Document:

Exhibit 10.2

Exhibit B

AMENDED
AND RESTATED

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

This AGREEMENT is
made by and between Intermec, Inc.,
a Delaware corporation, and                   
(the “Executive”) as of the     
day of             ,
20   (the “Effective Date”).

WHEREAS, the Board of Directors of Intermec, Inc.
has determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued dedication of
the Executive, notwithstanding the possibility, threat or occurrence of a
Change of Control (as defined below);

WHEREAS, the Board of Directors of Intermec, Inc.
believes it is imperative to diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the Executive’s full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Executive with compensation
and benefits arrangements upon a Change of Control which ensure that the
compensation and benefits expectations of the Executive will be satisfied and
which are competitive with those of other corporations;

WHEREAS, the Company and the Executive are parties
to a Change of Control Employment Agreement dated as of             ,
     (the “Original Agreement”);

WHEREAS, the Company and the Executive desire to
amend and restate the Original Agreement so that this Agreement will replace
the Original Agreement in its entirety;

NOW, THEREFORE, THE PARTIES AGREE
AS FOLLOWS:

1.     Definitions.

1.1  “Accounting Firm” means (i)
the independent certified public accounting firm serving the Company
immediately prior to the Change of Control Date or (ii) an independent
certified public accounting firm selected by the Executive pursuant to Section
7(c) of this Agreement.

1.2  “Accrued Obligations” has
the meaning set forth in Section 6(a)(i) of this Agreement.

1.3  “Affiliate” means a Person
that Controls or is Controlled by or is under common Control with Intermec,
Inc.

1.4  “Agreement” means this
Amended and Restated Change of Control and Employment Agreement.

1.5  “Annual Base Salary” has the
meaning set forth in Section 4(b)(i) of this Agreement.

1.6  “Annual Bonus” has the
meaning set forth in Section 4(b)(ii) of this Agreement.

1.7  “Benefits” means Fringe
Benefits, Retirement Benefits, and/or Welfare Benefits.

1.8  “Board” means the Board of
Directors of Intermec, Inc. and its Successors.

 1
 

 

1.9  “Business Combination” means
a reorganization, merger, or consolidation or sale or other disposition of all
or substantially all of the assets of the Company.

1.10  “Cause” has the meaning set
forth in Section 5(b) of this Agreement.

1.11  “Change of Control” has the
meaning set forth in Section 2 of this Agreement.

1.12  “Change of Control Date”
means (i) the effective date of a Change of Control or (ii) if, the Company
terminates the Executive’s employment or reduces Executive’s Annual Base
Salary, Annual Bonus, Opportunities or Benefits without Cause prior to the
effective date of a Change of Control and if it is reasonably demonstrated by
the Executive that such termination or reduction (A) was at the request of a
third party who had taken steps reasonably calculated to effect a Change of
Control or (B) otherwise arose in connection with or in anticipation of a
Change of Control, then “Change of Control Date” means the date immediately
prior to the date of such termination or reduction.

1.13  “Company” means Intermec,
Inc., its Successors and its Affiliates.

1.14  “Control” means (i)
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act),
directly or indirectly, of 30% or more of a Person’s then outstanding voting
equity generally entitled to vote in the election of directors (or other
participants of the managing authority) or (ii) acquisition of actual control
of the operations of a Person whether by means of contract or otherwise or
(iii) acquisition of control of a Person through a merger or consolidation or
(iv) acquisition of all or substantially all of a Person’s assets.

1.15  “Date of Termination” means
(i) if the Executive’s employment is terminated by the Company for Cause, or by
the Executive for Good Reason, the date of receipt of the Notice of Termination
or any later date specified therein, as the case may be, (ii) if the Executive’s
employment is terminated by the Company other than for Cause or Disability, the
date on which the Company notifies the Executive of such termination, and (iii)
if the Executive’s employment is terminated by reason of death or Disability,
the date of death of the Executive or the Disability Effective Date, as the
case may be; provided, however, that, when the event of termination occurs in
the fourth calendar quarter of the year, the Date of Termination is January 1
of the following year.

1.16  “Disability”
means the absence of the Executive from the Executive’s duties with the Company
on a full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative.

1.17  “Disability Effective Date”
means the 30th day after the Executive’s receipt of the Company’s notice of
intent to terminate the Executive’s employment pursuant to Section 5(a) of this
Agreement.

1.18  “Dispute” means
disagreement, dispute, controversy, suit, action, proceeding or claim arising
out of or relating to this Agreement or the interpretation of this Agreement.

1.19  “Effective Date” has the
meaning set forth in the first sentence of this Agreement.

1.20  “Employment Period” means
the period beginning on the Change of Control Date and ending on the second
anniversary of such Change of Control Date.

 2
 

 

1.21  “ERISA Sections 601-608”
means Sections 601-608 of the Employee Retirement Income Security Act of 1974,
as amended.

1.22  “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

1.23  “Excess Parachute Payment”
means an excess parachute payment within the meaning of IRC Section 280G.

1.24  “Excise Tax” means the
excise tax imposed by IRC Section 4999.

1.25  “Executive” has the meaning
set forth in the first sentence of this Agreement.

1.26  “Executive’s Principal
Location” means the location where the Executive was employed on the business
day immediately preceding the Change of Control Date.

1.27  “Fringe Benefit Plan” means
any plan, practice, program or policy maintained by the Company with respect to
fringe benefits, including, without limitation, tax and financial planning
services and payment of related expenses.

1.28  “Good Reason” has the
meaning set forth in Section 5(c) of this Agreement.

1.29  “Incentive Compensation
Plans” means incentive (including stock option or similar incentive plans),
savings and retirement plans, practices, policies and programs maintained by
the Company, including, without limitation, the Management Incentive
Compensation Plan.

1.30  “Incumbent Board” has the
meaning set forth in Section 2(b) of this Agreement.

1.31  “IRC” means the Internal
Revenue Code of 1986 as amended.

1.32  “IRC Section 1274(b)(2)(B)”
means Section 1274(b)(2)(B) of the IRC.

1.33  “IRC Section 1274 (d)”
means Section 1274(d) of the IRC.

1.34  “IRC Section 409A” means
Section 409A of the IRC.

1.35  “IRC Section 4980B means
Section 4980B of the IRC.

1.36  “IRC Section 4999” means
Section 4999 of the IRC.

1.37  “IRC Interest Rate” means
the applicable federal interest rate provided for delayed payment in Section
7872(f)(2)(A) of the IRC.

1.38 “IRS” means the U.S. Internal Revenue Service.

1.39  “Management Incentive
Compensation Plan” means the Intermec, Inc. Management Incentive Compensation
Plan (effective for the 1999 fiscal year and thereafter) and any predecessor or
successor plans which provide for the grant of annual cash bonuses or other
short-term cash incentive awards during the last three full fiscal years prior
to the Change of Control Date.

1.40 “Net After-Tax Benefit” has the meaning set forth in Section 7(a)
of this Agreement.

 3
 

 

1.41  “Notice of Termination”
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated, and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date will be not
more than thirty days after the giving of such notice).

1.42  “Opportunities” means the
opportunity to (i) obtain regular or special incentive compensation under the
Company’s Incentive Compensation Plans, (ii) obtain regular or special
retirement benefits under the Company’s Retirement Plans, (iii) save through
the Company’s Savings Plans and/or (iv) obtain regular or special benefits
under the Company’s Welfare Benefit Plans.

1.43  “Other Benefits” has the
meaning set forth in Section 6(a)(iv) of this Agreement.

1.44  “Outstanding Company Common
Stock” has the meaning set forth in Section 2(a)(i) of this Agreement.

1.45  “Outstanding Company Voting
Securities” has the meaning set forth in Section 2(a)(ii) of this Agreement.

