Document:

FY2011 10-K Exhibit 10.15

                         Exhibit 10.15 

MICROVISION, INC. 

CHANGE OF CONTROL SEVERANCE PLAN

The Compensation Committee (the "Committee") of the Board of Directors of Microvision, Inc. (the
"Board") recognizes that the possibility of a Change of Control of the Company, and the uncertainty it creates, may result in
the loss or distraction of key employees of the Company to the detriment of the Company and its shareholders.

The Board and the Committee consider the avoidance of such loss and distraction to be essential to protecting and enhancing the
best interests of the Company and its stockholders.  The Board and the Committee also believe that, when a Change of Control is
perceived as imminent or is occurring, the Board should be able to receive and rely on disinterested service from key employees
regarding the best interests of the Company and its shareholders without concern that employees might be distracted or concerned by
the personal uncertainties and risks created by the perception of an imminent or occurring Change of Control.

In addition, the Board and the Committee believe that it is consistent with the Company's employment practices and policies and in
the best interests of the Company and its shareholders to treat fairly certain key employees whose employment terminates in
connection with or following a Change of Control.

Accordingly, the Committee has determined that appropriate steps should be taken to assure the Company of the continued
employment and attention and dedication to duty of certain key employees and to seek to ensure the availability of their continued
service, notwithstanding the possibility or occurrence of a Change of Control.

	Establishment of Plan.  As of the Effective Date, the Company hereby establishes the Microvision, Inc. Change of Control
Severance Plan (as amended from time to time, the "Plan"), as set forth in this document.

	Definitions.  Unless the context requires otherwise, words and phrases not otherwise defined herein shall have the
following respective meanings:

Affiliate.  "Affiliate" means any parent and subsidiaries of the Company and any entities directly or indirectly
controlling, controlled by or under common control with the Company, where control may be by either management authority or equity
interest.

Base Salary.  "Base Salary" means the annual base rate of compensation payable to a Participant by the
Company.  

Board.  "Board" means the Board of Directors of the Company. 

Cause.  The following, as determined by the Board in its reasonable judgment, shall constitute "Cause" for
termination: (i) a Participant's repeated willful failure to perform, or gross negligence in the performance of, his or her duties and
responsibilities to the Company or any of its Affiliates; (ii) fraud, embezzlement or other dishonesty with respect to the Company or any
of its Affiliates; (iii) breach of any agreement entered into between the Participant and the Company and one of its Affiliates relating to
confidential information, the assignment of rights to intellectual property, non-solicitation, non-competition and participation in certain
other outside activities or (iv) commission of a felony.  

Change of Control.  "Change of Control" means the occurrence of any of the following events after the
Effective Date: 

	The acquisition by any Person or group of the ultimate beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of more than 50% of the then outstanding
securities of the Company entitled to vote generally in the election of directors; excluding, however, the following: (A) any acquisition
directly from the Company (other than any acquisition by virtue of the exercise of an exercise, conversion or exchange privilege unless
the security being so exercised, converted or exchanged was itself acquired directly from the Company); (B) any acquisition by the
Company; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or by any
corporation controlled by the Company; (D) any acquisition by the Participant, by all Participant-Related Party (as defined herein) or by
a group of which the Participant is a member; or (E) any acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C); or

	Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof 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 shall be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or

	A Corporate Transaction, unless (A) securities representing more than 50% of the then outstanding securities entitled to vote
generally in the election of directors of the Company or the corporation resulting from or surviving such Corporate Transaction (or the
ultimate parent of the Company or such corporation after such Corporate Transaction) are beneficially owned subsequent to such
Corporate Transaction by the Person or Persons who were the beneficial owners of the outstanding securities of the Company entitled
to vote generally in the election of directors immediately prior to such Corporate Transaction, in substantially the same proportions as their ownership

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immediately prior to such Corporate Transaction, (B) no Person (excluding any corporation resulting from such
Corporate Transaction or any employee benefit plan (or related trust) of the Company of such corporation resulting from such
Corporate Transaction) ultimately beneficially owns, directly or indirectly, more than 50% of the then outstanding securities entitled to
vote generally in the election of directors of the Company or the corporation resulting from or surviving such Corporate Transaction (or
the ultimate parent of the Company or such corporation after such Corporate Transaction) except to the extent that such ownership
existed prior to the Corporate Transaction; and (C) at least a majority of the members of the board of directors of the corporation
resulting from such Corporate Transaction were 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 Corporate Transaction; or

	The sale, transfer or other disposition of all or substantially all of the assets of the Company; or

	Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding the foregoing, if a Change of Control occurs, no subsequent event or condition shall constitute a Change of Control
hereunder.

For purposes of this definition of "Change of Control," securities entitled to vote generally in the election of directors that
are issuable upon the exercise of an exercise, conversion or exchange right shall be deemed to be outstanding.  In addition, for
purposes of this definition of Change of Control, the following terms have the meanings set forth below: 

A "Corporate Transaction" means a reorganization, recapitalization, merger or consolidation of the Company.

A Person shall be deemed to be the "owner" of any securities of which such Person would be the "beneficial
owner," as such term is defined in Rule 13d-3 promulgated by the Securities and Exchange Commission under the Exchange Act.

