Document:

Exhibit
10.1

 

 

Water
Pik Technologies, Inc.

2005
ANNUAL INCENTIVE PLAN (AIP)

 

 

 

CONTENT

 

	
   

  	
  Page

  
	
  At a Glance

  	
  3

  
	
   

  	
   

  
	
  Changes from 2004

  	
  3

  
	
  What is the Annual
  Incentive Plan?

  	
  3

  
	
  Who is Eligible for this
  Plan?

  	
  3

  
	
  How Does the
  Annual Incentive Plan Work?

  	
  3

  
	
   

  	
   

  
	
  Calculation
  of the Annual Incentive Plan Award at 100% Goal Achievement

  	
  4

  
	
   

  	
   

  
	
  Target Bonus Percentage

  	
  4

  
	
  Performance Goals and the Target
  Bonus Percentage

  	
  4

  
	
  Financial Performance Goals

  	
  4

  
	
  Individual Performance
  Goals

  	
  4

  
	
  How the AIP Award is
  Calculated

  	
  5

  
	
   

  	
   

  
	
   

  	
   

  
	
  How
  the AIP Award is Calculated for Various Other Achievement
  Levels

  	
  6

  
	
   

  	
   

  
	
  Maximums and Minimums

  	
  6

  
	
  Formulas
  for Weighting Financial & Individual Performance

  	
  6

  
	
  Putting
  it Together

  	
  7

  
	
   

  	
   

  
	
  Additional
  Guidelines for the Annual Incentive Plan

  	
  10

  
	
   

  	
   

  
	
  Discretionary Adjustments

  	
  10

  
	
  Some Special Circumstances

  	
  10

  
	
  Payments

  	
  10

  
	
   

  	
   

  
	
  Plan
  Administration

  	
  11

  

 

2

 

At
a Glance

 

Changes from last year

There
are no material changes in the Plan document for 2005.  However, in the calculation of the 2005
payout, based on the transition to an October through September fiscal year,
the 2005 AIP will be paid out at 75% of the annual target award based on the
full 12-month FY 2005 plan.

 

What is the Annual Incentive Plan

The Annual Incentive Plan
(the “AIP” or the “Plan”) provides key managers of Water Pik Technologies, Inc.
(“Water Pik,” the “Company”) with the opportunity to earn an incentive award
when certain pre-established performance goals are met:

 

•                  at
the total Company level,

•                  at
the segment level, and

•                  at
the individual level.

 

Who is Eligible
for This Plan

Generally, key managers who
have a significant impact on the total Company’s operations will be eligible to
participate in the Plan.  Individuals
eligible (the “Participants”) for participation are determined annually, based
on recommendations of Water Pik’s Chief Executive Officer (the “Chief Executive
Officer”), with the approval of the Personnel and Compensation Committee of its
Board of Directors (the “Committee”).

 

How Does the Annual Incentive
Plan Work

Under the Plan,
designated key employees may earn an incentive award equal to a percentage of
their base salary, depending on the extent to which pre-established individual,
and total Company and/or, segment performance goals have been achieved.

 

•      For purposes of the Plan, base salary is
generally the Participant’s annual base salary rate as of the end of the year,
excluding any commission or other incentive pay.  For some special circumstances affecting the
amount of base salary used in the Plan, see this plan document.

 

•      A target bonus percentage is used in
calculating the incentive award.  It is
explained on the next page.  Each
Participant will be given a target bonus percentage.

 

•      The actual bonus percentage is determined
by adjusting the target bonus percentage upward or downward based on the extent
to which certain financial performance goals and individual performance goals
are achieved.

 

•      The actual bonus percentage determines the
amount of the incentive award for the year subject to discretionary adjustments

 

•      Incentive award payments will generally be
distributed in cash after the year-end audit is complete and the Committee has
granted its approval.

