Q.E.P. Co., Inc. Omnibus Stock Plan of 1996



 Exihibit 10.1 
  
 Q.E.P. CO., INC. 
 OMNIBUS STOCK PLAN OF 1996 
  
 (Amended July 9, 2004)

  

	1.	 	PURPOSE 

  
 The purpose of this Plan is to promote the interest of the Corporation and its stockholders and the Corporations’ success through awards of incentive
stock options, nonqualified stock options, restricted stock, performance units, performance shares, dividend equivalents and other incentive awards to Employees and Directors of the Corporation and its Subsidiaries and to selected Consultants who,
in the course of their business activities, direct a significant amount of business to the Corporation. 
  

	2.	 	DEFINITIONS 

  
 “AWARD” means any form of stock option, restricted stock, Performance Unit, Performance Share, stock appreciation right, dividend equivalent or
other incentive award granted under the Plan. 
  
 “AWARD
NOTICE” means any written notice from the Corporation to a Participant or agreement between the Corporation and a Participant that establishes the terms applicable to an Award. 
  
 “BOARD OF DIRECTORS” means the Board of Directors of the Corporation. 
  
 “CODE” means the Internal Revenue Code of 1986, as amended.

  
 “COMMITTEE” means the Compensation Committee of the
Board of Directors, or such other committee designated by the Board of Directors, which is authorized to administer the Plan under Section 3 hereof. The number of persons who shall serve on the Committee shall be specified from time to time by the
Board of Directors; however, it is intended that the Committee will be composed in a manner that meets the requirements described in Exchange Act Rules 16b-3(d) (1) and 16-3(b) (3) such that the Plan will qualify under Rule 16b-3 with regard to
Awards to persons who are subject to Section 16 of the Exchange Act. If at any time no Committee shall be in office, the functions of the “Committee” under the Plan shall be exercised by the Board. 
  
 “COMMON STOCK” means shares of the common stock, par value $.001
per share, of the Corporation. 
  
 “CONSULTANT” means
any individual who renders services directly to the Corporation or a Subsidiary or to the Corporation’s customers as defined and designated from time to time by the Committee. 







 “CORPORATION” means Q.E.P. Co., Inc. 
  
 “DIRECTOR” means a member of the Board or a member of the board of
directors of a Subsidiary. 
  
 “EMPLOYEE” means any
employee of the Corporation or a Subsidiary whose performance the Committee determines can have a significant effect on the success of the Corporation. The term “Employee” shall not include any individual who is not treated as an employee
on the payroll records of the Corporation or applicable Subsidiary, even if such individual is determined to be a common law employee by a court or governmental agency. 
  
 “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended. 
  
 “FAIR MARKET VALUE” means, as of a specified date, (i) if the
Common Stock is listed for trading on The NASDAQ Stock Market or a national securities exchange, the per share closing sale price of the Common Stock on such date on the exchange on which it is so listed, as the case may be, (ii) if the Common Stock
is not listed for trading on The NASDAQ Stock Market or a national securities exchange, but is traded in the over-the-counter market, the per share closing bid price of the Common Stock on such date as reported by NASDAQ or an equivalent generally
accepted reporting service, (iii) if the Common Stock is not listed for trading on The NASDAQ Stock Market or on any national securities exchange and if trading in the Common Stock is not reported by NASDAQ, the lowest per share bid price of the
Common Stock on such date as reported in the “pink sheets” published by National Quotation Bureau, Incorporated, (iv) if no such reported price is reported for such date pursuant to (i), (ii), or (iii) above, then the closing sale price,
closing bid price or lowest per share bid price, respectively, on the first preceding day on which so reported, or (v) if the Common Stock is not so traded and/or reported for a 30-day period immediately preceding the date for determining Fair
Market Value, the amount determined by the Committee, using such factors as the Committee considers relevant and acting in good faith and in conformity with the requirements of Section 422 of the Code, pursuant to such method as it may establish for
determining Fair Market Value. 
  
