Document:

EX-10.1

 Exhibit 10.1 

EXECUTION COPY 

EMPLOYMENT AND RETENTION AGREEMENT 

THIS EMPLOYMENT AND RETENTION AGREEMENT (the “Agreement”) is made and entered into as of December 23, 2014 (the “Agreement
Date”), between IXIA, a California corporation (“Employer”), and RONALD W. BUCKLY (“Employee”). 
 RECITALS

 A. Prior to the Agreement Date, Employee has been an employee and executive officer of Employer in his position as Employer’s
General Counsel, Senior Vice President, Corporate Affairs and Corporate Secretary. 
 B. Employee plans to resign as Employer’s General
Counsel and Corporate Secretary. Employer desires to thereafter continue to retain Employee’s services as an employee and executive officer of Employer for purposes of providing certain services, including assisting in transitioning to his
successor his duties and responsibilities as General Counsel and Corporate Secretary, and Employee is willing to remain employed in such a role, all on the terms and conditions hereinafter set forth. 

NOW, THEREFORE, in consideration of the provisions and the mutual covenants of the parties hereinafter set forth, it is hereby agreed as
follows: 
 AGREEMENT 

1. Resignation. Effective at the end of the day, California time, on December 31, 2014 (the “Effective Time”),
Employee hereby resigns from his position as General Counsel and Corporate Secretary of Employer. 
 2. Employment and
Duties. From the Agreement Date through the Effective Time, Employee will continue to perform all his duties and responsibilities as Employer’s General Counsel, Senior Vice President, Corporate Affairs and Corporate Secretary.
Beginning on January 1, 2015 and throughout the remaining term of this Agreement, Employee will continue to perform services as an employee and executive officer of Employer in his role as Senior Vice President, Corporate Affairs of Employer.
In such capacity, Employee will report directly to Employer’s Chief Executive Officer (“CEO”) and will perform the following services if, and for so long as, requested by the CEO: (i) monitor, oversee, and handle matters related
to Employer’s pending litigation matters; (ii) handle legal matters relating to Employer’s foreign subsidiaries, equity incentive plans, corporate governance, equity and debt offerings, and compliance policies; and (iii) assist
on such other matters and perform legal services with respect to such other projects as Employee and the CEO and/or General Counsel may mutually agree. Employee will also provide such assistance as Employee’s successor in the positions of
General Counsel and Corporate Secretary may reasonably request to support a smooth transition of the duties and responsibilities of General Counsel and Corporate Secretary to such successor. 

 3. Full-Time and Exclusive Service; Compliance with Agreement, Law and Policies. As
requested by the CEO, Employee will loyally devote Employee’s full-time efforts to Employee’s employment with Employer hereunder. During the term of this Agreement, Employee will not engage in any other employment, will not engage in any
consulting or similar activity, and will not author any publications outside the scope of Employee’s employment, except with the prior written approval of the CEO and provided such activities do not unreasonably or materially interfere with the
performance of Employee’s responsibilities and duties under this Agreement. Employer acknowledges that, as of the Agreement Date, Employee serves as corporate secretary and/or as a director of certain other business entities, and agrees that
Employee may continue such activities during the term of this Agreement provided they do not unreasonably or materially interfere with the performance of Employee’s duties and responsibilities hereunder. Employee will comply at all times with
the terms of this Agreement, with all applicable laws, and with the policies and procedures of Employer. 
 4. Compensation and
Benefits. 
 4.1 Base Salary. Employee’s annual base salary of $340,000 prior to the Agreement Date will be
increased by 3% for the period from April 1, 2014 through December 31, 2014 and, on the first payroll date that occurs on or after December 31, 2014, Employer shall make a one-time payment to Employee, subject to usual and required
employee payroll deductions and withholdings, to compensate him for such retroactive base salary increase. Effective January 1, 2015, for services rendered under this Agreement, Employee will be paid an annual base salary of $350,200, payable
in accordance with Employer’s standard payroll schedules in effect from time to time and subject to usual and required employee payroll deductions and withholdings. Employee’s base salary will be subject to an annual adjustment at such
time in 2015 (if any) as Employer adjusts the salaries of all (or substantially all) of its other executive officers for services rendered in 2015. Any such increase will, as a percentage of Employee’s base salary, not be less than the average
of the three highest percentage salary increases for Employer’s other executive officers who receive such salary increases (other than the CEO and any executive officers who receive salary increases in connection with changes in their positions
(e.g., promotions)). For purposes of clarification, the salaries of executive officers (if any) who are newly hired and appointed during 2015, as well as salary increases associated with the 2015 promotion of employees to executive officer
positions, will not be relevant for purposes of the calculation of such average. 
 4.2 Bonuses. Following the Agreement Date,
Employee will continue to participate in Employer’s 2014 Senior Officer Bonus Plan in accordance with the terms and provisions thereof. In the event that Employer awards discretionary bonuses to any three or more of its senior officers (other
than the CEO) for services provided in 2014, Employee shall, for services provided by him in 2014, be awarded a discretionary bonus in an amount that is not less than the average of the three highest amounts of such discretionary bonuses, excluding
any such bonus paid to the CEO. For 2015, Employee will be eligible to participate in Employer’s 2015 bonus plan for its senior officers (the “2015 Bonus Plan”), and Employee’s at-target bonus opportunity under the 2015 Bonus
Plan will be equal to 60% of his annual base salary. Employee will participate in the 2015 Bonus Plans in accordance with the terms and conditions thereof, provided that as long as Employee remains employed by Employer through January 8, 2016,
Employer hereby waives any requirement under the 2015 Bonus Plan that Employee be employed by Employer on the date of payment of any bonuses thereunder (including any discretionary bonuses). Employee acknowledges that no bonus amount for 2014 or
2015 is guaranteed. 