1.46  “Parachute Payment” means “parachute
payment” within the meaning of IRC Section 280G.

1.47  “Parachute Value” means the
present value as of the date of the Change of Control of the portion of the
Payment that constitutes a “parachute payment” under IRC Section 280G(b)(2), as
determined by the Accounting Firm in accordance with IRC Section 280G(b)(2).

1.48  “Payment” has the meaning
set forth in Section 7(a) of this Agreement.

1.49  “Person”  has the meaning set forth in Section 2(a) of
this Agreement.

1.50  “Plan” means Fringe Benefit
Plan, Incentive Compensation Plan, Retirement Plan, Savings Plan, Severance
Plan, Vacation Plan and/or Welfare Benefit Plan.

1.51 “Reduced Amount” means an amount expressed in present value which
maximizes the aggregate present value of Payments without causing any Payment
to be subject to Excise Tax.

1.52 “Repayment Amount” has the meaning set forth in Section 7(c) of
this Agreement.

1.53  “Retirement Benefits” means
any compensation a retiree is eligible to receive under a Retirement Plan.

1.54  “Retirement Plan” means any
qualified or non-qualified defined benefit retirement plan maintained by the
Company, including but not limited to the Intermec, Inc. Pension Plan, the
Intermec, Inc. Supplemental Executive Retirement Plan and the Intermec, Inc.
Restoration Plan.

1.55  “Safe Harbor Amount” means
the maximum dollar amount of Payments in the nature of compensation that are
contingent on a Section 280G Change of Control and may be paid or distributed
to the Executive without imposition of the Excise Tax.

 4
 

 

1.56  “Savings Plan” means any
qualified or non-qualified savings program maintained by the Company, including
but not limited to the Intermec, Inc. Financial Security and Savings Program.

1.57  “Section 280G Change of
Control” means a change of control within the meaning of IRC Section 280G.

1.58  “Section 280G Compensation
means compensation within the meaning of IRC Section 280G.

1.59   “SERP” means any excess or
supplemental retirement plan maintained by the Company.

1.60  “Severance Plan” means any
plan, practice, policy or program under which the Company provides benefits to
employees following the Company’s termination of their employment.

1.61  “Successor” means a Person
that acquires Control of the Company.

1.62  “Vacation Plan” means any
plan, practice, policy or program maintained by the Company with respect to
employee vacations.

1.63  “Welfare Benefit Plan”
means any welfare benefit plan, practice, policy or program provided by the
Company to its employees (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs)

1.64  “Willful” has the meaning
set forth in Section 5(b) of this Agreement.

2.     Change
of Control.  For the purpose of this
Agreement, the term “Change of Control”
means:

(a)  An
acquisition by any individual, entity, or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30 % or more of either (i) the then outstanding shares of
common stock of the Company (the “Outstanding Company Common
Stock”) or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”);
excluding, however, the following acquisitions of Outstanding Company Common
Stock and Outstanding Company Voting Securities: (i) any acquisition directly
from the Company, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was itself acquired
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company, or (iv) any acquisition by any Person pursuant to a
transaction which complies with clauses (i), (ii), and (iii) of subsection (c)
of this Section 2; or

(b) 
Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual who
becomes a member of the Board subsequent to the Effective Date whose election,
or nomination for election by the Company’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board will be considered as though such individual were a member of the
Incumbent Board, but provided further, 
that any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A 

 5
 

 

promulgated under the Exchange Act)  or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board will not
be considered to be a member of the Incumbent Board; or

(c) 
The approval by the shareholders of the Company of a Business
Combination or if consummation of such Business Combination is subject, at the
time of such approval by shareholders, to the consent of any government or
governmental agency, obtaining of such consent (either explicitly or implicitly
by consummation); excluding, however, such a Business Combination pursuant to
which (i) all or sub­stantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination will beneficially own, directly or indirectly, more than 60 percent
of, respectively, the outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (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) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (other than any employee benefit
plan (or related trust) sponsored or maintained by the Company or such
corporation resulting from such Business Combination) will beneficially own,
directly or indirectly, 30 percent or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the outstanding voting securities
of such corporation entitled to vote generally in the election of directors
except to the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination will have
been members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

(d) 
The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

3.     Employment
Period.  Subject to the terms and
conditions of this Agreement, the Company agrees to continue the Executive in
its employ, and the Executive agrees to remain in the employ of the Company for
the duration of the Employment Period.

4.     Terms
of Employment.

(a)  Position
and Duties.

(i)  During the Employment Period, (A) the
Executive’s position (including status, offices, titles, and reporting
requirements), authority, duties, and responsibilities will be at least commensurate
in all material respects with the most significant of those held, exercised,
and assigned at any time during the 120-day period immediately preceding the
Change of Control Date and (B) the Executive’s services will be performed at
the Executive’s Principal Location or at any office or location that is 25
miles or less from the Executive’s Principal Location.

(ii)  During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary
to discharge the responsibilities assigned to the Executive hereunder, to use
the Executive’s reasonable best efforts to perform faithfully and efficiently 

 6
 

 

such
responsibilities.  During the Employment
Period it will not be a viola­tion of this Agreement for the Executive to (A)
serve on corporate, civic, or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements, or teach at educational institutions,
and (C) manage personal investments, so long as such activities do not
significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this
Agreement.  It is expressly understood
and agreed that to the extent that any such activities have been conducted by
the Executive prior to the Change of Control Date, the continued conduct of
such activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Change of Control Date will not thereafter be deemed
to interfere with the performance of the Executive’s responsibilities to the
Company.

(b)  Compensation.

(i)  Base
Salary.  During the Employment Period,
the Executive will receive from the Company an annual base salary (“Annual Base Salary”), (which will be paid at a monthly rate)
at least equal to twelve times the highest monthly base salary paid or payable,
including any base salary which has been earned but deferred, to the Executive
by the Company in the 12-month period immediately preceding the Change of
Control Date.  During the Employment
Period, the Annual Base Salary will be reviewed by the Company no more than 12
months after the last salary increase awarded to the Executive prior to the
Change of Control Date and thereafter at least annually.  Any increase in the Executive’s Annual Base
Salary will not limit or reduce any of the Company’s other obligations to the
Executive under this Agreement.  The
Annual Base Salary will not be reduced after any such increase and, as used in
this Agreement, the term “Annual Base Salary”
means the Annual Base Salary as so increased.

(ii) Annual Bonus.  In addition to Annual Base Salary, the
Executive will be awarded, for each fiscal year ending during the Employment
Period, an annual bonus in cash equal to the Target Bonus (as that term is
defined in the Management Incentive Compensation Plan) applicable to the
Executive for the fiscal year, or if the Management Incentive Compensation Plan
is not in effect for such fiscal year, the target bonus or award which the
Executive would earn for such year under any incentive plan or arrangement in
which the Executive participates or is eligible to participate pursuant to
Section 4(b)(iii) assuming the attainment of any performance goals or similar
criteria to the extent necessary for the Executive to qualify to receive the
target award thereunder.  The amount
described in preceding sentence is hereinafter called the “Annual Bonus.”

(iii)  Incentive,
Savings, and Retirement Plans. 
During the Employment Period, the Executive will be entitled to
participate in all Incentive Compensation Plans applicable generally to other
peer executives of the Company, but in no event will such plans provide the
Executive with Incentive Compensation Plan Opportunities, Savings Plan
Opportunities and Retirement Plan Opportunities, in each case, less favorable,
in the aggregate, than the most favorable of those provided by the Company for the
Executive under such plans as in effect at any time during the 120-day period
immediately preceding the Change of Control Date or, if more favorable to the
Executive, those provided generally at any time on or after the Change of
Control Date to other peer executives of the Company.

