Document:

Exhibit 10.1

 

2010 EXECUTIVE INCENTIVE PAYMENT PLAN

 

1.             Target Award
for each Participant

 

·        17.5 percent of
annual base salary

·        Additional 17.5
percent of annual base salary (Michael Smith and Anthony Mirabelli) -  if pre-tax profit exceeds a higher pre-established
performance level

 

2.             Criteria

 

100
percent of the “target” award for each participant tied to Cobra Electronics
Corporation exceeding target pre-tax profit levels without regard to
extraordinary or other nonrecurring or unusual items in accordance with
generally accepted accounting principles unless the Compensation Committee
determines that any such item shall not be disregarded.

 

3.             Payments

 

If
performance goal is exceeded, each participant will receive his pro rata
portion (calculated based on the “target” award of such participant measured
against the aggregate target awards of all participants) of such excess until
all of the participants in the plan receive their full “target” awards.

 

4.             Other Terms

 

·        Pre-tax profit
will be calculated based on Cobra Electronics’ consolidated results

·        Incentive
payments will be processed with the next regularly scheduled payroll after the
approval by the Board of Directors of 2010 audited consolidated results, but
not later than March 15, 2011, subject to changes approved by the
Compensation Committee

 

1Exhibit 10.2

 

COBRA
ELECTRONICS CORPORATION

 

2010 EQUITY
INCENTIVE PLAN

 

I. INTRODUCTION

 

1.1  Purposes.  The purposes of the Cobra
Electronics Corporation 2010 Equity Incentive Plan (this “Plan”) are (i) to
align the interests of the Company’s stockholders and the recipients of awards
under this Plan by increasing the proprietary interest of such recipients in
the Company’s growth and success, (ii) to advance the interests of the
Company by attracting and retaining directors, officers and other employees and
(iii) to motivate such persons to act in the long-term best interests of
the Company and its stockholders. As of the effective date of the Plan, no
further awards shall be granted under the Prior Plans, as defined in Section 1.2.

 

1.2  Certain
Definitions.

 

“Agreement” shall mean the written
agreement evidencing an award hereunder between the Company and the recipient
of such award.

 

“Board” shall mean the Board of
Directors of the Company.

 

“Change in Control” shall have the
meaning set forth in Section 6.8(b).

 

“Code” shall mean the Internal
Revenue Code of 1986, as amended.

 

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

 

“Common Stock” shall mean the common
stock, par value $0.331/3 per share, of the Company, and all rights
appurtenant thereto.

 

“Company” shall mean Cobra
Electronics Corporation, a Delaware corporation, or any successor thereto.

 

“Corporate Transaction” shall have the
meaning set forth in Section 6.8(b).

 

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

 

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

 

“Fair Market Value” shall mean the
closing transaction price of a share of Common Stock as reported on NASDAQ on
the date as of which such value is being determined or, if the Common Stock is
not listed on NASDAQ, the closing transaction price of a share of Common Stock
on the principal national stock exchange on which the Common Stock is traded on
the date as of which such value is being determined or, if there shall be no reported
transactions for such date, on the next preceding date for which transactions
were reported; provided, however, that if the Common
Stock is not listed on a national stock exchange or if Fair Market Value for
any date cannot be so determined, Fair Market Value shall be determined by the
Committee by whatever means or method as the Committee, in the good faith
exercise of its discretion, shall at such time deem appropriate and in
compliance with Section 409A of the Code.

 

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

 

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

 

“NASDAQ” shall mean the Nasdaq Stock
Market of the National Association of Securities Dealers, Inc. Automated
Quotation System.

 

“Non-Employee Director” shall mean any
director of the Company who is not an officer or employee of the Company or any
Subsidiary.