  
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 4.3 Additional Benefits. During the term of this Agreement and except as expressly
provided herein, Employee will be eligible to continue to participate in Employer’s employee benefit plans that are applicable to similarly situated employees, including, without limitation, any plans covering medical, dental, vision, life and
disability, paid time off (“PTO”), 401(k) plans, and educational assistance programs. Any such participation in such employee benefit plans will be subject to the terms, conditions, and limitations contained in the applicable plan
documents and/or policies, as well as applicable law. In general, Employee will receive such benefits as Employer generally provides to its employees holding positions similar to that of Employee, and Employee understands that Employer retains the
right to establish, change, or terminate any such plans, programs, and benefits from time to time at its sole discretion. 
 4.4
Restricted Stock Units. The Compensation Committee of Employer’s Board of Directors will grant to Employee on February 5, 2015 (or if not reasonably practicable on that date, then as soon as is reasonably practicable
thereafter), under the Company’s Second Amended and Restated 2008 Equity Incentive Plan (the “2008 Plan”), 60,000 restricted stock units (“RSUs”), each of which will represent the right to receive one share of
Employer’s Common Stock upon vesting of the RSU. The RSUs will vest as follows: (i) 50% of the RSUs will vest in four equal quarterly installments, with the first installment vesting on February 15, 2015 and an additional installment
vesting on the 15th day of the second month of each of the three calendar quarters thereafter and (ii) the remaining 50% of the RSUs will vest on January 8, 2016, provided Employee remains an employee of Employer through the applicable
vesting date. The RSUs will be subject in all respects to the terms and provisions of the 2008 Plan and the Restricted Stock Unit Agreement (the “RSU Agreement”) that will be entered into between Employee and Employer to evidence the grant
of the RSUs. In addition to the principal terms set forth in this Section 4.4, the RSU Agreement will include such other terms and conditions as are customarily included in award agreements evidencing RSUs granted to employees of the Company.

 4.5 Expenses. Employee will be reimbursed for all reasonable and necessary expenses incurred by Employee in performing
Employee’s duties hereunder, provided that such expenses are in accordance with Employer’s applicable policies and are properly documented and accounted for in accordance with such policies. Expenses shall be reimbursed pursuant to
Employer’s expense reimbursement policies as in effect from time to time, but in no event later than the last day of the year following the year in which expenses were incurred. The amount of expenses eligible for reimbursement may not affect
the expenses eligible for reimbursement in any other taxable year. 
 5. Officer Severance Plan. 

5.1 Severance Entitlement. Employer acknowledges and agrees that, upon the termination of Employee’s employment with
Employer on the Termination Date (as defined below), and except as provided in Sections 5.3 and 5.4 below, Employee will be entitled to receive severance compensation and benefits in accordance with Employer’s Officer Severance Plan (As Amended
and Restated Effective January 1, 2009), as amended (the “2009 OSP”), as contemplated by Section 4 (Amount and Payment of Severance Benefits) thereof. Employee’s receipt of such severance compensation and benefits will be
subject to Employee’s compliance with the terms of the 2009 OSP, including Employee’s timely execution and delivery of, and compliance with, a written employment separation agreement in the form of the agreement attached to the 2009 OSP.
Employee’s Severance Allowance (as defined in the 2009 OSP) will be determined based on 