"Person" has the meaning used in Rule 13d of the Exchange Act, except that "Person" does not include (i)
the Participant, a Participant-Related Party, or any group of which the Participant or Participant-Related Party is a member, or (ii) the
Company or a wholly-owned subsidiary of the Company or an employee benefit plan (or related trust) of the Company or of a wholly-owned
subsidiary. 

A "Participant-Related Party" means any affiliate or associate of the Participant other than the Company or a subsidiary
of the Company.  The terms "affiliate" and "associate" have the meanings given in Rule 12b-2 under the
Exchange Act; the term "registrant" in the definition of "associate" means, in this case, the Company. 

Code.  "Code" means the Internal Revenue Code of 1986, as amended.

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Committee.  "Committee" means the Compensation Committee of the Board, or such other Committee as may
be appointed and constituted from time to time under Section 4 of the Plan.

Company.  "Company" means Microvision, Inc. and any successor thereto and, if applicable, the ultimate
parent of any such successor.

Date of Termination.  "Date of Termination" means the date of receipt of a notice of termination from the
Company or the Participant as applicable or any later date specified in the notice of termination, which date shall not be more than 30
days after the giving of such notice.  The Company and the Participant shall take all steps necessary (including with regard to any
post-termination services by the Participant) to ensure that any termination under the Plan constitutes a "separation from service"
within the meaning of Section 409A of the Code, and notwithstanding anything contained herein to the contrary, the date on which such
separation from service takes place shall be the "Date of Termination."

Designated Participant.  The "Designated Participants" are (i) the Company's Chief Financial Officer, (ii) the
Company's General Counsel and (iii) such other executives (including, without limitation, an executive who is already a Participant) as
may be expressly designated by the Committee in writing as "Designated Participants" hereunder.  None of the foregoing
individuals nor any other Participant hereafter designated as a Designated Participant hereunder shall thereafter be designated by the
Committee as not being a Designated Participant without his or her prior written consent.

Effective Date.  "Effective Date" means November 28, 2011.

Employee Release.  "Employee Release" means a general release in the form attached hereto as Exhibit A,
with such changes thereto that are not materially adverse to the Participant as may be acceptable to the Committee in its sole
discretion.  

Final Payment.  "Final Payment" means the sum of the value of (i) any earned and unpaid Base Salary,
payable on the Company's next regular pay day following the Date of Termination, (ii) any vacation time earned but not used through
the Date of Termination, (iii) any bonus compensation earned for the year preceding that in which the termination occurs and
unpaid on the Date of Termination and (iv) any reimbursable business expenses incurred by the Participant but not yet reimbursed on
the Date of Termination, provided that such expenses and required substantiation and documentation are submitted within 60 days of
termination, with reimbursement being made promptly after receipt of documentation, but in any event no later than December 31 of the
calendar year following the calendar year in which the expenses were incurred.

Good Reason.  "Good Reason" means, without the Participant's prior written consent, (i) failure of the
Company to continue the Participant in his current position; (ii) substantial diminution in the nature and scope of the Participant's
responsibilities, duties, authority, and upwards reporting requirements of the Participant; provided, however, that the Company's failure
to continue the Participant's appointment or election as a director or officer of one of the

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Company's Affiliates and any diminution of the
business at the Company or any of its Affiliates shall not constitute Good Reason; (iii) material failure of the Company to provide the
Participant with Base Salary, or in the case of a Designated Participant bonus opportunity (at target, expressed as a percentage of
Base Salary), as in effect prior to the Change of Control; or (iv) relocation of the Participant's office more than 35 miles from the
then-current location of the Company's principal offices without his consent. 
Option.  "Option" means an option to acquire common stock of the Company.

Option Agreement.  "Option Agreement" means an agreement between the Company and a Participant
evidencing the award of Options.

Participant.  "Participant" means (i) the Company's Chief Financial Officer, (ii) the Company's General
Counsel, (iii) the Company's Vice President, Engineering, (iv) the Company's Vice President, Sales & Marketing and (v) such other
executives as may be expressly identified by the Committee in writing as "Participants" hereunder.  None of the foregoing
individuals nor any other individual hereafter designated as a Participant hereunder shall thereafter be designated by the Committee as
not being a Participant without his or her prior written consent.

Qualified Termination.  A "Qualified Termination" means (i) in the case of a Participant other than a Designated
Participant, any termination of the Participant's employment, on or during the 18-month period following a Change of Control, by the
Company other than for Cause or by the Participant for Good Reason; and (ii) in the case of a Designated Participant, any termination
of the Designated Participant's employment on, or during the two-year period following, a Change of Control, for any reason (and
regardless of the party terminating the employment) other than by the Company for Cause.  

Notwithstanding any other provision of the Plan, the Participant shall not be deemed to have terminated his or her employment for
Good Reason hereunder unless (i) the Participant gives notice to the Company within 90 days of the initial occurrence of the event or
condition constituting Good Reason, setting forth in reasonable detail the nature of such Good Reason; (ii) the Company fails
to cure within 30 days following such notice; and (iii) the Participant terminates his employment within 30 days following the end of the
30-day cure period (if the Company fails to cure).  In addition, for the avoidance of doubt, in no event shall a Participant whose
employment is terminated prior to, or more than two years following, a Change of Control, have experienced a Qualified Termination.