 

3

 

Calculation of the Annual Incentive Plan Award
at 100% Goal Achievement

 

Target Bonus Percentage

The Plan provides an incentive opportunity for Participants calculated
as a percentage of each Participant’s base salary.  Each Participant will be provided with an
initial percentage, referred to as a “target bonus percentage.”  The target bonus percentage is the percentage
of base salary that is generally earned as an award if 100% of the performance
goals are achieved.

 

The performance goals
reflect financial and individual performance and are described below.

 

Target bonus percentages,
performance goals and performance achievements against goal should be
communicated to each eligible Participant. 
The Committee may change the goals, objectives and targets for the Plan
at any time.

 

Performance Goals and the Target Bonus Percentages

The Plan for 2005 establishes a financial performance goal based on Net
Income (“NI”) and Return On Average Capital Employed (“RACE”), and individual
performance goals based on individual performance objectives.  RACE is defined as Adjusted NI divided by
Average Capital Employed.  Net Income is
defined as income after tax.

 

Each performance goal is
weighted as a percentage share of the target bonus percentage.  For all Participants in the Plan, 80% of the
target bonus percentage will be based on the financial performance goals; the
other 20% of the target bonus percentage will be based upon individual
performance goals.

 

Actual performance will
be measured and compared to the performance goals.  The actual result achieved will be expressed
as a percentage of the performance goal. 
The adjustment formulas are described further below.

 

Financial Performance Goals

For 2005, the financial
performance goal will be weighted 75% NI and 25% RACE, which represents a total
of 80% of the target bonus percentage. 
NI and RACE goals will be set at the total Company and segment level
based on the applicable business plan. 
How total Company and segment are weighted for a given Participant
depends upon the Participant’s major area of responsibility at Water Pik and
its business segments.  For example, some
Participants may have 60% of target based on segment financial performance and
20% on total Company financial performance. 
Others may have 80% of target based on total Company performance.

 

Individual Performance Goals

Each year, managers will
establish individual performance goals with Participants.  The achievement of individual performance
goals will represent 20% of the target bonus percentage.  Individual performance goals can be achieved
to a maximum of 100%.

 

4

 

How the AIP Award is Calculated when 100% of the Performance
Goals are Achieved

If 100% of all
performance goals are achieved, then 100% of the target bonus percentage will
generally be used to calculate the Participant’s incentive award.

 

For example, if a
Participant’s target bonus percentage is 20% and if all goals are achieved at
100%, then the target bonus percentage of 20% is multiplied by 100% to produce
an incentive award equal to 20% of base salary:

 

	
  Goal

  	
   

  	
  Percent of

  Target

  	
   

  	
   

  	
   

  	
  Goal

  Achievement

  	
   

  	
   

  	
   

  	
  Target %

  Earned

  	
   

  
	
  Financial
  Performance

  	
   

  	
  80

  	
  %

  	
  X

  	
   

  	
  100

  	
  %

  	
  =

  	
   

  	
  80

  	
  %

  
	
  Individual
  Performance

  	
   

  	
  20

  	
  %

  	
  X

  	
   

  	
  100

  	
  %

  	
  =

  	
   

  	
  20

  	
  %

  
	
  Total
  Goals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  =

  	
   

  	
  100

  	
  %

  

 

In the above example,
100% of the target bonus percentage is earned, and the incentive award will be
20% of the participant’s base salary subject to any discretionary adjustments.

 

The following example
further defines the financial performance goals typical for a segment
Participant at 100% achievement of financial and personal goals.  Using the above example of a Participant’s
target bonus percentage of 20%, and weighting the Participant’s financial goals
of 80%, at 60% segment and 20% total Company, the following example provides
clarification of the NI and RACE components:

 

	
  Goal

  	
   

  	
  Percent of

  Target (20%)

  	
   

  	
   

  	
   

  	
  Goal

  Achievement

  	
   

  	
   

  	
   

  	
  Target %

  Earned

  	
   

  
	
  Financial
  Performance (80%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Segment (60%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (75%)

  	
   