 “PARTICIPANT” means
any individual to whom an Award is granted under the Plan. 
  
 “PERFORMANCE SHARE” means a Unit expressed in terms of, or valued by reference to, a share of Common Stock. 
  
 “PERFORMANCE UNIT” means a Unit valued by reference to designated criteria established by the Committee, other than Common Stock. 
  
 “PLAN” means this Plan, which shall be known as Q.E.P. Co., Inc.
Omnibus Stock Plan of 1996, as amended. 







 “RULE 16B-3” means Rule 16b-3 promulgated under the Exchange Act, or any successor rule.

  
 “SUBSIDIARY” means a corporation or other business
entity (i) of which the Corporation directly or indirectly has an ownership interest of 50% or more, or (ii) of which the Corporation has the right to elect or appoint 50% or more of the members of the board of directors or other governing body. A
Subsidiary shall include both currently owned Subsidiaries and any Subsidiary hereafter acquired. 
  
 “UNIT” means a bookkeeping entry used by the Corporation to record the grant of an Award until such time as the Award is paid, cancelled,
forfeited or terminated. 
  

	3.	 	ADMINISTRATION 

  

	 	A.	 	The Plan shall be administered by the Committee. The Committee shall have the exclusive authority to (i) construe and interpret the Plan; (ii) promulgate, amend and rescind rules
relating to the implementation of the Plan; (iii) make all determinations necessary or advisable for the administration of the Plan, including the selection of Employees, Consultants and affiliated individuals who shall be granted Awards, the number
of shares of Common Stock or Units to be subject to each Award, the Award price, if any, the vesting or duration of Awards, and the designation of stock options as incentive stock options or non-qualified stock options; (iv) determine the
disposition of Awards in the event of a Participant’s divorce or dissolution of marriage; (v) determine whether Awards will be granted alone or in combination or in tandem with other Awards; (vi) determine whether cash will be paid or Awards
will be granted in replacement of, or as alternatives to, other grants under the Plan or any other incentive or compensation plan of the Corporation, a Subsidiary or an acquired business unit. 

  

	 	B.	 	Subject to the requirement of applicable law, the Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan, any Award, or any Award Notice;
take any and all other actions it deems necessary or advisable for the proper administration of the Plan; designate persons other than members of the Committee to carry out its responsibilities; and prescribe such rules, conditions and limitations
as it may deem appropriate; except that the Committee may not delegate its authority with regard to the selection for participation of, or the granting of Awards to, persons who are subject to Section 16 of the Exchange Act. Any determination,
decision, or action of the Committee in connection with the construction, interpretation, administration, or application of the Plan shall be final, conclusive and binding upon all 








 persons validly claiming under or through persons participating in the Plan. A member of the Committee
will not be liable for performing any act or making any determination in good faith. 
  

	 	C.	 	The Committee may at any time, and from time to time amend or cancel any outstanding Award, but only with the consent of the person to whom the Award was granted.


  

	 	D.	 	Any Awards granted to the officers of the Corporation considered “covered employees” under Code section 162(m) (3) which are intended to comply with the exemption provided
by Code section 162(m) (4) (C) shall be approved by the Board or a committee of the Board (which may be the Committee) that meets the requirements of Section 1.162-27(e) (3) of the Income Tax Regulations. 

  

	4.	 	ELIGIBILITY 

  

	 	A.	 	Any Employee is eligible to become a Participant in the Plan. 

  

	 	B.	 	Directors who are not Employees of the Corporation or a Subsidiary shall receive Awards in accordance with Section 7. 

  

	 	C.	 	Consultants who are not Directors of the Corporation shall be eligible to receive Awards in accordance with Section 8. 