Notwithstanding the foregoing, no termination which is not a "separation from service" for the purposes of Section 409A
of the Code shall constitute a Qualified Termination for the purposes of the Plan.

Target Bonus.  The greater of (i) the target bonus amount applicable to a Participant in the year directly preceding the year
in which a Change of Control occurs or (ii) the target bonus amount applicable in the year in which a termination of a Participant's
employment occurs.  

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	Benefits.

	Benefits.  In the event that a Participant has a Qualified Termination, the Company, in addition to providing the Participant
the Final Payment, (i) shall pay the Participant an amount equal to one year of Base Salary at the rate in effect at the Date of
Termination or, if higher, on the date of the Change of Control plus a payment equal to the Target Bonus for which the Participant is
eligible, which amount shall be payable within 10 business days following the later of the effective date of the Employee Release or the
date it is received by the Company; provided that, if the timing associated with the execution, revocation and effectiveness of the
release described in the Employee Release and in Section 3(b) would otherwise allow the payment described in the foregoing clause to
be made in either of two taxable years, such payment shall not be made prior to the first day of the second taxable year, and (ii) shall
pay the full cost of the Participant's continued participation in the Company's group health and dental plans for one year or, if less, for
so long as the Participant remains entitled to continue such participation under applicable law. In addition, 100% of those Options which
are not exercisable, and which have not been exercised and have not expired or been surrendered or cancelled, shall become initially
exercisable upon such termination and shall otherwise be and remain exercisable in accordance with the terms of the Options subject
to the Option Agreement, and 100% of any other equity-based compensation awards granted to the Participant, including, but not
limited to, restricted stock and restricted stock units, shall become vested and become free of restrictions.  In the event that, after the
Effective Date, the Participant enters into an agreement relating to compensation that would be covered by this Section 3(a) if such
agreement were entered into before the Effective Date, then, subject to the other terms of the Plan, this Section 3(a) shall apply in
accordance with its terms with respect to such compensation, unless the subsequent agreement expressly provides otherwise with a
specific reference to the Plan.

	Release.  The obligations of the Company hereunder, other than for the Final Payment, if any, are subject to the
Participant signing and delivering to the Company, not later than the earlier of (i) 60 days after termination of employment or (ii) the
deadline for consideration and execution thereof specified in the Employee Release, together with the end of any applicable revocation
period, the Employee Release.  No payment will be made prior to the effective date of the Employee Release and if at the relevant time
the Participant is a Specified Employee, so much of the amounts payable hereunder as constitutes nonqualified deferred compensation
subject to Section 409A of the Code and that would be payable during the six-month period following the Participant's termination shall
instead be accumulated and paid in a single sum upon the day after the conclusion of such six-month period.  

	WARN Act.  Notwithstanding any other provision of the Plan to the contrary, to the extent permitted by the Worker
Adjustment and Retraining Notification Act ("WARN"), any benefit payable hereunder to a Participant as a consequence of
the Participant's Qualified Termination shall be reduced by any amounts required to be paid under Section 2104 of WARN to such
Participant in connection with such Qualified Termination.  

	Administration.  The Plan shall be administered by the Committee or by such other committee as may be appointed to
administer to coordinate the Plan.  If there is no Committee, the Board shall have the rights and responsibilities specified hereunder.
Prior to (but not on or after) a Change of Control, (i) the Committee shall have the right to interpret the Plan, with all of

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its interpretations to be accorded the maximum deference provided by law, and (ii) the Committee's determinations shall be final and binding on all
parties.  If and to the extent applicable, no member of the Committee may act as to matters under the Plan specifically relating to such
member.  The Committee shall have the full authority to employ and rely on such legal counsel, actuaries and accountants (which may
also be those of the Employer), and other agents, designees and delegatees, as it may deem advisable to assist in the administration of
the Plan.  

	Full Settlement.  The Company's obligation to make the payments provided for in the Plan and otherwise to perform its
obligations hereunder shall be absolute and unconditional and shall not be affected by any set-off, counterclaim, recoupment, defense
or other claim, right or action which the Company may have against a Participant or others.  In no event shall a Participant be obligated
to seek other employment or take any other action by way of mitigation of the amounts payable to such Participant under any of the
provisions of the Plan and no amounts received from other employment shall serve to mitigate the payments hereunder.  

	Controlling Law.  The Plan shall be construed and enforced under, and be governed in all respects by, the laws of the
State of Washington, without regard to the conflict of laws principles thereof; provided, however, that in the event the Company
relocates its principal place of business and the Participant's principal place of work to another state, the laws of that state shall apply
without regard to the conflict of laws principles thereof.

	Amendments; Termination.  The Company reserves the right to amend, modify, suspend or terminate the Plan at any time
by action of a majority of the Board; provided that the Plan (including, without limitation, this Section 7) as applied to any particular
Participant may not be amended or terminated during the two-year period following the Effective Date in any manner materially adverse
to the interests of such Participant without the express written consent of such Participant, and may not be amended or terminated at
any time on or after the occurrence of a Change of Control in any manner adverse to the interests of such Participant.