(iv)  Welfare Benefit Plans.  During the Employment Period, the Executive
and/or the Executive’s family, as the case may be, will be eligible for
participation in and will receive all benefits under the Company’s Welfare Benefit
Plans to the extent applicable generally to other peer executives of the
Company, but in no event will such plans, practices, policies, and programs
provide the Executive with benefits which are less favorable, in the aggregate,
than the most favorable of such plans, practices, policies, and programs in
effect for the Executive at any time during the 120-day period immediately
preceding the Change of Control Date or, if 

 7
 

 

more
favorable to the Executive, those provided generally at any time on or after the
Change of Control Date to other peer executives of the Company.

(v)  Expenses.  During the Employment Period, the Executive
will be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices, and procedures of the Company in effect for the Executive at any
time during the 120-day period immediately preceding the Change of Control Date
or, if more favorable to the Executive, on or after the Change of Control Date
with respect to other peer executives of the Company.

(vi)  Fringe Benefits.  During the Employment Period, the Executive
will be entitled to fringe benefits, including, without limitation, if
applicable, tax and financial planning services in accordance with the most
favorable Plans of the Company in effect for the Executive at any time during
the 120-day period immediately preceding the Change of Control Date or, if more
favorable to the Executive, as in effect generally at any time on or after the
Change of Control Date with respect to other peer execu­tives of the Company.

(vii)  Office and Support Staff.  During the Employment Period, the Executive
will be entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal secretarial and other assistance,
at least equal to the most favorable of the foregoing provided to the Executive
by the Company at any time during the 120-day period immediately preceding the
Change of Control Date or, if more favorable to the Execu­tive, as provided
generally at any time on or after the Change of Control Date with respect to
other peer executives of the Company.

(viii)  Vacation.  During the Employment Period, the Executive
will be entitled to paid vacation in accordance with the most favorable Plan of
the Company as in effect for the Executive at any time during the 120-day
period immediately preceding the Change of Control Date or, if more favorable
to the Executive, as in effect generally at any time on or after the Change of
Control Date with respect to other peer executives of the Company.

5.     Termination
of Employment.

(a)  Death
or Disability.  Subject to Section
5(d) of this Agreement, the Executive’s employment will terminate automatically
upon the Executive’s death during the Employment Period.  If the Company determines in good faith that
the Disability of the Executive has occurred during the Employment Period, it
may give to the Executive written notice in accordance with Section 12(b) of
this Agreement of its intention to terminate the Executive’s employment.  In such event, the Executive’s employ­ment
with the Company will terminate effective on the Disability Effective Date,
unless, prior to such date, the Executive has returned to the full-time
performance of his or her duties.

(b)  Cause.  The Company may terminate the Executive’s
employment during the Employment Period for Cause.  For purposes of this Agreement, “Cause” means:

(i)  the Willful and continued failure of the
Executive to perform substantially the Executive’s duties with the Company
(other than any such failure resulting from incapacity due to physical or
mental illness), after a written demand for substantial performance is
delivered to the Executive by the Board or the Chief Executive Officer of the
Company which specifically identifies the manner in which the Board or Chief
Executive Officer believes that the Executive has not substantially performed
the Executive’s duties, or

(ii)  the Willful engaging by the Executive in
illegal conduct or gross misconduct which is materi­ally and demonstrably
injurious to the Company.

 8
 

 

For purposes of this provision, no act or failure to act, on the part
of the Executive, will be considered “Willful” unless
it is done, or omitted to be done, by the Executive in bad faith or without
reasonable belief that the Execu­tive’s action or omission was in the best
interests of the Company.  Any act, or
failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
a senior officer of the Company or based upon the advice of counsel for the
Company will be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.  The cessation of employment of the Executive
will not be deemed to be for Cause unless and until there will have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of
the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive is guilty of the
conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.

(c)  Good
Reason.  During the Employment
Period, the Executive may terminate his or her employment with the Company (by
resignation or retirement) for Good Reason. 
For purposes of this Agreement, “Good Reason”
means:

(i)  the assignment to the Executive of any duties
inconsistent in any respect with the Executive’s position (including status,
offices, titles, and reporting requirements), authority, duties, or
responsibilities as contemplated by Section 4(a) of this Agreement, or any
other action by the Company which results in a diminution in such position,
authority, duties, or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

(ii)  the Company’s failure to comply with any of
the provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial, and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

(iii)
the Company’s reduction of the Executive’s Annual Base Salary, Annual Bonus,
Opportunities, Retirement Benefits or Welfare Benefits without Cause;

(iv)
the Company’s failure to continue in effect any Incentive Compensation Plan
(other than equity-based plans), Retirement Plan or Savings Plan in which
Executive was eligible to participate on the Change of Control Date, unless an
equitable on-going substitute or alternative plan applicable to the Executive
was previously adopted by the Company;

(v)  the Company’s requiring the Executive to be
based at any office or location other than as provided in Section 4(a)(i)(B)
hereof or the Company’s requiring the Executive to travel on Company business
to a substantially greater extent than required immediately prior to the Change
of Control Date;

(vi)  any purported termination by the Com­pany of
the Executive’s employment otherwise than as expressly permitted by this
Agreement; or

(vii)  any failure by the Company to comply with and
satisfy Section 14(c) of this Agreement.

 9
 

 

For purposes of this Section 5(c), any good faith determination of Good
Reason made by the Executive will be conclusive.

The Executive’s continued employment during the Employment Period will
not constitute and will not deemed to be consent to or a waiver of rights with
respect to any fact or circumstance constituting grounds for the Executive’s
termination of his or her employment pursuant to this Section 5(c).

(d) Executive’s Right To Terminate During
Disability.  The Executive’s
Disability during the Employment Period will not end or otherwise impair his or
her right to terminate his or her employment with the Company based on any fact
or circumstance constituting grounds for such termination pursuant to Section
5(c).

(e) Notice of Termination.  Any termination by the Company for Cause, or
by the Executive for Good Reason, will be communicated by Notice of Termination
to the other party hereto given in accordance with Section 12(b) of this
Agreement.  The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause will not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact
or circum­stance in enforcing the Executive’s or the Company’s rights
hereunder.

6.     Obligations
of the Company Upon Termination.

(a)  Good
Reason; Other Than for Cause, Death or Disability.  If, during the Employment Period, the Company
termi­nates the Executive’s employment other than for Cause or Disability or
the Executive terminates employment for Good Reason:

(i)  the Company will pay to the Executive the sum
of the following amounts:

A.  the sum of (1) the Executive’s Annual Base
Salary through the Date of Termination to the extent not theretofore paid, (2)
the product of (x) the Annual Bonus, and (y) a fraction, the numerator of which
is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365, in each case to the extent
not theretofore paid and (3) any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon), any awards
under the Management Incentive Compensation Plan or any comparable or successor
plan and any accrued vacation pay, in each case to the extent not theretofore
paid (the sum of the amounts described in clauses (1), (2), and (3) shall be
hereinafter referred to as the “Accrued Obligations”); and

B.  The lump sum cash amount equal to the product
of (1) two and (2) the sum of (x) the Executive’s Annual Base Salary and (y)
the Annual Bonus, or if higher, any bonus paid with respect to any fiscal year
during the Employment Period; and

C.  Utilizing actuarial assumptions no less
favorable to the Executive than those in effect immediately prior to the Change
of Control Date, a lump sum cash amount equal to the excess of (a) the
actuarial equivalent of the benefit under the Company’s Retirement Plan and
SERP which the Executive would receive if the Executive’s employment continued
for two years after the Date of Termination assuming for this purpose that all
accrued benefits are fully vested, and, assuming that the Executive’s
compensation in each of the two years is that required by Section 4(b)(i) and
Section 4(b)(ii), over (b) the actuarial equivalent of the Executive’s actual
benefit (paid or payable), if any, under the Retirement Plan and the SERP as of
the Date of Termination;