  	
  45

  	
  %

  	
  X

  	
   

  	
  100

  	
  %

  	
  =

  	
   

  	
  45

  	
  %

  
	
  RACE (25%)

  	
   

  	
  15

  	
  %

  	
  X

  	
   

  	
  100

  	
  %

  	
  =

  	
   

  	
  15

  	
  %

  
	
  Total Company
  (20%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (75%)

  	
   

  	
  15

  	
  %

  	
  X

  	
   

  	
  100

  	
  %

  	
  =

  	
   

  	
  15

  	
  %

  
	
  RACE (25%)

  	
   

  	
  5

  	
  %

  	
  X

  	
   

  	
  100

  	
  %

  	
  =

  	
   

  	
  5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Financial
  Performance

  	
   

  	
  80

  	
  %

  	
  X

  	
   

  	
  100

  	
  %

  	
  =

  	
   

  	
  80

  	
  %

  
	
  Individual
  Performance

  	
   

  	
  20

  	
  %

  	
  X

  	
   

  	
  100

  	
  %

  	
  =

  	
   

  	
  20

  	
  %

  
	
  Total
  Goals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  =

  	
   

  	
  100

  	
  %

  

 

The sections below
discuss the impact of achieving more or less than 100% of the performance goals
and the impact of other potential adjustments.

 

5

 

How the
AIP Award is Calculated for Various Other Achievement Levels

 

If
more or less than 100% of a Participant’s financial or individual performance
goals are achieved, then the Participant’s target bonus percentage will be
adjusted.  The following section describes
adjustments based on maximum and minimum achievement levels, and the formulas
used to weight achievements at all levels.

 

Maximums
and Minimums

 

•                  Where more than 100% of financial performance goals
are achieved, up to a maximum of 125%, more than 100% will then be earned for
that goal’s contribution to the overall achievement.  However, the maximum percentage earned for
any goal’s share of the target bonus percentage is 225%, and therefore the
overall maximum incentive award that an individual can earn under the weighting
formula is 225% of the target bonus percentage.*

 

•                  If financial goals are achieved at above target
performance levels, the over-achievement will enhance the individual
performance goal attainment.

 

•                  Where 75% of a financial or individual performance
goal is achieved, only 25% of that goal’s share (80% or 20% as applicable) of
the target bonus percentage will be earned.

 

•                  If less than 75% of the Company’s Business Plan Net
Income is achieved, no Company, segment or personal awards will be paid
regardless of the level of achievement of the financial or individual
performance goals.

 

Formulas for Weighting Financial
and Individual Performance

The following
formulas will be used to weight the achievement of the financial and individual
performance measures under the Plan:

 

Formula A

 

If 75% to 100% of
a goal is achieved, the Percent of Target Earned for that goal equals the
Percentage of Goal Achieved (i.e. Actual Performance divided by Planned
Performance) minus 75% (which is the threshold level of performance) times 3.0,
plus 25%.

 

Formula A Example:

 

	
  Assumption:
  Percentage of Goal Achieved

  	
   

  	
  =

  	
   

  	
  90%

  
	
  Percent
  of Target Earned for the Goal

  	
   

  	
  =

  	
   

  	
  [(90%
  - 75%) x 3.0] + 25%

  
	
   

  	
   

  	
  =

  	
   

  	
  [(15%
  x 3.0)] + 25%

  
	
   

  	
   

  	
  =

  	
   

  	
  45%
  + 25%

  
	
   

  	
   

  	
  =

  	
   

  	
  70%

  

 

*  Historical maximum was 200%.

 

6

 

Formula B

 

If over 100% of
goal is achieved, the Percent of Target Earned for that goal equals the
Percentage of Goal Achieved (i.e. Actual Performance divided by Planned
Performance) minus 100% (which is the target level of performance) times 5,
plus 100%.  In all cases, the maximum
Percent of Target Earned of 225% results when 125% of that goal is achieved.