 

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

 

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

 

“Performance Measures” shall mean the
criteria and objectives, established by the Committee, which shall be satisfied
or met (i) as a
condition to the grant or exercisability of all or a portion of an option or
SAR or (ii) during the applicable Restriction Period or Performance Period
as a condition to the vesting of the holder’s interest, in the case of a Restricted
Stock 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 the
shares of Common Stock subject to such award or of payment with respect to such
award. To the extent necessary for an award to be qualified performance-based
compensation under Section 162(m) of the Code and the regulations
thereunder, such criteria and objectives shall include one or more of the
following corporate-wide or subsidiary, division, operating unit or individual
measures, stated in either absolute terms or relative terms, such as rates of
growth or improvement: the attainment by a share of Common Stock of a specified
Fair Market Value for a specified period of time, earnings per share, return to
stockholders (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 expense
after taxes, return on investment, return on investment capital, return on
operating costs, economic value created, operating margin, gross margin, net
income before or after taxes, pretax earnings before interest, depreciation
and/or amortization, pretax operating earnings after interest expense and
before incentives, and/or extraordinary or special items, operating earnings,
net cash provided by operations, and strategic business criteria, consisting of
one or more objectives based on meeting specified market penetration,
geographic business expansion goals, cost targets, days sales outstanding
goals, customer satisfaction, reductions in errors and omissions, reductions in
lost business, management of employment practices and employee benefits,
supervision of litigation and information technology, quality and quality audit
scores, productivity, efficiency, and goals relating to acquisitions or
divestitures, or any combination of the foregoing. In the sole discretion of
the Committee, but subject to Section 162(m) of the Code, the
Committee may amend or adjust the Performance Measures or other terms and
conditions of an outstanding award in recognition of unusual or nonrecurring
events affecting the Company or its financial statements or changes in law or
accounting principles.

 

“Performance Option” shall mean an
Incentive Stock Option or Nonqualified Stock Option, the grant of which or the
exercisability of all or a portion of which is contingent upon the attainment
of specified Performance Measures within a specified Performance Period.

 

“Performance Period” shall mean any
period designated by the Committee during which (i) the Performance
Measures applicable to an award shall be measured and (ii) the conditions
to vesting applicable to an award shall remain in effect.

 

“Performance Unit” shall mean a
right to receive, contingent upon the attainment of specified Performance
Measures within a specified Performance Period, a specified cash amount or, in
lieu thereof, shares of Common Stock having a Fair Market Value equal to such
cash amount.

 

“Performance Unit Award” shall mean an
award of Performance Units under this Plan.

 

“Prior Plans” shall mean the Company’s
1995 Key Employees Nonqualified and Incentive Stock Option Plan, 1998 Stock
Option Plan, 2000 Stock Option Plan, 2000 Outside Directors Stock Option Plan
and 2002 Outside Directors Stock Option Plan.

 

“Restricted Stock” shall mean
shares of Common Stock which are subject to a Restriction Period and which may,
in addition thereto, be subject to the attainment of specified Performance Measures
within a specified Performance Period.

 

“Restricted Stock Award” shall mean an
award of Restricted Stock under this Plan.

 

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“Restricted Stock Unit” shall mean a
right to receive one share of Common Stock or, in lieu thereof, the Fair Market
Value of such share of Common Stock in cash, which shall be contingent upon the
expiration of a specified Restriction Period and which may, in addition
thereto, be contingent upon the attainment of specified Performance Measures
within a specified Performance Period.

 

“Restricted Stock Unit Award” shall mean an
award of Restricted Stock Units under this Plan.

 

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

 

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

 

“Stock Award” shall mean a Restricted
Stock 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 in
which the Company owns, directly or indirectly, an equity interest possessing
more than 50% of the combined voting power of the total outstanding equity
interests of such entity.

 

“Tandem SAR” shall mean an SAR which is
granted in tandem with, or by reference to, an option (including a Nonqualified
Stock Option granted prior to the date of grant of the SAR), which entitles the
holder thereof to receive, upon exercise of such SAR and surrender for
cancellation of all or a portion of such option, shares of Common Stock (which
may be Restricted Stock) with an aggregate value equal to the excess of the
Fair Market Value of one share of Common Stock on the date of exercise over the
base price of such SAR, multiplied by the number of shares of Common Stock
subject to such option, or portion thereof, which is surrendered.

