Document:

exv10w2

 

 

    Exhibit 10.2

 

    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

    

    1

 

			
	
		
    (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 equal 5% of the annual net income of the Company, as
    determined based on the Company’s audited financial
    statements (the “Bonus Pool”).
	 
	
    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%.

    

    2

 

 

			
	
    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
    2006 Long-Term Equity Incentive Plan).
	 
	
    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.

    

    3

 

			
	
		
    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 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.

    

    4

 

			
	
		
    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) 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.

    

    5exv10w3

 

Exhibit 10.3

AETHER HOLDINGS, INC.

ADDENDUM TO STOCK OPTION AGREEMENT

     Aether Holdings, Inc. (the “Corporation”) has issued you three option grants dated October
25, 1999 and three option grants dated July 25, 2001 (the “Options”) under its 1999 Equity Incentive Plan
(the “1999 Plan”). Each Option entitles you to acquire a specified number (the “Option Shares”) of shares
of the Corporation’s common stock, at specified prices per share (the “Exercise Price”) pursuant to the provisions of the 1999
Plan and the grant agreements. This Addendum to Stock Option Agreement (the “Addendum Agreement”) will modify one or more provisions
governing your Options. By signing this Addendum Agreement, you agree to be bound by the modified terms
and restrictions included herein. However, except as modified herein, the 1999 Plan and the grant agreements remain in
full force and effect. In addition, only the Options specifically identified above are modified by this
Addendum Agreement and any other options granted to you by the Corporation remain subject to the 1999 Plan and
stock option agreements governing such grants.

     Attached to this Addendum Agreement, as Schedule I, are the details of the grants covering
the Options. Schedule I specifies the number of Option Shares, the Exercise Price, the Date of Grant, and
other details of your Options. The Options are subject in all respects, except as modified herein by the Addendum
Agreement, to the applicable terms and restrictions of the 1999 Plan and the grant agreements.

     In addition to the terms and restrictions in the 1999 Plan and grant agreements, the following terms and
restrictions apply to each Option and shall govern if a conflict arises with the 1999 Plan
or the terms of the grant agreements held by you:

	 	 	 
	Option Expiration Rules:

	 	For each of the three option grants dated October 25, 1999,
as identified on Schedule I, such options shall become
exerciseable on or after January 1, 2009 and shall remain
exercisable until midnight on October 25, 2009.1

 

			
	1	 	These option grants cannot be exercised beyond the date that is ten years following the original
grant date, which is October 25, 1999.

 

 

	 	 	 
	 

	 	For the three option grants dated July 25, 2001, as
identified on Schedule I, such options shall become
exerciseable on or after January 1, 2011 and shall remain
exerciseable until midnight on July 25, 2011.2
	 
	 	 
	 

	 	Any options not exercised within the time periods set forth
above shall expire and be forfeited.
	 
	 	 
	 

	 	Notwithstanding the foregoing, all options otherwise
exerciseable within the fixed schedules set forth above shall
become immediately exerciseable upon a change of control
(as defined under Section 409A of the Internal Revenue
Code) that occurs prior to the first date that such options
may be exercised.

 

			
	2	 	These options grants cannot be exercised beyond the date that is ten years following the original grant date,
which is (July 25, 2001).

2

 

          IN WITNESS WHEREOF, the parties hereto have caused this Addendum to Stock Option
Agreement to be duly executed either individually or by their respective authorized officers as of
October 31, 2006.

	 	 	 	 	 
	 	AETHER HOLDINGS, INC.

 	 
	 	/s/  David B. Meister
	 
	 	By:    David B. Meister 	 
	 	Its:   Senior Vice President and
Chief Financial Officer 	 
	 
	 	OPTION HOLDER

 	 
	 	/s/ J. Carter Beese, Jr.
 	 
	 	By:            J. Carter Beese, Jr. 	 
	 	 	 
	 

3

 

Schedule 1 —

J. Carter Beese, Jr.

	 	 	 	 	 	 	 	 	 
	# Option	 	Exercise	 	 	 	 
	Shares	 	Price	 	Date of Grant	 	Expiration Date
	 
	 	 	 	 	 	 	 	 
	12,600

	 	$	16.00	 	 	October 25, 1999
	 	October 25, 2009
	4,000

	 	$	16.00	 	 	October 25, 1999
	 	October 25, 2009
	4,000

	 	$	16.00	 	 	October 25, 1999
	 	October 25, 2009
	18,000

	 	$	8.54	 	 	July 25, 2001
	 	July 25, 2011
	5,000

	 	$	8.54	 	 	July 25, 2001
	 	July 25, 2011
	5,000

	 	$	8.54	 	 	July 25, 2001
	 	July 25, 2011

4

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