  
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Employee’s Annual Compensation (as defined in the 2009 OSP) on the Termination Date. For purposes of calculating Annual Compensation in accordance with Section 2(c) of the 2009 OSP and
specifically the average of the annual aggregate amounts of the bonus payments earned by Employee for services rendered during the three calendar years immediately preceding termination, if Employee’s bonus for the immediately preceding
calendar year is not earned and determinable on the Termination Date, then the three-year average will be based on the amounts of the bonus payments earned for services rendered during the three calendar years immediately preceding such immediately
preceding calendar year. 
 5.2 Method of Payment. This Section 5.2 shall apply in the event Employee is a specified
employee, as such status is determined under the nonqualified deferred compensation plans of Employer subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), but only to the extent required to avoid any
adverse tax consequences under Section 409A of the Code. In consideration of Section 409A and the regulations promulgated thereunder, and as contemplated by Section 4(b) (Method of Payment) and Section 9 (409A Code Compliance) of
the 2009 OSP, the severance compensation that would otherwise be due and payable to Employee during the six-month period following the Termination Date (the “409A Delay Period”) and the cost of the continuation of Employee’s health
care insurance benefits that would otherwise be paid by Employer during the 409A Delay Period will be paid by Employer to Employee in a lump sum cash amount, with interest accruing from the Termination Date at a rate per annum equal to the Prime
Rate (as defined herein), plus one percent (1%), on the first day of the seventh calendar month immediately following the Termination Date (e.g., if the Termination Date is January 8, 2016, then such lump sum payment would be due on
August 1, 2016). Following the 409A Delay Period, the remaining Severance Allowance will be paid to Employee in equal monthly installments in accordance with Section 4(b) of the 2009 OSP (e.g., if the Termination Date is January 8,
2016, then such installments will be payable on August 8, 2016 and on the 8th day of the five calendar months thereafter), and health care insurance continuation benefits will be provided in the manner set forth in Section 4(c) of the 2009
OSP. For purposes of this Agreement, “Prime Rate” means the lending rate announced from time to time by Bank of America, N.A. For purposes of Section 409A of the Code, the right to a series of installment payments hereunder shall be
treated as a right to a series of separate payments. 
 5.3 Ineligible Termination. Notwithstanding anything herein to the
contrary, in the event that Employee ceases to be an employee of Employer as a result of (a) Employee’s voluntary resignation or retirement as contemplated by Section 3(c)(i) or Section 3(c)(ii) of the 2009 OSP,
(b) Employer’s termination of Employee for “Cause” (as defined in the 2009 OSP), (c) the removal of Employee from one or more officer positions but Employee is offered and accepts one or more other officer positions, or
(d) Employee’s death or long-term disability as determined in accordance with Section 3(c)(v) of the 2009 OSP, Employee will not be entitled to receive severance compensation and benefits as provided in Section 5.1 above.
Employer acknowledges and agrees that in the event of any termination of employment due to death or long-term disability, Employee will be entitled to receive, in accordance with and subject to the terms and conditions of the 2009 OSP, the severance
benefits provided in Section 3(c)(v) of the 2009 OSP relating to the accelerated vesting and extension of exercise rights of equity incentive grants or other rights to purchase or acquire securities or other property of Employer. The
determination as to whether an ineligible termination has occurred shall be subject to the applicable terms and conditions of Section 3(c) of the 2009 OSP; provided, however, that Employer expressly acknowledges and agrees that
Employee’s termination of employment at the close of business on January 8, 2016, as contemplated by Section 6 below, will not be deemed an ineligible termination for purposes of this Section 5.3 and the 2009 OSP. 

  
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 5.4 Change in Control. From and after the Agreement Date, Employee will be
designated as an “Eligible Officer” under the 2009 OSP in his capacity as Senior Vice President, Corporate Affairs of Employer. Notwithstanding anything herein to the contrary, in the event that Employee’s employment with Employer
terminates under circumstances that would entitle Employee to severance compensation and benefits pursuant to Section 6 (Change in Control Provisions) of the 2009 OSP, Employee shall be entitled to receive such severance compensation and
benefits in accordance with and subject to the terms and conditions of said Section 6 and the 2009 OSP. In any such case, Employee shall not be entitled to receive the severance compensation and benefits provided for in Section 5.1 of this
Agreement. 
 5.5 General. The provisions of this Section 5 are intended to clarify, but not modify, Employee’s
rights under the provisions of the 2009 OSP. 
 6. Term of Agreement. Employee’s employment by Employer hereunder and the
term of this Agreement will continue through the close of business on January 8, 2016, unless Employer’s employment and this Agreement are earlier terminated as provided below: 

6.1 Mutual Written Agreement. Employer and Employee may mutually agree in writing to terminate this Agreement and
Employee’s employment hereunder. 
 6.2 Termination by Employer. Employer may terminate this Agreement and
Employee’s employment hereunder for Cause (as defined in the 2009 OSP), effective immediately or as of such other time as may be agreed upon by the parties, by giving written notice to Employee. 

6.3 Death or Disability. This Agreement shall automatically terminate upon Employee’s death of Employee or long-term
disability (as determined in accordance with the 2009 OSP). 
 7. Effect of Termination or Expiration of Agreement. Upon the
termination of Employee’s employment for any reason, including upon expiration of the term of this Agreement, Employer shall pay Employee the compensation and benefits accrued and payable to Employee under Section 4 through the date of
such termination (the “Termination Date”). Employee shall also provide to Employee such other payments and benefits (if any) as a result of such termination as are expressly provided for in or contemplated by this Agreement. Except as
expressly provided herein or contemplated hereby, Employee’s rights following any termination under Employer’s equity incentive plans and under Employer’s benefit plans of general application, including without limitation any medical,
dental, vision, life, disability, and 401(k) plans then in effect, shall be determined under the provisions of those plans. Following the termination of Employee’s employment with the Company, the Company will also maintain directors’ and
officers’ liability insurance coverage with respect to Employee (as a former executive officer of the Company) to the same extent the Company would maintain such insurance with respect to similarly situated former executive officers of the
Company. 
 8. Confidentiality, Non-Competition, Non-Solicitation and Inventions Agreement. From and after the Agreement Date,
Employee remains bound by the Confidentiality, Non-Competition, Non-Solicitation and Inventions Agreement (the “Confidentiality Agreement”) dated as of April 27, 2007 between Employer and Employee. 

