Document:

Unassociated Document

    EXHIBIT
      10.1

     

    EXECUTIVE
      INCENTIVE COMPENSATION PLAN

    

    The
      Advanced Photonix, Inc. Executive Incentive Compensation Plan (the “Plan”) is
      adopted by Advanced Photonix, Inc., a Delaware corporation (the
“Company”).

    

    1. Purpose
      of the Plan.

    

    The
      purpose of this Plan is to motivate certain designated employees of the Company
      to achieve strategic business objectives and to sustain high levels of
      performance by tying a significant portion of their compensation to the
      achievement of the Company’s financial goals and pre-established strategic
      objectives.

    

    2. Definitions.

    

    2.1. “Bonus”
      has the meaning set forth in Section 4.1.

    

    2.2. “Bonus
      Opportunity” has the meaning set forth in Section 4.4.

     

    2.3. “Committee”
      means the Compensation Committee of the Board of Directors of the
      Company.

    

    2.4. “EBIT
      Percentage” means a percentage computed by dividing
      (i) net
      income plus
      (a)
      interest expense and (b) income taxes, as each such amount is reported on the
      Company’s audited Consolidated Statement of Operations for such Fiscal Year
      (but, in the case of each of the amounts described in clauses (a) and (b),
      only
      to the extent such amount was deducted in computing net income for such Fiscal
      Year), by (ii) Sales. In the sole discretion of the Committee, EBIT Percentage
      may also be adjusted by adjusting net income to eliminate (i) the costs of
      acquiring an ownership interest in any entity during such Fiscal Year, (ii)
      the
      operating results of such acquired entities for such Fiscal Year, (iii) losses
      on the impairment of intangible assets or goodwill and (iv) stock option
      compensation (but, in the case of each of the amounts described in clauses
      (i)
      through (iv), only to the extent such amount was taken into account in arriving
      at net income for such Fiscal Year). In addition to the foregoing, in the sole
      discretion of the Committee, EBIT Percentage may also be adjusted to account
      for
      the amount, if any, by which the aggregate amount accrued for payment of Bonuses
      to all Participants for such Fiscal Year exceeds or is less than the actual
      amounts of Bonus to be paid to all Participants for such Fiscal
      Year.

    

    2.5. “EBIT
      Percentage Targets” has the meaning set forth in Section 4.2.

    

    2.6. “Eligible
      Salary” means, for each Participant for any Fiscal Year, the amount of such
      Participant’s annual base compensation (determined as of the first day of such
      Fiscal Year or, if the Committee subsequently approves any increase or increases
      in such compensation during the first six months of such Fiscal Year, the first
      day the last such increase is effective) as shown on the Company's payroll
      records.

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

    2.7. “Executive
      Employees” means, with respect to any Fiscal Year, the Company’s Chief Executive
      Officer, Chief Financial Officer and Chief Technology Officer and any other
      executive officer of the Company whose title begins with “Chief”.

    

    2.8. “Fiscal
      Year” means the fiscal year of the Company. Fiscal years are referred to in
      terms of the calendar year in which the last day of the fiscal year occurs.
      Thus, for example, “Fiscal Year 2008” refers to the Fiscal Year ending on or
      about March 31, 2008.

    

    2.9. “Matrix”
      has the meaning set forth in Section 4.2.

    

    2.10. “Mid-Year
      Participant” has the meaning set forth in Section 3.1.

    

    2.11. “Participant”
      has the meaning set forth in Section 3.1.

    

    2.12. “Payment
      Date” has the meaning set forth in Section 5.

    

    2.13. “Plan”
      means this Advanced Photonix, Inc. Executive Incentive Compensation
      Plan.

    

    2.14. “Sales”
      means net sales of the Company as such amount is reported on the Company’s
      audited Consolidated Statement of Operations for such Fiscal Year.

    

    2.15. “Sales
      Targets” has the meaning set forth in Section 4.2.

