Document:

EXHIBIT 10.2

EXHIBIT 10.2

WARRANT PURCHASE AND EXERCISE AGREEMENT
WARRANT PURCHASE AND EXERCISE AGREEMENT dated as of August 6, 2014 by and among BIA Digital Partners SBIC II LP (“BIA”), BNY Mellon-Alcentra Mezzanine III, L.P. (“Alcentra”), Plexus Fund II, L.P. (“Plexus”) and GTT Communications, Inc. (the “Company”).  BIA, Alcentra and Plexus are sometimes referred to in this Agreement individually as a “Seller” and together as the “Sellers”, and the Sellers and the Company are sometimes referred to in this Agreement individually as a “Party” and together as the “Parties”.
Background:
A.    BIA is the record and beneficial owner of (i) a Warrant, dated June 6, 2011, for the purchase of up to 634,648 shares of common stock of the Company (“BIA Warrant #1”), (ii) a Warrant, dated November 9, 2011, for the purchase of up to 63,225 shares of common stock of the Company (“BIA Warrant # 2”) and (iii) a Warrant, dated April 30, 2013, for the purchase of up to 356,649 shares of common stock of the Company (“BIA Warrant #3” and collectively with BIA Warrant #1 and BIA Warrant #2, the “BIA Warrants”).  
B.    Alcentra is the record and beneficial owner of a Warrant, dated April 30, 2013, for the purchase of up to 329,214 shares of common stock of the Company (the “Alcentra Warrant”).  
C.    Plexus is the record and beneficial owner of (i) a Warrant, dated April 30, 2012, for the purchase of up to 535,135 shares of common stock of the Company (“Plexus Warrant #1”), (ii) a Warrant, dated December 31, 2012, for the purchase of up to 178,378 shares of common stock of the Company ( “Plexus Warrant #2”) and (iii) a Warrant, dated April 30, 2013, for the purchase of up to 246,911 shares of common stock of the Company (“Plexus Warrant #3”, and collectively with Plexus Warrant #1 and Plexus Warrant #2, the “Plexus Warrants”).  The BIA Warrants, the Alcentra Warrant and the Plexus Warrants are sometimes referred to in this Agreement individually as a “Warrant” and collectively as the “Warrants”.  
D.    The Company would like to acquire one-half of the Warrants from the Sellers, and the Sellers are willing to sell such Warrants to the Company, on the terms and conditions set forth in this Agreement.  
E.    The Company would like to induce the Sellers to exercise the remainder of the Warrants that are not being purchased by the Company, and the Sellers are willing to exercise such Warrants, on the terms and conditions set forth in this Agreement.
F.    The Parties would like to implement certain covenants and agreements with respect to the shares of Company common stock issued upon exercise of the Warrants.
Agreement:
Based on the foregoing and in consideration of the mutual promises set forth in this Agreement, the Parties agree as follows:
1.Purchase and Sale of Warrants.  

(a)BIA Warrants.  Subject to the terms and conditions of this Agreement, at the Closing (as defined in Section 1(e)), BIA will sell to the Company, and the Company will purchase from BIA:  (i) Warrants to purchase 317,324 shares of common stock under BIA Warrant #1 for an aggregate purchase price equal to (A) the Closing Price minus the exercise price of $1.111, (B) multiplied by 317,324; (ii) Warrants to purchase 31,613 shares of common stock under BIA Warrant #2 for an aggregate purchase price equal to (A) the Closing Price minus the exercise price of $1.147, (B) multiplied by 31,613; and (iii) Warrants to purchase 178,325 shares of common stock under BIA Warrant #3 for an aggregate purchase price equal to (A) the Closing Price minus the exercise price of $3.269 (B) multiplied by 178,325.  At the Closing, BIA will deliver to the Company each of such Warrants, together 

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with an assignment in the form attached to this Agreement as Annex A, against payment to BIA of the purchase price for each such Warrant pursuant to Section 1(d).

(b)Alcentra Warrants.  Subject to the terms and conditions of this Agreement, at the Closing, Alcentra will sell to the Company, and the Company will purchase from Alcentra Warrants to purchase 164,607 shares of common stock under the Alcentra Warrant for an aggregate purchase price per share equal to (i) the Closing Price minus the exercise price of $3.269, (ii) multiplied by 164,607.  At the Closing, Alcentra will deliver to the Company such Warrant, together with an assignment in the form attached to this Agreement as Annex A, against payment to Alcentra of the purchase price for each such Warrant pursuant to Section 1(d).

(c)Plexus Warrants.  Subject to the terms and conditions of this Agreement, at the Closing, Plexus will sell to the Company, and the Company will purchase from Plexus: (i) Warrants to purchase 267,568 shares of common stock under Plexus Warrant #1 for an aggregate purchase price per share equal to (A) the Closing Price minus the exercise price of $2.144, (B) multiplied by 267,568; (ii) Warrants to purchase 89,189 shares of common stock under Plexus Warrant #2 for an aggregate purchase price per share equal to (A) the Closing Price minus the exercise price of $2.468, (B) multiplied by 89,189; and (iii) Warrants to purchase 123,456 shares of common stock under Plexus Warrant #3 for an aggregate purchase price equal to (A) the Closing Price minus the exercise price of $3.269 (B) multiplied by 123,456.  At the Closing, Plexus will deliver to the Company each of such Warrants, together with an assignment in the form attached to this Agreement as Annex A, against payment to Plexus of the purchase price for each such Warrant pursuant to Section 1(d).

(d)Payment.  Payment for the Warrants purchased by the Company shall be paid by wire transfer of funds to such account as each Seller may designate to the Company reasonably in advance of the Closing.

(e)Closing.  The closing of the sale and purchase of the Warrants under this Agreement (the “Closing”) shall take place at the offices of Kelley Drye & Warren LLP in New York, New York at 10:00 a.m. on the date of, and simultaneously with, the repayment of the mezzanine financing provided to the Company from BIA, Plexus, Alcentra and Alcentra Capital Corporation (such date, the “Closing Date”) or at such other time, date and place as are mutually agreeable to the Sellers and the Company.

(f)Closing Price.  As used in this Agreement, “Closing Price” means $10.48, which was calculated by taking the average of the VWAP on each of the thirty (30) trading days prior to and including the second trading day preceding the Closing Date, and for this purpose, “VWAP” means, for each such trading day, the dollar volume-weighted average price for the Company’s common stock on the New York Stock Exchange during the period beginning at 9:30:01 a.m., New York Time and ending at 4:00:00 p.m., New York Time as reported by Bloomberg through its “Volume at Price” functions. 