  
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 9. Release by Employee. 

9.1 General. In consideration of Employee’s continuing employment by Employer in accordance with the terms of this
Agreement and the compensation and benefits provided to Employee hereunder, Employee does hereby and forever release and discharge Employer, Employer’s direct and indirect subsidiaries (the “Subsidiaries”), the predecessors,
successors, and assigns of Employer and/or any of the Subsidiaries, and the current, prior, or future shareholders, officers, directors, heirs, agents, employees, attorneys, insurers, and representatives of any of the foregoing (collectively, the
“Released Parties”), from any and all cause or causes of action, actions, judgments, liens, indebtedness, damages, losses, claims, liabilities, and demands of any kind or character whatsoever, whether known or unknown, suspected to exist
or not suspected to exist, anticipated or not anticipated, whether or not heretofore brought before any state or federal agency, court, or other governmental entity which are existing on or arising prior to the Agreement Date and which, directly or
indirectly, in whole or in part, relate or are attributable to, connected with, or incidental to the employment of Employee by Employer prior to the Agreement Date and any dealings between the parties concerning Employee’s employment by
Employer prior to the Agreement Date, excepting only those obligations expressly recited herein or to be performed hereunder. Nothing contained in this Section 9.1 shall affect any rights, claims, or causes of action which Employee may have
(1) with respect to Employee’s rights and Employer’s obligations and performance under or as expressly provided in or contemplated by this Agreement, (2) with respect to outstanding stock options, restricted stock units, or other
rights to purchase Employer’s Common Stock or other securities under the terms and conditions thereof; (3) as a shareholder of Employer; (4) to indemnification by Employer, to the extent required under the provisions of
Employer’s Amended and Restated Articles of Incorporation, as amended, Employer’s Bylaws, as amended, the California General Corporation Law, the Indemnification Agreement dated as of April 27, 2007 between Employer and Employee (the
“Indemnification Agreement”), insurance, or contracts, with respect to matters relating to Employee’s service prior to the Agreement Date as an officer, employee, or agent of Employer or as a director, officer, employee, or agent of
any of Employer’s subsidiaries; and (5) to make claims against, or seek indemnification or contribution from, (i) anyone not released by the first sentence of this Section 9.1 with respect to any matter or (ii) anyone
released by the first sentence of this Section 9.1 with respect to any matter not released thereby. Further, Employee waives specifically any and all rights or claims Employee has or may have under the Age Discrimination in Employment Act
(“ADEA”) and Older Workers Benefit Protection Act (“OWBPA”), and acknowledges that such waiver is given voluntarily in exchange for certain consideration included in the benefits being paid pursuant to this Agreement. Employee
acknowledges that the agreements of Employer pursuant to this Agreement include sufficient consideration for Employee’s release of claims provided herein. 

9.2 Waiver of Unknown Claims. Employee acknowledges that he is aware that he may hereafter discover claims or facts different
from or in addition to those he now knows or believes to be true with respect to the matters herein released, and he agrees that this release shall be and remain in effect in all respects a complete general release as to the matters released and all
claims relative thereto which may exist or may heretofore have existed, notwithstanding any such different or additional facts. Employee acknowledges that he has been informed of Section 1542 of the Civil Code of the State of California, and
does hereby expressly waive and relinquish all rights and benefits which he has or may have under said Section, which reads as follows: 

  
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 “A general release does not extend to claims which the creditor does not know or suspect to
exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” 

For purposes of Section 1542, “creditor” refers to Employee, and “debtor” refers to Employer and the other Released
Parties. 
 9.3 Covenant Not to Sue on Matters Released. Employee covenants that he will not make, assert, or maintain against
any person or entity that Employee has released in this Agreement, any claim, demand, action, cause of action, suit, or proceeding arising out of or in connection with the matters herein released, including but not limited to any claim or right
under the ADEA, the OWBPA, or any other federal or state statute or regulation. Employee represents and warrants that he has not assigned or transferred, purported to assign or transfer, and will not assign or transfer, any matter or claim herein
released. Employee represents and warrants that he knows of no other person or entity which claims an interest in the matters or claims herein released. Employee agrees to, and shall at all times, indemnify and hold harmless each person and entity
that Employee has released in this Agreement against any claim, demand, damage, debt, liability, account, action or cause of action, or cost or expense, including attorneys’ fees, resulting or arising from any breach of the representations,
warranties, and covenants made herein. 
 10. Parties’ Representations. Each party represents and warrants to the other
that (i) such party has full power and authority (and legal capacity in the case of Employee) to execute, deliver, and perform this Agreement and (ii) such party’s execution, delivery, and performance of this Agreement do not and will
not conflict with, breach, violate, or cause a default under any contract, agreement, instrument, order, judgment, or decree to which such party is a party or by which such party is bound (including, in the case of Employer, its Amended and Restated
Articles of Incorporation, as amended, and Bylaws, as amended). 
 11. Severability. The determination that any provision of
this Agreement is unenforceable shall not terminate this Agreement or otherwise affect the other provisions of this Agreement, it being the intention of the parties hereto that this Agreement shall be construed to permit the equitable reformation of
such provision to permit the enforcement of the remaining provisions of this Agreement as if such unenforceable provision were not included herein. 

