SYMBOL TECHNOLOGIES, INC.
EXECUTIVE BONUS PLAN
(AMENDED AND RESTATED AS OF MARCH 10, 2004)
SECTION 1. PURPOSE. The purpose of the Symbol Technologies, Inc.
Executive Incentive Plan (the "Plan") is to provide Officers of Symbol
Technologies, Inc. (the "Company") and its affiliates with incentive
compensation based upon the level of achievement of financial and other
performance criteria. The Plan is intended to enhance the ability of the Company
and its affiliates to attract individuals of exceptional managerial talent upon
whom, in large measure, the sustained progress, growth and profitability of the
Company depends.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
(a) "AWARD" means a cash bonus payment that may be made pursuant to the
Plan.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended from time to
time and any successor thereto.
(d) "COMMITTEE" means the Stock Option / Compensation Committee of the
Board (or any successor committee); provided that, with respect to
Awards made to Covered Employees as described in Section 5, "COMMITTEE"
means a committee of the Board (or subcommittee thereof) consisting
solely of two or more members of the Board, each of whom is an Outside
Director.
(e) "COVERED EMPLOYEE" means a "covered employee" within the meaning of
Section 162(m) of the Code.
(f) "MEASUREMENT PERIOD" means a period of time selected by the Committee
for which the Performance Goal will be measured for purposes of
Section 5.
(g) "NET INCOME" means the net income before taxes of the Company as
determined under generally accepted accounting principles, excluding
(a) extraordinary items; (b) cumulative effects of changes in
accounting principles; (c) securities gains and losses; (d)
amortization or write-off of goodwill, acquired intangibles and
purchased in-process research and development; and (e) nonrecurring
items including, but not limited to, gains or losses on asset
dispositions and sales of divisions, business units or subsidiaries,
restructuring and separation charges, and gains and losses from
qualified benefit plan curtailments and settlements.
(h) "OFFICER" means any employee of the Company or any affiliate holding a
position at or above Senior Vice President or any zone level that the
Committee determines, in its sole discretion, is the equivalent
thereof.
(i) "OUTSIDE DIRECTORS" means those members of the Board who are "outside
directors" within the meaning of Section 162(m) of the Code.
(j) "PARTICIPANT" means any person selected by the Committee to participate
in the Plan.
(k) "PERFORMANCE GOAL" has the meaning set forth in Section 5(b).
(l) "PERFORMANCE PERIOD" means a period of time selected by the Committee
to which an Award relates.
(m) "TARGET AWARD" means an Award amount that may be paid if certain
performance criteria are achieved.
SECTION 3. ELIGIBILITY. Persons employed by the Company or any of its
affiliates on the last day of a Performance Period in active service at an
Officer level for all or any part of the Performance
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Period are eligible to be Participants under the Plan for such Performance
Period (whether or not so employed or living at the date an Award is made) and
may be considered by the Committee for an Award. An Officer is not rendered
ineligible to be a Participant by reason of being a member of the Board.
SECTION 4. AWARDS-GENERAL. The Committee will establish Target Awards
for Participants at the beginning of each Performance Period and the performance
criteria to be applicable to Awards for such Performance Period. Except as
otherwise provided by Section 5, the performance criteria utilized by the
Committee may be based on individual performance, net income, other Company and
business unit financial objectives, customer satisfaction indicators,
operational efficiency measures, and other measurable objectives tied to the
Company's success or such other criteria as the Committee shall determine.
Awards will be made by the Committee following the end of each Performance
Period. Awards shall be paid after the end of the Performance Period, except to
the extent that a Participant has made an election to defer the receipt of such
Award pursuant to an approved deferred compensation plan (and in accordance with
the terms of such deferred compensation plan). Subject to Sections 5 and 6(d),
the Award amount with respect to a Participant shall be determined in the sole
discretion of the Committee or such person or committee empowered by the
Committee or Board. The determination of the Award amount for each Participant
shall be made at the end of each Performance Period and may be less than
(including no Award) or, except as otherwise provided by Section 5(c), greater
than the Target Award.
SECTION 5. AWARDS TO COVERED EMPLOYEES.
(a) If the Committee determines at the time a Target Award is established
for a Participant that such Participant is, or may be as of the end of
the tax year for which the Company would claim a tax deduction in
connection with such Award, a Covered Employee, then the Committee
shall provide that this Section 5 is applicable to such Award under
such terms as the Committee shall determine.
