMarket of the National Association of Securities Dealers, Inc. AutomatedQuotation System.

 

**“Non-Employee Director”** shall mean anydirector of the Company who is not an officer or employee of the Company or anySubsidiary.

 

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

 

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

 

**“Performance Measures”** shall mean thecriteria and objectives, established by the Committee, which shall be satisfiedor met (i) as acondition to the grant or exercisability of all or a portion of an option orSAR or (ii) during the applicable Restriction Period or Performance Periodas a condition to the vesting of the holder’s interest, in the case of a RestrictedStock 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 theshares of Common Stock subject to such award or of payment with respect to suchaward. To the extent necessary for an award to be qualified performance-basedcompensation under Section 162(m) of the Code and the regulationsthereunder, such criteria and objectives shall include one or more of thefollowing corporate-wide or subsidiary, division, operating unit or individualmeasures, stated in either absolute terms or relative terms, such as rates ofgrowth or improvement: the attainment by a share of Common Stock of a specifiedFair Market Value for a specified period of time, earnings per share, return tostockholders (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 expenseafter taxes, return on investment, return on investment capital, return onoperating costs, economic value created, operating margin, gross margin, netincome before or after taxes, pretax earnings before interest, depreciationand/or amortization, pretax operating earnings after interest expense andbefore incentives, and/or extraordinary or special items, operating earnings,net cash provided by operations, and strategic business criteria, consisting ofone or more objectives based on meeting specified market penetration,geographic business expansion goals, cost targets, days sales outstandinggoals, customer satisfaction, reductions in errors and omissions, reductions inlost business, management of employment practices and employee benefits,supervision of litigation and information technology, quality and quality auditscores, productivity, efficiency, and goals relating to acquisitions ordivestitures, or any combination of the foregoing. In the sole discretion ofthe Committee, but subject to Section 162(m) of the Code, theCommittee may amend or adjust the Performance Measures or other terms andconditions of an outstanding award in recognition of unusual or nonrecurringevents affecting the Company or its financial statements or changes in law oraccounting principles.

 

**“Performance Option”** shall mean anIncentive Stock Option or Nonqualified Stock Option, the grant of which or theexercisability of all or a portion of which is contingent upon the attainmentof specified Performance Measures within a specified Performance Period.

 

**“Performance Period”** shall mean anyperiod designated by the Committee during which (i) the PerformanceMeasures applicable to an award shall be measured and (ii) the conditionsto vesting applicable to an award shall remain in effect.

 

**“Performance Unit”** shall mean aright to receive, contingent upon the attainment of specified PerformanceMeasures within a specified Performance Period, a specified cash amount or, inlieu thereof, shares of Common Stock having a Fair Market Value equal to suchcash amount.

 

**“Performance Unit Award”** shall mean anaward of Performance Units under this Plan.

 

**“Prior Plans”** shall mean the Company’s1995 Key Employees Nonqualified and Incentive Stock Option Plan, 1998 StockOption Plan, 2000 Stock Option Plan, 2000 Outside Directors Stock Option Planand 2002 Outside Directors Stock Option Plan.

 

**“Restricted Stock”** shall meanshares of Common Stock which are subject to a Restriction Period and which may,in addition thereto, be subject to the attainment of specified Performance Measureswithin a specified Performance Period.

 

**“Restricted Stock Award”** shall mean anaward of Restricted Stock under this Plan.

 

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**“Restricted Stock Unit”** shall mean aright to receive one share of Common Stock or, in lieu thereof, the Fair MarketValue of such share of Common Stock in cash, which shall be contingent upon theexpiration of a specified Restriction Period and which may, in additionthereto, be contingent upon the attainment of specified Performance Measureswithin a specified Performance Period.

 

**“Restricted Stock Unit Award”** shall mean anaward of Restricted Stock Units under this Plan.

 

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

 

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

 

**“Stock Award”** shall mean a RestrictedStock 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 inwhich the Company owns, directly or indirectly, an equity interest possessingmore than 50% of the combined voting power of the total outstanding equityinterests of such entity.