 

“Tax Date” shall have the meaning set
forth in Section 6.5.

 

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

 

“Unrestricted Stock Award” shall mean an
award of Unrestricted Stock under this Plan.

 

1.3  Administration.  This Plan shall be administered
by the Committee. Any one or a combination of the following awards may be made
under this Plan to eligible persons: (i) options to purchase shares of
Common Stock in the form of Incentive Stock Options or Nonqualified Stock
Options (which may include Performance Options), (ii) SARs in the form of
Tandem SARs or Free-Standing SARs, (iii) Stock Awards in the form of
Restricted Stock or Restricted Stock Units and (iv) Performance Units. The
Committee shall, subject to the terms of this Plan, select eligible persons for
participation in this Plan and determine the form, amount and timing of each award to such persons
and, if applicable, the number of shares of Common Stock, the number of SARs,
the number of Restricted Stock Units and the number of Performance Units
subject 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 other
terms and conditions of the award, including, without limitation, the form of
the Agreement evidencing the award. The Committee may, in its sole discretion
and for any reason at any time, subject to the requirements of Section 162(m) of
the Code and regulations thereunder in the case of an award intended to be
qualified performance-based compensation, take action such that (i) any or
all outstanding options and SARs shall become exercisable in part or in full, (ii) all
or a portion of the Restriction Period applicable to any outstanding Restricted
Stock or Restricted Stock Units shall lapse, (iii) all or a portion of the
Performance Period applicable to any outstanding Restricted Stock, Restricted
Stock Units or Performance Units shall lapse and (iv) the Performance
Measures (if any) applicable to any outstanding award shall be deemed to be
satisfied at the target or any other level. The Committee shall, subject to the
terms of this Plan, interpret this Plan and the application thereof, establish rules and
regulations it deems necessary or desirable for the administration of this Plan
and may impose, incidental to the grant of an award, conditions with respect to
the award, such as limiting competitive employment or other activities. All
such interpretations, rules, regulations and conditions shall be conclusive and
binding on all parties.

 

The Committee may delegate some or all of its power and authority
hereunder to the Board or, subject to applicable law, to the Chief Executive
Officer or other executive officer of the Company as the Committee deems
appropriate; provided, however, that (i) the
Committee may not delegate its power and authority to the Board or the Chief
Executive Officer or other executive officer of the Company with regard to the
grant of an award to any person who is a “covered employee” within the meaning
of Section 162(m) of the Code or who, in the Committee’s judgment, is
likely to be a covered employee at any time during the period an award
hereunder to such employee would be outstanding and (ii) the Committee may
not delegate its power and authority to the Chief Executive Officer or other
executive officer of the Company with regard to the selection for participation
in this Plan of an officer, 

 

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director
or other person subject to Section 16 of the Exchange Act or decisions
concerning 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 Executive
Officer nor any other executive officer to whom the Committee delegates any of
its power and authority hereunder, shall be liable for any act, omission,
interpretation, construction or determination made in connection with this Plan
in good faith, and the members of the Board and the Committee and the Chief
Executive Officer or other executive officer shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including attorneys’ fees) arising therefrom to the full
extent permitted by law (except as otherwise may be provided in the Company’s
Certificate of Incorporation and/or By-laws) and under any directors’ and
officers’ liability insurance that may be in effect from time to time.

 

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

 

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

 

1.5  Shares
Available.  Subject to adjustment as provided in Section 6.7
and to all other limits set forth in this Section 1.5, 800,000 shares of
Common Stock shall be available for all awards under this Plan, reduced by the
sum of the aggregate number of shares of Common Stock under this Plan which
become subject to outstanding options, outstanding Free-Standing SARs and
outstanding Stock Awards and delivered upon the settlement of Performance Units
Awards. 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 reason
of (i) the expiration, termination, cancellation or forfeiture of such
award (excluding shares subject to an option cancelled upon settlement in
shares of a related tandem SAR or shares subject to a tandem SAR cancelled upon
exercise of a related option) or (ii) the settlement of such award in
cash, then such shares of Common Stock shall again be available under this
Plan.