12. Notices. Any notice required or permitted to be given under the Agreement shall be in writing and shall be deemed to have
been given and received on (i) the date when personally delivered, (ii) the next business day after deposit with a reputable courier service such as Federal Express, provided receipt is confirmed by the sender, or (iii) three business
days after deposit with the United States Postal Service, registered or certified postage prepaid, in each case addressed to the other party at the address shown below: 

  
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 If to Employer: 

Ixia 
 26601 W. Agoura Road 

Calabasas, CA 91302 
 Attention:
Chief Executive Officer 
 If to Employee: 

Ronald W. Buckly 
 or to such
other address as either of them may designate to the other in writing. 
 13. Amendment and Waiver. This Agreement may be
amended and any terms of it waived only by a written instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure or waiver of either party at any time or times to require performance of
any provision hereof shall in no manner affect such party’s right at a later time to enforce the same or any other provision. 
 14.
Governing Law. This Agreement shall be governed by and construed under and in accordance with the laws of the State of California. Any litigation or other proceeding arising out of or relating to this Agreement shall be filed and
pursued exclusively in the state or federal courts in the County of Los Angeles, California, and the parties hereto consent to the jurisdiction of and venue in such courts. 

15. Entire Agreement. This Agreement, together with the agreements, plans, and other instruments expressly referenced herein,
including without limitation the Indemnification Agreement, constitute the entire agreement between the parties pertaining to the subject matter hereof, and this Agreement supersedes any and all prior or contemporaneous agreements, arrangements,
negotiations, and understandings, whether oral or written, between Employee and Employer pertaining to the subject matter hereof. 
 16.
Assignment. This Agreement and all rights hereunder are personal to Employee and may not be transferred or assigned by Employee at any time. Employer’s rights, together with its obligations hereunder, may be assigned to any
parent, subsidiary, affiliate, or successor. 
 17. Survivability. Without prejudice to the survival of any of Employee’s
other obligations and/or Employer’s other rights, Employee and Employer expressly agree that Employee’s obligations and/or Employer’s rights under Sections 5 through 19 hereof will survive the expiration or earlier termination of this
Agreement. 
 18. Independent Advice. Employee has been encouraged to consult with counsel of Employee’s choice
concerning this Agreement. Employee hereby acknowledges and represents that Employee has consulted with, or has voluntarily declined to consult with, independent counsel regarding Employee’s rights and obligations under this Agreement, and that
Employee fully understands and is voluntarily agreeing to the terms and conditions contained herein. 

  
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 19. Review Period; Right to Revoke. Employee has been given a period of 21 days to
consider whether to sign this Agreement. Employee can use as much or little of that period as Employee chooses. Employee will have the right to revoke this Agreement for a period of seven days following the date on which this Agreement is signed by
him by delivering a signed written notice of revocation to Employer’s CEO. 

  
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 IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below. 

 

									
	IXIA	 		 		 	EMPLOYEE
					
	By:	 	 /s/ Bethany Mayer
	 		 		 	/s/ Ronald W. Buckly
	 Name:
 Title:
	 	 Bethany Mayer
 President and Chief Executive
Officer
	 		 		 	 Ronald W. Buckly
  

Date: December 23, 2014

 Date: December 23, 2014 

  
 10Exhibit 10(a)

SEVCON, INC.

1996 EQUITY INCENTIVE PLAN

(As Amended and Restated)

	
1.

	
Purpose and History

The purpose of the Sevcon, Inc. 1996 Equity Incentive Plan as amended and restated (the “Plan”) is to attract and retain key employees, directors, and consultants of the Company and its Affiliates, to provide an incentive for them to achieve long-range performance goals, and to enable them to participate in the long-term growth of the Company.

The Plan was originally adopted by the Board and approved by the Company’s stockholders effective as of January 31, 1996.  The Board and the Company’s stockholders subsequently approved amendments to the Plan effective as of January 21, 2003, and January 26, 2010, increasing the number of shares available for award.

	
2.

	
Definitions

“Affiliate” means any business entity in which the Company owns directly or indirectly 50% or more of the total voting power or has a significant financial interest as determined by the Committee.

“Award” means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or Foreign National Award granted under the Plan.

“Board” means the Board of Directors of the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor law.

“Committee” means one or more committees each comprised of not less than three members of the Board appointed by the Board to administer the Plan or a specified portion thereof.  If a Committee is authorized to grant Awards to a Reporting Person or a Covered Employee, each member shall be a “disinterested person” or the equivalent within the meaning of applicable Rule 16b-3 under the Exchange Act or an “outside director” or the equivalent within the meaning of Section 162(m) of the Code, respectively.

“Common Stock” or “Stock” means the Common Stock, $.10 par value, of the Company.

“Company” means Sevcon, Inc.