 

**“Tandem SAR”** shall mean an SAR which isgranted in tandem with, or by reference to, an option (including a NonqualifiedStock Option granted prior to the date of grant of the SAR), which entitles theholder thereof to receive, upon exercise of such SAR and surrender forcancellation of all or a portion of such option, shares of Common Stock (whichmay be Restricted Stock) with an aggregate value equal to the excess of theFair Market Value of one share of Common Stock on the date of exercise over thebase price of such SAR, multiplied by the number of shares of Common Stocksubject to such option, or portion thereof, which is surrendered.

 

**“Tax Date”** shall have the meaning setforth in Section 6.5.

 

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

 

**“Unrestricted Stock Award”** shall mean anaward of Unrestricted Stock under this Plan.

 

**1.3*** ***Administration****.**  This Plan shall be administeredby the Committee. Any one or a combination of the following awards may be madeunder this Plan to eligible persons: (i) options to purchase shares ofCommon Stock in the form of Incentive Stock Options or Nonqualified StockOptions (which may include Performance Options), (ii) SARs in the form ofTandem SARs or Free-Standing SARs, (iii) Stock Awards in the form ofRestricted Stock or Restricted Stock Units and (iv) Performance Units. TheCommittee shall, subject to the terms of this Plan, select eligible persons forparticipation in this Plan and determine the form, amount and timing of each award to such personsand, if applicable, the number of shares of Common Stock, the number of SARs,the number of Restricted Stock Units and the number of Performance Unitssubject 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 otherterms and conditions of the award, including, without limitation, the form ofthe Agreement evidencing the award. The Committee may, in its sole discretionand for any reason at any time, subject to the requirements of Section 162(m) ofthe Code and regulations thereunder in the case of an award intended to bequalified performance-based compensation, take action such that (i) any orall outstanding options and SARs shall become exercisable in part or in full, (ii) allor a portion of the Restriction Period applicable to any outstanding RestrictedStock or Restricted Stock Units shall lapse, (iii) all or a portion of thePerformance Period applicable to any outstanding Restricted Stock, RestrictedStock Units or Performance Units shall lapse and (iv) the PerformanceMeasures (if any) applicable to any outstanding award shall be deemed to besatisfied at the target or any other level. The Committee shall, subject to theterms of this Plan, interpret this Plan and the application thereof, establish rules andregulations it deems necessary or desirable for the administration of this Planand may impose, incidental to the grant of an award, conditions with respect tothe award, such as limiting competitive employment or other activities. Allsuch interpretations, rules, regulations and conditions shall be conclusive andbinding on all parties.

 

The Committee may delegate some or all of its power and authorityhereunder to the Board or, subject to applicable law, to the Chief ExecutiveOfficer or other executive officer of the Company as the Committee deemsappropriate; provided, however, that (i) theCommittee may not delegate its power and authority to the Board or the ChiefExecutive Officer or other executive officer of the Company with regard to thegrant of an award to any person who is a “covered employee” within the meaningof Section 162(m) of the Code or who, in the Committee’s judgment, islikely to be a covered employee at any time during the period an awardhereunder to such employee would be outstanding and (ii) the Committee maynot delegate its power and authority to the Chief Executive Officer or otherexecutive officer of the Company with regard to the selection for participationin this Plan of an officer, 

 

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directoror other person subject to Section 16 of the Exchange Act or decisionsconcerning 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 ExecutiveOfficer nor any other executive officer to whom the Committee delegates any ofits power and authority hereunder, shall be liable for any act, omission,interpretation, construction or determination made in connection with this Planin good faith, and the members of the Board and the Committee and the ChiefExecutive Officer or other executive officer shall be entitled toindemnification and reimbursement by the Company in respect of any claim, loss,damage or expense (including attorneys’ fees) arising therefrom to the fullextent permitted by law (except as otherwise may be provided in the Company’sCertificate of Incorporation and/or By-laws) and under any directors’ andofficers’ liability insurance that may be in effect from time to time.

 

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

 

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

 

**1.5*** ***SharesAvailable****.**  Subject to adjustment as provided in Section 6.7and to all other limits set forth in this Section 1.5, 800,000 shares ofCommon Stock shall be available for all awards under this Plan, reduced by thesum of the aggregate number of shares of Common Stock under this Plan whichbecome subject to outstanding options, outstanding Free-Standing SARs andoutstanding Stock Awards and delivered upon the settlement of Performance UnitsAwards. 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 reasonof (i) the expiration, termination, cancellation or forfeiture of suchaward (excluding shares subject to an option cancelled upon settlement inshares of a related tandem SAR or shares subject to a tandem SAR cancelled uponexercise of a related option) or (ii) the settlement of such award incash, then such shares of Common Stock shall again be available under thisPlan.