 

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

 

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

 

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

 

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II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

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

 

(a)   Number of
Shares and Purchase Price.  The
number of shares of Common Stock subject to an option and the purchase price
per share of Common Stock purchasable upon exercise of the option shall be
determined by the Committee; provided, however, that
the purchase price per share of Common Stock shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the date of grant of such
option; and provided further, that if an Incentive Stock Option
shall be granted to any person who, at the time such option is granted, owns capital stock
possessing more than ten (10) percent of the total combined voting power
of all classes of capital stock of the Company (or of any parent or
Subsidiary) (a “Ten Percent Holder”), the purchase price per share of
Common Stock shall not be less than the price (currently 110% of Fair Market
Value) required by the Code in order to constitute an Incentive Stock Option.

 

(b)   Option
Period and Exercisability.  The
period during which an option may be exercised shall be determined by the
Committee; provided, however, that no option shall be
exercised later than ten (10) years after its date of grant; and
provided further, that if an Incentive Stock Option shall be granted to a
Ten Percent Holder, such option shall not be exercised later than five (5) years
after its date of grant. The Committee may, in its discretion, determine that
an option is to be granted as a Performance Option and may establish an
applicable Performance Period and Performance Measures which shall be satisfied
or met as a condition to the grant of such option or to the exercisability of
all or a portion of such option. The Committee shall determine whether an
option shall become exercisable in cumulative or non-cumulative installments
and 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 of
Exercise.  An option may be exercised
(i) by giving written notice to the Company specifying the number of whole
shares of Common Stock to be purchased and accompanying such notice with
payment therefor in full (or arrangement made for such payment to the Company’s
satisfaction) either (A) in cash, (B) by delivery (either actual
delivery or by attestation procedures established by the Company) of previously
owned whole shares of Common Stock having an aggregate Fair Market Value,
determined as of the date of exercise, equal to the aggregate purchase price
payable by reason of such exercise, (C) authorizing the Company to
withhold whole shares of Common Stock which would otherwise be delivered having
an aggregate Fair Market Value, determined as of the date of exercise, equal to
the amount necessary to satisfy such obligation, (D) except as may be
prohibited by applicable law, in cash by a broker-dealer acceptable to the
Company 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 set
forth in the Agreement relating to the option, (ii) if applicable, by
surrendering to the Company any Tandem SARs which are cancelled by reason of
the exercise of the option and (iii) by executing such documents as the
Company may reasonably request. Any fraction of a share of Common Stock which
would be required to pay such purchase price shall be disregarded and the
remaining amount due shall be paid in cash by the optionee. No shares of Common
Stock shall be issued and no certificate representing Common Stock shall be
delivered until the full purchase price therefor and any withholding taxes
thereon, as described in Section 6.5, have been paid (or arrangement made
for such payment to the Company’s satisfaction).

 

2.2  Stock
Appreciation Rights.  The Committee may, in its discretion, grant
SARs to such eligible persons as may be selected by the Committee. The
Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.

 

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

 

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

 

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(b)   Exercise
Period and Exercisability.  The
period 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 SAR
shall 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 condition
to 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 or
non-cumulative installments and in part or in full at any time. An exercisable
SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only
with respect to whole shares of Common Stock and, in the case of a
Free-Standing SAR, only with respect to a whole number of SARs. If an SAR is exercised
for shares of Restricted Stock, a certificate or certificates representing such
Restricted Stock shall be issued in accordance with Section 3.2(c), or
such shares shall be transferred to the holder in book entry form with
restrictions on the Shares duly noted, and the holder of such Restricted Stock
shall have such rights of a stockholder of the Company as determined pursuant
to Section 3.2(d). Prior to the exercise of an SAR, the holder of such SAR
shall have no rights as a stockholder of the Company with respect to the shares
of Common Stock subject to such SAR.