  

	5.	 	SHARES AVAILABLE 

  

	 	A.	 	Subject to Section 16 of the Plan, the maximum number of shares of Common Stock available for Award grants (including incentive stock options) shall be 1,000,000. Notwithstanding
the foregoing sentence, the maximum number of shares of Common Stock that may be awarded under this Plan in the form of restricted stock awards pursuant to Section 10 may be limited by the Committee. Any shares of Common Stock subject to an Award
that expires or otherwise terminates without having been exercised, any shares of Common Stock that are subject to an Award that are forfeited, and any shares of Common Stock withheld for the payment of taxes with respect to an Award shall continue
to be available for Awards under the Plan. 

  

	6.	 	TERM 

  

	 	A.	 	The Plan became effective on June 20, 1996, and shall continue in effect until June 20, 2014. 









	7.	 	SPECIAL RULES FOR AWARDS OF OPTIONS TO NON-EMPLOYEE DIRECTORS AND CONSULTANTS 

  

	 	A.	 	Options granted to Participants who are not Employees of the Corporation or a Subsidiary shall be subject to the following terms: 

  

	 	(i)	 	The exercise price of the option shall be not less than 85% of the Fair Market Value on the date of grant of the option, payable in accordance with the alternatives stated in
Section 9.B.(ii) of the Plan; 

  

	 	(ii)	 	The term of the option shall be not less than five nor more than ten years; 

  

	 	(iii)	 	The options shall be exercisable in accordance with such vesting and other conditions as the Committee shall specify; and 

  

	 	(iv)	 	The options shall be subject to Section 14 of the Plan. 

  

	8.	 	[Intentionally Omitted] 

  

	9.	 	STOCK OPTIONS 

  

	 	A.	 	Awards may be granted in the form of stock options. Stock options may be incentive stock options within the meaning of Section 422 of the Code or non-qualified stock options (i.e.,
stock options which are not incentive stock options). Each stock option granted shall be evidenced by a written option agreement executed by the Corporation and the Participant who receives the option. 

  

	 	B.	 	Subject to Section 9.C relating to incentive stock options, options shall be in such form and contain such terms as the Committee deems appropriate. While the terms of options need
not be identical, each option shall be subject to the following terms: 

  

	 	(i)	 	The exercise price shall be the price set by the Committee but may not be less than 85% of the Fair Market Value of the underlying shares of Common Stock on the date of the grant.


  

	 	(ii)	 	The exercise price shall be paid in cash (including check, bank draft, or money order), or at the discretion of the Committee, but only to the extent permitted under applicable law
(including the Sarbanes-Oxley Act of 2002), all or part of the purchase price may be paid by delivery of the optionee’s full recourse promissory note, delivery of Common Stock already owned by the Participant for at least six months and valued
at its 








 Fair Market Value, or any combination of the foregoing methods of payment. In the case of incentive
stock options, the terms of payment shall be determined at the time of grant. 
  

	 	(iii)	 	Promissory notes given as payment of the exercise price, if permitted by the Committee, but only to the extent permitted under applicable law (including the Sarbanes-Oxley Act of
2002), shall contain such terms as set by the Committee which are not inconsistent with the following: the unpaid principal shall bear interest at a rate set from time to time by the Committee; payments of principal and interest shall be made no
less frequently than annually; no part of the note shall be payable later than ten (10) years from the date of purchase of the underlying shares of Common Stock; and the optionee shall give such security as the Committee deems necessary to ensure
full payment. 

  

	 	(iv)	 	The term of an option may not be greater than ten years from the date of the grant. 

  

	 	(v)	 	Neither a person to whom an option is granted nor such person’s legal representative, heir, legalee or distributee shall be deemed to be the holder of, or to have any of the
rights of a holder or owner with respect to, any shares of Common Stock subject to such option unless and until such person has exercised the option. 

  

	 	C.	 	The following special terms shall apply to grants of incentive stock options: 

  


	 	(i)	 	Subject to Section 9.C (ii) of the Plan, the exercise price of each incentive stock option shall not be less than 100% of the Fair Market Value of the underlying shares of Common
Stock on the date of the grant. 