 

Formula B Examples:

 

	
  1. Assumption:
  Percentage of Goal Achieved

  	
   

  	
  =

  	
   

  	
  140%

  
	
  Percent
  of Target Earned for the Goal

  	
   

  	
  =

  	
   

  	
  (140% - 100%) x
  5] + 100%

  
	
   

  	
   

  	
  =

  	
   

  	
  [40%
  x 5] + 100%

  
	
   

  	
   

  	
   

  	
   

  	
  =   200%
  + 100%

  
	
   

  	
   

  	
   

  	
   

  	
  =   300%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  However, the maximum target bonus is capped at 225%
  of target.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. Assumption:
  Percentage of Goal Achieved

  	
   

  	
  =

  	
   

  	
  110%

  
	
  Percent
  of Target Earned for that Goal

  	
   

  	
  =

  	
   

  	
  [(110% - 100%) x
  5] + 100%

  
	
   

  	
   

  	
  =

  	
   

  	
  [10% x 5] + 100%

  
	
   

  	
   

  	
  =

  	
   

  	
  50% + 100%

  
	
   

  	
   

  	
  =

  	
   

  	
  150%

  

 

The formulas
described above are designed to create a greater positive incentive for
over-achieving the plan than for under-achieving.  As a result of the formulas, actual
performance that exceeds 100% of the goal is weighted more than actual performance
that exceeds the 75% threshold levels of performance, but does not reach 100%
of the goal.

 

 

Putting
it Together

Here are two
examples of how a Participant might earn an incentive award under the plan.

 

1.               For the first example, assume that the Participant
achieves:

 

•                  90% of the financial performance
goals for segment and total Company for NI and RACE, and

 

•                  80% of individual performance goals.

 

•                  Assume that the Participant’s annual
salary is $80,000 and that the Participant’s target bonus percentage is 20% of
base salary.

 

The first step is to
calculate the percent of target earned based upon actual performance.

 

Formula A above would be used for weighting financial and individual
performance goals, because less than 100% of those goals were achieved.

 

7

 

	
  Goal

  	
   

  	
  (1)

  Percent

  of

  Target

  	
   

  	
  (2)

  Goal

  Achievement

  	
   

  	
  (3)

  Formula

  Weighting

  Achievement

  	
   

  	
  (4)

  Target % of

  Earned

  (1) x (3)

  	
   

  
	
  Financial Performance (80%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Segment (60%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (75%)

  	
   

  	
  45

  	
  %

  	
  90

  	
  %

  	
  70

  	
  %

  	
  31.5

  	
  %

  
	
  RACE (25%)

  	
   

  	
  15

  	
  %

  	
  90

  	
  %

  	
  70

  	
  %

  	
  10.5

  	
   

  
	
  Total Company (20%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (75%)

  	
   

  	
  15

  	
  %

  	
  90

  	
  %

  	
  70

  	
  %

  	
  10.5

  	
  %

  
	
  RACE (25%)

  	
   

  	
  5

  	
  %

  	
  90

  	
  %

  	
  70

  	
  %

  	
  3.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Financial Performance

  	
   

  	
  80

  	
  %

  	
  90

  	
  %

  	
  70

  	
  %

  	
  56.0

  	
  %

  
	
  Individual Performance

  	
   

  	
  20

  	
  %

  	
  80

  	
  %

  	
  40

  	
  %

  	
  8.0

  	
  %

  
	
  Total Goals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  =

  	
   

  	
  64.0

  	
  %

  

 

With 64% of target
achieved, the incentive award would be calculated as 64% of the 20% target
bonus percentage, or 12.8%.  The
incentive payment would, in turn, be the product of 12.8% of the Participant’s
base salary of $80,000, or $10,240.

 

2.               For
another example, assume that the same segment Participant achieves:

 

•                  Financial Performance:  segment NI is 115%, segment RACE is 110%,
total Company NI is 107% and total Company RACE is 105%, and

 

•                  100% of individual performance goals.