	Assignment.  The Company shall require any corporation, entity, individual or other person who is the successor (whether
direct or indirect by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all the business or assets of the
Company to expressly assume and agree to perform, by operation of law, a written agreement in form and in substance satisfactory to
the Company, or otherwise, all of the obligations of the Company under the Plan.  It is a condition of the Plan, and all rights of each
person eligible to receive benefits under the Plan shall be subject hereto, that no right or interest of any such person in the Plan shall be
assignable or transferable in whole or in part, except by operation of law, including, but not by way of limitation, lawful execution, levy,
garnishment, attachment, pledge, bankruptcy, alimony, child support or qualified domestic relations order.  

	Arbitration.  

	Any dispute, controversy or claim between the parties arising out of the Plan shall be settled by arbitration conducted in Seattle,
Washington in accordance with the rules and procedures of JAMS for the resolution of employment disputes (the "Rules")
and the laws of the State of Washington.  

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	In the event that a party requests arbitration (the "Requesting Party"), it shall serve upon the other party (the
"Non-Requesting Party") within 90 days of the date the Requesting Party knew, or reasonably should have known, of the
facts on which the controversy, dispute or claim is based, a written demand for arbitration stating the substance of the controversy,
dispute or claim and the contention of the Requesting Party.  An arbitrator shall be selected in accordance with the Rules, with the
Requesting Party initiating that process within 30 days of the date it serves demand for arbitration on the Non-Requesting Party (or
such longer period to which the parties shall agree in writing). 

	The function of the arbitrator shall be to determine the interpretation and application of the specific provisions of this Plan to the
issues submitted to arbitration.  There shall be no right in arbitration to obtain, and no arbitrator shall have any authority to award or
determine, any change in, addition to, or detraction from, any of the provisions of this Plan.  The decision of the arbitrator shall be in
writing, shall set forth the basis for the decision and shall be rendered within 30 business days following the hearing.  The decision of
the arbitrator acting within the scope of his authority shall be final and binding upon the parties and may be enforced and executed
upon in any court having jurisdiction over the party against whom enforcement of such decision is sought. 

	The parties involved in the dispute shall divide equally the administrative charges, arbitrator's fees and related expenses of the
arbitration; but each party shall pay its own legal fees and expenses incurred in connection with such arbitration.  

	Withholding.  The Company shall be entitled to withhold from any payments or deemed payments any amount of tax
withholding required by law.

	Gender and Plurals.  Wherever used in the Plan, words in the masculine gender shall include masculine or feminine
gender, and, unless the context otherwise requires, words in the singular shall include the plural, and words in the plural shall include
the singular.

	Plan Controls.  In the event of any inconsistency between the Plan and any other communication regarding the Plan, the
Plan controls.

	Benefits Claims and Appeals.  A Participant shall have 60 days following receipt of any adverse benefit determination
within which to appeal the determination in writing with the Committee, and that the Committee must respond in writing within 60 days
of receiving the appeal, specifically identifying those Plan provisions on which the benefit denial was based and indicating what, if any,
information the Participant must supply in order to perfect a claim for benefits.  Notwithstanding the foregoing, the claims and appeals
procedure established by the Committee will be provided for the use and benefit of Participants who may choose to avail themselves of
such procedures, but compliance with the provisions of these claims and appeals procedures by the Participant will not be mandatory
for any Participant whose claim or appeal is filed after a Change of Control.  

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	Grantor Trust.  The Committee may establish a trust with a bank trustee, for the purpose of paying benefits under the
Plan.  If so established, the trust shall be a grantor trust subject to the claims of the Company's creditors and shall, immediately prior to
a Change of Control, be funded in cash or common stock of the Company or such other assets as the Committee deems appropriate
with an amount equal to 100% of the aggregate benefits payable under the Plan assuming that all Participants in the Plan incurred a
termination of employment entitling them to the benefits described in Section 3 immediately following the Change of Control, or such
lesser amount as the Committee shall determine prior to the Change of Control; provided, however, that the trust shall not be funded if
the funding thereof would result in taxable income to the Participant by reason of Section 409A(b) of the Code; and provided, further,
that in no event shall any trust assets at any time be located or transferred outside of the United States, within the meaning of Section
409A(b) of the Code.  Notwithstanding the establishment of any such trust, a Participant's rights hereunder will be solely those of a
general unsecured creditor.

	Employment Status.  The Plan does not constitute a contract of employment or impose on the Participant or the Company
any obligation to retain the Participant as an employee, to change the status of the Participant's employment, or to change the
Company's policies or those of its Affiliates regarding termination of employment.