“Covered Employee” means a “covered employee” within the meaning of Section 162(m)(3) of the Code.

“Designated Beneficiary” means the beneficiary designated by a Participant, in a manner determined by the Committee, to receive amounts due or exercise rights of the Participant in the event of the Participant’s death.  In the absence of an effective designation by a Participant, “Designated Beneficiary” means the Participant’s estate.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor law.

“Fair Market Value” means, with respect to Common Stock or any other property, the fair market value of such property as determined by the Committee in good faith or in the manner established by the Committee from time to time.

“Foreign National Award” – See Section 9(i).

“Incentive Stock Option” - See Section 6(a).

“Nonstatutory Stock Option” - See Section 6(a).

 

“Option” - See Section 6(a).

“Participant” means a person selected by the Committee to receive an Award under the Plan.

“Performance Goals” means with respect to any Performance Period, one or more objective performance goals based on one or more of the following objective criteria established by the Committee prior to the beginning of such Performance Period or within such period after the beginning of the Performance Period as shall meet the requirements to be considered “pre-established performance goals” for purposes of Code Section 162(m):  (i) increases in the price of the Common stock; (ii) market share; (iii) sales; (iv) revenue; (v) return on equity, assets, or capital; (vi) economic profit (economic value added); (vii) total shareholder return; (viii) costs; (ix) expenses; (x) margins; (xi) earnings or earnings per share; (xii) cash flow; (xiii) customer satisfaction; (xiv) operating profit; or (xv) any combination of the foregoing, including without limitation goals based on any of such measures relative to appropriate peer groups or market indices.  Such Performance Goals may be particular to a Participant or may be based, in whole or in part, on the performance of the division, department, line of business, subsidiary, or other business unit, whether or not legally constituted, in which the Participant works or on the performance of the Company generally.

“Performance Period” means the period of service designated by the Committee applicable to an Award subject to Section 9(l) during which the Performance Goals will be measured.

“Reporting Person” means a person subject to Section 16 of the Exchange Act.

“Restricted Period” - See Section 8(a).

“Restricted Stock” - See Section 8(a).

“Restricted Stock Unit” – See Section 8(c).

“Stock Appreciation Right” or “SAR” - See Section 7(a).

	
3.

	
Administration

The Plan shall be administered by the Committee.  The Committee shall have authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the operation of the Plan as it shall from time to time consider advisable, and to interpret the provisions of the Plan.  The Committee’s decisions shall be final and binding.  To the extent permitted by applicable law, the Committee may delegate to one or more executive officers of the Company the power to make Awards to Participants who are not subject to Section 16 of the Exchange Act and all determinations under the Plan with respect thereto, provided that the Committee shall fix the maximum amount of such Awards for all such Participants, a maximum for any one Participant, and such other features of the Awards as required by applicable law.

	
4.

	
Eligibility

All employees and, in the case of Awards other than Incentive Stock Options under Section 6, consultants, directors of the Company or any Affiliate, and Directors Emeritus of the Company capable of contributing significantly to the successful performance of the Company, other than a person who has irrevocably elected not to be eligible, are eligible to be Participants in the Plan.  Incentive Stock Options may be granted only to persons eligible to receive such Options under the Code.

	
5.

	
Stock Available for Awards

 

(a)    Amount.  Subject to adjustment under subsection (b), Awards may be made under the Plan for up to 600,000 shares of Common Stock, together with all shares of Common Stock available for issue under the Company’s former 1987 Stock Option Plan on January 31, 1996, and all shares of stock available for issuance under the Company’s former 1998 Director Stock Option Plan as of January 27, 2004.  If any Award (including any grant under the 1987 Plan or the Director Plan) expires or is terminated unexercised or is forfeited or settled in a manner that results in fewer shares outstanding than were awarded, the shares subject to such Award, to the extent of such expiration, termination, forfeiture or decrease, shall again be available for award under the Plan.  Common Stock issued through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares available for Awards under the Plan.  Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

 

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(b)    Adjustment.  In the event that the Committee determines that any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, or other transaction affects the Common Stock such that an adjustment is required in order to preserve the benefits intended to be provided by the Plan, then the Committee (subject in the case of Incentive Stock Options to any limitation required under the Code) shall equitably adjust any or all of (i) the number and kind of shares in respect of which Awards may be made under the Plan, (ii) the number and kind of shares subject to outstanding Awards, and (iii) the exercise price with respect to any of the foregoing, and if considered appropriate, the Committee may make provision for a cash payment with respect to an outstanding Award, provided that the number of shares subject to any Award shall always be a whole number.

(c)     Limit on Individual Grants.  The maximum number of shares of Common Stock subject to all Awards that may be granted under this Plan to any Participant in the aggregate in any calendar year shall not exceed 60,000 shares, subject to adjustment under subsection (b).

	
6.

	
Stock Options

 

(a)     Grant of Options.  Subject to the provisions of the Plan, the Committee may grant options (“Options”) to purchase shares of Common Stock (i) complying with the requirements of Section 422 of the Code or any successor provision and any regulations thereunder (“Incentive Stock Options”) and (ii) not intended to comply with such requirements (“Nonstatutory Stock Options”).  The Committee shall determine the number of shares subject to each Option and the exercise price therefor, which shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant.  No Incentive Stock Option may be granted hereunder more than ten years after the effective date of the Plan.