2.Exercise of Remaining Warrants.  On the Closing Date, each Seller hereby exercises on a cashless basis all of the Warrants registered in its name that are not purchased by the Company pursuant to Section 1.  Pursuant to such cashless exercise of all of the Warrants, the Company shall issue shares of common stock to the Sellers as follows:  (i) 434,542 shares to BIA; (ii) 113,255 shares to Alcentra; and (iii) 365,952 shares to Plexus.  The provisions of this Section 2 shall have the same effect as if each Seller had delivered a notice of exercise pursuant to the terms of the Warrants on the date of this Agreement for the exercise of all of such Warrants registered in its name that are not purchased by the Company pursuant to Section 1.  To the extent the provisions of this Section 2 constitute an amendment of the Warrants, this Agreement constitutes an amendment approved by the Sellers and the Company pursuant to Section 17(a) of each of the Warrants.   
 
3.Termination of Warrants.  Each Seller and the Company agrees that from and after the Closing Date, but conditioned upon receipt by such Seller of the purchase price payment contemplated by Section 1 and the shares of Common Stock pursuant to Section 2, the rights and obligations of the Company and such Seller under each of such Seller’s Warrants shall terminate; provided, however, that (a) the provisions of Section 5(a) and 5(d) of each of the Warrants shall survive with respect to the delivery of shares of common stock in accordance with the Warrants; and (b) the reference to the “second Trading Day” in Section 5(a) of each of the Warrants shall be 

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replaced with a reference to the “fifth Trading Day”.  Except as provided in the foregoing provision, such termination shall be applicable as to all of the provisions of the Warrants, notwithstanding that any of such provisions state they may survive the termination of the Warrants.  To the extent the provisions of this Section 3 constitute an amendment of the Warrants, this Agreement constitutes an amendment approved by the Sellers and the Company pursuant to Section 17(a) of each of the Warrants.  

4.Tax Reimbursement Payment.  

(a)In the event a Change of Control (as defined below) is consummated prior to the first anniversary of the Closing Date, the Company shall pay to the Sellers an amount equal to One Million Nine Hundred Fifteen Thousand Dollars ($1,915,000), by wire transfer of immediately available funds on the closing date of such Change of Control, as follows:  (i) $938,000 to BIA; (ii) $222,000 to Alcentra; and (iii) $755,000 to Plexus.

(b)Definition of Change of Control.  As used in this Agreement, “Change of Control” means (i) any merger, consolidation or other business combination of the Company with or into another Person as a result of which the common stock of the Company is converted into cash or any other security or property, (ii) any tender offer for a majority of the common stock of the Company or (iii) any liquidation or dissolution of the Company in which cash or assets are distributed to the holders of common stock of the Company (and for the avoidance of doubt, any dividend or distribution payable on the common stock of the Company other than in connection with the liquidation or dissolution of the Company shall not be deemed to have been made in connection with a Change of Control).

5.Representations and Warranties of the Sellers.  Each Seller, as to itself only, represents and warrants to the Company as follows:

(a)Such Seller owns beneficially and of record all of the Warrants registered in the name of such Seller.  All of the Warrants registered in the name of such Seller are owned by such Seller free and clear of any options, liens, trusts, encumbrances, security interests, charges or claims of any kind (“Liens”), other than restrictions under applicable securities laws.  Upon the transfer of the Warrants registered in the name of such Seller to the Company, such Seller will have transferred title to such Warrants to the Company, free and clear of any Liens.  There are no outstanding rights of subscriptions, warrants, calls, options, contracts or other agreements of any kind, issued or granted by such Seller with respect to the Warrants registered in its name.

(b)Such Seller is an accredited investor, as that term is defined under the Securities Act of 1933, as amended.  Such Seller has received such disclosure regarding Company, its business, its financial condition, its prospects and its industry as such Seller has determined to be necessary in connection with the sale of the Warrants to the Company and the releases herein and such Seller has had an opportunity to ask such questions and make such inquiries concerning the Company, its business, its financial condition, its prospects and its industry as such Seller has deemed appropriate in connection with such sale and release and to receive satisfactory answers to such questions and inquiries.  Such Seller has such knowledge and experience in financial and business matters, including by virtue of its relationship with Company and otherwise, that it is able to evaluate the merits of selling the Warrants and to make an informed decision to do so.

6.Representations of All Parties.  Each Party represents and warrants to the other Parties that:

(a)Such Party has all requisite corporate or limited partnership (as applicable) power and authority to execute, deliver and perform this Agreement, and to consummate the transactions contemplated hereby.  

(b)The execution, delivery and performance of this Agreement and the consummation by such Party of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of such Party and its board of directors, general partner and equityholders, as applicable. 
 

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(c)This Agreement, upon execution and delivery by each other Party, will be the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforceability of creditors’ rights in general or by general principles of equity.

(d)No brokerage or finder's fees or commissions are or will be payable by such Party to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement, and no Party has taken any action that would cause any other Party to be liable for any such fees or commissions.

7.Representations and Warranties of the Company.  The Company represents and warrants to each Seller as follows:

(a)The Company is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  The Company is not in violation of any of the provisions of its certificate of incorporation, bylaws or other organizational or charter documents.

(b)The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of the Company’s certificate of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations and the rules and regulations of any self-regulatory organization to which the Company or its securities are subject), or by which any property or asset of the Company is bound or affected

(c)The shares of Common Stock being issued to each Seller are duly authorized, duly and validly issued, fully paid and nonassessable, free and clear of all Liens, other than restrictions under applicable securities laws or those which have been or are created by such Seller, and shall not be subject to preemptive rights or similar rights of any stockholders.

(d)The Company has filed all reports required to be filed by it under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof.  

8.Releases.  Except for the rights and obligations created under this Agreement, each Party (on its own behalf and on behalf of its subsidiaries and affiliated companies, and each of their respective parents, affiliated entities, and present and former officers, directors, equityholders, partners, managers, members, employees, agents, contractors, insurers, and the successors and attorneys of each of the foregoing persons and entities, and, where applicable, their respective predecessors, heirs, executors, assigns, administrators and representatives), effective upon the Closing, unconditionally fully and forever release, remise, covenant not to sue and forever discharge the other Parties hereto and each of its subsidiaries and affiliated companies, and each of their respective parents, affiliated entities, and present and former officers, directors, equityholders, partners, managers, members, employees, agents, contractors, insurers, and the successors and attorneys of each of the foregoing persons and entities, and, where applicable, their respective predecessors, heirs, executors, assigns, administrators and representatives from and against any action, cause of action, suit, debt, sum of money, account, promise, warranty, damage, covenant, contract, agreement, controversy, damage, liability, cost, expense, judgment, claim or demand of any kind or nature, in law or in equity, whether presently known or unknown, asserted or unasserted, on any theory 

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whatsoever (collectively, “Claims”), that any of them may possess (or that might subsequently accrue) of any kind and character with respect the period of time up to and including the Closing Date arising out of or related to the Warrants.  

9.Additional Provisions.

(a)Survival of Representations and Warranties.  All agreements, representations and warranties contained herein shall survive the execution and delivery of this Agreement and the closing of the transactions contemplated hereby.

(b)Expenses.  Each Party shall pay its own costs and expenses in connection with this Agreement and the closing of the transactions contemplated hereby.  