 

Subject to adjustment as provided in Section 6.7 and all otherlimits set forth in this Section 1.5, 800,000 shares of Common Stock shallbe available for Stock Awards and Performance Unit Awards settled with stockunder this Plan, reduced by the sum of the aggregate number of shares of CommonStock which become subject to outstanding Stock Awards. To the extent thatshares of Common Stock subject to an outstanding restricted stock or restrictedstock unit award granted under the Plan are not issued or delivered by reasonof (i) the expiration, termination, cancellation or forfeiture of suchaward or (ii) the settlement of such award in cash, then such shares ofCommon 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 madeavailable for issuance under this Plan if such shares are: (i) shares thatwere subject to a stock-settled SAR and were not issued upon the net settlementor net exercise of such SAR, (ii) shares used to pay the exercise price ofan Incentive Stock Option or Nonqualified Stock Option, (iii) sharesdelivered to or withheld by the Company to pay withholding taxes related to anaward under this Plan, or (iv) shares repurchased on the open market withthe proceeds of an option exercise.

 

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

 

To the extent necessary for an award to be qualified performance-basedcompensation under Section 162(m) of the Code and the regulationsthereunder (i) the maximum number of shares of Common Stock with respectto which options or SARs or a combination thereof may be granted during anyfiscal year of the Company to any person shall be 300,000, subject toadjustment as provided in Section 6.7; (ii) the maximum number ofshares of Common Stock with respect to which Stock Awards subject toPerformance Measures may be granted during any fiscal year of the Company toany 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 toPerformance Units granted during any fiscal year of the Company to any personshall be $1,000,000.

 

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**II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS**

 

**2.1*** ***StockOptions****.**  The Committee may, in its discretion, grantoptions to purchase shares of Common Stock to such eligible persons as may beselected by the Committee. Each option, or portion thereof, that is not anIncentive Stock Option, shall be a Nonqualified Stock Option. To the extentthat the aggregate Fair Market Value (determined as of the date of grant) ofshares of Common Stock with respect to which options designated as IncentiveStock Options are exercisable for the first time by a participant during anycalendar year (under this Plan or any other plan of the Company, or any parentor 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 andshall contain such additional terms and conditions, not inconsistent with theterms of this Plan, as the Committee shall deem advisable:

 

(a) **Number ofShares and Purchase Price.  Thenumber of shares of Common Stock subject to an option and the purchase priceper share of Common Stock purchasable upon exercise of the option shall bedetermined by the Committee; provided, however, thatthe purchase price per share of Common Stock shall not be less than 100% of theFair Market Value of a share of Common Stock on the date of grant of suchoption; and provided further, that if an Incentive Stock Optionshall be granted to any person who, at the time such option is granted, owns capital stockpossessing more than ten (10) percent of the total combined voting powerof all classes of capital stock of the Company (or of any parent orSubsidiary) (a “Ten Percent Holder”), the purchase price per share ofCommon Stock shall not be less than the price (currently 110% of Fair MarketValue) required by the Code in order to constitute an Incentive Stock Option.

 