 

Again, the first
step is to calculate the percent of target earned for each goal.  Formula B would be
used, because the goal achievement was greater than or equal to 100%.

 

	
  Goal

  	
   

  	
  (1)

  Percent

  of

  Target

  	
   

  	
  (2)

  Goal

  Achievement

  	
   

  	
  (3)

  Formula

  Weighting

  Achievement

  	
   

  	
  (4)

  Target % of

  Earned

  (1) x (3)

  	
   

  
	
  Financial Performance (80%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Segment (60%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (75%)

  	
   

  	
  45

  	
  %

  	
  115

  	
  %

  	
  175

  	
  %

  	
  78.8

  	
  %

  
	
  RACE (25%)

  	
   

  	
  15

  	
  %

  	
  110

  	
  %

  	
  150

  	
  %

  	
  22.5

  	
  %

  
	
  Total Company (20%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (75%)

  	
   

  	
  15

  	
  %

  	
  107

  	
  %

  	
  135

  	
  %

  	
  20.3

  	
  %

  
	
  RACE (25%)

  	
   

  	
  5

  	
  %

  	
  105

  	
  %

  	
  125

  	
  %

  	
  6.3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Financial Performance

  	
   

  	
  80

  	
  %

  	
  112

  	
  %*

  	
  160

  	
  %

  	
  127.9

  	
  %

  
	
  Individual Performance

  	
   

  	
  20

  	
  %

  	
  112

  	
  %**

  	
  160

  	
  %

  	
  32.0

  	
  %

  
	
  Total Goals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  =

  	
   

  	
  159.9

  	
  %

  

 

* -
Weighted Average.

** -
Because the financial performance is >100% of goal achievement, the
difference between actual and goal of 12% (112% - 100%) is added to the
individual performance goal achievement to arrive at the total individual
performance goal achievement.

 

8

 

With
all goal achievement greater than the target, the incentive award would be
calculated as 159.9% of the 20% target bonus percentage, or 32%.  The incentive payment would, in turn, be the
product of 32% of the Participant’s base salary of $80,000 or $25,600.

 

3.               For
another example, assume that the same Participant achieves:

 

•                  Financial Performance:  segment NI is 115%, segment RACE is 110%,
total Company NI is 107% and total Company RACE is 105%, and

 

•            75% of individual performance goals.

 

Again, the first
step is to calculate the percent of target earned for each goal.  Formula B would be used
for financial performance, because over 100% of that goal was achieved.  Formula A would be used
for individual performance, because less than 100% of that goal was achieved.

 

	
  Goal

  	
   

  	
  (1)

  Percent

  of

  Target

  	
   

  	
  (2)

  Goal

  Achievement

  	
   

  	
  (3)

  Formula

  Weighting

  Achievement

  	
   

  	
  (4)

  Target %

  of Earned

  (1) x (3)

  	
   

  
	
  Financial Performance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Segment (60%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (75%)

  	
   

  	
  45

  	
  %

  	
   

  	
  115

  	
  %

  	
  175

  	
  %

  	
  78.8

  	
  %

  
	
  RACE (25%)

  	
   

  	
  15

  	
  %

  	
   

  	
  110

  	
  %

  	
  150

  	
  %

  	
  22.5

  	
  %

  
	
  Total Company (20%)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income (75%)

  	
   

  	
  15

  	
  %

  	
   

  	
  107

  	
  %

  	
  135

  	
  %

  	
  20.3

  	
  %

  
	
  RACE (25%)

  	
   

  	
  5

  	
  %

  	
   

  	
  105

  	
  %

  	
  125

  	
  %

  	
  6.3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Financial Performance

  	
   

  	
  80

  	
  %

  	
   

  	
  112

  	
  %*

  	
  160

  	
  %

  	
  127.9

  	
  %

  
	
  Individual Performance

  	
   

  	
  20%

  (75%+12%)

  	
   

  	
  87

  	
  %**

  	
  67.5

  	
  %

  	
  13.5

  	
  %

  
	
  Total Goals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  =

  	
   

  	
  141.4

  	
  %

  

 

With
financial goal achievement greater than the target, and personal goal
achievement less than the target, the incentive award would be calculated as
141.4% of the 20% target bonus percentage, or 28.3%.  The incentive payment would, in turn, be the
product of 28.3% of the Participant’s base salary of $80,000 or $22,624.