(b)    Terms and Conditions.  Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee may specify in the applicable grant or thereafter; provided that no Option shall be exercisable after the expiration of ten years from the date the Option is granted.  The Committee may impose such conditions with respect to the exercise of Options, including conditions relating to applicable securities laws, as it considers necessary or advisable.

(c)     Payment.  No shares shall be delivered pursuant to any exercise of an Option until payment in full of the exercise price therefor is received by the Company.  Such payment may be made in whole or in part in cash or through a so-called “cashless” or “broker-assisted” exercise.  To the extent permitted by the Committee at or after the grant of the Option, such payment may also be made by delivery of a note (subject to the limitations of Section 9(g)) or shares of Common Stock owned by the optionee, including vested Restricted Stock, or by retaining shares otherwise issuable pursuant to the Option, in each case valued at their Fair Market Value on the date of delivery or retention, or such other lawful consideration as the Committee may determine.

	
7.

	
Stock Appreciation Rights

 

(a)     Grant of SARs.  Subject to the provisions of the Plan, the Committee may grant rights to receive any excess in value of shares of Common Stock over the exercise price (“Stock Appreciation Rights” or “SARs”) in tandem with an Option (at or after the award of the Option), or alone and unrelated to an Option.  SARs in tandem with an Option shall terminate to the extent that the related Option is exercised, and the related Option shall terminate to the extent that the tandem SARs are exercised.  The Committee shall determine at the time of grant or thereafter whether SARs are settled in cash, Common Stock or other securities of the Company, Awards or other property.

 

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(b)     Exercise Price.  The Committee shall fix the exercise price of each SAR or specify the manner in which the price shall be determined.  An SAR granted in tandem with an Option shall have an exercise price not less than the exercise price of the related Option.  An SAR granted alone and unrelated to an Option may not have an exercise price less than 100% of the Fair Market Value of the Common Stock on the date of the grant.

(c)     Limited SARs.  An SAR related to an Option, which SAR can only be exercised upon or during limited periods following a change in control of the Company, may entitle the Participant to receive an amount based upon the highest price paid or offered for Common Stock in any transaction relating to the change in control or paid during a specified period immediately preceding the occurrence of the change in control in any transaction reported in the stock market in which the Common Stock is normally traded.

	
8.

	
Restricted Stock and Restricted Stock Units

 

(a)     Grant of Restricted Stock.  Subject to the provisions of the Plan, the Committee may grant shares of Common Stock subject to forfeiture (“Restricted Stock”) and determine the duration of the period (the “Restricted Period”) during which, and the conditions under which, the shares may be forfeited to the Company and the other terms and conditions of such Awards.  Shares of Restricted Stock may be issued for no cash consideration or such minimum consideration as may be required by applicable law.

(b)     Restrictions.  Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Committee, during the Restricted Period.  Shares of Restricted Stock shall be evidenced in such manner as the Committee may determine.  Any certificates issued in respect of shares of Restricted Stock shall be registered in the name of the Participant and unless otherwise determined by the Committee, deposited by the Participant, together with a stock power endorsed in blank, with the Company.  At the expiration of the Restricted Period, the Company shall deliver such certificates to the Participant or if the Participant has died, to the Participant’s Designated Beneficiary.

(c)       Restricted Stock Units.  Subject to the provisions of the Plan, the Committee may grant the right to receive in the future shares of Common Stock subject to forfeiture (“Restricted Stock Units”) and determine the duration of the Restricted Period during which, and the conditions under which, the Award may be forfeited to the Company and the other terms and conditions of such Awards.  Restricted Stock Unit Awards shall constitute an unfunded and unsecured obligation of the Company, and shall be settled in shares of Common Stock or cash, as determined by the Committee at the time of grant or thereafter.  Such Awards shall be made in the form of “units” with each unit representing the equivalent of one share of Common Stock.

	
9.

	
General Provisions Applicable to Awards

 

(a)     Reporting Person Limitations.  Notwithstanding any other provision of the Plan, to the extent required to qualify for the exemption provided by Rule 16b-3 under the Exchange Act, Awards made to a Reporting Person shall not be transferable by such person other than by will or the laws of descent and distribution and are exercisable during such person’s lifetime only by such person or by such person’s guardian or legal representative.  If then permitted by Rule 16b-3, such Awards shall also be transferable pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder.

(b)    Documentation.  Each Award under the Plan shall be evidenced by a writing delivered to the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan (including but not limited to the requirement that a Participant satisfy Performance Goals) or to comply with applicable tax and regulatory laws and accounting principles.

(c)     Committee Discretion.  Each type of Award may be made alone, in addition to or in relation to any other Award.  The terms of each type of Award need not be identical, and the Committee need not treat Participants uniformly.  Except as otherwise provided by the Plan or a particular Award, any determination with respect to an Award may be made by the Committee at the time of grant or at any time thereafter.