     

    3. Eligibility
      to Participate In the Plan.

    

    3.1. Each
      person who is an Executive Employee on the first day of the Fiscal Year shall
      be
      entitled to participate in the Plan for that Fiscal Year, In addition, prior
      to
      the beginning of each Fiscal Year, the Chief Executive Officer of the Company
      may recommend to the Committee other executive officers of the Company for
      participation in the Plan with respect to such Fiscal Year. No later than six
      (6) months after the beginning of any Fiscal Year, the Chief Executive Officer
      may also recommend to the Committee for participation in the Plan any person
      who
      was not an Executive Employee as of the beginning of such Fiscal Year but who
      is
      an Executive Employee at the time of such recommendation (a “Mid-Year
      Participant”). In either of such cases, the Committee, in its sole discretion,
      will designate from among such recommendations those persons who will be
      entitled to participate in the Plan for such Fiscal Year. Each person who
      participates in the Plan with respect to a Fiscal Year will be referred to
      herein as a “Participant”). 

    

    3.2. Notwithstanding
      that a person may be a Participant with respect to a Fiscal Year, such person
      will not be entitled to a Bonus under the Plan if such person is not employed
      by
      the Company on the Payment Date relating to such Bonus, and any Bonus otherwise
      payable to such person in accordance with Section 4 will instead be forfeited.
      For purposes of this Section 3.2, (i) an employee of the Company who is
      receiving short-term disability payments on the Payment Date will be treated
      as
      employed by the Company on such Payment Date; and (ii) an employee of the
      Company who is receiving long-term disability payments or who is receiving
      salary from the Company only as part of a severance arrangement or plan entered
      into prior to the Payment Date will not be considered to be employed by the
      Company on the Payment Date. 

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    4. Determination
      of Bonus.

    

    4.1. Each
      Participant will be eligible to earn a bonus for the Fiscal Year (the “Bonus”)
      in an amount not to exceed two times such Participant’s Bonus Opportunity. The
      amount of the Bonus will be dependent upon the combination of the EBIT
      Percentage Target and the Sales Target attained by the Company.

     

    4.2. Prior
      to
      the beginning of each Fiscal Year the Committee will establish, based upon
      the
      recommendation of the Chief Executive Officer, targets for EBIT Percentage
      and
      Sales for the ensuing Fiscal Year (the “EBIT Percentage Targets” and “Sales
      Targets”, respectively) and the applicable percentages of Bonus Opportunity
      related to the Company’s attainment of such targets. The EBIT Percentage Targets
      and the Sales Targets will be set forth in a matrix (the “Matrix”) in which (i)
      the EBIT Percentage Targets will be set forth in the far left column, with
      the
      highest EBIT Percentage Target in the top row and the balance of the EBIT
      Percentage Targets in descending order in the rows below and (ii) the Sales
      Targets will be set forth in the heading row, with the highest Sales Target
      in
      the far right column and the balance of the Sales Targets in descending order
      in
      the columns moving from right to left. The applicable percentage of the Bonus
      Opportunity to be earned will be set forth at the intersection of the highest
      EBIT Percentage Target and the highest Sales Target that has been equaled or
      exceeded by the Company for such Fiscal Year. The Committee will distribute
      to
      each Participant a copy of the Matrix as soon as practicable after establishment
      under this Section 4.2.

    

    4.3. At
      such
      time as the Company issues its audited financial statements for the Fiscal
      Year,
      the Committee will determine which EBIT Percentage Targets and Sales Targets,
      have been met and, as a result, the applicable percentage of each Participant’s
      Bonus Opportunity that was earned for the Fiscal Year. If for any Fiscal Year
      Sales do not fall within any Sales Target and/or EBIT Percentage does not fall
      within any EBIT Percentage Target in the Matrix, the Committee will determine,
      after consultation with the Chief Executive Officer and such other personnel
      as
      the Committee may deem appropriate, whether and to what extent each Participant
      will earn a percentage of his or her Bonus Opportunity for the Fiscal Year.
      As
      soon as practicable but no later than 30 days after the Company has filed its
      Annual Report on Form 10-K with respect to the Fiscal Year with the Securities
      Exchange Commission, but no later than the last day of the calendar year in
      which the Fiscal Year ends, the Committee will issue its report setting forth
      the Bonus payable to each Participant for such Fiscal Year. Subject to the
      provisions of Section 3.2, the Participant will be entitled to receive the
      Bonus
      for the Fiscal Year as so determined.