(b) **OptionPeriod and Exercisability.  Theperiod during which an option may be exercised shall be determined by theCommittee; provided, however, that no option shall beexercised later than ten (10) years after its date of grant; andprovided further, that if an Incentive Stock Option shall be granted to aTen Percent Holder, such option shall not be exercised later than five (5) yearsafter its date of grant. The Committee may, in its discretion, determine thatan option is to be granted as a Performance Option and may establish anapplicable Performance Period and Performance Measures which shall be satisfiedor met as a condition to the grant of such option or to the exercisability ofall or a portion of such option. The Committee shall determine whether anoption shall become exercisable in cumulative or non-cumulative installmentsand 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 ofExercise.  An option may be exercised(i) by giving written notice to the Company specifying the number of wholeshares of Common Stock to be purchased and accompanying such notice withpayment therefor in full (or arrangement made for such payment to the Company’ssatisfaction) either (A) in cash, (B) by delivery (either actualdelivery or by attestation procedures established by the Company) of previouslyowned whole shares of Common Stock having an aggregate Fair Market Value,determined as of the date of exercise, equal to the aggregate purchase pricepayable by reason of such exercise, (C) authorizing the Company towithhold whole shares of Common Stock which would otherwise be delivered havingan aggregate Fair Market Value, determined as of the date of exercise, equal tothe amount necessary to satisfy such obligation, (D) except as may beprohibited by applicable law, in cash by a broker-dealer acceptable to theCompany 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 setforth in the Agreement relating to the option, (ii) if applicable, bysurrendering to the Company any Tandem SARs which are cancelled by reason ofthe exercise of the option and (iii) by executing such documents as theCompany may reasonably request. Any fraction of a share of Common Stock whichwould be required to pay such purchase price shall be disregarded and theremaining amount due shall be paid in cash by the optionee. No shares of CommonStock shall be issued and no certificate representing Common Stock shall bedelivered until the full purchase price therefor and any withholding taxesthereon, as described in Section 6.5, have been paid (or arrangement madefor such payment to the Company’s satisfaction).

 

**2.2*** ***StockAppreciation Rights****.**  The Committee may, in its discretion, grantSARs to such eligible persons as may be selected by the Committee. TheAgreement relating to an SAR shall specify whether the SAR is a Tandem SAR or aFree-Standing SAR.

 

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

 

(a) **Number ofSARs and Base Price.  The number ofSARs subject to an award shall be determined by the Committee. Any Tandem SARrelated to an Incentive Stock Option shall be granted at the same time thatsuch Incentive Stock Option is granted. The base price of a Tandem SAR shall bethe purchase price per share of Common Stock of the related option. The baseprice 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 ashare of Common Stock on the date of grant of such SAR.

 

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(b) **ExercisePeriod and Exercisability.  Theperiod 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 SARshall 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 conditionto 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 ornon-cumulative installments and in part or in full at any time. An exercisableSAR, or portion thereof, may be exercised, in the case of a Tandem SAR, onlywith respect to whole shares of Common Stock and, in the case of aFree-Standing SAR, only with respect to a whole number of SARs. If an SAR is exercisedfor shares of Restricted Stock, a certificate or certificates representing suchRestricted Stock shall be issued in accordance with Section 3.2(c), orsuch shares shall be transferred to the holder in book entry form withrestrictions on the Shares duly noted, and the holder of such Restricted Stockshall have such rights of a stockholder of the Company as determined pursuantto Section 3.2(d). Prior to the exercise of an SAR, the holder of such SARshall have no rights as a stockholder of the Company with respect to the sharesof Common Stock subject to such SAR.

 

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

 

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

 

**2.4*** ***No Repricing****.**  Notwithstanding anything inthis Plan to the contrary and subject to Section 6.7, without the approvalof the stockholders of the Company, the Committee will not amend or replace anypreviously 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*** ***StockAwards****.**  The Committee may, in its discretion, grantStock Awards to such eligible persons as may be selected by the Committee. TheAgreement relating to a Stock Award shall specify whether the Stock Award is aRestricted Stock Award, an Unrestricted Stock Award or a Restricted Stock UnitAward.

 

**3.2*** ***Terms ofRestricted Stock Awards****.**  Restricted Stock Awards shall be subject tothe following terms and conditions and shall contain such additional terms andconditions, not inconsistent with the terms of this Plan, as the Committeeshall deem advisable.

 

(a) **Number ofShares and Other Terms.  The numberof shares of Common Stock subject to a Restricted Stock Award and theRestriction Period, Performance Period (if any) and Performance Measures (ifany) applicable to a Restricted Stock Award shall be determined by theCommittee.

 

(b) **Vesting and Forfeiture.  The Agreement relating to a Restricted StockAward shall provide, in the manner determined by the Committee, in itsdiscretion, and subject to the provisions of this Plan, for the vesting of theshares of Common Stock subject to such award (i) if the holder of suchaward remains continuously in the employment or service of the Company duringthe specified Restriction Period and (ii) if specified PerformanceMeasures (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) ifthe holder of such award does not remain continuously in the employment orservice of the Company during the specified Restriction Period or (y) ifspecified Performance Measures (if any) are not satisfied or met during aspecified Performance Period.