   

   

   

   

   

   

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EXHIBIT A

RELEASE OF CLAIMS  

FOR AND IN CONSIDERATION OF the benefits to be provided me in connection with the termination of my employment, as set
forth in The Microvision, Inc. Change of Control Severance Plan, dated as of [____________] (the "Plan"), which
are conditioned on my signing this Release of Claims and to which I am not otherwise entitled, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, I, on my own behalf and on behalf of my heirs, executives,
administrators, beneficiaries, representatives and assigns, and all others connected with me, hereby release and forever discharge
MICROVISION, INC. (the "Company"), its subsidiaries and other affiliates and all of their respective past, present and future
officers, directors, trustees, shareholders, employees, agents, general and limited partners, members, managers, joint venturers,
representatives, successors and assigns, and all others connected with any of them, both individually and in their official capacities,
from any and all causes of action, rights and claims of any type or description, known or unknown, which I have had in the past, now
have, or might now have, through the date of my signing of this Release of Claims, in any way resulting from, arising out of or
connected with my employment by the Company or any of its subsidiaries or other affiliates or the termination of that employment or
pursuant to any federal, state or local law, regulation or other requirement (including without limitation Washington Law Against
Discrimination (RCW 49.60), the Washington Prohibited Employment Practices Law (RCW 49.44), the Washington Minimum Wage Act
(RCW 49.46), Washington's Little Norris-LaGuardia Act (RCW 49.32), the Civil Rights Act of 1964 (including Title VII of that Act), the
Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967 (ADEA), the Americans with Disabilities Act of 1990 (ADA),
the Fair Labor Standards Act of 1938 (FLSA), the Family and Medical Leave Act of 1993 (FMLA), the Worker Adjustment and
Retraining Notification Act (WARN), the Employee Retirement Income Security Act of 1974 (ERISA), the National Labor Relations Act
(NLRA), and the fair employment practices laws of the state or states in which I have been employed by the Company or any of the
subsidiaries or other affiliates, each as amended from time to time). 

Excluded from the scope of this Release of Claims is (i) the Final Payment (as defined in the Agreement) owed to the Participant
pursuant to the Plan, (ii) any claim arising under the terms of the Plan after the effective date of this Release of Claims, (iii) any right of
indemnification or contribution that I have pursuant to the Articles of Incorporation or By-Laws of the Company or any of its subsidiaries
or other affiliates and (iv) any non-forfeitable rights to accrued benefits, if any, arising under any applicable employee benefit plans.

I agree that I have no right to obtain or receive any monetary damages or other relief of any kind as a result of any action or
proceeding by me or by anyone else on my behalf regarding any claims covered by the above general release and, to the extent
permitted by law, I agree that I will not seek or accept any monetary damages or other relief of any kind in any such action or
proceeding.  In addition, without limiting the scope of the foregoing, I expressly (i) agree not to be a class representative or be part of a
class regarding any action under ERISA, or otherwise to bring an action under ERISA on behalf of a plan or trust for relief for such plan
or trust under

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ERISA, and (ii) to the extent permitted by law, agree not to retain the benefits of any decision, judgment or settlement in any such action.

In signing this Release of Claims, I acknowledge my understanding that I may not sign it prior to the termination of my employment,
but that I may consider the terms of this Release of Claims for up to 21 days (or such longer period as the Company may specify) from
the later of the date my employment with the Company terminates or the date I receive this Release of Claims. I also acknowledge that
I am advised by the Company and its subsidiaries and other affiliates to seek the advice of an attorney prior to signing this Release of
Claims; that I have had sufficient time to consider this Release of Claims and to consult with an attorney, if I wished to do so, or to
consult with any other person of my choosing before signing; and that I am signing this Release of Claims voluntarily and with a full
understanding of its terms. 

I further acknowledge that, in signing this Release of Claims, I have not relied on any promises or representations, express or
implied, that are not set forth expressly in the Plan.  I understand that I may revoke this Release of Claims at any time within seven
days of the date of my signing by written notice to the [Director, Human Resources] of the Company and that this Release of
Claims will take effect only upon the expiration of such seven-day revocation period and only if I have not timely revoked it.

Intending to be legally bound, I have signed this Release of Claims under seal as of the date written below.

Signature: _____________________________________________

Name (please print): ____________________________________ 

Date Signed: ___________________________________________

   

   

   

   

                                                       11ex10_2.htm

Exhibit No. 10.2

 

Exhibit A

JOURNAL COMMUNICATIONS, INC.

ANNUAL MANAGEMENT INCENTIVE PLAN

amended and restated as of  February 9, 2009

Article 1

Background

This Annual Management Incentive Plan (the “Plan”) replaced the Journal Communications, Inc. Annual Management Incentive Plan that was in effect for fiscal year 2008 and prior years.  The Plan was amended and restated as of December 8, 2008 to preserve the “performance-based compensation” exemption from Section 162(m) of the Code in light of Revenue Ruling 2008-13, issued in February 2008.  The Plan is being further amended and restated as of February 9, 2009 to permit payment of incentive awards in the form of cash and/or Shares.

This Plan is a subplan of the Journal Communications, Inc. 2007 Omnibus Incentive Plan (“2007 Omnibus Plan”), consisting of a program for the grant of annual Performance Awards under Articles 10 and 11 of the 2007 Omnibus Plan.  The Plan has been established and approved, and will be administered by, the Committee pursuant to the terms of the 2007 Omnibus Plan.  It is intended that the performance bonuses earned under the Plan shall be Qualified Performance-Based Awards under Article 11 of the 2007 Omnibus Plan with respect to Participants who are Covered Employees, with the intent that the performance bonuses will be fully deductible by the Company without regard to the limitations of Code Section 162(m).