(c)Notices.  All notices, requests, demands, waivers, consents and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered personally, (ii) mailed using certified or registered U.S. mail with postage prepaid or (iii) sent by next-day or overnight mail or delivery using a nationally recognized overnight courier service, as follows:

If to Borrower:     c/o Global Telecom and Technology, Inc.
7900 Tysons One Place, Suite 1450
McLean, VA 22102
Attn:  Richard D. Calder

with a copy to:      Kelley Drye & Warren, LLP
Washington Harbour, Suite 400
3050 K Street NW
Washington, D.C. 20007
Attn: Jay R. Schifferli

 If to BIA:               BIA Digital Partners SBIC II LP
15120 Enterprise Court
Chantilly, Virginia 20151
Attn: Mr. Lloyd Sams

with a copy to:      Proskauer Rose LLP
One International Place
Boston, Massachusetts 02110
Attn:  Steven Ellis, Esquire

If to Alcentra:           Alcentra Capital Corporation
200 Park Avenue, 7th Floor
New York, New York  10166
Attn: Mr. Branko Krmpotic

with a copy to:      Proskauer Rose LLP
One International Place
Boston, Massachusetts 02110
Attn:  Steven Ellis, Esquire

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If to Plexus:       Plexus Fund II, L.P.
200 Providence Road, Suite 210
Charlotte, North Carolina  28207
Attn: Mr. Bob Anders

with a copy to:      Proskauer Rose LLP
One International Place
Boston, Massachusetts 02110
Attn:  Steven Ellis, Esquire

A Party may designate a new address to which notices, requests, demands, waivers, consents and other communications shall thereafter be transmitted by providing written notice to that effect to the other Parties.  Each notice, request, demand, waiver, consent or other communication transmitted in the manner described in this Section 8(c) shall be deemed to have been provided, received and become effective for all purposes at the time it shall have been (A) delivered to the addressee as indicated by the return receipt (if transmitted by mail) or the affidavit or receipt of the messenger (if transmitted by personal delivery or courier service) or (B) presented for delivery to the addressee as so addressed during normal business hours, if such delivery shall have been rejected, denied or refused for any reason.                           
(d)Entire Agreement.  This Agreement embodies the entire agreement and
understanding between the Sellers and the Company with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings relating to such subject matter.

(e)Amendments.  No purported amendment, waiver or modification to any provision of this Agreement by any of the Parties shall be effective against or binding upon the Parties unless each of the Parties (or in the case of a waiver, the Party against whom such waiver is intended to be enforced) shall have duly executed and delivered to the other Parties a written instrument which states that it constitutes an amendment, waiver or modification (as applicable) to this Agreement.

(f)Counterparts.  This Agreement may be executed in one or more counterparts, all of which (when executed and delivered) shall be considered one and the same Agreement and shall become effective when one or more counterpart signature pages have been signed by or on behalf of each Party and delivered by each Party to the other Parties, it being understood that each of the Parties need not sign the same counterpart.  Counterparts may be delivered by facsimile or other electronic transmission method (including pdf), and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

(g)Assignment; Binding Effect; Beneficiaries.  This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated, in whole or in part, by (i) either Seller without the prior written consent of the Company or (ii) by the Company without the prior written consent of each Seller, except that this Agreement shall be assigned by the Company to the successor of the Company in Change of Control and such successor shall timely pay and discharge all of the obligations of the Company hereunder.  Any purported assignment or delegation by any party of this Agreement or any of the rights or obligations hereunder in violation of this Section 8(g) shall be void and of no force or effect. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Sellers any legal or equitable right, remedy or cause of action under this Agreement.

(h)Headings; Section References.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  Except as expressly indicated to the contrary, references made in this Agreement to a Section mean a Section of this Agreement.

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(i)Severability.  If any provision of this Agreement shall hereafter be held invalid, unenforceable or illegal, in whole or in part, in any jurisdiction under any circumstances for any reason (i) such provision shall be reformed to the minimum extent necessary to cause such provision to be valid, enforceable and legal while preserving the intent of the Parties as expressed in, and the benefits to such parties provided by, such provision or (ii) if such provision cannot be so reformed, such provision shall be severed from this Agreement and an equitable adjustment shall be made to this Agreement (including addition of necessary further provisions to this Agreement) so as to give effect to the intent as so expressed and the benefits so provided.  Such holding shall not affect or impair the validity, enforceability or legality of such provision in any other jurisdiction or under any other circumstances.  Neither such holding nor such reformation or severance shall affect or impair the legality, validity or enforceability of any other provision of this Agreement.

(j)Governing Law; Venue; Waiver Of Jury Trial.  all questions concerning the construction, validity, enforcement and interpretation of this aGREEMENT shall be governed by and construed and enforced in accordance with the laws of the state of New york without regard to its conflict of laws principles which would require the application of the laws of any other jurisdiction.  each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the County of New York, State of New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper.  each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  the company and EACH SELLER hereby waive all rights to a trial by jury.

 [signature page follows]

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed by its duly authorized representative as of the day and year first above written.

The Sellers:

BIA Digital Partners SBIC II LP 

By:    /s/ Lloyd R. Sams                           
Name: Lloyd R. Sams              
Title:  Managing Director      

BNY Mellon-Alcentra Mezzanine III, L.P.

By:    /s/ Paul Echausse                                
Name:     Paul Echausse                                
Title:  Managing Director                              

Plexus Fund II, L.P.

By:  Plexus Fund II GP, LLC, its General Partner

By:    /s/ Robert R. Anders, Jr.                          
Name:    Robert R. Anders, Jr.                               
Title:  Manager 
                        

The Company:

GTT COMMUNICATIONS, INC.

By:   /s/ Michael R. Bauer                      
Name: Michael R. Bauer
Title: Chief Financial Officer and Treasurer     

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Annex A

Form of Assignment

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto GTT Communications, Inc. the right represented by the within Warrant to purchase  ____________ shares of common stock of GTT Communications, Inc. to which the within Warrant relates and appoints ________________ attorney to transfer said right on the books of GTT Communications, Inc. with full power of substitution in the premises.
	