 

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

 

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

 

2.4  No Repricing.  Notwithstanding anything in
this Plan to the contrary and subject to Section 6.7, without the approval
of the stockholders of the Company, the Committee will not amend or replace any
previously 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  Stock
Awards.  The Committee may, in its discretion, grant
Stock Awards to such eligible persons as may be selected by the Committee. The
Agreement relating to a Stock Award shall specify whether the Stock Award is a
Restricted Stock Award, an Unrestricted Stock Award or a Restricted Stock Unit
Award.

 

3.2  Terms of
Restricted Stock Awards.  Restricted Stock Awards shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.

 

(a)   Number of
Shares and Other Terms.  The number
of shares of Common Stock subject to a Restricted Stock Award and the
Restriction Period, Performance Period (if any) and Performance Measures (if
any) applicable to a Restricted Stock Award shall be determined by the
Committee.

 

(b)   Vesting and Forfeiture.  The Agreement relating to a Restricted Stock
Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of the
shares of Common Stock subject to such award (i) if the holder of such
award remains continuously in the employment or service of the Company during
the specified Restriction Period and (ii) if specified Performance
Measures (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) if
the holder of such award does not remain continuously in the employment or
service of the Company during the specified Restriction Period or (y) if
specified Performance Measures (if any) are not satisfied or met during a
specified Performance Period.

 

(c)   Stock
Issuance.  During the Restriction
Period, the shares of Restricted Stock shall be held by a custodian in book
entry form with restrictions on such shares duly noted or, alternatively, a
certificate or certificates representing a Restricted Stock Award shall be
registered in the holder’s name and may bear a legend, in addition to any
legend which may be required pursuant to Section 6.6, indicating that the
ownership of the shares of Common Stock represented by such certificate is
subject to the restrictions, terms and conditions of this Plan and the
Agreement relating to the Restricted Stock Award. All such certificates shall
be deposited with the Company, together with stock powers or other instruments
of assignment (including a power of attorney), each endorsed in blank with a
guarantee of signature if deemed necessary or appropriate, which would permit
transfer to the Company of all or a portion of the shares of Common Stock
subject to the Restricted Stock Award in the event such award is forfeited in
whole or in part. Upon termination of any applicable Restriction Period (and
the satisfaction or attainment of applicable Performance Measures), 

 

7

 

subject
to 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 of
Common Stock that are held in book entry form, and all certificates evidencing
ownership of the requisite number of shares of Common Stock shall be delivered
to the holder of such award.

 

(d)   Rights with
Respect to Restricted Stock Awards. 
Unless otherwise set forth in the Agreement relating to a Restricted
Stock Award, and subject to the terms and conditions of a Restricted Stock
Award, the holder of such award shall have all rights as a stockholder of the
Company, including, but not limited to, voting rights, the right to receive
dividends and the right to participate in any capital adjustment applicable to
all holders of Common Stock; provided, however, that (i) a
distribution with respect to shares of Common Stock, other than a regular cash
dividend, and (ii) a regular cash dividend with respect to shares of
Common Stock that are subject to performance-based vesting conditions, in each
case, shall be deposited with the Company and shall be subject to the same
restrictions as the shares of Common Stock with respect to which such
distribution was made.

 

3.3  Terms of
Restricted Stock Unit Awards.  Restricted Stock Unit Awards shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.

 

(a)   Number of
Shares and Other Terms.  The number
of shares of Common Stock subject to a Restricted Stock Unit Award and the
Restriction Period, Performance Period (if any) and Performance Measures (if
any) applicable to a Restricted Stock Unit Award shall be determined by the
Committee.

 

(b)   Vesting and
Forfeiture.  The Agreement relating
to a Restricted Stock Unit Award shall provide, in the manner determined by the
Committee, in its discretion, and subject to the provisions of this Plan, for
the vesting of such Restricted Stock Unit Award (i) if the holder of such
award remains continuously in the employment or service of the Company during
the specified Restriction Period and (ii) if specified Performance
Measures (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) if
the holder of such award does not remain continuously in the employment or
service of the Company during the specified Restriction Period or (y) if
specified Performance Measures (if any) are not satisfied or met during a
specified Performance Period.

