Policy Regarding Compensation of Independent Directors


    Exhibit
      10.1

     

    GUARDIAN
      TECHNOLOGIES INTERNATIONAL, INC.

    


    Policy
      Regarding Compensation of Independent Directors

    


    December
      22, 2005

     

    The
      board
      of directors (the “Board”) of Guardian Technologies International, Inc., a
      Delaware corporation (the “Company”), has adopted the following Policy Regarding
      Compensation of Independent Directors (“Policy”) pursuant to the recommendations
      of the Compensation Committee of the Company. The purpose of the Policy is
      to
      attract and retain qualified independent members of the Board.

    


    1. No
      Remuneration of Officers and Employees.
      Directors who are also officers or employees of the Company or any subsidiary
      of
      the Company shall not be entitled to any compensation for serving as a director
      on the Board.

    


    2. Reimbursement
      of Expenses. Each
      director who is not also an employee or officer of the Company or any subsidiary
      (an “Independent Director”) shall be reimbursed for reasonable, documented out
      of pocket expenses incurred in connection with travel to and attending Board
      meetings and the meetings of any committee of the Board of which he or she
      is a
      member.

    


    3. Annual
      Compensation. As
      compensation for his or her services as an Independent Director, each
      Independent Director shall receive annual compensation for serving as a director
      of the Company as follows: on the second day of each calendar year (or the
      next
      succeeding day, if that day is a holiday), each Independent Director shall
      be
      granted non-qualified stock options to purchase an aggregate of 5,000 shares
      of
      common stock, $.001 par value per share (“Common Stock”), of the Company
      pursuant to the Company’s Amended and Restated 2003 Stock Incentive Plan (“2003
      Stock Incentive Plan”), which options shall vest and become exercisable one (1)
      year after the date of grant, shall be exercisable at a price equal to the
      fair
      market value of the Company’s Common Stock on the date of grant as determined in
      accordance with the terms of the 2003 Stock Incentive Plan, and as authorized
      and approved by the Compensation Committee or such other committee of the Board
      as shall then administer the 2003 Stock Incentive Plan. Following the adoption
      of this Policy, in the event a newly appointed Independent Director commences
      serving as a director on a day subsequent to the second day of a calendar year
      (or the next succeeding day, if that day is a holiday), each such Independent
      Director shall be granted a pro rata portion of the number of non-qualified
      options to be granted pursuant to this Section 3 for the calendar year five
      (5)
      business day following such appointment to the Board, which pro rata portion
      shall be determined on the basis of the number of days until the next option
      grant authorized pursuant to this Section 3.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4. Compensation
      of Newly Appointed Directors. As
      an
      incentive for each newly appointed Independent Director to accept such
      appointment to the Board, each such newly appointed Independent Director
      appointed following the adoption of this Policy shall receive the following
      compensation: on the day immediately following the date of his or her
      appointment (or the next succeeding day, if that day is a holiday), each newly
      appointed Independent Director shall be granted non-qualified stock options
      to
      purchase an aggregate of 10,000 shares of Common Stock pursuant to the 2003
      Stock Incentive Plan, which options shall vest and become exercisable one (1)
      year after the date of grant, shall be exercisable at a price equal to the
      fair
      market value of the Company’s Common Stock on the date of grant as determined in
      accordance with the terms of the 2003 Stock Incentive Plan and as authorized
      and
      approved by the Compensation Committee or such other committee of the Board
      as
      shall then administer the 2003 Stock Incentive Plan.

    


    5. Compensation
      of Current Independent Directors. As
      compensation for his or her continued service on the Board, each Independent
      Director who was an Independent Director of the Company on January 1, 2005,
      and
      who continues to serve as such on the date of the adoption of this Policy,
      shall
      receive the following compensation: within five (5) business days of the
      effective date of this Policy, each such Independent Director shall be granted
      non-qualified stock options to purchase an aggregate of 10,000 shares of Common
      Stock pursuant to the Company’s 2003 Stock Incentive Plan, which options shall
      vest and become exercisable on January 1, 2006, shall be exercisable at a price
      equal to the fair market value of the Company’s Common Stock on the date of
      grant as determined in accordance with the terms of the 2003 Stock Incentive
      Plan and as authorized and approved by the Compensation Committee.

    


    6. Annual
      Compensation of Members of Board Committee.
      Each
      Independent Director who also serves as a member of one or more of the
      committees of the Board (Audit, Compensation or Nominating Committee, and such
      other committee(s) of the Board as shall be established by the Board from time)
      shall receive the following annual compensation for each committee of which
      he
      is a member: on the second day of each calendar year (or the next succeeding
      day, if that day is a holiday), each Independent Director who is then a member
      of a Board committee shall, for each committee on which he then serves, be
      granted non-qualified stock options to purchase an aggregate of 2,500 shares
      of
      Common Stock pursuant to the 2003 Stock Incentive Plan, which options shall
      vest
      and become exercisable one (1) year after the date of grant, shall be
      exercisable at a price equal to the fair market value of the Company’s Common
      Stock on the date of grant as determined in accordance with the terms of the
      2003 Stock Incentive Plan and as authorized and approved by the Compensation
      Committee or such other committee of the Board as shall then administer the
      2003
      Stock Incentive Plan. Following the adoption of this Policy, in the event a
      newly appointed Independent Director commences serving as a committee member
      on
      a day subsequent to the second day of a calendar year (or the next succeeding
      day, if that day is a holiday), each such Independent Director shall be granted
      a pro rata portion of the number of non-qualified options to be granted pursuant
      to this Section 6 for that calendar year five (5) business days following such
      appointment to a committee, which pro rata portion shall be determined on the
      basis of the number of days until the next option grant authorized pursuant
      hereto; provided that such options shall be exercisable at a price equal to
      the
      fair market value of the Company’s Common Stock on the date of grant as
      determined in accordance with the terms of the 2003 Stock Incentive Plan and
      as
      authorized and approved by the Compensation Committee or such other committee
      of
      the Board as shall then administer the 2003 Stock Incentive Plan.

    


    
      
         

      

      
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    7. Other
      Awards and Compensation. The
      Board, in its discretion, may grant additional awards of options, restricted
      stock and/or cash compensation to Independent Directors as it may determine
      from
      time to time.

    


    8. Terms
      of 2003 Stock Incentive Plan Shall Govern.
      In the
      event of any inconsistency between the terms of this Policy and the terms of
      the
      2003 Stock Incentive Plan, or any Non-Qualified Stock Option Award Agreement
      covering any options which are granted pursuant to this Policy, the terms of
      the
      2003 Stock Incentive Plan or Non-Qualified Stock Option Award Agreement shall
      govern.

    


    9. Amendment
      or Termination. This
      Policy may be amended, altered or terminated at the election of the Board in
      its
      absolute discretion, provided that no amendment, alteration or termination
      of
      this Policy shall have a retroactive effect or impair the rights of any
      Independent Director under any stock option grant theretofore granted to any
      such Independent Director.

    


    10. Effective
      Date. This
      Policy was adopted by the Board of Directors, pursuant to the recommendations
      of
      the Compensation Committee, on December 22, 2005, and is effective as of such
      date.

    


     

     

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