		
	 
	 

	 
	 

	Dated: August _, 2014
	 

	 
	 

	 
	[Name of Seller]

By:_______________________

Title:______________________

	 
	 

9Exhibit 4.5 2014-08

Exhibit 4.5

UNIVERSAL ELECTRONICS INC.
2014 STOCK INCENTIVE PLAN

Adopted by the Board of Directors at its meeting held on April 23-24, 2014
and Amended by the Board of Directors by Unanimous Written Consent dated May 30, 2014

EFFECTIVE JUNE 12, 2014

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TABLE OF CONTENTS
	
		
	ARTICLE I     GENERAL PROVISIONS
	4

	Section 1.01     Adoption
	4

	Section 1.02     Description
	4

	Section 1.03     Purpose of Plan
	4

	 
	 

	ARTICLE II    DEFINITIONS AND RULES OF CONSTRUCTION
	4

	Section 2.01     Definitions
	4

	Section 2.02     Rules of Construction
	6

	 
	 

	ARTICLE III   ADMINISTRATION
	7

	Section 3.01     Responsibilities and Authority of the Committee
	7

	Section 3.02     Binding Determinations
	7

	Section 3.03     Reliance on Experts
	7

	Section 3.04     Delegation
	7

	Section 3.05     Limitations on Liability
	7

	 
	 

	ARTICLE IV    ELIGIBILITY
	7

	 
	 

	ARTICLE V     SHARES AVAILABLE FOR AWARDS
	7

	Section 5.01     Shares Available and Aggregate Share Limit
	7

	Section 5.02     Limit Applicable to Specific Awards
	7

	Section 5.03     Annual Limitations on Awards to Any Participant
	8

	Section 5.04     Adjustments Upon Recapitalization, Reorganization, or Other Corporate Transactions
	8

	 
	 

	ARTICLE VI    GENERAL PROVISIONS RELATED TO AWARDS
	8

	Section 6.01     Grant of Awards
	8

	Section 6.02     Award Agreements
	8

	Section 6.03     Period for Granting Awards
	8

	 
	 

	ARTICLE VII   OPTIONS
	8

	Section 7.01     Grant and Exercise
	8

	Section 7.02     Terms and Conditions
	9

	 
	 

	ARTICLE VIII  RESTRICTED STOCK UNITS
	9

	Section 8.01     Grant
	9

	Section 8.02     Termination of Award
	9

	Section 8.03     Distributions with Respect to Restricted Stock Units
	9

	 
	 

	ARTICLE IX    PERFORMANCE STOCK UNITS
	10

	Section 9.01     Grant
	10

	Section 9.02     Termination of Award
	10

	Section 9.03     Distributions with Respect to Performance Stock Units
	11

2

	
		
	ARTICLE X     AMENDMENT AND TERMINATION
	11

	Section 10.01    General Provisions
	11

	Section 10.02    Amendment of Awards
	11

	Section 10.03    Section 409A
	11

	 
	 

	ARTICLE XI    MISCELLANEOUS PROVISIONS
	11

	Section 11.01    Unfunded Status
	11

	Section 11.02    Participant Representations
	11

	Section 11.03    Other Compensation Arrangements
	11

	Section 11.04    No Right to Continued Service
	12

	Section 11.05    Tax Withholding
	12

	Section 11.06    Limitation on Liability
	12

	Section 11.07    Compliance with Rule 16b-3
	12

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UNIVERSAL ELECTRONICS INC.
2014 STOCK INCENTIVE PLAN

ARTICLE I
GENERAL PROVISIONS
Section 1.01.  Adoption.  Universal Electronics Inc. ("Corporation") hereby establishes the Universal Electronics Inc. 2014 Stock Incentive Plan ("Plan"), effective June 12, 2014 ("Effective Date"), subject to approval of the shareholders of the Corporation at the Corporation's annual meeting occurring on such date.
Section 1.02.  Description.  The Plan is designed to promote the interests of the Corporation and its shareholders by providing a means by which the Corporation can award stock-based incentives to employees and directors of the Corporation and/or its Subsidiaries.  The Plan permits the Committee to grant Stock Options, Performance Stock Units, Restricted Stock Units, or any combination of the foregoing, all as provided herein. 
Section 1.03.  Purpose of Plan.  The primary purposes of the Plan are (i) to further the growth, development, and financial success of the Corporation by providing stock-based incentives to Participants that align their interests more closely with those of the Corporation's shareholders and (ii) to provide an additional means by which the Corporation and its Subsidiaries can attract and retain talented employees and directors and motivate them to use their best efforts to create value for the Corporation's shareholders. 
ARTICLE II
DEFINITIONS AND RULES OF CONSTRUCTION
Section 2.01.  Definitions.  The following terms, when capitalized herein, shall have the meanings set out below:
(a)"Award" means any Option, Performance Stock Unit, and/or Restricted Stock Unit granted to a Participant pursuant to the Plan.
(b)"Award Agreement" means a written instrument between the Corporation and a Participant evidencing an Award and prescribing the terms, conditions, and restrictions applicable to the Award.
(c)"Board" means the Board of Directors of the Corporation.
(d)"Cause" means, unless otherwise defined in the applicable Award Agreement, (i) the willful and continued failure by the Participant to substantially perform his duties with the Corporation or, if applicable, any Subsidiary, (other than a failure resulting from the Participant's death or "Disability") after the Corporation or Subsidiary makes a demand for substantial performance to the Participant, which specifically identifies the manner in which it is believed that the Participant has not substantially performed his duties; (ii) the Participant's willful engaging in gross misconduct materially and demonstrably injurious to the property or business of the Corporation or any Subsidiary; (iii) the Participant's commission of fraud, misappropriation, or a felony.  For purposes of clause (i) of the preceding sentence, no act or failure to act of the Participant will be considered "willful" unless done, or omitted to be done, by the Participant not in good faith and without a reasonable belief that his action or omission was in the interests of the Corporation or not opposed to the best interests of the Corporation or, if applicable, any Subsidiary.
(e)"Change in Control" means the occurrence of any of the following (i) any "person" or "group" (as such terms are used in Sections 3(a), 13(d), and 14(d) of the Exchange Act), other than (1) a trustee or other fiduciary holding securities under any employee benefit plan of the Corporation or (2) a corporation owned directly or indirectly by the stockholders of the Corporation in substantially the same proportions as their ownership of stock in the Corporation immediately prior to any such occurrence, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the total voting power of the then outstanding securities of the Corporation entitled to vote generally in the election of directors (the "Voting Stock"); (ii) individuals who are members of the Board on the date of the applicable Award Agreement and any individuals who become members of the Board thereafter whose nomination for election as a director was approved by the affirmative vote of a majority of such directors (including any non-director added pursuant to this clause), cease to constitute a majority of the members of the Board; (iii) there occurs a merger or consolidation of the Corporation with any other corporation or entity, other than a merger or consolidation that would result in the Voting Stock of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 80% of the total voting power represented by the Voting Stock or the voting securities 