 10
 

 

(ii)  for two years after the Executive’s Date of
Termination, or such longer period as may be provided by the terms of the
appropriate Welfare Benefit Plan, the Company will continue benefits to the
Executive and/or the Executive’s family at least equal to those which would
have been provided to them in accordance with the Welfare Benefit Plans
described in Section 4(b)(iv) of this Agreement if the Executive’s employment
had not been terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and their families, provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or other
welfare benefits under another employer’s plan, the Welfare Benefits described
in this Section 6(c)(ii) will be secondary to those provided under such other
plan during such applicable period of eligibility.  For purposes of determining eligibility (but
not the time of commencement of benefits) of the Executive for Retirement
Benefits, the Executive will be considered to have remained employed by the
Company until two years after the Date of Termination and to have retired on
the last day of such period.  At the
termination of the medical and dental benefits described in this Section 4.2(b)(ii),
the Executive and his or her family will be entitled to continuation coverage
pursuant to IRC Section 4980B, ERISA Sections 601-608 and under any other
applicable law as if the Termination Date was the date on which such medical
and dental benefits expired.  In the
event you are ineligible under the terms of such benefit plans or programs to
continue to be so covered, the Company will provide you with substantially
equivalent coverage through other sources or will provide you with a lump-sum
payment in such amount that, after all income taxes on that amount, will be
equal to the cost of providing yourself such benefit coverage.  The lump sum will be determined on a present
value basis using the interest rate provided in IRC Section 1274(b)(2)(B) as of
the Date of Termination.

(iii)  the Company will, at its sole expense and up
to the end of the second calendar year after the calendar year containing the
Date of Termination, provide the Executive with reasonable outplacement
services the scope and provider of which will be selected by the Executive in
his or her sole discretion; and

(iv)  subject to Section 9(b), the Company will pay
or provide to the Executive any other amounts or benefits required to be paid
or provided or which the Executive is eligible to receive under any plan,
program, policy, or practice or contract or agreement of the Company (such
other amounts and benefits will be hereinafter referred to as the “Other Benefits”).

(b)  Death.  If the Executive’s employment is terminated
by reason of the Executive’s death during the Employment Period, this Agreement
will terminate without further obligations to the Executive’s legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits.  Accrued Obligations will be paid to the
Executive’s estate or beneficiary, as applicable, in a lump sum in cash.  With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(b) will include,
without limitation, and the Executive’s estate and/or beneficiaries will be
entitled to receive, benefits at least equal to the most favorable benefits
provided by the Company to the estates and beneficiaries of peer executives of
the Company and such affiliated companies under such plans, programs,
practices, and policies relating to death benefits, if any, as in effect with
respect to other peer executives and their beneficiaries at any time during the
120-day period immediately preceding the Change of Control Date or, if more
favorable to the Executive’s estate and/or the Executive’s beneficiaries, as in
effect on the date of the Executive’s death with respect to other peer
executives of the Company and their beneficiaries.

 11
 

 

(c)  Disability.  If the Executive’s employment is terminated
by reason of the Executive’s Disability during the Employment Period, this
Agreement will terminate with­out further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits.  Accrued Obligations will
be paid to the Executive in a lump sum in cash. 
With respect to the provision of Other Benefits, the term Other Benefits
as utilized in this Section 6(c) will include, and the Executive will be
entitled after the Disability Effective Date to receive, disability and other
benefits at least equal to the most favorable of those generally provided by
the Company to disabled executives and/or their families in accordance with
such plans, programs, practices, and policies relating to disability, if any,
as in effect generally with respect to other peer executives and their families
at any time during the 120-day period immediately preceding the Change of
Control Date or, if more favorable to the Executive and/or the Executive’s
family, as in effect at any time thereafter generally with respect to other
peer executives of the Company and their families.

(d)  Cause;
Other than for Good Reason.  If the
Executive’s employment is terminated for Cause during the Employment Period or
if the Executive volun­tarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement will terminate
without further obligations to the Executive other than the obligation to pay
to the Executive the sum of (x) his or her Annual Base Salary through the Date
of Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid.  In such case, all Accrued
Obligations will be paid to the Executive in a lump sum in cash.

7.     Conditional
Cap On Payments.

(a) 
Subject to Section 7(b), if it is determined that any payment or
distribution in the nature of Section 280G Compensation by the Company to or
for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 7) (a “Payment”) would constitute an Excess Parachute Payment and, but for this Section 7, would
be subject to Excise Tax, then such Payments will be reduced to the Reduced
Amount but only if, by reason of such reduction, the net after-tax benefit to
the Executive exceeds the net after-tax benefit which would be received by the
Executive if no such reduction was made. 
For the purposes of this Section 7, the term “net
after-tax benefit” means (i) the total Payments the Executive
receives or is entitled to receive that would constitute Parachute Payments
less (ii) the amount of all federal, state and local income and employment
taxes payable by the Executive with respect to the total Payments calculated at
the highest marginal income tax rate for each year in which the Payments will
be paid to the Executive (based on the rate in effect for such year as set
forth in the IRC as in effect at the time of the first Payment), less (iii) the
Excise Taxes imposed by IRC Section 4999 with respect to the Payments.  Unless the Executive elects another reduction
method by giving written notice thereof to the Company prior to the Change of
Control Date, the Company will reduce the Payments to the Reduced Amount by
first reducing Payments that are not payable in cash and then by reducing cash
Payments.  Only amounts payable under
this Agreement that are Section 280G Compensation and are contingent on a
Section 280G Change of Control will be reduced pursuant to this Section 7(a).

(b) All determinations required to be made
under this Section 7, including whether and when Payments will be reduced to
the Reduced Amount and the amount of such reduction and the assumptions to be
utilized in arriving at such determination, will be made by the Accounting Firm
which will provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Company
that there will be a Payment, or at such earlier time as the Company may
request.  In the event that the 

 12
 

 

Accounting Firm is serving as accountant or auditor
for the individual, entity, or group effecting the Change of Control, the
Executive will appoint another independent certified accounting firm to make
the determinations required hereunder. 
All fees and expenses of the Accounting Firm will be borne solely by the
Company.  Subject to Section 7(c), the
Accounting Firm’s determination will be conclusive and binding upon the Company
and the Executive.

(c)  If
the IRS determines that Executive is liable for Excise Tax as a result of
receipt of a Payment, Executive will be obligated to pay to the Company the
smallest such amount, if any, as is required to be paid to the Company so that
the Executive’s net proceeds with respect to any Payments (after taking the
payment of the Excise Tax on such Payments) is maximized (the “Repayment Amount”); provided, however, that the Repayment
Amount will be zero if a Repayment Amount greater than zero would not eliminate
the Excise Tax imposed on such Payment. 
If the Repayment Amount is greater than zero, the Executive will pay that
amount within 30 days of the date that the Executive enters into a binding
agreement with the IRS as to the amount of the Executive’s Excise Tax liability
or within 30 days of receiving a final determination by the IRS or a court of
competent jurisdiction requiring the Executive to pay the Excise Tax with
respect to a Payment from which no appeal is available or is timely taken.  If the Excise Tax is not eliminated through
the payment of the Repayment Amount, the Executive will pay the Excise Tax.

8.  Timing
of Payments Due To Executive; Taxes.

(a) 
Subject to Section 8(b) of this Agreement, payments to be made by the
Company to the Executive or his or her legal representative, estate or
beneficiary under Section 6(a)(i) of this Agreement will be made not later than
30 days after the Date of Termination. 
All other payments to be made by the Company to the Executive or his or
her legal representative, estate or beneficiary pursuant to this Agreement will
be made at the time and in the manner specified herein or in the applicable
Plan.

