Document:

exv10w4

 

Exhibit 10.4

Aether Holdings, Inc.

2006 Management Bonus Plan

	 	 	 
	Purpose

	 	Aether Holdings, Inc., a Delaware corporation (the
“Company”), wishes to motivate, reward and retain key
management employees of the Company and its
subsidiaries. To further these objectives, the Company
hereby sets forth this Aether Holdings, Inc. 2006
Management Bonus Plan (the “Plan”), effective as of
June 6, 2006, to provide participants with
opportunities to earn performance-based bonus awards
(“Awards”).
	 
	 	 
	Participants

	 	For each Performance Period, the Chief Executive
Officer will be eligible for Awards under this Plan.
In addition, the Compensation Committee (the
“Committee”), as described below, may designate key
management employees of the Company (including those of
any subsidiary, operating unit or division), who, in
addition to the Chief Executive Officer, will be
eligible for Awards under this Plan (the
“Participants”).
	 
	 	 
	Administrator

	 	The Plan’s administrator shall be the Committee. The
Committee, which shall be comprised solely of two or
more outside directors, is responsible for the general
operation and administration of the Plan and for
carrying out its provisions and has full discretion in
interpreting and administering the provisions of the
Plan. Subject to the express provisions of the Plan,
the Committee may exercise such powers and authority of
the Board of Directors as the Committee may find
necessary to carry out its functions. The Committee
shall exercise its power under the Plan in a manner
that preserves the Company’s federal income tax
deduction for payments made under the Plan, in
accordance with the requirements of Section 162(m)
(“Section 162(m)”) of the Internal Revenue Code of
1986, as amended (the “Code”). (All references to
Section 162(m) or any other code section include
successor provisions, related regulations and
amendments).
	 
	 	 
	General Responsibilities

	 	Subject to the terms herein, for each Performance
Period, the Committee will:

	 	(i)	 	determine the size of the Bonus Pool;
	 
	 	(ii)	 	establish performance objectives for Awards;
	 
	 	(iii)	 	designate the key management employees who, in
addition to the Chief Executive Officer, will be
Participants in the Plan;
	 
	 	(iv)	 	define Award terms and conditions, including the
Bonus Pool Percentage, for each Participant;
	 
	 	(v)	 	determine and certify the Award amounts earned;

 

 

	 	(vi)	 	determine and make permitted discretionary
reductions to Awards otherwise earned; and
	 
	 	(vii)	 	decide whether, under what circumstances, and
subject to what terms Awards may be paid on a deferred
basis.

	 	 	 
	 

	 	All designations, determinations, interpretations and
other decisions made under or with respect to the Plan
and all Awards made under the Plan are within the sole
and absolute discretion of the Committee and will be
final, conclusive and binding on all persons, including
the Company, Participants and Beneficiaries or other
persons having or claiming any rights under the Plan.
	 
	 	 
	Performance Objectives

	 	(i) Establishment. Performance objectives for Awards
may be expressed in terms of (i) earnings per share,
(ii) share price, (iii) pre-tax profits, (iv) net
earnings, (v) return on equity or assets, (vi) sales,
or (vii) any combination of the foregoing. Performance
objectives may be absolute or relative (to prior
performance of the Company or to the performance of one
or more other entities or external indices) and may be
expressed in terms of a progression within a specified
range. The performance objectives with respect to a
Performance Period shall be established in writing by
the Committee by the earlier of (x) the date on which a
quarter of the Performance Period has elapsed or (y)
the date which is ninety (90) days after the
commencement of the Performance Period, and in any
event while the performance relating to the performance
objectives remain substantially uncertain.
	 
	 	 
	 

	 	(ii) Effect of certain events. At the time of the
granting of a performance award, or at any time
thereafter, in either case to the extent permitted
under Section 162(m) and the regulations thereunder
without adversely affecting the treatment of the
performance award as performance-based compensation,
the Committee may provide for the manner in which
performance will be measured against the performance
objectives (or may adjust the performance objectives)
to reflect the impact of specified corporate
transactions, accounting or tax law changes and other
extraordinary or nonrecurring events.
	 
	 	 
	 

	 	(iii) Determination of performance. Prior to the
payment of any Award to a Participant who is subject to
Section 162(m), the Committee shall certify in writing
that the applicable performance objectives have been
satisfied to the extent necessary for such Award to
qualify as performance based compensation.
	 