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of such surviving entity outstanding immediately after such merger or consolidation; (iv) there occurs a sale or transfer or disposition of all or substantially all of the Corporation's assets to any other corporation or entity, other than a corporation owned directly or indirectly by the stockholders of the Corporation in substantially the same proportions as their ownership of Stock in the Corporation immediately prior to such sale, transfer or disposition; or (v) the dissolution or liquidation of the Corporation.
(f)"Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto.
(g)"Committee" means the Compensation Committee of the Board.  Each member of the Committee is intended to qualify as (i) "independent," as determined in accordance with the regulations of the stock exchange on which the Stock is principally traded, (ii) a "non-employee director" under Rule 16b-3, and (iii) an "outside director" under Code Section 162(m).  However, no action of the Committee shall be void or deemed to be without authority due to the failure of any member, at the time the action was taken, to meet the foregoing qualification standards. To the extent that the Committee has delegated authority to another person or persons pursuant to Section 3.04, the term "Committee” shall refer to such other person or persons.
(h)"Corporation" means Universal Electronics Inc., a corporation incorporated under the laws of the State of Delaware (or any successor corporation).
(i)"Covered Employee" means an individual who is a covered employee within the meaning of Code Section 162(m)(3)).
(j)"Director" means a member of the Board of Directors of the Corporation or any Subsidiary.
(k)"Disability" means, unless otherwise defined in the applicable Award Agreement, an event of illness or other incapacity of the Participant resulting in the Participant's failure or inability to discharge his duties as an Employee or Director, as applicable for 90 or more days during any period of 120 days.
(l)"Dividend Equivalent" has the meaning specified in Subsection 8.01(b) or 9.01(b), as applicable.
(m)"Effective Date" has the meaning specified in Section 1.01.
(n)"Eligible Person" means an Employee or Director.
(o)"Employee" means an employee of the Corporation or any Subsidiary.
(p)"Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations thereunder.
(q)"Exercise Price" means the price required to be paid to the Corporation upon the exercise of an Option.
(r)"Fair Market Value" means, as of any given date, with respect to an Award granted hereunder, the mean of the high and low trading price of the Stock on such date as reported on The Nasdaq Stock Market, or if the Stock is not then traded on The Nasdaq Stock Market, on such other national securities exchange on which the Stock is admitted to trade or, if none, on the National Association of Securities Dealers Automated Quotation System, if the Stock is admitted for quotation thereon; provided, however, that if any such system, exchange, or quotation system is closed on any day on which Fair Market Value is to be determined, Fair Market Value shall be determined as of the first day immediately preceding such day on which such system, exchange, or quotation system was open for trading; provided, further, that in all other circumstances, "Fair Market Value" shall be determined by the Committee in accordance with Code Section 409A and the regulations thereunder.
(s)"Grant Date" means, with respect to an Award, the date on which the Committee takes action required to grant the Award or such later date designated by the Committee at the time it takes action required to grant the Award.  Notwithstanding the preceding sentience, if the Committee grants an Award subject to approval of the full Board, and the Award is later approved by the full Board, the Grant Date shall be the date of approval by the full Board.
(t)"Option" means a right granted to an Eligible Person pursuant to Article VII to purchase a specified number of Shares at a specified price during a specified period.  Only nonqualified stock options (i.e., options not subject to Code Section 422A) shall be awarded pursuant to the Plan.
(u)"Optionee" means an Employee or Director to whom the Committee has granted an Option that remains outstanding.
(v)"Participant" means an Employee or Director to whom the Committee has granted an Award that remains outstanding.
(w)"Performance Criteria" has the meaning specified is Subsection 9.01(d).
(x)"Performance Goals" has the meaning specified in Subsection 9.01(e).

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(y)"Performance Period" means the period (which must be for at least 12 consecutive months) designated by the Committee during which the Performance Goals applicable to a Performance Stock Unit must be satisfied.
(z)"Performance Stock Unit" has the meaning specified in Section 9.01.
(aa)"Restricted Stock Unit" or "RSU" has the meaning specified in Section 8.01.
(ab)"Rule 16b-3" means Rule 16b-3 issued by the Securities Exchange Commission pursuant to the Exchange Act, as such rule is in effect from time to time.
(ac)"Share" means a share of Stock.
(ad)"Stock" means the common stock, par value $0.01 per share, of the Corporation.
(ae)"Subsidiary" means any corporation in an unbroken chain of corporations beginning with the Corporation, if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.
(af)"Termination Date" means the effective date of a Participant's Termination of Service.
(ag)"Termination of Service," "Terminated Service," "Service Terminates," and any variation of such terms means, (i) in the case of an Employee, a complete termination of the employment relationship between the Employee and the Corporation and its Subsidiaries and, (ii) in the case of a Director, the cessation of service as a director of the Corporation and all Subsidiaries.
(ah)"Unit" means a Restricted Stock Unit" or a "Performance Stock Unit," as applicable.
Section 2.02.  Rules of Construction.  The following rules shall apply in construing the Plan and any Award Agreement:
(a)Except as expressly provided below, this Plan, the Awards, all documents evidencing Awards and all other related documents shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to conflict of law principles.
(b)Words used in the masculine shall be construed to include the feminine gender, where appropriate, and words used in the singular or plural shall be construed as being in the plural or singular, where appropriate.
(c)Captions and headings are for convenience only, and they shall not affect the construction of the Plan or any Award Agreement.
(d)Reference to any provision of the Code or other law or regulation shall be deemed to include a reference to the successor of such provision.
(e)The Plan and the Awards are intended to comply with and shall be construed to effect compliance with, the exemptions under Rule 16b-3, in the case of Participants who are subject to Section 16 of the Exchange Act; provided, however, the Corporation shall have no liability to any Participant for Section 16 consequences of an Award.
(f)It is intended that all Options granted pursuant to the Plan and, to the extent provided in Article IX, all Performance Stock Units granted to Covered Employees shall qualify as performance-based compensation or otherwise be exempt from deductibility limitations under Code Section 162(m), and the Plan and the Awards shall be construed accordingly.
(g)It is intended that all Awards shall be exempt from the provisions of Code Section 409A, and the provisions of the Plan and any Agreement applicable to an Award shall be construed in accordance with such intent.  All Options are intended to satisfy the exemption for stock rights under U.S. Treasury Regulations Section 1.409A-1(b)(5), and all Restricted Stock Units and all Performance Stock Units and Restricted Stock Units are intended to satisfy the short-term deferral exemption under U.S. Treasury Regulations Section 1.409A-1(b)(4), and the Plan and applicable Award Agreement shall be construed and applied to effect such interpretation.
(h)If a court of competent jurisdiction holds any provision invalid and unenforceable, the remaining provisions of the Plan shall continue in effect, provided that the essential economic terms of the Plan and any Award can still be enforced.