  

	 	(ii)	 	No incentive stock option shall be granted to any Employee who directly or indirectly owns stock possessing more than 10% of the total combined voting power of all classes of stock
of the Corporation, unless at the time of such grant the exercise price of the option is at least 110% of the Fair Market Value of the underlying shares of Common Stock subject to the option and such option is not exercisable after the expiration of
five years from the date of the grant. 

  

	 	(iii)	 	No incentive stock option shall be granted to a person in his capacity as an Employee of a Subsidiary if the Corporation has less than 50% ownership interest in such Subsidiary.










	 	(iv)	 	The aggregate Fair Market Value, determined on the date of grant, of Common Stock with respect to which any Incentive Stock Options under the Plan and all other plans of the
Corporation or its Subsidiaries may become exercisable by any individual for the first time in any calendar year shall not exceed $100,000. 

  

	 	(v)	 	Options shall contain such other terms as may be necessary to qualify the options granted therein as incentive stock options pursuant to Section 422 of the Code, or any successor
statute, including that such incentive stock options shall be granted only to Employees, that such incentive stock options are non-transferable, and which shall conform to all other requirements of the Code. 

  

	10.	 	RESTRICTED STOCK 

  

	 	A.	 	Awards may be granted in the form of restricted stock. 

  

	 	B.	 	Grants of restricted stock shall be awarded in exchange for consideration in an amount determined by the Committee. The price, if any, of such restricted stock shall be paid in
cash, or at the discretion of the Committee, but only to the extent permitted under applicable law (including the Sarbanes-Oxley Act of 2002), all or part of the purchase price may be paid by delivery of the Participant’s full recourse
promissory note, delivery of Common Stock already owned by the Participant for at least six months and valued at its Fair Market Value, or any combination of the foregoing methods of payment, provided no less than the par value of the stock is paid
in cash, and the Participant has rendered no less than three months prior service to the Corporation. 

  

	 	C.	 	Restricted stock awards shall be subject to such restrictions as the Committee may impose and may include, if the Committee shall so determine, restrictions on transferability and
restrictions relating to continued employment. 

  

	 	D.	 	The Committee shall have the discretion to grant to a Participant receiving restricted shares all or any rights of a stockholder while such shares continue to be subject to
restrictions. 

  

	11.	 	PERFORMANCE UNITS AND PERFORMANCE SHARES 

  

	 	A.	 	Awards may be granted in the form of Performance Units or Performance Shares. Awards of Performance Shares shall refer to a commitment by the Corporation to make a distribution to
the Participant or to his beneficiary depending on (i) the attainment of the performance objective(s) and other conditions established by the Committee and (ii) the base value of the Performance Unit or Performance Shares, respectively, as
established by the Committee. 









	 	B.	 	Settlement of Performance Units and Performance Shares may be in cash, in shares of Common Stock, or a combination thereof. The Committee may designate a method of converting
Performance Units into Common Stock, including, but not limited to, a method based on the Fair Market Value of Common Stock over a series of consecutive trading days. 

  

	 	C.	 	Participants shall not be entitled to exercise any voting rights with respect to Performance Units or Performance Shares, but the Committee in its sole discretion may attach
dividend equivalent to such Awards. 

  

	12.	 	STOCK APPRECIATION RIGHTS 

  

	 	A.	 	Awards may be granted in the form of stock appreciation rights. Stock appreciation rights may be awarded in tandem with a stock option, in addition to a stock option, or may be
free-standing and unrelated to a stock option. 

  

	 	B.	 	A stock appreciation right entitles the Participant to receive from the Corporation an amount equal to the positive difference between (i) the Fair Market Value of Common Stock on
the date of exercise of the stock appreciation right and (ii) the grant price or some other amount as the Committee may determine at the time of grant (but not less than the Fair Market Value of Common Stock on the date of grant).


  

	 	C.	 	Settlement of stock appreciation rights may be in cash, in shares of Common Stock, or a combination thereof, as determined by the Committee. 