(b) 
Notwithstanding anything to the contrary in this Agreement, any cash
payments (other than Accrued Obligations) due to the Executive under this
Agreement on or within the 6-month period following the Executive’s termination
will accrue during such 6-month period and will become payable in a lump sum
cash payment on the date 6 months and 1 business day following the Date of
Termination, provided, however, that such payments will be made earlier (at the
times and in the manner specified in Section 8(a)) if the Executive advises the
Company in writing that, after consulting with his or her legal and tax
advisers, the Executive has determined that such earlier payment will not
result in the imposition of the tax described in IRC Section 409A.  In addition, this Agreement will be deemed
amended to the extent necessary to avoid imposition of any tax or income
recognition under IRC Section 409A prior to actual payment.

(c) 
If, for any reason, the taxes described in IRC Section 409A are imposed
with respect to payments due to the Executive or his or her legal
representative, estate or beneficiaries, the Executive and his or her legal
representative, estate and beneficiary are solely responsible for payment of
such taxes and any interest or penalties related thereto.  Subject to Section 7, all federal, state,
local and foreign taxes are the sole responsibility of the Executive and his or
her legal representative, estate or beneficiaries.

(d) 
The Company may withhold from any amounts payable under this Agreement
such federal, state, local or foreign taxes as are required to be withheld
pursuant to applicable laws and regulations.

 13
 

 

9.     Non-exclusivity of Rights; No Double
Benefits.

(a)  Subject
to Section 9(b), nothing in this Agreement prevents or limits the Executive’s
continuing or future participation in any Plan maintained by the Company and
for which the Executive may qualify, nor will anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company.  Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any  the Company at or
subsequent to the Date of Termination will be payable in accordance with the
applicable Plan unless this Agreement provides otherwise.

(b)  If, in
addition to this Agreement, another agreement requires the Company to make  payments or provide other benefits to the
Executive as a result of a Change of Control or, if a Severance Plan requires
the Company to make payments or provide other benefits to the Executive on
termination of the Executive’s employment for reasons other than Cause, the
Executive will receive the benefits of this Agreement if and only the Executive
waives in writing all rights to the benefits of such other agreement or
Severance Plan.  The Company shall also
have the right to offset the benefits of this Agreement in the absence of such
a waiver.

10.   No
Offsets.  Excepted as provided under
Section 9(b), the Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder will not be
affected by any set-off, counterclaim, recoupment, defense, or other claim,
right, or action which the Company may have against the Executive or others.

11.   Mitigation
Not Required.  In no event will the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts will not be reduced whether or
not the Executive obtains other employment.

12.   Compensation
During Dispute; Legal Fees.

(a)  Subject
to Section 8(b), in the event of a Dispute, the Company will pay the Executive
fifty percent (50%) of  the amounts
payable under Section 6 and will provide the Executive with all of the benefits
specified in Section 6 if, but only if, the Executive agrees in writing that,
if the Dispute is resolved in the Company’s favor, the Executive will promptly
reimburse the Company for the excess payments and benefits together with
interest thereon at the rate specified in IRC Section 1274(d).  If the Dispute is resolved in the Executive’s
favor, the Company will promptly pay the Executive the amount that was withheld
during the Dispute together with interest thereon at the rate specified in IRC
Section 1274(d).

(b)  The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive
or others of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including
as a result of any contest by the Executive about the amount of any payment
pursuant to this Agreement), plus in each case interest on any delayed pay­ment
at the applicable rate set forth in IRC Section 7872(f)(2)(A).

13.    At
Will Employment; Termination.  The
Executive and the Company acknowledge and agree that the employment of the
Executive by the Company is “at will” and the Executive’s employment and/or
this Agreement may be terminated by either the Executive or the Company at any
time prior to the Change of Control Date, in which case the Execu­tive will
have no further rights under this Agreement.

 14
 

 

14.   Successors.

(a)  This
Agreement is personal to the Executive and without the prior written consent of
the Company cannot be assigned or otherwise transferred by the Executive except
by will or the laws of descent and distribution.  This Agreement will inure to the benefit of
and be enforceable by the Executive’s legal representatives, estate and
beneficiaries.

(b) 
This Agreement will inure to the benefit of and be binding upon the
Company, its Successors and assigns.

(c) 
The Company will require any Successor to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no Change of Control had occurred.

15.  Confidential
Information.  The Executive will hold
in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge, or data relating to the Company, and their
respective businesses, which will have been obtained by the Executive during
the Executive’s employment by the Company and which will not be or become
public knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). 
After termination of the Executive’s employment with the Company, the
Executive will not, without the prior written consent of the Company or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge, or data to anyone other than the Company and those
designated by it.  In no event will an
asserted violation of the provisions of this Section 15 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.

16.   Miscellaneous.

(a)  This
Agreement will be governed by and construed in accordance with the laws of the
State of Delaware, without reference to principles of conflict of laws.

(b) No suit, action, proceeding or claim arising
under or by reason of this Agreement may be brought by any party or any third
party in any place other than the state or federal courts located in Seattle,
Washington.  The parties irrevocably
consent to the jurisdiction and venue of such courts in connection with any
such suit, action, proceeding or claim.

(c)  The captions
of this Agreement are not part of the provisions hereof and will have no force
or effect.  This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

(d) 
All notices and other communications hereunder will be in writing and
will be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

If
to the Executive:                     ________________

________________

________________

________________

If to the Company:                     Intermec,
Inc.

Attention:  SVP and Chief Financial
Officer
6001 36th Avenue West

Everett, WA  98203-1264

 15
 

 

With
a copy to:                                     Intermec, Inc.

Attention:  SVP, General Counsel and
Secretary

6001 36th Avenue
West

Everett, WA  98203-1264

or to such other address as either party will have furnished to the
other in writing in accordance herewith. 
Notice and communications will be effective when actually received by
the addressee.

(e) 
The invalidity or unenforceability of any provision of this Agreement
will not affect the validity or enforceability of any other provision of this
Agreement.

(f) 
The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(vii) of this Agreement, will not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

(g) This Agreement supercedes the Original
Agreement in its entirety.  Furthermore,
this Agreement constitutes a single, integrated contract expressing the entire
agreement of the parties with respect to the subject matter hereof and
supercedes all prior or contemporaneous oral and written agreements and
discussions with respect to the subject matter hereof and, except as explicitly
set forth herein, there are no other agreements, written or oral, express or
implied between the parties with respect to the subject matter of this
Agreement.

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to
the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.

	
   

  	
  

  
	
   

  	
  [Executive]

  
	
   

  	
   

  
	
   

  	
  Intermec,
  Inc.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Lanny H. Michael

  
	
   

  	
   

  	
  Senior Vice
  President and

  
	
   

  	
   

  	
  Chief Financial
  Officer

  

 

06COCFORM

 

 16Exhibit 10.3

INTERMEC, INC.

2002 DIRECTOR STOCK OPTION AND FEE PLAN

As Amended Effective January 1, 2007

1.     Purpose.  The UNOVA, Inc. 2002 Director Stock Option and Fee Plan (the “Plan” ) is intended to provide an incentive to members of
the board of directors of Intermec, Inc., a Delaware corporation (the “Company” ), who are neither officers nor employees of the
Company, to remain in the service of the Company and increase their efforts for
the success of the Company and to encourage such directors to own shares of the
Company’s stock, thereby aligning their interests more closely with the
interests of the Company’s shareholders. The Plan is also intended to assist
the Company in attracting experienced and qualified candidates to become
members of the Board.

2.     Definitions.

“1997 Plan” means
the UNOVA, Inc. Director Stock Option and Fee Plan, adopted
September 24, 1997, and amended July 27, 1999.

“Adverse
Tax Consequences under Section 409A” means the accelerated inclusion, 20 percent additional tax rate, and
associated interest charge that will apply to any deferred compensation
included in taxable income of a Director under Section 409A(a)(1)(B) of the
Code.