	 	 
	Limitation on Awards

	 	Notwithstanding any other provisions of this Plan, the
aggregate amount of Awards payable under this Plan in
any one fiscal year shall not exceed 5% of the annual
net income of the Company, as determined based on the
Company’s audited financial statements (the “Bonus
Pool”).

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	Designation of
Participants and Bonus
Pool Percentages

	 	At the time the Committee establishes performance
objectives, the Committee shall (i) designate the key
management employees who, in addition to the Chief
Executive Officer, are eligible for Awards and (ii)
determine the percentage of the Bonus Pool (a “Bonus
Pool Percentage”) which shall comprise the Award to
each Participant. The Bonus Pool Percentage of the
Chief Executive Officer always shall be at least 50%.
The sum of all Bonus Pool Percentages shall not exceed
100%.
	 
	 	 
	Payment of Awards

	 	Subject to the limitations set forth in this section,
Awards determined under the Plan for a Performance
Period will be paid to Participants in cash and, if the
Company’s equity plans allow, in shares of the
Company’s stock or other equity-based awards. Except
as provided below, awards will be paid as soon as
practicable following the end of the Performance
Period, but in any event in accordance with Section
409A of the Code (“Section 409A”)
	 
	 	 
	 

	 	Deferral. The Committee may specify that all or a
portion of an Award for any given Performance Period
will be paid on a deferred basis, in accordance with
any Award payment rules the Committee may establish for
the Performance Period; provided, however, that all
such deferred payments must comply with Section 409A.
	 
	 	 
	 

	 	Continued Employment. The Committee may require that
Participants for a Performance Period must still be
employed as of the end of the Performance Period and/or
as of the later date the Awards for the Performance
Period are announced to be eligible to receive an
Awards for the Performance Period. Any such
requirement must be established and announced within
the Applicable Period and may be subject to such
exceptions as the Committee may specify within the
Applicable Period.
	 
	 	 
	Performance Period

	 	The Performance Period shall be the applicable fiscal
year (which may be prorated in the Committee’s
discretion).
	 
	 	 
	Applicable Period

	 	The Applicable Period with respect to any Performance
Period shall be the period beginning on the first day
of the Performance Period and ending on the
90th day of the Performance Period.
	 
	 	 
	Forfeiture or Proration

	 	Within the Applicable Period and subject to the
Committee certificate required for payment of Awards,
the Committee may adopt such forfeiture, proration or
other rules that it deems appropriate, in its sole and
absolute discretion, regarding the impact on Awards of
(i) a Participant’s death, disability, voluntary
termination of employment, termination of employment by
the Company for cause or the termination of employment
by the Company for reasons other than cause, and (ii) a
Change of Control (as defined in the Company’s 1999
Equity Incentive Plan).

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	Other Plans

	 	Awards will not be treated as compensation for purposes
of any other compensation or benefit plan, program or
arrangement of the Company or any subsidiary unless and
except to the extent that the Board of Directors or the
Committee determines so in writing.
	 
	 	 
	 

	 	Neither the adoption of this Plan nor the submission of
the Plan to the Company’s stockholders for approval
shall be construed as limiting the power of the Board
of Directors or the Committee to adopt such other
incentive arrangements as either may deem appropriate.
	 
	 	 
	Legal Compliance

	 	The Company will not make payments of Awards until all
applicable requirements imposed by federal and state
laws, rules and regulations, and by any applicable
regulatory agency, have been fully met. No provision
in the Plan or action taken under it authorizes any
action that federal or state laws otherwise prohibit.
	 
	 	 
	 

	 	The plan is intended to conform with all provisions of
Section 162(m) and Treasury Regulation 1.162-27 to the
extent necessary to allow the Company a federal income
tax deduction for Awards as “qualified performance
based compensation.” Awards under the Plan are
intended to comply with all of the provisions of
Section 409A and the regulations thereunder.
	 
	 	 
	 

	 	Notwithstanding anything in the Plan to the contrary,
the Committee must administer the Plan, and Awards may
be granted and paid, only in a manner that conforms to
such laws, rules and regulations. To the extent
permitted by applicable law, the Plan will be treated
as amended to the extent necessary to conform to such
laws, rules and regulations.
	 