 

* -
Weighted Average.

** -
Because the financial performance is >100% of goal achievement, the
difference between actual and goal of 12% (112% - 100%) is added to the
individual performance goal achievement to arrive at the total individual
performance goal achievement.

 

9

 

Additional Guidelines for the
Annual Incentive Plan

 

A
minimum of 75% of the total Company Business Plan Net Income must be achieved
for annual incentives to be paid regardless of other factors.

 

Discretionary
Adjustments

The
Plan allows for discretionary adjustments of up to +20% or –20% of a
Participant’s calculated award.  However,
discretionary adjustments for all eligible Participants cannot exceed +5% of
the aggregate calculated incentive awards and must be approved in advance by
the Chief Executive Officer, subject to Committee approval.

 

Some
Special Circumstances

The
above formulas generally determine the amount of the incentive award for the
year.  Other factors that may affect the
actual award follow:

 

•                  If a Participant leaves the Company
prior to the incentive award payment, due to retirement, death, or disability,
an award will be prorated based on the actual base salary earned during the
year in which the Participant left.  The
incentive award will be paid at the time all other awards are paid under this
Plan.

 

•                  If a Participant leaves the Company
voluntarily or involuntarily for any other reason than retirement, death, or
disability, prior to the incentive award payment, the Participant will not
receive an incentive award under this Plan.

 

•                  Participants who are hired during the
year earn a pro-rated bonus for that year, based on the salary earned during
that year.

 

•                  If a Participant received a promotion
or demotion during the year where the eligible target percent changed, then the
calculation will be pro-rata for each target percent, i.e.: 4 months at 15% and
8 months at 20%.

 

•                  The base salary for Plan purposes is
the final base salary at September 30, 2005.

 

•                  The Committee may, in its discretion,
amend or change the Plan or the goals, objectives or targets for the Plan at
any time.

 

Payments

Incentive
awards, less applicable withholding taxes are paid after the year-end audit is
complete and the Committee approves the awards. 
Payment is expected to occur no later than December 15, 2005.  Repayment by participant of bonuses paid will
comply with appropriate legislation.

 

10

 

Plan
Administration

 

This
summary relates to the Annual Incentive Plan (AIP) of Water Pik Technologies,
Inc.  The Plan is administered by the
Committee.  At its discretion and at any
time, the Committee has full authority to:

 

•                  interpret the Plan,

 

•                  designate eligible Participants and
categories of eligible Participants,

 

•                  set and modify the terms and
conditions of incentive awards,

 

•                  establish and modify administrative
rules for the Plan, and

 

•                  amend the Plan.

 

Plan Participants
may obtain additional information about the plan and the Committee from:

 

Vice President, Human Resources

Water Pik Technologies, Inc.

23 Corporate Plaza, Suite 246

Newport Beach, CA 92660

Phone: 949-719-3700

Fax: 949-719-6472

 

The Plan will
remain in effect until terminated by the Committee.  The Plan is not subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA) and is not
“qualified” under Section 401 (a) of the Internal Revenue Code.