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ARTICLE III
ADMINISTRATION
Section 3.01.  Responsibilities and Authority of the Committee.  The Committee shall administer the Plan, subject to its right to delegate pursuant to Section 3.04.  Subject to the express provisions of the Plan, the Committee is authorized and empowered to administer the Plan and to (i) designate those persons who are Participants; (ii) grant Awards; (iii) determine the effective date of each Award, the number of Shares subject to the Award, and the other terms and conditions of the Award, which terms and conditions need not be the same for each Award; (iv) interpret the Plan and any Award Agreement; (v) determine the Fair Market Value of the Shares; (vi) accelerate the time during which an Option may be exercised, notwithstanding the provisions of the Award Agreement; (vii) accelerate the time during which restrictions apply to an Award; (viii) prescribe, amend, and rescind rules relating to the Plan; (ix) authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Award previously granted by the Committee; (x) determine the rights and obligations of Participants under the Plan; and (xi) make all other determinations deemed necessary or advisable for the administration of the Plan.  Notwithstanding the preceding provisions, the Committee is not authorized to take any action that would, in its judgment, cause an Award to become subject to the provisions of Code Section 409A.
Section 3.02.  Binding Determinations.  Any action taken by, or inaction of, the Company, the Board, or the Committee relating or pursuant to the Plan (including, without limitation, any determination of Fair Market Value) shall be within the sole discretion of that entity or body and shall be conclusive and binding upon all persons.  Subject only to compliance with the express provisions hereof, the Committee may act in its sole discretion in matters within its authority related to the Plan.
Section 3.03.  Reliance on Experts.  In making any determination or in taking or not taking any action under the Plan, the Committee or the Board, as the case may be, may obtain and rely upon the advice of experts, including employees of and professional advisors to the Company.
Section 3.04.  Delegation.  The Committee may delegate ministerial non-discretionary functions to one or more Company officers or employees.  Subject to applicable law, the Committee may delegate to the Company's Chief Executive Officer all or part of its authority and duties with respect to the granting of Awards to individuals who are not (i) subject to the reporting and other provisions of Section 16 of the Exchange Act or (ii) Covered Employees.  Any delegation pursuant to this Section shall specify the duration of the delegation and limit the amount of Awards that may be granted pursuant thereto.
Section 3.05.  Limitations on Liability.  No director, officer, or agent of the Company shall be liable for any action, omission, or decision under the Plan that is taken, made, or omitted in good faith.
ARTICLE IV
ELIGIBILITY
The Committee shall, from time to time, in its discretion, designate those persons eligible to receive Awards under the Plan from among Employees and Directors. 
ARTICLE V
SHARES AVAILABLE FOR AWARDS
Section 5.01.  Shares Available and Aggregate Share Limit.  
(a)Subject to adjustment pursuant to Section 5.04, the total number of Shares reserved and available for delivery in connection with Awards under the Plan shall be one million one hundred thousand (1,100,000), subject to approval of this Plan by the shareholders of the Corporation.  Such Shares may consist, in whole or in part, of authorized and unissued Shares or issued Shares reacquired by the Corporation from time to time, as the Board may determine.
(b)To the extent that (a) an Option expires or is otherwise terminated, canceled, or surrendered without being exercised (including, without limitation, in connection with the grant of a replacement option) or (b) any Restricted Stock Unit Award or Performance Stock Unit Award granted hereunder expires or is otherwise terminated or canceled, the Shares underlying such Option or subject to such Restricted Stock Unit Award or Performance Stock Unit Award shall again be available for issuance in connection with future Awards under this Plan.
Section 5.02.  Limit Applicable to Specific Awards.  The only limitations on the number of Shares available for Options, Restricted Stock Units, and/or Restricted Stock Units are the overall limits set out in this Article.

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Section 5.03.  Annual Limitations on Awards to Any Participant.  The maximum number of Shares subject to all Awards granted in any three-calendar year period to a Participant who is either (i) subject to the reporting and other provisions of Section 16 of the Exchange Act or (ii) a Covered Employee shall be limited to three hundred fifty-thousand (350,000).
Section 5.04.  Adjustments Upon Recapitalization, Reorganization, or Other Corporate Transactions.  In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, spin-off, or other change in corporate structure or capitalization affecting the Stock, the Committee shall make an equitable adjustment or substitution in the number and class of shares reserved for issuance under this Plan, the number and class of shares covered by outstanding Awards and the per-Share Exercise Price under Options, and the limitations under Section 5.03 to reflect the effect of such change in corporate structure or capitalization on the Stock; provided, however, that any fractional shares resulting from such adjustment shall be eliminated; provided further, however, that if by reason of any such change in corporate structure or capitalization a Participant holding a Restricted Stock Unit Award or Performance Stock Unit Award shall be entitled, subject to the terms and conditions of such Award, to additional or different shares of any security, the issuance of such additional or different shares shall thereupon be subject to all of the terms and conditions (including restrictions and performance criteria) that were applicable to such Award before such change in corporate structure or capitalization; and, provided, further, however, that unless the Committee, in its sole discretion determines otherwise, any issuance by the Corporation of shares of stock of any class or securities convertible into shares of stock of any class shall not affect, and no such adjustment or substitution by reason thereof shall be made with respect to, the number or class of shares reserved for issuance under the Plan, the number or class of shares covered by outstanding Awards, or any option price or applicable price.
ARTICLE VI
GENERAL PROVISIONS RELATED TO AWARDS
Section 6.01.  Grant of Awards.  The Committee may grant Awards singly or in combination or tandem with other Awards. 
Section 6.02.  Award Agreements.  Each Award shall be evidenced by an Award Agreement, which shall be distributed to the Participant to whom the Award has been made.  The Committee may require, as a condition of any Award, that the Participant sign a copy of the Award Agreement and return it to the Corporation as provided therein.  The terms of an Award need not be the same for any two Participants or for more than one Award to the same Participant.
Section 6.03.  Period for Granting Awards.   Notwithstanding any other provision of this Plan, no Award may be granted pursuant to the Plan on or after the tenth anniversary of the Effective Date; provided, however, Awards granted before such tenth anniversary may extend beyond that date.
ARTICLE VII
OPTIONS 
Section 7.01.  Grant and Exercise.  The Committee may grant Options to any Employee or Director, either alone or in addition to other Awards, in such form and subject to such terms and conditions as the Committee specifies.  
(a)Award Agreement.  The Award Agreement for an Option shall specify the grant date, the number of Shares subject to the Option, the exercise period (to the extent that such period is not set out in the Plan), the Exercise Price, and such other provisions applicable to the Option as the Committee, in its sole discretion, may determine.
(b)Exercisability.  Options shall be exercisable during the period specified in the Award Agreement.
(c)Method of Exercise.  Options may be exercised by giving written notice of exercise as provided in the Award Agreement, specifying the number of Shares with respect to which the Stock Option is being exercised, accompanied by payment in full of the Exercise Price in cash or its equivalent, as determined by the Committee in its sole discretion, and satisfaction of the withholding requirements set out in Section 11.05 and/or the Award Agreement.  If requested by the Committee, the Optionee shall deliver to the Corporation the Award Agreement evidencing the Stock Option being exercised for notation thereon of such exercise and return thereafter of such agreement to the Optionee.  As determined by the Committee, in its sole discretion, payment of the Exercise Price in full or in part may also be made in the form of unrestricted Shares already owned by the Optionee (based on the Fair Market Value of such Shares on the date on which the Stock Option is exercised).  The Committee also may allow cashless exercise, as permitted under Federal Reserve Board's Regulation T, subject to applicable securities law restrictions, or by any other means that the Committee determines to be consistent with this Plan's purpose and applicable law.  An Optionee shall generally have the rights to dividends or other rights of a stockholder with respect to Shares subject to a Stock Option when the Optionee has given written notice of exercise, has paid in full for such Shares, and, if requested, has made representations described in Section 11.02.