“Annual
Grant” means the
annual grant of Options, if any, made to Directors under Section 7(a) of the
Plan.

“Average Quarterly Price” means the average of the Fair Market Value of Common Stock on each
trading date of a calendar quarter.

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

“Cash
Account” means the
bookkeeping account established by the Company for the deferral of Fees by
Directors which will be credited with interest pursuant to Section 6(d)
hereof.

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

“Common
Stock” means the
common stock, par value $.01 per share, of the Company.

“Deferral
Election” means an
election pursuant to Section 6 hereof to defer receipt of Fees into a
Share Account or Cash Account.

“Deferred
Amounts” mean the
amounts credited to a Director’s Share Account or Cash Account pursuant to a
Deferral Election or otherwise pursuant to Section 6(h).

“Director”
means a member of the
Board who is neither an officer nor an employee of the Company. A director of
the Company shall not be deemed to be an employee of the Company solely by
reason of the existence of a consulting contract between such director and the
Company or any subsidiary thereof pursuant to which the director agrees to
provide consulting services as an independent consultant to the Company or its
subsidiaries on a regular or occasional basis for a stated consideration. The
term “Director” as used in this Plan shall include any person who may hereafter
become an advisory director of the Company, as that term is used in the Company’s
By-Laws.

 1
 

 

“Effective
Date” means
January 1, 2002, subject to approval by the Company’s shareholders as
provided in Section 12 hereof.

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

“Fair
Market Value” means,
as of any given date, the average of the highest and lowest reported sales
prices of the Common Stock on the New York Stock Exchange Composite Tape or, if
not listed on such exchange, on any other national securities exchange on which
the Common Stock is listed or on NASDAQ. If there is no regular public trading
market for such Common Stock, the Fair Market Value of the Common Stock shall
be determined by the Board in good faith.

“Fees” means Retainer Fees and Meeting Fees.

“Meeting
Fees” means fees
scheduled to be paid to a Director for attendance at Board or committee
meetings.

“Options”
means the options to
purchase Common Stock granted to a Director under Section 7(a) as an
Annual Grant.

“Retainer
Fees” means the
annual retainer scheduled to be paid to a Director for the calendar year and
additional annual fees scheduled to be paid to a Director for serving as Chair
of a Board committee.

“Share
Account” means the
bookkeeping account established by the Company for the deferrals of Fees by
Directors, which will be credited with Share Units pursuant to
Section 6(a) hereof.

“Share
Election” means the
election by a Director to receive shares of Common Stock in lieu of Meeting
Fees as set forth in Section 5(b) hereof.

“Share
Unit” means a share
of Common Stock credited as a bookkeeping entry to a Director’s Share Account.
Each Share Unit shall represent the right to receive one share of Common Stock.

3.     Administration
of the Plan.  Subject to the express provisions of the
Plan, the Board will have complete authority to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the respective option agreements (which
need not be identical); and to make all other determinations necessary or
advisable for the administration of the Plan. The Board shall have the right to
delegate its authority to administer the Plan to the Governance and Nominating
Committee or another Board committee consisting solely of independent
Directors.  The Board’s or such committee’s
determination on the matters referred to in this Section 3 shall be
conclusive.

4.     Stock
Reserved for the Plan.  The number of shares of Common
Stock authorized for issuance under this Plan is 500,000 plus (i) the
number of shares reserved and available for issuance under the 1997 Plan on the
Effective Date of this Plan and (ii) any shares subject to grants made
under the 1997 Plan, but which subsequently expire or are canceled, forfeited,
or terminated. The number of shares of Common Stock issuable under this Plan
shall be subject to adjustment pursuant to Section 10 hereof. Shares of
Common Stock delivered hereunder may be either authorized but unissued shares
or previously issued shares reacquired and held by the Company as treasury
shares.

 2
 

 

5.             Terms and Conditions of
Payment of Fees.

(a)           Fees.

(i)  Retainer
Fees.  Each Director shall receive in the form of
Common Stock (subject to a Deferral Election) all, or such lesser amount as the
Board may determine from time to time in the exercise of its judgment, of his
or her Retainer Fees earned in each calendar year. The shares of Common Stock
(and cash in lieu of fractional shares) issuable under this Section 5(a)
shall be issued quarterly in accordance with Section 5(c) hereof.

(ii)
Meeting Fees. 
Unless a Director makes a Share Election in accordance
with Section 5(c) hereof, each Director shall receive Meeting Fees to be paid
in the form of cash, after the end of the quarter in which earned.

(iii)  Fee Amounts.  The amount of Retainer Fees shall be set from
time-to-time by the Board.  The amount of
Meeting Fees shall be set from time-to-time by the Board, in any manner
reasonably intended to reflect and compensate the Directors’ duty to attend
meetings of the Board and its committees. If at a time other than at the
beginning of the year (A) any person becomes a Director, (B) a Director ceases
to be a Director or (C) a Director joins or leaves a committee of the Board, an
adjustment shall be made to the calculation of the applicable Retainer Fee and
Meeting Fee, as the case may be, based upon the time remaining in such year.

(b)           Share Election. Each Director may make an annual election
(the “Share Election”) to receive in the
form of Common Stock (subject to a Deferral Election) all of his or her Meeting
Fees earned in each calendar year. The shares of Common Stock (and cash in lieu
of fractional shares) issuable pursuant to a Share Election shall be issued
quarterly in accordance with Section 5(c) hereof. The Share Election must
be in writing and delivered to the Secretary of the Company on or prior to
December 31 of the calendar year preceding the calendar year in which the
applicable Meeting Fees are to be earned; provided, however, that any Director who commences service on the
Board on or subsequent to January 1 of a calendar year may make a Share
Election during the thirty-day period immediately following the commencement of
his or her directorship. A Share Election, once made, shall be irrevocable for
the calendar year with respect to which it is made and shall remain in effect
for future calendar years unless revoked in writing or modified by a subsequent
Share Election with respect to future calendar years on or prior to December 31
of the calendar year preceding the calendar year in which such revocation shall
take effect and in accordance with the provisions hereof.

(c)           Issuance of Shares.  Shares of Common Stock issuable to a Director
pursuant to Sections 5(a) and 5(b) shall be issued to such Director on the
first business day following the end of each calendar quarter. The total number
of shares of Common Stock to be so issued shall be determined by dividing
(x) the dollar amount of the Director’s Retainer Fees for the preceding
calendar quarter and any Meeting Fees for the preceding calendar quarter to
which a Share Election applies, by (y) the Average Quarterly Price for the
preceding quarter. In no event shall the Company be required to issue
fractional shares. In the event that a fractional share of Common Stock would
otherwise be required to be issued, an amount in lieu thereof shall be paid in
cash based upon the Fair Market Value of such fractional share on the last
business day of the preceding calendar quarter.

6.     Terms and Conditions of Deferral Elections.

(a)            In General.  Each Director may irrevocably
elect annually to defer receiving all or a 

 3
 

 

portion of (i) the
shares of Common Stock that would otherwise be issued in connection with such
Director’s Retainer Fees in respect of a calendar year, (ii) the shares of
Common Stock that would otherwise be issued upon a Share Election, or
(iii) such Director’s Meeting Fees in respect of a calendar year that are
not subject to a Share Election (a “Deferral Election”).
A Director who has made a Deferral Election with respect to shares of Common
Stock shall have the number of shares of Common Stock that are the subject of
the Deferral Election credited to a Share Account in the form of Share Units. A
Director who has made a Deferral Election with respect to Meeting Fees that are
not subject to a Share Election shall have the amount of deferred fees credited
to a Cash Account.