The applicable Award limits of Section 5.4 of the 2007 Omnibus Plan shall apply with respect to the Plan.  Section 5.4(e) of the 2007 Omnibus Plan provides that the maximum aggregate amount that may be paid with respect to a cash-based Award under the 2007 Omnibus Plan to any one Participant in any one fiscal year of the Company is three percent (3%) of the Company’s consolidated net earnings from continuing operations for such year as shown in the Company’s consolidated statements of earnings and filed with the Company’s Annual Report on Form 10-K for such fiscal year.  While this Plan is designed as a cash-based plan, the Committee may, in its discretion, pay any incentive awards earned hereunder, in whole or in part, in the form of Stock granted under Article 13 of the 2007 Omnibus Plan.  Section 5.4(d) of the 2007 Omnibus Plan provides that the maximum aggregate grant with respect to Other Stock-Based Awards in any 12-month period to any one Participant is 750,000 Shares.  Therefore, the maximum number of Shares granted to any one Participant in any fiscal year of the Company under this Plan, together with any other grants of Other Stock-Based Awards to such Participant under the 2007 Omnibus Plan, shall be the lesser of (i) 750,000 Shares, or (ii) the number of Shares having an aggregate Fair Market Value equal to (A) three percent (3%) of the Company’s consolidated net earnings from continuing operations for such year, minus (B) the cash awarded to such Participant under this Plan for such year.

 

  

  

  

Article 2

Plan Purpose

The purpose of the Plan is to:

	
  

	
·

	
Reward key individuals for achieving pre-established financial and non-financial goals that support the Company’s and its Subsidiaries’ annual business objectives.

	
  

	
·

	
Encourage and reinforce effective teamwork and individual contributions toward the Company’s and its Subsidiaries’ stated goals.

	
  

	
·

	
Provide an incentive opportunity incorporating an appropriate level of risk that will enable the Company to attract, motivate and retain outstanding executives.

	
  

	
·

	
Provide Qualified Performance-Based Awards to Covered Employees that qualify for the Section 162(m) Exemption.

Article 3

Definitions

Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the 2007 Omnibus Plan.  In addition, the following words and phrases have the respective meanings indicated below unless a different meaning is plainly implied by the context:

“2007 Omnibus Plan” means the Journal Communications, Inc. 2007 Omnibus Incentive Plan, as amended from time to time.

“CEO” means the Chief Executive Officer of the Company.

“Eligible employee” means the CEO and any other management-level employee of the Company or a Subsidiary whose job responsibilities have a direct impact on the Company’s strategic goals.

“Incentive award” means the amount to be paid, in the form of cash and/or Shares, to an eligible employee pursuant to the Plan.

“Individual Award Limit” for any Plan Year has the meaning given such term in Section 6.1.

“Participant” means an eligible employee who has been designated in the Plan or by the Committee to participate in the Plan for a given Plan Year.

“Intermediate Incentive Opportunity Range” refers to the range of incentive award opportunities that may be established for a given Participant or Participants pursuant to Section 6.2 hereof (expressed as minimum, target and maximum), which is below the Individual Award Limit.

“Intermediate Performance Goals” refers to the corporate, subsidiary and/or individual performance measures and goals and their respective weightings for each eligible Participant that may be set pursuant to Section 6.2 hereof for the determination of individual incentive awards, subject to the achievement of the Threshold Earnings Performance.

 

  

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“Plan” means the plan set forth in this Journal Communications Inc. Annual Management Incentive Plan, as it may be amended from time to time, and known as the “Annual Management Incentive Plan.”

“Plan Year” means the Company’s fiscal year for financial reporting purposes.

“Threshold Earnings Performance” has the meaning given such term in Section 6.1.

Article 4

Plan Administration

The Plan shall be administered by the Committee.  The Committee shall have sole authority and discretion, consistent with the provisions of the Plan, to:

	
  

	
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Approve Participants from time to time from among eligible employees,

	
  

	
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Establish, at the beginning of each Plan Year, Intermediate Incentive Opportunity Ranges and Intermediate Performance Goals for any Participant who is an executive officer,

	
  

	
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Approve, at the beginning of each Plan Year, the CEO’s recommendation of Intermediate Incentive Opportunity Ranges and Intermediate Performance Goals for any Participant who is not an executive officer,

	
  

	
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Modify the Intermediate Incentive Opportunity Ranges and Intermediate Performance Goals for any Participant, in accordance with Section 6.3,

	
  

	
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Determine at the end of each Plan Year whether the Threshold Earnings Performance was achieved, and

	
  

	
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Determine and approve at the end of each Plan Year incentive awards for all Participants, subject to the achievement of the Threshold Earnings Performance and the Individual Award Limit.

	
  

	
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Determine the form of payment of incentive award earned by a Participant in any Plan Year, which may be in the form of cash, Shares or any combination thereof, subject to the award limits contained in the 2007 Omnibus Plan and set forth herein.

The Committee shall have full authority and discretion to adopt rules and regulations to carry out the purposes and provisions of the Plan within the parameters defined by the Board.  The Committee’s interpretation and construction of any provision of the Plan, and all decisions and actions of the Committee, shall be binding and conclusive.  All expenses of administering the Plan shall be borne by the Company.

Article 5

Eligibility and Participation

The CEO shall be a participant in the Plan in each Plan Year.  The Committee is responsible for reviewing and approving the recommendations of the CEO regarding the eligibility and participation of employees in the Plan other than himself.