 

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

 

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

 

IV. PERFORMANCE UNIT AWARDS

 

4.1  Performance
Unit Awards.  The Committee may, in its discretion, grant
Performance Unit Awards to such eligible persons as may be selected by the
Committee.

 

4.2  Terms of
Performance Unit Awards.  Performance Unit Awards shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.

 

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

 

(b)   Vesting and
Forfeiture.  The Agreement relating
to a Performance Unit Award shall provide, in the manner determined by the
Committee, in its discretion, and subject to the provisions of this Plan, for
the vesting of such Performance Unit Award if the specified Performance
Measures are satisfied or met during the specified Performance Period and for
the forfeiture of such award if the specified Performance Measures are not
satisfied or met during the specified Performance Period.

 

8

 

(c)   Settlement
of Vested Performance Unit Awards. 
The Agreement relating to a Performance Unit Award shall specify whether
such award may be settled in shares of Common Stock (including shares of
Restricted Stock) or cash or a combination thereof. If a Performance Unit Award
is settled in shares of Restricted Stock, such shares of Restricted Stock shall
be issued to the holder in book entry form or a certificate or certificates
representing such Restricted Stock shall be issued in accordance with Section 3.2(c) and
the holder of such Restricted Stock shall have such rights as a stockholder of
the Company as determined pursuant to Section 3.2(d). Prior to the
settlement of a Performance Unit Award in shares of Common Stock, including
Restricted Stock, the holder of such award shall have no rights as a
stockholder of the Company.

 

4.3  Termination
of Employment or Service.  All of the terms relating to the satisfaction
of Performance Measures and the termination of the Performance Period relating
to a Performance Unit Award, or any forfeiture and cancellation of such award
upon a termination of employment or service with the Company of the holder of
such award, whether by reason of disability, retirement, death or any other
reason, shall be determined by the Committee.

 

V. PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS

 

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

 

5.2  Directors
Options.  Each Directors Option shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable:

 

(a)   Exercise
Period and Exercisability.  The
period during which a Director Option may be exercised shall be determined by
the Committee; provided, however, that no Director
Option shall be exercised later than ten (10) years after its date of
grant. The Committee may, in its discretion, determine that a Director Option
is to be granted as a Performance Option and may establish an applicable
Performance Period and Performance Measures which shall be satisfied or met as
a condition to the grant of such option or to the exercisability of all or a
portion of such option. The Committee shall determine whether a Director Option
shall become exercisable in cumulative or non-cumulative installments and in
part 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 Common
Stock subject to any Directors Option shall be equal to 100% of the Fair Market
Value 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 part
only with respect to whole shares of Common Stock. Directors Options shall be
exercisable in accordance with Section 2.1(c).

 

VI. GENERAL

 

6.1  Effective
Date and Term of Plan.  This Plan shall be submitted to the
stockholders of the Company for approval at the Company’s 2010 annual meeting
of stockholders and, if approved, shall become effective as of the date of such
approval. This Plan shall terminate as of the first annual meeting of the
Company’s stockholders to occur on or after the tenth anniversary of its
effective date, unless terminated earlier by the Board. Termination of this
Plan shall not affect the terms or conditions of any award granted prior to
termination.

 

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

 

6.3  Agreement.  Each award under this Plan
shall be evidenced by an Agreement setting forth the terms and conditions
applicable to such award. No award shall be valid until an Agreement is
executed by the Company and the recipient of such award and, upon execution by
each party and delivery of the Agreement to the Company within the time period
specified by the Company, such award shall be effective as of the effective
date set forth in the Agreement.