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Section 7.02.  Terms and Conditions.  Stock Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem desirable.
(a)Exercise Price.  The per-Share Exercise Price for Shares under each Option shall be determined by the Committee at the time of grant, but shall be not less than 100% of the Fair Market Value of a Share on the Grant Date.
(b)Option Term.  The term of each Stock Option shall be fixed by the Committee at the time of grant, but no Stock Option shall be exercisable more than ten years after its Grant Date.
(c)Transferability.  Except as otherwise determined by the Committee, no Option shall be transferable by the Optionee otherwise than by will or by the laws of descent and distribution and, during the Optionee's lifetime, all Options shall be exercisable only by the Optionee, or in the case of Optionee's legal incompetency, only by Optionee's guardian or legal representative.
(d)Impact of Termination of Service.  An Optionee may exercise an Option after Termination of Service only to the extent provided in the applicable Award Agreement or as otherwise determined by the Committee, in its sole discretion.  Except as provided in the preceding sentence, all Options held by an Optionee shall terminate immediately upon Termination of Service without the necessity of any further action by the Corporation, the Committee, or the Optionee.
ARTICLE VIII
RESTRICTED STOCK UNITS
Section 8.01.  Grant.  The Committee may grant Restricted Stock Units pursuant to this Article to any Eligible Person.  Each Restricted Stock Unit represents the right to receive one Share, subject to the terms, conditions, and provisions of this Plan and the applicable Award Agreement.
(a)Award Agreement.  The Award Agreement shall set out the number of Restricted Stock Units subject to the Award, the vesting provisions applicable to such Units, other such other terms applicable to the Award, as the Committee, in its discretion, may determine.
(b)Dividend Equivalents.  If the Committee, in its sole discretion, so determines at the time of grant, a Participant to whom a Restricted Stock Unit Award has been made may be credited with an amount equivalent to all cash dividends ("Dividend Equivalents") that would have been paid to the Participant if one Share for every Restricted Stock Unit awarded had been issued to the Participant on the Grant Date.  Dividend Equivalents with respect to a Restricted Stock Unit, to the extent that they become vested, shall be paid to the Participant at such time as the Shares related to such Restricted Stock Unit are distributed.
(c)Vesting.  Restricted Stock Units subject to an Award shall become vested pursuant to the schedule specified in the Award Agreement or as otherwise determined by the Committee pursuant to the Plan.  Upon vesting of outstanding Units, the Participant shall be entitled to payment pursuant to Section 8.03.
(d)Additional Terms and Conditions.  The Committee shall determine the terms and conditions of each Restricted Stock Unit Award, including without limitation, the number of Restricted Stock Units subject to the Award and the restricted period applicable to the Units.  The Committee, in its sole discretion, shall prescribe terms and conditions applicable to the vesting of Restricted Stock Units in addition to those provided in this Plan.
(e)Transferability.  Restricted Stock Units shall not be transferable.
Section 8.02.  Termination of Award.  Unless otherwise determined by the Committee, in its sole discretion, (i) a breach of any term or condition of the Plan or applicable Award Agreement or (ii) the Participant's Termination of Service will cause a cancellation of all unvested Restricted Stock Units (including any Dividend Equivalents with respect to such Units), and the Participant shall not be entitled to receive any consideration with respect thereto.
Section 8.03.  Distributions with Respect to Restricted Stock Units.  Upon the vesting of outstanding Restricted Stock Units, the Committee shall cause (i) a number of Shares equal to the number of whole Units becoming vested as of such date to be transferred to or for the benefit of the Participant, and (ii) if applicable, a cash amount equal to any Dividend Equivalents with respect to such whole Units to be paid to the Participant.  All such distributions and payments shall be subject to satisfaction of the withholding requirements set out in Section 11.05 and/or the Award Agreement.  Notwithstanding anything to the contrary contained in the Plan or any Award Agreement, distribution of Shares and, if applicable, Dividend Equivalents, with respect to a vested Unit shall be made at the time of vesting or as soon as administratively feasible thereafter, and under no circumstances later than March 15 of the calendar year following the calendar year in which the Units become vested.

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ARTICLE IX
PERFORMANCE STOCK UNITS
Section 9.01.  Grant.  The Committee may grant Performance Stock Units pursuant to this Article to any Eligible Person.  Each Performance Stock Unit represents the right to receive, subject to the terms and provisions of this Plan and the applicable Award Agreement, one Share or, in the Committee's discretion, cash equal to the Fair Market value of one Share on the vesting date.  Performance Stock Units granted to a Covered Employee are intended to qualify as performance-based compensation exempt from the deductibility limitations of Code Section 162(m).
(a)Award Agreement.  The Award Agreement shall set out (i) the number of Performance Stock Units subject to the Award; (ii) the Performance Goals and Performance Period (which must be at least 12 consecutive months) applicable to such Units, (iii) if applicable, the time-based vesting provisions established by the Committee with respect to such Units, and (iv) other terms applicable to the Award, as determined by the Committee, in its discretion.
(b)Dividend Equivalents.  If the Committee, in its sole discretion, so determines at the time of grant, a Participant to whom a Performance Stock Unit has been granted may be credited with an amount equivalent to all cash dividends ("Dividend Equivalents") that would have been paid to the Participant if one Share for every Performance Stock Unit awarded had been issued to the Participant on the Grant Date.  Dividend Equivalents with respect to a Performance Stock Unit, to the extent that they become vested, shall be paid to the Participant at such time as the Shares related to such Performance Stock Unit are transferred to or for the benefit of the Participant.
(c)Vesting.  Performance Stock Units subject to an Award shall become vested at the later of (i) the end of the specified Performance Period, provided that the applicable Performance Goals have been satisfied during such Period, or (ii) the completion of any additional time-based vesting requirements.  The Committee, in its sole discretion, may (i) prescribe terms and conditions applicable to the vesting of Units in addition to those provided in this Plan, or (ii) with respect to a Participant who is not a Covered Employee, deem the applicable vesting provisions to have been satisfied.  Upon vesting of outstanding Units, the Participant will be entitled to payment pursuant to Section 9.03.  To the extent that applicable Performance Criteria have not been satisfied during the Performance Period, or the Participant has failed to satisfy any time-based vesting requirements, the Participant shall have no further interest with respect to the non-vested Units.
(d)Performance Criteria.  "Performance Criteria" means the one or more of the following criteria selected by the Board for the purpose of establishing the Performance Goals for a Performance Period: (i) earnings (including earnings per share and net earnings); (ii) earnings before interest, taxes, and depreciation; (iii) total shareholder return; (iv) return on equity or average shareholders' equity; (v) stock price; (vi) net income (before or after taxes); (vii) net operating income (before or after taxes), (viii) sales or revenue targets; (ix) increases in revenue or product revenue; (x) debt reduction; (xi) customer satisfaction; or (xii) operating profit or net operating profit, and to the extent that an Award is not intended to comply with Code Section 162(m), other measures of performance selected by the Board.
(e)Performance Goals.  "Performance Goals" means, for a Performance Period, one or more goals established by the Committee for the Performance Period based upon the Performance Criteria.  The Committee shall establish the Performance Goals applicable to any Performance Stock Award not later than ninety (90) days after the commencement of the Performance Period for such Award; provided, however, that achievement of such Performance Goals must be substantially uncertain at the time the goals are established.  Before payment under a Performance Based Stock Award to a Covered Employee, the Committee shall certify the extent to which any Performance Goals and any other material terms under such Award have been satisfied.  The Performance Goals established by the Committee with respect to a Performance Based Stock Award may be based on Corporation-wide performance or with respect to one or more business units, divisions, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Committee (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Committee shall appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated Performance Goals; (iii) to exclude the effects of changes to generally accepted accounting principles; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; and (v) to exclude the effects of any "extraordinary items" as determined under generally accepted accounting principles.
(f)Transferability.  Performance Stock Unit Awards shall not be transferable.
Section 9.02.  Termination of Award.  Unless otherwise determined by the Committee, in its sole discretion, (i) a breach of any term or condition of the Plan or applicable Award Agreement or (ii) the Participant's Termination of Service will cause a cancellation of all unvested Performance Stock Units (including any Dividend Equivalents with respect to such Units), and the 