 

(c) **StockIssuance.  During the RestrictionPeriod, the shares of Restricted Stock shall be held by a custodian in bookentry form with restrictions on such shares duly noted or, alternatively, acertificate or certificates representing a Restricted Stock Award shall beregistered in the holder’s name and may bear a legend, in addition to anylegend which may be required pursuant to Section 6.6, indicating that theownership of the shares of Common Stock represented by such certificate issubject to the restrictions, terms and conditions of this Plan and theAgreement relating to the Restricted Stock Award. All such certificates shallbe deposited with the Company, together with stock powers or other instrumentsof assignment (including a power of attorney), each endorsed in blank with aguarantee of signature if deemed necessary or appropriate, which would permittransfer to the Company of all or a portion of the shares of Common Stocksubject to the Restricted Stock Award in the event such award is forfeited inwhole or in part. Upon termination of any applicable Restriction Period (andthe satisfaction or attainment of applicable Performance Measures), 

 

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subjectto 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 ofCommon Stock that are held in book entry form, and all certificates evidencingownership of the requisite number of shares of Common Stock shall be deliveredto the holder of such award.

 

(d) **Rights withRespect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a RestrictedStock Award, and subject to the terms and conditions of a Restricted StockAward, the holder of such award shall have all rights as a stockholder of theCompany, including, but not limited to, voting rights, the right to receivedividends and the right to participate in any capital adjustment applicable toall holders of Common Stock; provided, however, that (i) adistribution with respect to shares of Common Stock, other than a regular cashdividend, and (ii) a regular cash dividend with respect to shares ofCommon Stock that are subject to performance-based vesting conditions, in eachcase, shall be deposited with the Company and shall be subject to the samerestrictions as the shares of Common Stock with respect to which suchdistribution was made.

 

**3.3*** ***Terms ofRestricted Stock Unit Awards****.**  Restricted Stock Unit Awards shall be subjectto the following terms and conditions and shall contain such additional termsand conditions, not inconsistent with the terms of this Plan, as the Committeeshall deem advisable.

 

(a) **Number ofShares and Other Terms.  The numberof shares of Common Stock subject to a Restricted Stock Unit Award and theRestriction Period, Performance Period (if any) and Performance Measures (ifany) applicable to a Restricted Stock Unit Award shall be determined by theCommittee.

 

(b) **Vesting andForfeiture.  The Agreement relatingto a Restricted Stock Unit Award shall provide, in the manner determined by theCommittee, in its discretion, and subject to the provisions of this Plan, forthe vesting of such Restricted Stock Unit Award (i) if the holder of suchaward remains continuously in the employment or service of the Company duringthe specified Restriction Period and (ii) if specified PerformanceMeasures (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) ifthe holder of such award does not remain continuously in the employment orservice of the Company during the specified Restriction Period or (y) ifspecified Performance Measures (if any) are not satisfied or met during aspecified Performance Period.

 

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

 

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

 

**IV. PERFORMANCE UNIT AWARDS**

 

**4.1*** ***PerformanceUnit Awards****.**  The Committee may, in its discretion, grantPerformance Unit Awards to such eligible persons as may be selected by theCommittee.

 

**4.2*** ***Terms ofPerformance Unit Awards****.**  Performance Unit Awards shall be subject tothe following terms and conditions and shall contain such additional terms andconditions, not inconsistent with the terms of this Plan, as the Committeeshall deem advisable.

 

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

 

(b) **Vesting andForfeiture.  The Agreement relatingto a Performance Unit Award shall provide, in the manner determined by theCommittee, in its discretion, and subject to the provisions of this Plan, forthe vesting of such Performance Unit Award if the specified PerformanceMeasures are satisfied or met during the specified Performance Period and forthe forfeiture of such award if the specified Performance Measures are notsatisfied or met during the specified Performance Period.

 

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(c) **Settlementof Vested Performance Unit Awards. The Agreement relating to a Performance Unit Award shall specify whethersuch award may be settled in shares of Common Stock (including shares ofRestricted Stock) or cash or a combination thereof. If a Performance Unit Awardis settled in shares of Restricted Stock, such shares of Restricted Stock shallbe issued to the holder in book entry form or a certificate or certificatesrepresenting such Restricted Stock shall be issued in accordance with Section 3.2(c) andthe holder of such Restricted Stock shall have such rights as a stockholder ofthe Company as determined pursuant to Section 3.2(d). Prior to thesettlement of a Performance Unit Award in shares of Common Stock, includingRestricted Stock, the holder of such award shall have no rights as astockholder of the Company.