 

  

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Participation in the Plan is limited to management-level employees of the Company or any Subsidiary whose job responsibilities have a direct impact on the Company’s strategic goals.

Article 6

Plan Operation

Section 6.1       Threshold Earnings Performance and Award Limits.

Pursuant to Article 11 of the 2007 Omnibus Plan, by adopting this Plan, the Committee has established the threshold performance goal under the Plan for each Plan Year based on “earnings,” which is one of the Qualified Business Criteria approved by the shareholders under Section 11.2 of the 2007 Omnibus Plan.  Specifically, the threshold performance goal under the Plan for each Plan Year is that the Company achieve positive consolidated net earnings from continuing operations for such year, as reflected in the Company’s consolidated statements of earnings and filed with the Company’s Annual Report on Form 10-K for such fiscal year (the “Threshold Earnings Performance”).  Subject to Article 8 of this Plan in the case of a Change in Control, no incentive awards shall be payable under the Plan for any Plan Year unless the Threshold Earnings Performance has been achieved.  In any year in which the Threshold Earnings Performance is achieved, the incentive award payable to each executive officer Participant under the Plan for such Plan Year is three percent (3%) of such consolidated net earnings, and the incentive award payable to each non-executive officer Participant under the Plan for such Plan Year is one percent (1%) of such consolidated net earnings (respectively, the “Individual Award Limit”), subject in each case to the Committee’s discretion to award less than the Individual Award Limit as described herein.

Section 6.2       Negative Discretion; Intermediate Performance Goals and Incentive Opportunity Ranges.

It is anticipated, but not required, that the Committee would exercise negative discretion, as contemplated in Section 11.3 of the 2007 Omnibus Plan, to determine that the incentive award payable to any Participant for a Plan Year is less than the Individual Award Limit for such Participant.  In exercising such discretion, the Committee may establish or approve Intermediate Performance Goals and their respective weightings, and Intermediate Incentive Opportunity Ranges, as it deems appropriate to encourage and reward particular areas of performance, whether at the corporate, subsidiary or individual level.

Any such Intermediate Performance Goals and their respective weightings, and Intermediate Incentive Opportunity Ranges, for Participants who are executive officers shall be established by the Committee.  The CEO may recommend to the Committee for approval Intermediate Performance Goals and their respective weightings and Intermediate Incentive Opportunity Ranges for Participants who are not executive officers.

Section 6.3       Modification of Intermediate Incentive Opportunity Ranges and/or Intermediate Performance Goals

 

Intermediate Incentive Opportunity Ranges and Intermediate Performance Goals and weightings for eligible employees may be adjusted as those employees move in and out of positions.  Generally, the following conventions will apply when these changes occur:

	
  

	
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Participants who are assigned to different eligible positions will be considered for purposes of the Plan to have become eligible for that position’s Intermediate Incentive Opportunity Ranges, Intermediate Performance Goals and weightings at the start of the first full calendar month of his or her assignment. The Participant’s incentive award for the year will be pro-rated proportionately between the number of months in each position.

 

  

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Non-eligible employees who are promoted and/or newly-hired to incentive eligible positions must be in the position prior to July 1st of the Plan Year to become immediately eligible for the new position’s Intermediate Incentive Opportunity Ranges, Intermediate Performance Goals and weightings.  Non-eligible employees who are promoted and/or newly-hired on July 1st or after will be eligible starting at the beginning of the next Plan Year.

The Committee may, at any time prior to a Change in Control and prior to the approval of the incentive awards for a Plan Year, approve a change to the Intermediate Incentive Opportunity Ranges and/or Intermediate Performance Goals and weightings for any Participant or Participants for such Plan Year, and add or delete Intermediate Performance Goals.  Such a change may be desirable to reflect the strategic direction of the Company and/or its Subsidiaries or be in the interests of equitable treatment of the Participants and the Company as a result of extraordinary or non-recurring events, changes in applicable accounting rules or principles, changes in the Company’s method of accounting, changes in applicable law, changes due to consolidation, acquisition, divestiture, reorganization or other changes in the Company’s structure, major changes in business strategy or any other change or a similar nature to any of the foregoing.

Section 6.4       Determination of Incentive Awards.

As soon as practical after the end of each Plan Year, the Committee shall make a written determination as to whether the Threshold Earnings Performance was achieved for the Plan Year just ended and, if so, approve the incentive awards for all Participants for such Plan Year.  Subject to the achievement of the Threshold Earnings Performance, it is anticipated, but not required, that in the exercise of its negative discretion to pay less than the Individual Award Limit to any Participant, the Committee would approve incentive awards based on the level of achievement of Intermediate Performance Goals.  In that case, for example, a Participant’s percentage achievement level within an applicable Intermediate Incentive Opportunity Range would be determined for each Intermediate Performance Goal which would then be multiplied by the Participant’s base salary.  These amounts would be cumulated in the case of multiple Intermediate Performance Goals to determine the actual incentive award.  Actual performance falling between the minimum and the maximum within any Intermediate Incentive Opportunity Range would be interpolated for incentive award determination.

Without limiting the foregoing, the Committee could exercise its discretion to pay an award to any one or more Participants that is in addition to the amount that would have been earned based upon the achievement of Intermediate Performance Goals; provided that the Threshold Earnings Performance was achieved and the total award to such Participant does not exceed the Individual Award Limit for such Plan Year.