 

11Exhibit 10.84

 

Silicon
Valley Bank

 

Amendment to Loan Documents

 

Borrower:             Proxim Corporation

 

Dated as
of:           May 9, 2005

 

This Amendment
to Loan Documents is entered into between Silicon Valley Bank (“Bank”) and the
borrower named above (“Borrower”), with reference to the following facts:

 

Bank and the
Borrower are parties to the following: the Loan and Security Agreement between
them, dated December 27, 2002 (the “Loan Agreement”), the Accounts Receivable
Financing Agreement dated June 13, 2003 (the “Accounts Agreement”), the Amended
Overadvance LC Rider dated October 31, 2003 to the Accounts Agreement (as
amended from time to time, the “Overadvance LC Rider”), and the documents,
instruments and agreements relating thereto (with the Loan Agreement, the Accounts
Agreement, and the Overadvance LC Rider, and as may be amended from time to
time, collectively, the “Loan Documents”). (Capitalized terms used but not
defined in this Amendment, shall have the meanings set forth in the Accounts
Agreement.)

 

Effective as
of the above referenced date, the parties agree as follows:

 

1.             Delete Financial
Covenants.  Section
6.2 (O) of the Accounts Agreement entitled “Financial Covenants” is hereby deleted
from the Accounts Agreement.

 

2.             Delete Overadvance LC Facility.  The parties agree that no further Overadvance
LCs will be issued. Concurrently and at all times hereafter, Borrower shall
cause all outstanding Letters of Credit to be secured by cash in an amount
equal to the greater of (i) 105% of the total face amount of all outstanding
Letters of Credit, or (ii) $100,000 plus 100% of the total face amount of all
outstanding Letters of Credit; and Borrower shall execute and deliver Bank’s
standard form cash pledge agreements in connection therewith, and shall cause
the same to continue in full force and effect for so long as there is any
liability or obligation on the part of the Bank relating to the Letters of
Credit.

 

3.             Representations True.  Borrower represents and warrants to Bank that
all representations and warranties set forth in the Accounts Agreement, as
amended hereby, and the other Loan Documents (other than the Loan Agreement,
the representations in which were replaced by those in the Accounts Agreement)
are true and correct.

 

4.             General Provisions. This Amendment, and the other Loan
Documents set forth in full all of the representations and agreements of the
parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof. Except as herein expressly amended, all of
the terms and provisions of the Overadvance LC Rider, and all other Loan
Documents shall continue in full force and effect and the same are hereby
ratified and confirmed.

 

1

 

IN WITNESS
WHEREOF, the parties hereto have executed this Amendment to Overadvance LC
Rider as of the date first above written.

 

	
  Borrower: 

  	
  Bank:

  
	
   

  	
   

  
	
  PROXIM
  CORPORATION

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Michael
  Angel

  	
   

  	
  By

  	
  /s/ Maria
  Fisher Leaf

  	
   

  
	
   

  	
  President or Vice President

  	
   

  	
  Title

  	
  Senior Vice
  President

  	
   

  
							

 

 

CONSENT

 

Each of the
undersigned acknowledges that its consent to the foregoing Amendment is not
required, but the undersigned nevertheless do hereby consent to the foregoing
Amendment and to the documents and agreements referred to therein and to all future
modifications and amendments thereto, and any termination thereof, and to any
and all other present and future documents and agreements between or among the
foregoing parties. Nothing herein shall in any way limit any of the terms or
provisions of the Continuing Guaranty of the undersigned, all of which are
hereby ratified and affirmed.

 

	
  Proxim
  Wireless Networks, Inc.

  	
   

  	
  Wirelesshome
  Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
    /s/
  Michael Angel

  	
   

  	
  By

  	
    /s/
  Michael Angel

  	
   

  
	
  Name

  	
   

  	
  Michael
  Angel

  	
   

  	
  Name

  	
  Michael Angel

  	
   

  
	
  Title

  	
   

  	
  EVP &
  CFO

  	
   

  	
  Title

  	
  EVP & CFO

  	
   

  
											

 

 

Proxim International Holdings,
Inc.

(formerly Western Multiplex
International

Holdings, Inc.)

 

 

	
  By

  	
    /s/
  Michael Angel

  	
   

  
	
  Name

  	
   

  	
  Michael Angel

  	
   

  
	
  Title

  	
   

  	
  EVP &
  CFO

  	
   

  
						

 

2

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