	 	 
	Tax Withholding

	 	The Company may make all appropriate provisions for the
withholding of federal, state and local taxes imposed
with respect to Awards, which provisions may vary with
the time and manner of payment.
	 
	 	 
	No Transfer of Rights

	 	Except as and to the extent the law requires, or as the
Plan expressly provides, a Participant’s rights under
the Plan may not be assigned, pledged or otherwise
transferred in any way, whether by operation of law or
otherwise or through any legal or equitable proceeding
(including bankruptcy), by the Participant to any
person.
	 
	 	 
	Beneficiary Designations

	 	Each Participant may designate in a written form filed
with the Committee (or other designated recipient) the
person or persons (the “Beneficiary” or
“Beneficiaries”) to receive the amounts (if any)
payable under the Plan if the Participant dies before
the Award payment date for a Performance Period. A
Beneficiary

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	 	designation filed under this section will
not be considered a prohibited transfer of rights.
	 
	 	 
	 

	 	A Participant may change a Beneficiary designation at
any time without the Beneficiary’s consent (unless
otherwise required by law) by filing a new written
Beneficiary designation with the Committee. A
Beneficiary
designation will be effective only if the
Company is in receipt of the designation before the
Participant’s death.
	 
	 	 
	 

	 	If no effective Beneficiary designation is made, the
beneficiary of any amounts due will be the
Participant’s estate.
	 
	 	 
	Amendment or

Termination of Plan

	 	Subject to the limitations set forth in this section,
the Board may amend, suspend or terminate the Plan at
any time, without the consent of the Participants or
their Beneficiaries.

Without the Participant’s written consent, no amendment
or termination may materially adversely affect the
Award rights (if any) of any already designated
Participant for a given Performance Period once the
Committee has announced the Participant designations
for such Performance Period.

The Board or the Committee may make any amendments
necessary to comply with applicable regulatory
requirements, including Section 162(m) and Section 409A
and any regulations thereunder.

The Board must submit any Plan amendment to the
Company’s stockholders for their approval if and to the
extent such approval is required under Section 162(m).
	 
	 	 
	Limitations on Liability

	 	No member of the Committee and no other individual
acting as a director, officer, other employee or agent
of the Company will be liable to any Participant,
former Participant, spouse, Beneficiary, or any other
person for any claim, loss, liability, or expenses
incurred in connection with the Plan. No member of the
Committee will be liable for any action or
determination (including, but not limited to, any
decision not to act) made in good faith with respect to
the Plan or Award under the Plan. If a Committee
member intended to qualify as an “outside director”
under Section 162(m) does not in fact so qualify, the
mere fact of such nonqualification will not invalidate
any Award or other action made by the Committee under
the Plan that otherwise was validly made under the
Plan.
	 
	 	 
	 

	 	The Company will indemnify and hold harmless each
member of the Committee, director, officer, other
employee or agent of the Company to whom it or another
has delegated or does delegate any duty or power
relating to the administration or interpretation of the
Plan, against any cost or expense (including attorneys’
fees)

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	 	or liability (including any sum paid in
settlement of a claim with the Board’s approval)
arising out of any act or omission to act concerning
this Plan unless arising out of such person’s own fraud
and bad faith.
	 
	 	 
	No Employment Contract

	 	Nothing contained in this Plan constitutes an
employment contact between the Company and the
Participants. The Plan does not give any Participant
any right to be retained in the Company’s employ, and
it does not enlarge or diminish the Company’s right to
end the Participant’s employment or other relationship
with Company.
	 
	 	 
	Applicable Law

	 	The laws of the State of Delaware (other than its
choice of law provisions) govern this Plan and its
interpretation.
	 
	 	 
	Duration of the Plan

	 	The Plan will remain effective until terminated by the
Board, provided, however, that the continued
effectiveness of the Plan will be subject to the
approval of the Company’s stockholders at such times
and in such manner as Section 162(m) may require.
	 
	 	 
	Disclosure and Approval
of the Plan

	 	The Plan must be submitted to the Company’s
stockholders for their approval. The specific terms of
the Plan, including the class of employees eligible to
be Participants and the terms of payments of Awards,
must be disclosed to the stockholders to the extent
Section 162(m) requires. The stockholders must approve
the Plan by separate vote after such disclosure. If
the stockholders do not approve the Plan, the Plan will
be treated as void and of no effect.