(b)           Timing of Deferral
Election.  The
Deferral Election shall be in writing and delivered to the Secretary of the
Company on or prior to December 31 of the calendar year preceding the calendar
year in which the applicable Fees are to be earned; provided,
however, that a Director who commences
service on the Board on or subsequent to January 1 of a calendar year may
make a prospective Deferral Election during the thirty-day period immediately
following the commencement of his or her directorship, and, accordingly, such
Deferral Election shall apply only with respect to compensation paid for
services to be performed subsequent to the Deferral Election. A Deferral
Election, once made, shall be irrevocable for the calendar year with respect to
which it is made and shall remain in effect for future calendar years unless
revoked or modified by a subsequent Deferral Election with respect to future
calendar years on or prior to December 31 of the calendar year preceding the
calendar year in which such revocation shall take effect and in accordance with
the provisions hereof.  No subsequent
Deferral Election may be made with respect to Fees earned during the current
calendar year or prior calendar years.

(c)            Share Accounts.  Each Share Account shall be
deemed to be invested in shares of Common Stock. Whenever regular cash
dividends are paid by the Company on outstanding Common Stock, there shall be
credited to the Director’s Share Account additional Share Units equal to
(i) the aggregate dividend that would be payable on outstanding shares of
Common Stock equal to the number of Share Units in such Share Account on the
record date for the dividend, divided by (ii) the Fair Market Value of the
Common Stock on the payment date of the dividend.

(d)            Cash Accounts.  Each Director’s Cash Account
shall be credited with interest on the last day of each calendar quarter
calculated on the basis of the average daily balance in the Cash Account during
the calendar quarter. The interest rate for any calendar quarter shall be the
prime rate of interest as reported in the Wall Street Journal as
the prevailing prime rate of interest on the first business day of the calendar
quarter.

(e)            Commencement of Payment.  Except as otherwise provided in
Section 6(g) hereof, a Director’s Deferred Amounts shall become payable in
the January following the year in which the Director terminates service as a
Director. Payments from a Share Account shall be made by converting Share Units
into Common Stock on a one-for-one basis, with payment of fractional shares to
be made in cash based upon the Fair Market Value of such fractional share on
the last business day of the preceding calendar quarter.

(f)            Timing of Payments.  Subject to Section 6(g) hereof,
each Director shall elect in his or her Deferral Election to receive payment of
his or her Deferred Amounts either in a lump sum or in two to fifteen
substantially equal annual installments.

(g)           Distributions Upon Death,
Disability or Unforeseeable Emergency.  In the event of a Director’s
death, payment of the remaining portion of the Director’s Deferred Amounts will
be made to the Director’s beneficiary (or, if no beneficiary has been
designated, to the Director’s 

 4
 

 

estate or other legal
representative) in the same form as the Director has elected; provided, however, that if permitted under the Code and the
rules and regulations promulgated thereunder, such payment of the remaining
portion of the Director’s Deferred Amounts will be made to the Director’s
beneficiary (or, if no beneficiary has been designated, to the Director’s
estate or other legal representative) in a lump sum as soon as practicable
following the Director’s death. Notwithstanding any Deferral Election, in the
event of disability (as defined in Section 409A(a)(2)(C) of the Code) or severe
financial hardship to a Director resulting from an illness or accident of the
Director, the Director’s spouse or a dependent (as defined in Section 152(a) of
the Code) of the Director, loss of the Director’s property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Director, a Director may, by providing
written notice to the Secretary of the Company, withdraw any portion of the
Share Units in his or her Share Account (in an equivalent number of shares of
Common Stock) and/or cash in his or her Cash Account, provided that, as
determined under regulations of the Secretary of the Treasury, the amounts
distributed with respect to an emergency do not exceed the amounts necessary to
satisfy such emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the participant’s
assets (to the extent the liquidation of such assets would not itself cause
severe financial hardship).

(h)           No Account Transfers.  A Director may not transfer or
convert a Share Account to a Cash Account, or vice versa.

(i)            Status of Accounts.  The Share and Cash Accounts shall
not be funded, and all Deferred Amounts shall be held in the general assets of
the Company and be subject to the general creditors of the Company.

7.     Annual
Grants of Stock Options.

(a)            Annual Grants.  Commencing in 2005, Options to
purchase 10,000 shares of Common Stock shall be granted to each Director
automatically on the first business day of January in each year.  Any person who becomes a Director at any
other time of the year shall receive a pro-rata portion of the Annual Grant,
based upon the time remaining in such year, such grant to be effective on the
date he or she becomes a Director. The Board shall have the right to increase
or decrease the number of shares of Common Stock subject to the Annual Grant as
the Board may determine is necessary or appropriate to attract and retain
persons to serve as members of the Board, it being understood that all such
grants and changes in the number of options granted shall comply with
Section 16 of the Exchange Act and the rules promulgated thereunder and
the Code.

(b)            Option Price Per Share.  Options granted pursuant to this
Section 7 shall be exercisable at a price per share equal to the Fair
Market Value of the Common Stock on the date of the grant of the Option.

(c)            Period of Option.  (i)  Options granted on the first business day of
January pursuant to this Section 7 shall vest  and become exercisable in four equal
installments (subject to adjustment for fractional shares) on the first
business day of each fiscal quarter of the Company, beginning on the date of
grant, and shall remain exercisable until the tenth anniversary of the date of
grant, at which time it shall expire. 
(ii) Options granted on a day other than the first business day of
January pursuant to this Section 7 shall vest and become exercisable in
equal installments (subject to adjustment for fractional shares) on the date of
grant and the first business day of each fiscal quarter of the Company
remaining in the year of grant, and shall remain exercisable until the tenth 

 5
 

 

anniversary of the date of
grant, at which time it shall expire.

(d)            Exercise of Options.  Options may be exercised only by
written notice to the Company at its corporate office accompanied by payment of
the full consideration for the shares as to which they are exercised. The
purchase price is to be paid in full to the Company upon the exercise of the
option (i) by cash, including a personal check payable to the order of the
Company, or (ii) by delivering Common Stock already owned by the optionee
for a period of at least six months (valued at Fair Market Value as of the date
of delivery), or (iii) any combination of cash and Common Stock so valued.

(e)            Nonstatutory Options.  No option granted hereunder shall
constitute an “incentive stock option” as that term is defined in the Code.

8.     Modification,
Extension, and Renewal of Options.  The Board shall have the power to
modify, extend, or renew outstanding options and authorize the grant of new
options in substitution therefor, provided that such power may not be exercised
in a manner which would (i) alter or impair any rights or obligations of
any option previously granted without the written consent of the optionee,
(ii) adversely affect the qualification of the Plan or any other
stock-related plan of the Company under Rule 16b-3 under the Exchange Act,
(iii) lower the exercise price of existing options, (iv) substitute
new options for previously granted options having a higher exercise price, or
(v) cause an option to become subject to Section 409A of the Code.

9.     Limitation of Rights.

(a)            No Right to Continue as a
Director.  Neither
the Plan, nor the granting of an option or the making of a Share Election or
Deferral Election, or any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or
implied, that the Company will retain a Director for any period of time, or at
any particular rate of compensation.

(b)            No Shareholder’s Rights.  An optionee or a Director who has
made a Share Election or Deferral Election (or his or her representative) shall
have no rights as a shareholder with respect to the shares covered by his or
her Options or Share Election or to any Share Units with respect to a Deferral
Election until the date of the actual issuance to him or her (or such
representative) of shares of Common Stock (either through the Company’s Direct
Registration System or by certification) and, subject to Sections 6(c) and 10
hereof, no adjustment will be made for dividends or other rights for which the
record date is prior to the date such shares are issued.