 

**4.3*** ***Terminationof Employment or Service****.**  All of the terms relating to the satisfactionof Performance Measures and the termination of the Performance Period relatingto a Performance Unit Award, or any forfeiture and cancellation of such awardupon a termination of employment or service with the Company of the holder ofsuch award, whether by reason of disability, retirement, death or any otherreason, shall be determined by the Committee.

 

**V. PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS**

 

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

 

**5.2*** ***DirectorsOptions****.**  Each Directors Option shall be subject to thefollowing terms and conditions and shall contain such additional terms andconditions, not inconsistent with the terms of this Plan, as the Committeeshall deem advisable:

 

(a) **ExercisePeriod and Exercisability.  Theperiod during which a Director Option may be exercised shall be determined bythe Committee; provided, however, that no DirectorOption shall be exercised later than ten (10) years after its date ofgrant. The Committee may, in its discretion, determine that a Director Optionis to be granted as a Performance Option and may establish an applicablePerformance Period and Performance Measures which shall be satisfied or met asa condition to the grant of such option or to the exercisability of all or aportion of such option. The Committee shall determine whether a Director Optionshall become exercisable in cumulative or non-cumulative installments and inpart 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 CommonStock subject to any Directors Option shall be equal to 100% of the Fair MarketValue 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 partonly with respect to whole shares of Common Stock. Directors Options shall beexercisable in accordance with Section 2.1(c).

 

**VI. GENERAL**

 

**6.1*** ***EffectiveDate and Term of Plan****.**  This Plan shall be submitted to thestockholders of the Company for approval at the Company’s 2010 annual meetingof stockholders and, if approved, shall become effective as of the date of suchapproval. This Plan shall terminate as of the first annual meeting of theCompany’s stockholders to occur on or after the tenth anniversary of itseffective date, unless terminated earlier by the Board. Termination of thisPlan shall not affect the terms or conditions of any award granted prior totermination.

 

Awards hereunder may be made at any time prior to the termination ofthis Plan, provided that no award may be made later than ten (10) yearsafter the effective date of this Plan. In the event that this Plan is notapproved by the stockholders of the Company, this Plan and any awards hereundershall 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 Planas it shall deem advisable, subject to any requirement of stockholder approvalrequired by applicable law, rule or regulation, including Section 162(m) ofthe Code and any rule of NASDAQ, or, if the Common Stock is not listed onNASDAQ, any rule of the principal national stock exchange on which theCommon Stock is then traded; provided, however, that noamendment may impair the rights of a holder of an outstanding award without theconsent of such holder.

 

**6.3*** ***Agreement****.**  Each award under this Planshall be evidenced by an Agreement setting forth the terms and conditionsapplicable to such award. No award shall be valid until an Agreement isexecuted by the Company and the recipient of such award and, upon execution byeach party and delivery of the Agreement to the Company within the time periodspecified by the Company, such award shall be effective as of the effectivedate set forth in the Agreement.

 

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**6.4*** ***Non-Transferability****.**  No award shall be transferableother than by will, the laws of descent and distribution or pursuant tobeneficiary designation procedures approved by the Company or, to the extentexpressly permitted in the Agreement relating to such award, to the holder’sfamily members, a trust or entity established by the holder for estate planningpurposes or a charitable organization designated by the holder. Except to theextent permitted by the foregoing sentence or the Agreement relating to anaward, each award may be exercised or settled during the holder’s lifetime onlyby the holder or the holder’s legal representative or similar person. Except aspermitted by the second preceding sentence, no award may be sold, transferred,assigned, pledged, hypothecated, encumbered or otherwise disposed of (whetherby operation of law or otherwise) or be subject to execution, attachment orsimilar process. Upon any attempt to so sell, transfer, assign, pledge,hypothecate, encumber or otherwise dispose of any award, such award and allrights thereunder shall immediately become null and void.