  

	13.	 	DEFERRAL OF AWARDS 

  
 At the discretion of the Committee, payment of an Award, dividend equivalent, or any potion thereof may be deferred until a time established by the
Committee. Deferrals shall be made in accordance with guidelines established by the Committee to ensure that such deferrals comply with applicable requirements of the Code and its regulations. Deferrals shall be initiated by the delivery of a
written, irrevocable election by the participant to the Committee or its nominee. Such election shall be made prior to the date specified by the Committee. The Committee may also (A) credit interest equivalents on cash payments that are deferred and
set the rates of such interest equivalents and (B) credit dividends equivalents on deferred payments denominated in the form of shares of Common Stock. 








	14.	 	EXERCISE OF STOCK OPTIONS OR OTHER AWARDS UPON TERMINATION OF EMPLOYMENT OR SERVICES 

  

	 	A.	 	Except as otherwise provided by the Committee or by the Board of Directors pursuant to Section 14.B. hereof, and subject to Section 22 hereof, options granted under the Plan shall
be exercisable upon the Participant’s termination of service within the periods set forth below. With respect to Consultants who receive options under the Plan, the Committee shall determine what shall constitute termination of service for
purposes of this Section 14. 

  

	 	(i)	 	If on account of death, stock options may be exercised within 12 months of such event by the person or persons to whom the Participant’s rights pass by will or the laws of
descent or distribution; 

  

	 	(ii)	 	If on account of retirement (as defined from time to time by Corporation policy), stock options may be exercised within three months of such termination; 


 

	 	(iii)	 	If on account of resignation, stock options may be exercised within one month of such termination; 

  

	 	(iv)	 	If for cause (as defined from time to time by Corporation policy), no unexercised option shall be exercisable to any extent after termination; 

  

	 	(v)	 	If on account of the taking of leave of absence for the purpose of serving the government or the country in which the principal place of employment of the Participant is located,
either in a military or a civilian capacity, or for such other purpose or reason as the Committee may approve, a Participant shall not be deemed during the period of any such absence alone, to have terminated his service, except as the Committee may
otherwise expressly provide; 

  

	 	(vi)	 	If on account of disability, stock options may be exercised within one year following the disability of the Participant; and 

  

	 	(vii)	 	If for any reason other than death, retirement, resignation, cause or disability, stock options may be exercised within three months of such termination. 


 

	 	B.	 	An unexercised option shall be exercisable after a Participant’s termination of service only to the extent that such option was exercisable on the date of the
Participant’s termination of service. Notwithstanding the foregoing, the Committee and the Board of Directors shall have the power to accelerate the 








 exercisability of options, whether before or after a Participant’s termination of service, and to
permit options to remain exercisable after a Participant’s termination of service for periods longer than those set forth in Section 14.A., subject to compliance with applicable law. 
  

	 	C.	 	In no case may an unexercised option be exercised to any extent by anyone after expiration of its term. 

  

	 	D.	 	To the extent any Award other than stock options is exercisable by a Participant, such Award shall be exercisable after termination of service (in the case of Employees) within the
time periods specified in A (i) to A (vii) above, subject to the provisions of Section 14.B. In the case of a non-Employee Participant, such Award will be exercisable in accordance with the terms thereof unless the Committee has required continued
service to the Corporation or a Subsidiary as a condition to the exercise of an Award, in which event the exercise of an Award following termination of services by a non-Employee Participant shall be provided for by the Committee.


  

	15.	 	NONASSIGNABILITY 

  
 The rights of a Participant under the Plan shall not be assignable by such Participant, by operation of law or otherwise, except by will or the laws of
descent and distribution. During the lifetime of the person to whom a stock option or similar right (including a stock appreciation right) is granted, such person alone may exercise it. No Participant may create a lien on any funds, securities,
rights or other property to which such Participant may have an interest under the Plan, or which is held by the Corporation for the account of the Participant under the Plan. 
  