 

9

 

6.4  Non-Transferability.  No award shall be transferable
other than by will, the laws of descent and distribution or pursuant to
beneficiary designation procedures approved by the Company or, to the extent
expressly permitted in the Agreement relating to such award, to the holder’s
family members, a trust or entity established by the holder for estate planning
purposes or a charitable organization designated by the holder. Except to the
extent permitted by the foregoing sentence or the Agreement relating to an
award, each award may be exercised or settled during the holder’s lifetime only
by the holder or the holder’s legal representative or similar person. Except as
permitted by the second preceding sentence, no award may be sold, transferred,
assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether
by operation of law or otherwise) or be subject to execution, attachment or
similar process. Upon any attempt to so sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of any award, such award and all
rights thereunder shall immediately become null and void.

 

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

 

6.6  Restrictions
on Shares.  Each award made hereunder shall be subject to
the requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the delivery of shares
thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend indicating that
the sale, transfer or other disposition thereof by the holder is prohibited
except in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

 

6.7  Adjustment.  In the event of any stock
split, stock dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar change
in capitalization or event, or any distribution to holders of Common Stock
other than a regular cash dividend, the number and class of securities
available under this Plan, the number and class of securities subject to each
outstanding option and the purchase price per security, the terms of each
outstanding SAR, the terms of each outstanding Restricted Stock Award and Restricted Stock
Unit Award, including the number and class of securities subject thereto, the
terms of each outstanding Performance Unit, the maximum number of securities
with respect to which options or SARs may be granted during any fiscal year
of the Company to any one grantee and the maximum number of shares of Common
Stock that may be awarded during any fiscal year of the Company to any one
grantee pursuant to a Stock Award that is subject to Performance Measures shall
be equitably adjusted by the Committee, such adjustments to be made in the case
of outstanding options and SARs in accordance with Section 409A of the
Code. The decision of the Committee regarding any such adjustment shall be
final, binding and conclusive. If any such adjustment would result in a
fractional security being (a) available under this Plan, such fractional
security 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 first
vesting, exercise or settlement of such award, in whole or in part, occurring
after such adjustment, an amount in cash determined by multiplying (i) the
fraction of such security (rounded to the nearest hundredth) by (ii) the
excess, if any, of (A) the Fair Market Value on the vesting, exercise or
settlement date over (B) the exercise or base price, if any, of such
award.

 

6.8       Change in Control.

 

(a)           Notwithstanding any
provision 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 its
discretion:

 

10

 

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

 

(ii)           require that
shares of stock of the corporation resulting from such Change in Control, or a
parent corporation thereof, be substituted for some or all of the shares of
Common Stock subject to an outstanding award, with an appropriate and equitable
adjustment to such award as shall be determined by the Board in accordance with
Section 6.7; and/or

 

(iii)          require
outstanding awards, in whole or in part, to be surrendered to the Company by
the holder, and to be immediately cancelled by the Company, and to provide for
the holder to receive (A) a cash payment in an amount equal to (i) in
the case of an option or an SAR, the number of shares of Common Stock then
subject to the portion of such option or SAR surrendered multiplied by the
excess, if any, of the Fair Market Value of a share of Common Stock as of the
date of the Change in Control, over the purchase price or base price per share
of Common Stock subject to such option or SAR, (ii) in the case of a Stock
Award, the number of shares of Common Stock then subject to the portion of such
award surrendered multiplied by the Fair Market Value of a share of Common
Stock as of the date of the Change in Control, and (iii) in the case of a
Performance Unit Award, the value of the Performance Units then subject to the
portion of such award surrendered; (B) shares of capital stock of the
corporation resulting from such Change in Control, or a parent corporation
thereof, having a fair market value not less than the amount determined under
clause (A) above; or (C) a combination of the payment of cash
pursuant to clause (A) above and the issuance of shares pursuant to
clause (B) above.