(b) Subject to Section 6(d), the Award amount with respect to a
Participant covered by this Section 5 shall be determined in the sole
discretion of the Committee; provided that, if an Award is subject to
this Section 5, then the payment of cash pursuant thereto shall be
subject to the Company having attained a performance goal relating to
Net Income, Cash Flow, Earnings per Share, Return on Equity, Total
Return to Stockholders in the form of stock price appreciation and
dividends, if paid, or other measures (a "Performance Goal") as
determined in the sole discretion of the Committee for the applicable
Measurement Period. Such Performance Goals shall be established by the
Committee within the time prescribed by Section 162(m) of the Code and
the regulations thereunder in order for the Performance Goal to be
considered "pre-established" for purposes of Section 162(m) of the
Code. The Committee may, in its discretion, reduce the amount of such
an Award at any time prior to payment based on such criteria as it
shall determine, including but not limited to individual merit and the
attainment of specified levels of one or any combination of the
following: net cash provided by operating activities or other cash
flow-based measures, earnings per share from continuing operations,
operating income, revenues, gross margin, return on operating assets,
return on equity, economic value added, stock price appreciation,
total shareowner return (measured in terms of stock price appreciation
and dividend growth), or cost control, of the Company or the affiliate
or division of the Company for or within which the Participant is
primarily employed.
(c) Notwithstanding any contrary provision of this Plan, the Committee may
not adjust upwards the amount payable pursuant to any Award subject to
this Section 5, nor may it waive the attainment of the Performance
Goal requirement contained in Section 5(b), except in the case of the
death or disability of the Participant.
(d) Prior to the payment of any Award subject to this Section 5, the
Committee shall certify in writing that the Performance Goal
applicable to such Award was met.
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(e) The Committee shall have the power to impose such other restrictions
on Awards subject to this Section 5 as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
"performance-based compensation" within the meaning of Section
162(m)(4)(C) of the Code, the regulations promulgated thereunder, and
any successors thereto.
(f) No amounts shall be paid with respect to any Award subject to this
Section 5 unless and until the Company's stockholders shall have
approved the Plan and the Performance Goals as required by Section
162(m) of the Code. So long as the Plan shall not have been previously
terminated by the Company, it shall be resubmitted for approval by the
Company's stockholders in the fifth year after it shall have first
been approved by the Company's stockholders, and every fifth year
thereafter.
SECTION 6. OTHER CONDITIONS.
(a) No person shall have any claim to an Award under the Plan and there is
no obligation for uniformity of treatment of Participants under the
Plan. Awards under the Plan may not be assigned or alienated.
(b) Neither the Plan nor any action taken hereunder shall be construed as
giving to any Participant the right to be retained in the employ of
the Company or any affiliate.
(c) The Company or any affiliate shall have the right to deduct from any
Award to be paid under the Plan any federal, state or local taxes
required by law to be withheld with respect to such payment.
(d) Notwithstanding any contrary provision of the Plan, the maximum amount
which may be paid to a Participant in any fiscal year is $6 million.
SECTION 7. DESIGNATION OF BENEFICIARIES. A Participant may, if the
Committee permits, designate a beneficiary or beneficiaries to receive all or
part of the Award which may be made to the Participant, or may be payable, after
such Participant's death. A designation of beneficiary shall be made in
accordance with procedures specified by the Company and may be replaced by a new
designation or may be revoked by the Participant at any time. In case of the
Participant's death, an Award with respect to which a designation of beneficiary
has been made (to the extent it is valid and enforceable under applicable law)
shall be paid to the designated beneficiary or beneficiaries. Any Award granted
or payable to a Participant who is deceased and not subject to such a
designation shall be distributed to the Participant's estate. If there shall be
any question as to the legal right of any beneficiary to receive an Award under
the Plan, the amount in question may be paid to the estate of the Participant,
in which event the Company or its affiliates shall have no further liability to
anyone with respect to such amount.
SECTION 8. PLAN ADMINISTRATION.
(a) The Committee shall have full discretionary power to administer and
interpret the Plan and to establish rules for its administration
(including the power to delegate authority to others to act for and on
behalf of the Committee) subject to such resolutions, not inconsistent
with the Plan, as may be adopted by the Board, except that the
Committee (or any subcommittee thereof) shall have the exclusive
authority to exercise any such power with respect to Awards to which
Section 5 is applicable. In making any determinations under or
referred to in the Plan, the Committee (and its delegates, if any)
shall be entitled to rely on opinions, reports or statements of
employees of the Company and its affiliates and of counsel, public
accountants and other professional or expert persons.
(b) The Plan shall be governed by the laws of the State of Delaware and
applicable Federal law.
SECTION 9. MODIFICATION OR TERMINATION OF PLAN. The Board may modify or
terminate the Plan at any time, effective at such date as the Board may
determine. Any amendment to the Plan shall require stockholder approval only to
the extent required by Section 162(m) of the Code or any other applicable law,
rule or regulation.
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