	16.	 	ADJUSTMENT OF SHARES AVAILABLE 

  
 The Committee shall make appropriate and equitable adjustments in the shares of Common Stock available for future Awards and the number of shares of
Common Stock covered by unexercised, unvested or unpaid Awards upon the subdivision of the outstanding shares of Common Stock; the declaration of a dividend payable in Common Stock; the declaration of a dividend payable in a form other than Common
Stock in an amount that has a material effect on the price of the shares of Common Stock; the combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a lesser number of shares of Common Stock; a
recapitalization; or a similar event. 








	17.	 	PAYMENT OF WITHHOLDING TAXES 

  
 As a condition to receiving or exercising an Award, as the case may be, the Participant shall pay to the Corporation or the employer Subsidiary the amount
of all applicable Federal, state, local and foreign taxes required by law to be paid or withheld relating to receipt or exercise of the Award. Alternatively, the Corporation may withhold shares of Common Stock with an aggregate Fair Market Value
equal to such withholding taxes, from any Award in shares of Common Stock, to the extent the withholding is required by law. The Corporation also may deduct such withholding taxes from any Award paid in cash. 
  

	18.	 	AMENDMENTS 

  
 The Board of Directors may amend the Plan at any time and from time to time, subject to the receipt of stockholder approval where required by applicable
law. Rights and obligations under any Award granted before amendment of the Plan shall not be materially altered or impaired adversely by such amendment, except with consent of the person to whom the Award was granted. 
  

	19.	 	REGULATORY APPROVALS AND LISTINGS 

  
 Notwithstanding any other provision in the Plan, the Corporation shall have no obligation to issue or deliver certificates for shares of Common Stock
under the Plan prior to (A) obtaining approval from any governmental agency which the Corporation determines is necessary or advisable, (B) admission of such shares to listing on the stock exchange on which the Common Stock may be listed, and (C)
completion of any registration or other qualification of such shares under any state or Federal law or ruling of any governmental body which the Corporation determines to be necessary or advisable. 
  

	20.	 	NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS 

  
 Participation in the Plan shall not give any Employee any right to remain in the employ of the Corporation or any Subsidiary. Further, the adoption of
this Plan shall not be deemed to give any Employee or other individual the right to be selected as a Participant or to be granted an Award. 
  

	21.	 	NO RIGHT, TITLE, OR INTEREST IN CORPORATION ASSETS 

  
 No Participant shall have any rights as a stockholder of the Corporation until Participant acquires an unconditional right under an Award to have shares
of Common Stock issued to such Participant. In the case of a recipient of a stock option, the unconditional right to have shares of Common Stock issued to such Participant shall be defined as the date upon which the Participant 







 has exercised the stock option and tendered valid consideration to the Corporation for the exercise
thereof. To the extent any person acquires a right to receive payments from the Corporation under this Plan, such rights shall be no greater than the rights of an unsecured creditor of the Corporation. 
  

	22.	 	SPECIAL PROVISION PERTAINING TO PERSONS SUBJECT TO SECTION 16 

  
 With respect to persons subject to Section 16 of the Exchange Act, transactions under this Plan are intended to comply with all applicable conditions of
Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time, or its successor under the Exchange Act. To the extent any provision of the Plan or action by the Plan administrators fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Plan administrators. 
  

	23.	 	INDEMNIFICATION 

  
 In addition to such other rights of indemnification as they may have as Directors, the members of the Board of Directors or the Committee administering
the Plan shall be indemnified by the Corporation against reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted thereunder, and against all amounts paid by them in settlement thereof (provided such
settlement is approved by legal counsel selected by the Corporation) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such member is liable for negligence or misconduct in the performance of his duties; provided that within 60 days after institution of any such action, suit or proceeding, the member shall in writing offer the Corporation the
opportunity, at its own expense, to handle and defend the same. 
  

	24.	 	GOVERNING LAW 

  
 The Plan shall be governed by and construed in accordance with the laws of the State of Delaware.