 

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

 

**6.6*** ***Restrictionson Shares****.**  Each award made hereunder shall be subject tothe requirement that if at any time the Company determines that the listing,registration or qualification of the shares of Common Stock subject to suchaward upon any securities exchange or under any law, or the consent or approvalof any governmental body, or the taking of any other action is necessary ordesirable as a condition of, or in connection with, the delivery of sharesthereunder, such shares shall not be delivered unless such listing,registration, qualification, consent, approval or other action shall have beeneffected or obtained, free of any conditions not acceptable to the Company. TheCompany may require that certificates evidencing shares of Common Stockdelivered pursuant to any award made hereunder bear a legend indicating thatthe sale, transfer or other disposition thereof by the holder is prohibitedexcept in compliance with the Securities Act of 1933, as amended, and the rules andregulations thereunder.

 

**6.7*** ***Adjustment****.**  In the event of any stocksplit, stock dividend, recapitalization, reorganization, merger, consolidation,combination, exchange of shares, liquidation, spin-off or other similar changein capitalization or event, or any distribution to holders of Common Stockother than a regular cash dividend, the number and class of securitiesavailable under this Plan, the number and class of securities subject to eachoutstanding option and the purchase price per security, the terms of eachoutstanding SAR, the terms of each outstanding Restricted Stock Award and Restricted StockUnit Award, including the number and class of securities subject thereto, theterms of each outstanding Performance Unit, the maximum number of securitieswith respect to which options or SARs may be granted during any fiscal yearof the Company to any one grantee and the maximum number of shares of CommonStock that may be awarded during any fiscal year of the Company to any onegrantee pursuant to a Stock Award that is subject to Performance Measures shallbe equitably adjusted by the Committee, such adjustments to be made in the caseof outstanding options and SARs in accordance with Section 409A of theCode. The decision of the Committee regarding any such adjustment shall befinal, binding and conclusive. If any such adjustment would result in afractional security being (a) available under this Plan, such fractionalsecurity 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 firstvesting, exercise or settlement of such award, in whole or in part, occurringafter such adjustment, an amount in cash determined by multiplying (i) thefraction of such security (rounded to the nearest hundredth) by (ii) theexcess, if any, of (A) the Fair Market Value on the vesting, exercise orsettlement date over (B) the exercise or base price, if any, of suchaward.

 

**6.8****      ****Change in Control****.**

 

(a)           Notwithstanding anyprovision 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 itsdiscretion:

 

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

 

(ii)           require thatshares of stock of the corporation resulting from such Change in Control, or aparent corporation thereof, be substituted for some or all of the shares ofCommon Stock subject to an outstanding award, with an appropriate and equitableadjustment to such award as shall be determined by the Board in accordance withSection 6.7; and/or

 

(iii)          requireoutstanding awards, in whole or in part, to be surrendered to the Company bythe holder, and to be immediately cancelled by the Company, and to provide forthe holder to receive (A) a cash payment in an amount equal to (i) inthe case of an option or an SAR, the number of shares of Common Stock thensubject to the portion of such option or SAR surrendered multiplied by theexcess, if any, of the Fair Market Value of a share of Common Stock as of thedate of the Change in Control, over the purchase price or base price per shareof Common Stock subject to such option or SAR, (ii) in the case of a StockAward, the number of shares of Common Stock then subject to the portion of suchaward surrendered multiplied by the Fair Market Value of a share of CommonStock as of the date of the Change in Control, and (iii) in the case of aPerformance Unit Award, the value of the Performance Units then subject to theportion of such award surrendered; (B) shares of capital stock of thecorporation resulting from such Change in Control, or a parent corporationthereof, having a fair market value not less than the amount determined underclause (A) above; or (C) a combination of the payment of cashpursuant to clause (A) above and the issuance of shares pursuant toclause (B) above.