6exv10w5

 

Exhibit 10.5

					
	 
	 	Aether Systems, Inc.
	 	Grant No. ____________
	 
	 	1999 Equity Incentive Plan	 	 
	 
	 	Stock Option Agreement for Employees	 	 
	 
	 	Schedule I	 	 

	 	 	 	 	 
	Optionee’s Name:

	 	Robert W. D’Loren
	 	 

	 	 	 	 	 
	Optionee’s Signature:

	 	 
	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Optionee’s S.S.N.:

	 	 
	 	—
	 	 
	 	—
	 	 
	 	 

	 	 	 	 	 	 	 
	Option Shares:

	 	# of shares
	 	2,686,976	 	 

	 	 	 	 	 
	Date of Grant:

	 	June 6, 2006
	 	 

	 	 	 	 	 	 	 	 	 
	Exercise Price per Share:

	 	$	4.10	(	Four	Dollars and 	Ten	Cents)

	 	 	 	 	 
	Term Expiration Date:

	 	June 6, 2016
	 	 
	 

	 	 	 	 

	 	 	 
	Option Exercisability Provisions:

	 	This Option is exercisable effective as
follows: 1/3 shares effective June 6,
2007, 1/3 shares effective June 6, 2008
and 1/3 shares effective June 6, 2009,
assuming you remain employed through
that date. Unexercisable portions of
Options expire immediately when the
optionee ceases to be employed, unless
the optionee’s employment is terminated
by the company without Cause (as defined
in the optionee’s employment agreement)
or by optionee for Good Reason (as
defined in optionee’s employment
agreement) or upon the occurrence of a
Change of Control (as defined in the
optionee’s employment agreement), at
which time all unexercisable portions of
Options shall vest.
	 
	 	 
	Option Expiration Rules:

	 	Except as stated above, exercisable
portions of Options remain exercisable
until the first to occur of the
following, each as defined further in
the Plan, and then immediately expire:

	 	a.	 	on the date that
is 12 months after the optionee’s death;
	 
	 	b.	 	in the case of
the optionee’s Disability (as defined in optionee’s
employment agreement), on the earlier of (i) the first
anniversary of the optionee’s termination of employment
for Disability and (ii) 60 days after the date optionee
no longer has a Disability;
	 
	 	c.	 	On the date that
is 180 days following the date of termination, if,
within 12 months following a Change of Control, the
Company terminates the optionee’s employment without
Cause or if the
optionee terminates his employment for Good Reason;

Schedule I to Aether Option Form 99-12-B

 

 

	 	d.	 	on the date that
is the 90th day after the date of termination
of employment, other than (i) for a reason as stated in
subsections (a), (b) or (c) above or (ii) in the case of
termination for Cause, which shall cause this option and
the rights exercisable hereunder to terminate
immediately; or
	 
	 	•	 	immediately in the case of a Substantial Corporate
Change that is also a Change of Control, unless either
(i) such termination would prevent use of “pooling of
interest” accounting for a reorganization, merger or
consolidation of the Company that the Board of Directors
approves, or (ii) provision is made in writing in
connection with a transaction for the assumption or
continuation of this option or the substitution for this
option is provided for by the successor entity, with
appropriate adjustments as to the number and kind of
 shares of stock into which this option is exercisable
and prices, in which event this option shall not be
terminated; provided, however, that if the rights
hereunder would otherwise terminate under the preceding
clause and the Company considers that the fair market
value of the Common Stock as a result of the Substantial
Corporate Change exceeds or is likely to exceed the
exercise price, the Company will provided either that
(i) the optionee will have the right, at such time
before the completion of the transaction causing the
termination as the Board of Directors reasonably
designates, to exercise any unexercised portions of this
option, including those portions that the Change of
Control will make exercisable; or (ii) cause the
Company, or agree to allow the successor, to cancel this
option after payment to the optionee of an amount in
cash, cash equivalents, or successor equity interests
substantially equal to the fair market value under the
transaction minus the exercise price for the shares
covered by this option (and, where the Board of
Directors determines it is appropriate, any required tax
withholdings).

This Option is o is not þ intended to be an Incentive Stock Option.
Aether intends to treat Options designated as ISOs to the limits the Code allows and as
nonqualified stock options for any additional Option Shares.

Schedule I to Aether Option Form 99-12-B

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