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Participant shall not be entitled to receive any consideration with respect thereto.  In addition, all Performance Stock Units subject to an Award will be forfeited at the end of the applicable performance period to the extent that the performance objectives applicable such Units have not been met, subject to the Committee's discretion, as provided in Subsection 9.01(e).
Section 9.03.  Distributions with Respect to Performance Stock Units.
(a)Upon the vesting of outstanding Performance Stock Units, the Committee shall cause (i) to be issued and delivered to the Participant a stock certificate representing the number of Shares, if any, to be issued pursuant with respect to the vested Units, which, subject to Section 11.02 hereof, shall be free of all restrictions, and (ii) the cash, if any to be issued with respect to the Units, if any, including any Dividend Equivalents with respect to such vested Units.
(b)Notwithstanding anything to the contrary contained in the Plan or any Award Agreement, distribution of Shares and/or cash, as applicable, with respect to vested Units shall be made at the time of vesting or as soon as administratively feasible thereafter and under no circumstances later than March 15 of the calendar year following the calendar year in which the Units become vested.
ARTICLE X
AMENDMENT AND TERMINATION
Section 10.01.  General Provisions.  The Board may amend or terminate this Plan, but no such amendment or termination shall (i) impair the rights of a Participant under any Award theretofore granted without such Participant's consent, or (ii) without the approval of the stockholders of the Corporation (where such approval is necessary to satisfy then applicable requirements of Rule 16b-3, the Nasdaq Stock Market, Inc., any federal tax law relating to Incentive Stock Options, or any applicable state law):  
(a)except as provided in Article V, increase the total number of Shares that may be issued under this Plan;
(b)except as provided in Article V, decrease the Exercise Price any Stock Option to less than 100% of the Fair Market Value on the Grant Date;
(c)change the class of Eligible Persons; or
(d)extend (i) the period during which Awards may be granted or (ii) the maximum period of any Award.
Section 10.02.  Amendment of Awards.  Except as restricted herein with respect to Incentive Stock Options, the Committee may change the terms and conditions of any Award theretofore granted, and of any applicable Award Agreement, prospectively or retroactively, but no such change shall impair the rights of any Participant under such Award or Award Agreement without the Participant's consent.  
Section 10.03.  Section 409A.  Additional rules relating to amendments to the Plan or any Award or Award Agreement to assure compliance with Section 409A of the Code are set forth in Section 11.08.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01.  Unfunded Status.  This Plan is intended to constitute an "unfunded" plan.  With respect to any payments not yet made and due to a Participant by the Corporation, nothing contained herein shall give any such Participant any rights that are greater than those of a general unsecured creditor of the Corporation.  
Section 11.02.  Participant Representations.  The Committee may require each Participant purchasing or receiving Shares pursuant to an Award to represent to and agree with the Corporation in writing that such Participant is acquiring the Shares without a view to distribution thereof.  All certificates for Shares delivered under this Plan and, to the extent applicable, all evidences of ownership with respect to Dividend Equivalents delivered under this Plan, shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed, or quotation system on which the Shares are admitted for trading, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
Section 11.03.  Other Compensation Arrangements.  Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required, and such arrangements may be either generally applicable or applicable only in specific cases.  

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Section 11.04.  No Right to Continued Service.  Neither the adoption of this Plan nor the grant of any Award pursuant hereto shall (i) confer upon any Employee any right to continued employment with the Corporation or any Subsidiary or interfere with the right of the Corporation or Subsidiary to terminate the Employee's employment at any time and for any reason, or (ii) to confer upon any Director any right to be retained as a Director for any period.
Section 11.05.  Tax Withholding.  Unless the Committee otherwise determines, each Participant (other than a Participant who received an Award as a Director) shall, no later than the date as of which the value of an Award first becomes includable in the gross income of the Participant for federal income tax purposes, pay to the Corporation, or make arrangements satisfactory to the Committee regarding payment of, any federal, state or local taxes of any kind required by law to be withheld with respect to the Award.  The obligations of the Corporation under this Plan shall be conditional on such payment or arrangements and the Corporation (and, where applicable, its Subsidiaries) shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.  A Participant may elect to have such tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Corporation to withhold from Shares to be issued upon the exercise of a Stock Option or upon the vesting of any Restricted Stock Unit Award or the Performance Stock Unit Award a number of Shares with an aggregate Fair Market Value that would satisfy the withholding amount due, or (ii) transferring to the Corporation Shares owned by the Participant with an aggregate Fair Market Value that would satisfy the withholding amount due.  With respect to any Participant who is a director or an executive officer (i.e., any officer subject to Section 16(b) of the Exchange Act), the election to satisfy the tax withholding obligations relating to the exercise of a Stock Option or to the vesting of a Restricted Stock Unit Award or Performance Stock Unit Award in the manner permitted by this Section shall be made during the "window period" as described within the Corporation Insider Trading Policy unless, otherwise determined in the sole discretion of the Committee. 
Section 11.06.  Limitation on Liability.  No member of the Board or the Committee, nor any officer or employee of the Corporation acting on behalf of the Board or the Committee, shall be personally liable for any action, failure to act, determination, or interpretation taken or made in good faith with respect to this Plan, and all members of the Board or the Committee and each and any officer or employee of the Corporation acting on their behalf shall, to the extent permitted by law and by the Corporation's Amended and Restated Certificate of Incorporation, as amended, and its Amended and Restated By-Laws, as amended, be fully indemnified and protected by the Corporation in respect of any such action, failure to act, determination, or interpretation.
Section 11.07.  Compliance with Rule 16b-3.  This Plan is intended to satisfy the conditions of Rule 16b-3, and all interpretations of this Plan shall, to the extent permitted by law, regulations and rulings, be made in a manner consistent with and so as to satisfy the requirements and conditions of such rule.  Any provision of this Plan or the application of any provision of this Plan inconsistent with Rule 16b-3 shall be inoperative and shall not affect the validity of the Plan.

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