10.  Effect of
Certain Changes in Capitalization.  In the event of any change in
corporate capitalization (such as a stock split), any corporate transaction
(such as any merger, consolidation or separation (including a spinoff)), any
other distribution of stock or property of the Company, any reorganization
(whether or not such reorganization comes within the definition of such term in
Section 368 of the Code) or any partial or complete liquidation of the
Company, the Board shall equitably adjust the Share Account to reflect any such
transaction and shall make such substitution or adjustments in the aggregate
number and kind of shares reserved for issuance under the Plan, in the number,
kind and option price of shares subject to outstanding Options, in the number
and kind of shares subject to Annual Grants pursuant to Section 7 and/or
such other equitable substitution or adjustments in the terms of Options as it may
determine to be appropriate in its sole discretion; provided,
however, that the number of shares
subject to any Option shall always be a whole number.

 6
 

 

11.  Change in Control.

(a)            Definition.  For purposes of the Plan, a “Change in Control” shall mean a change in the ownership or
effective control of the Company, or in the ownership of a substantial portion
of the assets of the Company as provided in Section 409A(2)(A)(v) of the Code
and the regulations thereunder and interpretations thereof, as the same may be
applicable from time to time.

(b)            Consequences of Change in
Control.   Notwithstanding
anything in the Plan to the contrary, upon the occurrence of a Change in
Control:

(i)  all
Share Units credited to a Share Account shall be converted into Common Stock and
together with all Deferred Amounts credited to a Cash Account shall be
transferred as soon as practicable to each Director;

(ii)  Fees
earned in respect of the calendar quarter in which the Change in Control occurs
shall be paid in cash as soon as practicable; and

(iii)  all
Options shall immediately vest and become exercisable in full.

(c)           Definition Modified to Extent
Required by Section 409A of the Code.  Notwithstanding the foregoing, to the extent
necessary to comply with Section 409A of the Code, in the case of any payment
hereunder that in the determination of the Company would be considered “nonqualified
deferred compensation” subject to Section 409A and as to which, in the
determination of the Company, the requirements of Section 409A(a)(2)(A)(v) of
the Code would apply, an event or occurrence described above shall be
considered a “Change of Control” only if it also constitutes a change of
ownership or effective control of the Company, or a change in ownership of the
Company’s assets, described in Section 409A(a)(2)(A)(v) of the Code.

12.  Term of
Plan.  This
Plan shall be effective as of the Effective Date, subject to approval of the
Plan by the shareholders of the Company at the first annual meeting of
shareholders after the Effective Date. The Plan shall terminate on
December 31, 2011, unless earlier terminated by the Board. Notwithstanding
the Plan’s termination, amounts shall be delivered pursuant to any Deferral
Election made prior to the Plan’s termination in accordance with such election.
Options may be granted under the Plan at any time prior to the termination of
the Plan. Deferral Elections and Share Elections may not be made for any Fees
which would be paid following the date of the termination of the Plan. If the
shareholders of the Company do not approve this Plan, then this Plan shall be
void, all Share Elections and Deferral Elections made with respect to this Plan
shall be deemed to be Share Elections and Deferral Elections under the 1997
Plan, and all shares of Common Stock issued, Share Units credited to a Director’s
Share Account, and Fees credited to a Director’s Cash Account under this Plan
shall be deemed to have been issued and credited under the 1997 Plan.

13.  Amendment;
Termination.  The
Board may at any time and from time to time alter, amend, suspend, or terminate
the Plan in whole or in part; provided, however, that no amendment which is required by any
regulation, law or stock exchange rule to be approved by shareholders shall be
effective unless it is approved by the shareholders of the Company entitled to
vote thereon. Notwithstanding the foregoing, no amendment shall affect
adversely any of the rights of any Director, under any option or under any
election theretofore in effect under the Plan, or with respect to Deferred Amounts,
without such Director’s consent.

14.  Nontransferability.  No Option, or right or interest
of any Director in Deferred Amounts, shall be transferable by a Director other
than (i) by will or by the laws of descent and distribution, 

 7
 

 

(ii) pursuant
to a qualified domestic relations order (as defined in the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended), or
(iii) in the case of an Option, as otherwise expressly permitted under the
applicable option agreement including, if so permitted, pursuant to a gift to
such optionee’s family, whether directly or indirectly or by means of a trust
or partnership or otherwise. All Options or rights with respect to Deferred
Amounts shall be exercisable, during the Director’s lifetime, only by the
Director or by the guardian or legal representative of the Director or an
alternate payee pursuant to a qualified domestic relations order or, in the
case of an Option, by any person to whom such Option is transferred pursuant to
the preceding sentence. Under the Plan, it is understood that the term “optionee”
includes the guardian and legal representative of the Director named in the
option agreement and any person to whom an Option is transferred by will or the
laws of descent and distribution, pursuant to a qualified domestic relations
order or as otherwise described above.

15.  Beneficiaries.  The Board shall establish such
procedures as it deems appropriate for a Director to designate a beneficiary to
whom any amounts payable in the event of a Director’s death are to be paid or
by whom any Options held by a Director may be exercised following his or her
death. Directors shall make a beneficiary election with respect to Deferred
Amounts at the same time that a Deferral Election is made.

16.  Compliance
with Law, Etc.   Notwithstanding any other provision of the Plan or
agreements made pursuant hereto, the Company shall not be required to issue or
deliver any certificate or certificates for shares of Common Stock under the
Plan prior to fulfillment of all of the following conditions:

(a)  the
listing, or approval for listing upon notice of issuance, of such shares on the
New York Stock Exchange or such other securities exchange or NASDAQ as may at
the time be the principal market for Common Stock;

(b)  any
registration or other qualification of such shares of the Company under any
state or federal law or regulation, or the maintaining in effect of any such
registration or other qualification which the Board shall, in its absolute
discretion upon the advice of counsel, deem necessary or advisable; and

(c)  the
obtaining of any other consent, approval, or permit from any state or federal
governmental agency, which the Board shall, in its absolute discretion after
receiving the advice of counsel, determine to be necessary or advisable.

17.  Notice.  Any written notice to the Company
required by any of the provisions of the Plan shall be addressed to the
Secretary of the Company and shall become effective when it is received.

18.  Governing
Law.  The
Plan and all determinations made and actions taken pursuant hereto shall be
governed by the laws of the State of Delaware, without reference to principles
of conflict of laws, and shall be construed accordingly.

19.  Headings.  The headings of sections and subsections
herein are included solely for convenience of reference and shall not affect
the meaning of any of the provisions of the Plan.

20.  Termination
of the 1997 Plan.  If the shareholders of the Company approve this Plan as
provided in Section 12 hereof, the 1997 Plan shall terminate in accordance
with Section 12 thereof as of the date of such approval. In that case,
Share Accounts and Cash Accounts maintained under the 1997 Plan shall be
converted to and maintained as Share Accounts and Cash Accounts under this
Plan. If the shareholders of the Company do not approve this Plan, then the
1997 Plan shall continue in full force and effect until terminated in
accordance with the provisions thereof, all grants of options made pursuant to 

 8
 

 

Sections
5(d) and 5(e) shall be null and void, and all Share Elections and Deferral
Elections made under this Plan shall be deemed to have been made under the 1997
Plan.

21.  Savings
Clause.  This
Plan is intended to comply in all respects with Section 409A of the Code and
the rules and regulations promulgated thereunder. In the event that any
provision of this Plan would result in Adverse Tax Consequences or similar
adverse tax consequences to the Company or any Director, such provision shall
without further action by the Board be modified, restricted or nullified, as
appropriate to avoid such adverse tax consequences.  In addition, if the time or form of any
payment election is made in accordance with this Plan, but in violation of
Section 409A of the Code, then such payment election shall be null and void,
and all amounts deferred shall be paid or payments thereof shall commence on
the earliest date permitted in accordance with Section 409A of the Code without
the imposition of any Adverse Tax Consequences under Section 409A or other
adverse tax consequences to the Director and the Company.

 

 9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]