 

(b)           A “Change in Control” shall
be deemed to have occurred if: (a) any person, including a group within
the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, acquires beneficial ownership of, and the right to vote,
shares having at least 50% of the aggregate voting power of the class or
classes of capital stock of the Company having the ordinary and sufficient
voting power (not depending upon the happening of a contingency) to elect at
least a majority of the directors of the Board (the “Outstanding Voting
Securities”); (b) as a result of any tender or exchange offer,
substantial purchase of equity securities, merger, consolidation, sale of
assets or contested election, or any combination of the foregoing transactions,
the persons who were directors of the Company immediately prior to such
transaction or transactions shall not constitute a majority of the Board (or
the board of directors of any successor to or assign of the Company)
immediately after the next meeting of stockholders of the Company (or such
successor or assign) following such transaction; or (c) there is
consummated a reorganization, merger or consolidation of the Company or sale or
other disposition of all or substantially all of the assets of the Company (a “Corporate
Transaction”), excluding any Corporate Transaction pursuant to which (i) all
or substantially all of the individuals or entities who are the beneficial
owners, respectively,
of the Outstanding Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of the
combined voting power of the outstanding securities entitled to vote generally
in the election of directors of the corporation resulting from such
Corporate Transaction (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or indirectly) in substantially the same
proportions relative to each other as their ownership, immediately prior to
such Corporate Transaction, of the Outstanding Voting Securities; (ii) no
person (other than: the Company; any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company) will beneficially own, directly or indirectly, 50% or more of the
combined voting power of the outstanding securities of the corporation
resulting from such Corporate Transaction entitled to vote generally in the
election of directors and (iii) the persons who were directors of the
Company immediately prior to such Corporate Transaction will constitute at
least a majority of the board of directors of the corporation resulting from
such Corporate Transaction.

 

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

 

6.10  No Right of
Participation, Employment or Service.  Unless otherwise set forth in an employment
agreement, no person shall have any right to participate in this Plan. Neither
this Plan nor any award made hereunder shall confer upon any person any right
to continued employment by or service with the Company, any Subsidiary or any
affiliate of the Company or affect in any manner the right of the Company, any
Subsidiary or any affiliate of the Company to terminate the employment of any
person at any time without liability hereunder.

 

6.11  Rights as
Stockholder.  No person shall have any right as a
stockholder of the Company with respect to any shares of Common Stock or other
equity security of the Company which is subject to an award hereunder unless
and until such person becomes a stockholder of record with respect to such
shares of Common Stock or equity security.

 

11

 

6.12  Designation
of Beneficiary.  A holder of an award may file with the
Committee a written designation of one or more persons as such holder’s
beneficiary or beneficiaries (both primary and contingent) in the event of the
holder’s death or incapacity. To the extent an outstanding option or SAR
granted hereunder is exercisable, such beneficiary or beneficiaries shall be
entitled to exercise such option or SAR pursuant to procedures prescribed by
the Committee.

 

Each beneficiary designation shall become effective only when filed in
writing with the Committee during the holder’s lifetime on a form prescribed by
the Committee. The spouse of a married holder domiciled in a community property
jurisdiction shall join in any designation of a beneficiary other than such
spouse. The filing with the Committee of a new beneficiary designation shall
cancel all previously filed beneficiary designations.

 

If a holder fails to designate a beneficiary, or if all designated
beneficiaries of a holder predecease the holder, then each outstanding option
and SAR hereunder held by such holder, to the extent exercisable, may be
exercised by such holder’s executor, administrator, legal representative or
similar person.

 

6.13  Governing
Law.  This Plan, each award hereunder and the
related Agreement, and all determinations made and actions taken pursuant
thereto, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Delaware and
construed in accordance therewith without giving effect to principles of
conflicts of laws.

 

6.14  Foreign
Employees.  Without amending this Plan, the Committee may
grant awards to eligible persons who are foreign nationals on such terms and
conditions different from those specified in this Plan as may in the judgment
of the Committee be necessary or desirable to foster and promote achievement of
the purposes of this Plan and, in furtherance of such purposes the Committee
may make such modifications, amendments, procedures, subplans and the like as
may be necessary or advisable to comply with provisions of laws in other
countries or jurisdictions in which the Company or its Subsidiaries operates or
has employees.

 

12

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