    

    4.4. For
      purposes of this Section 4, the term “Bonus Opportunity” for any Participant and
      any Fiscal Year means an amount equal to that percentage (as determined by
      the
      Committee) of the Participant’s Eligible Salary. For Fiscal Year 2008, the Bonus
      Opportunity for the Chief Executive Officer will be 50% and the Bonus
      Opportunity for each of the Chief Financial Officer and Chief Technology Officer
      will be 35%.

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    5. Payment
      of Bonus.

    

    Subject
      to Section 3.2, the Bonus payable for any Fiscal Year under the Plan will be
      paid in cash no later than 30 days after the Company has filed its Annual Report
      on Form 10-K with respect to such Fiscal Year with the Securities Exchange
      Commission, but no later than the last day of the calendar year in which the
      Fiscal Year ends. The date of actual payment of the Bonus with respect to any
      Fiscal Year is referred to as the “Payment Date”. 

    

    6. Administration. 

    

    The
      Plan
      will be administered by the Committee, which will have plenary authority to
      take
      all action in connection with the Plan as it deems advisable or necessary.
      The
      interpretation, construction and administration of the Plan by the Committee
      and
      the Committee’s decisions with respect to the awarding and the amount of any
      Bonus hereunder will be binding and conclusive on the Company and the
      Participants.

    

    7. No
      Right of Employment.

    

    No
      Participant will have any right to continued employment with the Company by
      virtue of his participation in the Plan. No employee of the Company will have
      any right to participate in the Plan except as stated herein.

    

    8. No
      Alienation.

    

    No
      Participant will have any right to pledge, transfer, assign or otherwise
      alienate his right to receive any payment under the Plan except pursuant to
      an
      order of a court of competent jurisdiction.

    

    9. Amendment.

    

    The
      Board
      of Directors of the Company will have the right to amend the Plan at any time
      and from time to time (including the right to terminate the Plan) except that
      no
      such amendment of the Plan will adversely affect the right of any Participant
      to
      receive a Bonus under the Plan with respect to any Fiscal Year that has ended
      prior to the date of such amendment.

    

    10. Choice
      of Law.

    

    The
      interpretation, enforceability and validity of the Plan, and all rights
      hereunder, will be governed by the substantive laws (but not the choice of
      law
      rules) of the State of Delaware.

    

    11. Tax
      Withholding.

    

    All
      payments to be made to a Participant under the Plan will be subject to all
      required withholding of federal, state and local income and employment
      taxes.

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    
      
        
        

      

      
        32Unassociated Document

    EXHIBIT
      10.2

     

    Amendment
      No. 1 to Employment Agreement

    

    Amendment
      No. 1 dated December 17, 2007 to the Employment Agreement dated May 2, 2005
      (the
“Agreement”) by and between Advanced Photonix, Inc., a Delaware corporation (the
“Company”) and Robin Risser, an individual (the “Employee”). The Company and
      Employee wish to amend the Employment Agreement in order to conform to, and
      be
      interpreted to comply with, Section 409A of the Internal Revenue Code of 1986,
      as may be amended (the “Code”). Unless otherwise defined herein, capitalized
      terms shall have the respective meanings assigned to them in the Agreement.
      

     

    NOW,
      THEREFORE, in consideration of the mutual covenants of the parties contained
      herein and for other good and valuable consideration the receipt and sufficiency
      of which is hereby acknowledged, the parties hereto hereby agree as
      follows:

     

    
      
        1.
          Section
          E
          of the Agreement is amended by deleting the following
          sentence:

      

    

     

    “In
      the
      event of a separation of Employee from the Company, all accrued vacation shall
      be paid at the then pro-rata hourly base rate of Employee in accordance with
      the
      Company’s regular procedures and practices in effect from time to
      time.”

     

    Section
      E
      of the Agreement shall be further amended by adding the following sentence
      to
      the end of such Section:

     

    “The
      bonus payable to Employee pursuant to this Section shall be paid to Employee
      as
      soon as practicable but within two and a half months following the Company’s
      fiscal year end for the year in which such bonus was earned.”

     

    2. Section
      G
      of the Agreement is deleted in its entirety and replaced with the following:
      

     

    “Death;
      Disability.
      Employee’s employment shall terminate immediately upon the Employee’s death and
      upon notice of termination by the Company in the event Employee’s employment is
      terminated as a result of Employee’s Disability (as defined in Section L). Upon
      any such termination of employment, all payments hereunder shall cease as of
      the
      date of termination of employment and the Company shall have no further
      obligations or liabilities hereunder to Employee or Employee’s estate or legal
      representative or otherwise, provided however, that any salary or benefits
      accrued and unpaid as of the date of termination (including amounts payable
      with
      respect to accrued but unused vacation and sick days) shall be paid to Employee
      or Employee’s estate, or legal representative or otherwise, as appropriate,
      within 60 days after the date of such termination of employment.”