Section 6.5       Payment of Incentive Awards.

Unless deferred as provided in the following paragraph, incentive awards earned under the Plan shall be paid on or before March 15 of the year following the year to which the incentive award relates.

 

  

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Any Participant who is eligible to participate in the Company’s Non-Qualified Deferred Compensation Plan may elect to defer receipt of the cash portion of his or her incentive award under this Plan in accordance with the terms of Non-Qualified Deferred Compensation Plan.

Article 7

Termination of Employment

The Committee shall have the sole authority and discretion to make decisions regarding the payment of incentive awards for Participants who terminate employment voluntarily or involuntarily during the Plan Year due to retirement, Disability or for other reasons; provided, however, that the Committee shall not provide for the automatic vesting of any incentive award hereunder to a Covered Employee who terminates employment prior the end of a Plan Year for any reason other than death, Disability, or the occurrence of a Change in Control.

Article 8

Change in Control

Section 8.1       Awards not Assumed or Substituted by the Surviving Entity.

Upon the occurrence of a Change in Control, and except with respect to any incentive award opportunities hereunder assumed by the Surviving Entity or otherwise equitably converted or substituted in connection with the Change in Control in a manner approved by the Committee or the Board:

(A)           the Threshold Earnings Performance shall be waived, and

(B)           if a Change in Control occurs during the first half of a Plan Year, all relevant Intermediate Performance Goals, if any, will be deemed to have been achieved at the “target” level, and

(C)           if a Change in Control occurs during the second half of a Plan Year, the actual level of achievement of all relevant Intermediate Performance Goals, if any, against target will be measured as of the end of the calendar quarter immediately preceding the Change in Control, and

(D)           in either such case, there shall be a prorata payout to Participants within thirty (30) days following the Change in Control (unless a later date is required by Section 17.3 of the 2007 Omnibus Plan) based upon such Intermediate Performance Goals, if any, and length of time within the Plan Year that has elapsed prior to the date of the Change in Control.

Section 8.2       Awards Assumed or Substituted by the Surviving Entity.

With respect to incentive award opportunities hereunder assumed by the Surviving Entity of a Change in Control or otherwise equitably converted or substituted in connection with a Change in Control: if within the same Plan Year in which the Change in Control occurs (or after such year and before incentive awards for such Plan Year have been paid) a Participant’s employment is terminated without Cause or the Participant resigns for Good Reason, then the Participant’s payout opportunities attainable under this Plan for such Plan Year shall be deemed to have been earned as of the date of termination as follows:

 

  

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(A)      the Threshold Earnings Performance shall be waived, and

(B)       if the date of termination occurs during the first half of the Plan Year, all relevant Intermediate Performance Goals, if any, will be deemed to have been achieved at the “target” level, and

(C)       if the date of termination occurs during or after the second half of the Plan Year, the actual level of achievement of all relevant Intermediate Performance Goals, if any, against target will be measured as of the end of the calendar quarter immediately preceding the date of termination, and

(D)      in either such case, there shall be a prorata payout to the Participant or his or her estate within thirty (30) days following the date of termination (unless a later date is required by Section 17.3 of the 2007 Omnibus Plan) based upon such Intermediate Performance Goals, if any, and the length of time within the performance period that has elapsed prior to the date of termination.

 

For purposes of this Article 8, a Participant shall not be considered to have resigned for Good Reason unless the Participant is party to an employment, change-in-control, severance or similar agreement with the Company or an Affiliate that includes provisions in which the Participant is permitted to resign for Good Reason.

Article 9

Miscellaneous

Section 9.1       No Enlargement of Employee Rights

Nothing contained in the Plan shall be deemed to give any Participant the right to be retained in the service of the Company or any Subsidiary or to interfere with the right of the Company or any Subsidiary to discharge, discipline or retire any Participant at any time.

Section 9.2       Relationship to Other Benefits

Payments under the Plan shall be taken into account in determining any benefit under the Journal Communications, Inc. Employee Pension Trust Agreement.  Payments under the Plan will not be taken into account in determining any benefits under any other benefit plan of the Company or its Subsidiaries except as otherwise specifically provided in the respective benefits plan agreement.

 

  

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Section 9.3       Limitation on Vested Interest

The earning of incentive awards by eligible employees under the Plan is within the sole discretion of the Company in accordance with the terms of the Plan, and no eligible employee or other person has any legal right or vested interest in an incentive award under the Plan prior to the actual payment to the eligible employee as an incentive award.

Section 9.4       Plan Amendment and Discontinuation

The Committee may modify, suspend or terminate the Plan at any time prior to a Change in Control.

Section 9.5       Effective Date of the Plan

This Plan shall be effective with the Plan Year beginning closest to January 1, 2008 and shall continue in effect for later Plan Years until terminated by the Committee.

Section 9.6       Plan Communication

Each Participant will be given a written description of the Plan.  The description will provide details of the Plan including the Threshold Earnings Performance requirement, and the Individual Award Limit.  Participants shall be informed each year of any applicable Intermediate Incentive Opportunity Ranges, Intermediate Performance Goals and weightings, and the incentive opportunity associated with each performance level and measure.

 

 

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