 

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(d)    Dividends and Cash Awards.  In the discretion of the Committee, any Award under the Plan may provide the Participant with (i) dividends or dividend equivalents payable currently or deferred with or without interest, and (ii) cash payments in lieu of or in addition to an Award.

(e)    Termination of Employment or Service.  The Committee shall determine the effect on an Award of the disability, death, retirement or other termination of employment or service of a Participant and the extent to which, and the period during which, the Participant’s legal representative, guardian or Designated Beneficiary may receive payment of an Award or exercise rights thereunder.  Unless the Committee provides otherwise in any case, a Participant’s employment or other service shall have terminated for purposes of this Plan at the time the entity by which the Participant is employed or to which the Participant renders service ceases to be an Affiliate of the Company.

(f)     Change in Control.  In order to preserve a Participant’s rights under an Award in the event of a change in control of the Company, the Committee in its discretion may, at the time an Award is made or at any time thereafter, take one or more of the following actions:  (i) provide for the acceleration of any time period relating to the exercise or payment of the Award, (ii) provide for payment to the Participant of cash or other property with a Fair Market Value equal to the amount that would have been received upon the exercise or payment of the Award had the Award been exercised or paid upon the change in control, (iii) adjust the terms of the Award in a manner determined by the Committee to reflect the change in control, (iv) cause the Award to be assumed, or new rights substituted therefor, by another entity, or (v) make such other provision as the Committee may consider equitable to Participants and in the best interests of the Company.

(g)     Loans.  The Committee may authorize the making of loans or cash payments to Participants in connection with the grant or exercise any Award under the Plan, which loans may be secured by any security, including Common Stock, underlying or related to such Award (provided that the loan shall not exceed the Fair Market Value of the security subject to such Award), and which may be forgiven upon such terms and conditions as the Committee may establish at the time of such loan or at any time thereafter.  Notwithstanding the foregoing, no loans may be made to any director or executive officer (or equivalent thereof) of the Company which would be prohibited by Section 13(k) of the Exchange Act.

(h)    Withholding Taxes.  The Participant shall pay to the Company, or make provision satisfactory to the Committee for payment of, any taxes required by law to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability.  In the Committee’s discretion, such tax obligations may be paid in whole or in part in shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value on the date of delivery.  The Company and its Affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Participant.

(i)     Foreign National Awards.  Notwithstanding anything to the contrary contained in this Plan, Awards may be made to Participants who are foreign nationals or employed outside the United States on such terms and conditions different from those specified in the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable laws.

(j)     Amendment of Award.  The Committee may amend, modify or terminate any outstanding Award, including substituting therefor another Award of the same or a different type, changing the date of exercise or realization and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required unless the Committee determines that the action, taking into account any related action, would not materially and adversely affect the Participant.

(k)     Exchange Programs.  In addition to the authority granted to the Committee in Section 9(j), the Committee may, without further shareholder approval, engage in one or more exchange offers under which Participants may elect to exchange or surrender their outstanding Awards (including awards made under the Directors’ Plan) for other Awards or cash (each, an “Exchange Program”).  Each Exchange Program shall provide that each eligible Participant must exchange or surrender Awards with a fair value (as determined by the Committee using established methods including but not limited to Black-Scholes) equal to or greater than the fair value of the replacement Award or the present value of any cash consideration, as the case may be.  No Award granted on or after January 27, 2004, shall be eligible for any Exchange Program.

 

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(l)      Code Section 162(m) Provisions.  If the Committee determines at the time Restricted Stock or a Restricted Stock Unit is granted to a Participant that such Participant is, or may be as of the end of the tax year for which the Company would claim a tax deduction in connection with such Award, a Covered Employee, then the Committee may provide that the Participant’s right to receive cash, Shares, or other property pursuant to such Award shall be subject to the satisfaction of Performance Goals during a Performance Period.  Prior to the payment of any Award subject to this Section 9(l), the Committee shall certify in writing that the Performance Goals applicable to such award were met.  The Committee shall have the power to impose such other restrictions on Awards subject to this Section 9(l) as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code.

	
10.

	
Miscellaneous

 

(a)    No Right to Employment.  No person shall have any claim or right to be granted an Award.  Neither the Plan nor any Award hereunder shall be deemed to give any employee the right to continued employment or service, or to limit the right of the Company to discharge any Participant at any time.

(b)     No Rights as Stockholder.  Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed under the Plan until he or she becomes the holder thereof.  A Participant to whom Common Stock is awarded shall be considered the holder of the Stock at the time of the Award except as otherwise provided in the applicable Award.

(c)     Effective Date.  As used herein, the “effective date” of the Plan shall be the most recent date that the Plan was adopted or that it was approved by the stockholders, if earlier (as such terms are used in the regulations under Section 422 of the Code).

(d)     Amendment of Plan.  The Board may amend, suspend or terminate the Plan or any portion thereof at any time, subject to such stockholder approval as the Board determines to be necessary or advisable to comply with any tax or regulatory requirement.

(e)     Governing Law.  The provisions of the Plan shall be governed by and interpreted in accordance with the laws of Delaware.

Approved by the stockholders February 2, 2014

 

 

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