     

    3. Section
      L
      shall be amended by deleting the last paragraph of this Section and replacing
      it
      with the following paragraphs: 

     

    “In
      the
      event Employee’s employment is terminated by
      the
      Company for Cause, the Company’s obligations under this Agreement will terminate
      and the Company will have no obligations to make any additional payments of
      any
      kind, provided, however, that the Company shall pay Employee any accrued and
      unpaid salary payable to the Employee through the date of termination (including
      amounts payable with respect to accrued but unused vacation and sick days)
      (the
“Accrued Obligations”) in a lump sum payment within 60 days after the date of
      such termination of employment.” 

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    In
      the
      event of a termination of Employee’s employment by the Company without Cause or
      by Employee for Good Reason (a ‘Separation from Service’),
      the
      Company shall pay Employee a lump sum payment equal to any Accrued Obligations
      plus a severance payment equal to his Base Pay for the balance of the then
      remaining Employment Term within 90 days
      after the date of the Separation from Service (the ‘Payment Date’) and shall
      continue to provide medical, dental, life insurance, disability and similar
      benefits to the extent available to Employee as of the date of the Separation
      from Service through the remainder of the Employment Term, provided that
      Employee and the Company shall have executed a reciprocal release in such form
      as may be reasonably required by the Company and acceptable to Employee within
      60 days after the date of the Separation from Service. In the event such release
      is not executed by Employee on or prior to 60 days after the date of Employee’s
      Separation from Service, the Company shall have no obligation to make any
      additional payments or provide any benefits to Employee of any kind, except
      for
      the lump sum payment for any Accrued Obligations. With respect to the provision
      of benefits pursuant to this paragraph, the provision of benefits in kind to
      Employee or the provision of reimbursement to Employee therefore shall be
      subject to the following conditions: (i) the amount of expenses eligible for
      reimbursement or in-kind benefits provided during Employee’s taxable year may
      not affect the expenses eligible for reimbursement or in-kind benefits to be
      provided to Employee in any other taxable year; (ii) the reimbursement of an
      eligible expense must be made on or before the last day of Employee’s taxable
      year following the taxable year in which the expense was incurred; and (iii)
      the
      right to reimbursement or in-kind benefits may not be subject to liquidation
      or
      exchange for another benefit. Notwithstanding anything to the contrary in this
      paragraph, if as of the date of such Separation from Service, Employee is a
      ‘specified employee’ within the meaning of Section 409A of the Code, the
      payments and benefits which may be made or provided to Employee pursuant to
      this
      paragraph prior to the date which is six months and one day after the date
      of
      Employee’s Separation from Service shall be limited to (i) any Accrued
      Obligations plus (ii) the medical and dental benefits, if any, to be provided
      in
      accordance with this paragraph plus (iii) such benefits (to be selected by
      the
      Employee from the benefits to be provided under this paragraph) in an aggregate
      amount not to exceed the amount described in Section 402(g)(1)(B) of the Code
      for the calendar year in which the Separation from Service occurred. To the
      extent that the preceding provisions of this paragraph would require payment
      to
      Employee during the six month period commencing on the date of termination
      in
      excess of this limitation, then any such excess shall be paid to Employee
      (without interest) in a lump sum on the date that is six months plus one day
      after the date of Employee’s Separation from Service.” 

     

    Except
      as
      modified herein, the Agreement remains in full force and effect in accordance
      with its terms.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the undersigned have hereunto set their hands as of the day
      and
      year first above written.

     

    
      	
              ADVANCED
                PHOTONIX, INC. 

            	 	
              EMPLOYEE

            
	 	 	 
	
              By:

            	
              /s/Richard
                D. Kurtz

            	
            	 	
              /s/Robin
                Risser

            	
            
	 	
              Richard
                D. Kurtz, CEO

            	 	Robin
              Risser, CFO

    

    
      
        
        

      

      
        34

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]