 

(b)           A “Change in Control” shallbe deemed to have occurred if: (a) any person, including a group withinthe meaning of Section 13(d)(3) of the Securities Exchange Act of1934, as amended, acquires beneficial ownership of, and the right to vote,shares having at least 50% of the aggregate voting power of the class orclasses of capital stock of the Company having the ordinary and sufficientvoting power (not depending upon the happening of a contingency) to elect atleast a majority of the directors of the Board (the “Outstanding VotingSecurities”); (b) as a result of any tender or exchange offer,substantial purchase of equity securities, merger, consolidation, sale ofassets or contested election, or any combination of the foregoing transactions,the persons who were directors of the Company immediately prior to suchtransaction or transactions shall not constitute a majority of the Board (orthe board of directors of any successor to or assign of the Company)immediately after the next meeting of stockholders of the Company (or suchsuccessor or assign) following such transaction; or (c) there isconsummated a reorganization, merger or consolidation of the Company or sale orother disposition of all or substantially all of the assets of the Company (a “CorporateTransaction”), excluding any Corporate Transaction pursuant to which (i) allor substantially all of the individuals or entities who are the beneficialowners, respectively,of the Outstanding Voting Securities immediately prior to such CorporateTransaction will beneficially own, directly or indirectly, more than 50% of thecombined voting power of the outstanding securities entitled to vote generallyin the election of directors of the corporation resulting from suchCorporate Transaction (including, without limitation, a corporation which as aresult of such transaction owns the Company or all or substantially all of theCompany’s assets either directly or indirectly) in substantially the sameproportions relative to each other as their ownership, immediately prior tosuch Corporate Transaction, of the Outstanding Voting Securities; (ii) noperson (other than: the Company; any employee benefit plan (or related trust)sponsored or maintained by the Company or any corporation controlled by theCompany) will beneficially own, directly or indirectly, 50% or more of thecombined voting power of the outstanding securities of the corporationresulting from such Corporate Transaction entitled to vote generally in theelection of directors and (iii) the persons who were directors of theCompany immediately prior to such Corporate Transaction will constitute atleast a majority of the board of directors of the corporation resulting fromsuch Corporate Transaction.

 

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

 

**6.10*** ***No Right ofParticipation, Employment or Service****.**  Unless otherwise set forth in an employmentagreement, no person shall have any right to participate in this Plan. Neitherthis Plan nor any award made hereunder shall confer upon any person any rightto continued employment by or service with the Company, any Subsidiary or anyaffiliate of the Company or affect in any manner the right of the Company, anySubsidiary or any affiliate of the Company to terminate the employment of anyperson at any time without liability hereunder.

 

**6.11*** ***Rights asStockholder****.**  No person shall have any right as astockholder of the Company with respect to any shares of Common Stock or otherequity security of the Company which is subject to an award hereunder unlessand until such person becomes a stockholder of record with respect to suchshares of Common Stock or equity security.

 

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**6.12*** ***Designationof Beneficiary****.**  A holder of an award may file with theCommittee a written designation of one or more persons as such holder’sbeneficiary or beneficiaries (both primary and contingent) in the event of theholder’s death or incapacity. To the extent an outstanding option or SARgranted hereunder is exercisable, such beneficiary or beneficiaries shall beentitled to exercise such option or SAR pursuant to procedures prescribed bythe Committee.

 

Each beneficiary designation shall become effective only when filed inwriting with the Committee during the holder’s lifetime on a form prescribed bythe Committee. The spouse of a married holder domiciled in a community propertyjurisdiction shall join in any designation of a beneficiary other than suchspouse. The filing with the Committee of a new beneficiary designation shallcancel all previously filed beneficiary designations.

 

If a holder fails to designate a beneficiary, or if all designatedbeneficiaries of a holder predecease the holder, then each outstanding optionand SAR hereunder held by such holder, to the extent exercisable, may beexercised by such holder’s executor, administrator, legal representative orsimilar person.

 

**6.13*** ***GoverningLaw****.**  This Plan, each award hereunder and therelated Agreement, and all determinations made and actions taken pursuantthereto, to the extent not otherwise governed by the Code or the laws of theUnited States, shall be governed by the laws of the State of Delaware andconstrued in accordance therewith without giving effect to principles ofconflicts of laws.

 

**6.14*** ***ForeignEmployees****.**  Without amending this Plan, the Committee maygrant awards to eligible persons who are foreign nationals on such terms andconditions different from those specified in this Plan as may in the judgmentof the Committee be necessary or desirable to foster and promote achievement ofthe purposes of this Plan and, in furtherance of such purposes the Committeemay make such modifications, amendments, procedures, subplans and the like asmay be necessary or advisable to comply with provisions of laws in othercountries or jurisdictions in which the Company or its Subsidiaries operates orhas employees.

 

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