q210q.htm

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DdgyH/Z8Z2r0wXtn/nuVdJB42dZSz/gqaF/bi6bmCFWFVMryFVqfVkbZuSoHtD7r dxh/0QeKwMyGsCow0/WE2g== 0001140361-08-018489.txt : 20080807 0001140361-08-018489.hdr.sgml : 20080807 20080807062412 ACCESSION NUMBER: 0001140361-08-018489 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20080629 FILED AS OF DATE: 20080807 DATE AS OF CHANGE: 20080807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Intermec, Inc. CENTRAL INDEX KEY: 0001044590 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 954647021 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13279 FILM NUMBER: 08996463 BUSINESS ADDRESS: STREET 1: 6001 36TH AVENUE WEST CITY: EVERETT STATE: WA ZIP: 98203-1264 BUSINESS PHONE: 425-265-2400 MAIL ADDRESS: STREET 1: 6001 36TH AVENUE WEST CITY: EVERETT STATE: WA ZIP: 98203-1264 FORMER COMPANY: FORMER CONFORMED NAME: UNOVA INC DATE OF NAME CHANGE: 19970815 10-Q 1 q210q.htm 2ND QUARTER 10Q q210q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2008

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-13279

Intermec, Inc.

(Exact name of registrant as specified in its charter)

Delaware		95-4647021
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

6001 36th Avenue West, Everett, WA		98203-1264
(Address of principal executive offices)		(Zip Code)

(425) 265-2400

(Registrant’s telephone number, including area code)

[None]

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý

No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):.

Large accelerated filer ý				Accelerated filer 

Non-accelerated filer 				Smaller reporting company filer 
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o

No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at July 28, 2008
Common Stock, $0.01 par value per share		61,672,220 shares

INTERMEC, INC.

TABLE OF CONTENTS

REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 29, 2008

		Page Number
PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Operations (unaudited) Three and Six Month Periods Ended June 29, 2008, and July 1, 2007		3

	Condensed Consolidated Balance Sheets (unaudited) June 29, 2008, and December 31, 2007		4

	Condensed Consolidated Statements of Cash Flows (unaudited) Six Months Ended June 29, 2008, and July 1, 2007		5

	Notes to Condensed Consolidated Financial Statements (unaudited)		6-13

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14-20

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk		20

ITEM 4.	Controls and Procedures		21

PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings		22

ITEM 1A.	Risk Factors		22

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		23

ITEM 4.	Submission of Matters to a Vote of Security Holders		24

ITEM 6.	Exhibits

Signature

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INTERMEC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(thousands of dollars, except per share amounts)

(unaudited)

	Three Months Ended						Six Months Ended
	June 29, 2008			July 1, 2007			June 29, 2008			July 1, 2007
Revenues:
Product	$	180,455		$	169,939		$	360,028		$	311,451
Service		37,806			40,584			75,011			78,390
Total revenues		218,261			210,523			435,039			389,841

Costs and expenses:
Cost of product revenues		108,189			108,726			215,894			200,920
Cost of service revenues		21,154			20,623			42,859			43,206
Research and development		17,143			16,465			33,665			32,971
Selling, general and administrative		59,506			52,307			118,143			105,362
Flood related charges		1,122			-			1,122			-
Total costs and expenses		207,114			198,121			411,683			382,459

Operating profit from continuing operations		11,146			12,402			23,356			7,382
Interest income		1,171			2,467			2,846			5,020
Interest expense		(345	)		(2,348	)		(2,135	)		(4,643	)
Earnings from continuing operations before income taxes		11,972			12,521			24,067			7,759
Provision for income taxes		4,250			4,591			8,639			4,261
Earnings before discontinued operations		7,722			7,930			15,428			3,498
Loss from discontinued operations, net of tax		-			(1,283	)		-			(1,283	)
Net earnings	$	7,722		$	6,647		$	15,428		$	2,215

Basic earnings (loss) per share
Continuing operations	$	0.13		$	0.13		$	0.25		$	0.06
Discontinued operations		-			(0.02	)		-			(0.02	)
Net earnings per share	$	0.13		$	0.11		$	0.25		$	0.04

Diluted earnings (loss) per share
Continuing operations	$	0.13		$	0.13		$	0.25		$	0.06
Discontinued operations		-			(0.02	)		-			(0.02	)
Net earnings per share	$	0.13		$	0.11		$	0.25		$	0.04

Shares used in computing earnings (loss) per share
Basic		61,103			60,251			61,030			60,121
Diluted		61,611			61,065			61,543			60,987

See accompanying notes to condensed consolidated financial statements.

INTERMEC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands of dollars)

(unaudited)

	June 29, 2008			December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	199,014		$	237,247
Short-term investments		293			28,230
Accounts receivable, net of allowance for doubtful accounts and sales returns of $10,042 and $12,854		159,664			191,487
Inventories		137,087			113,145
Net current deferred tax assets		61,501			61,532
Other current assets		14,543			14,690
Total current assets		572,102			646,331

Property, plant and equipment, net		42,462			47,732
Intangibles, net		3,678			4,138
Net deferred tax assets		144,079			150,154
Other assets		59,138			52,280
Total assets	$	821,459		$	900,635

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	120,753		$	141,667
Payroll and related expenses		28,978			32,170
Deferred revenue		53,776			49,020
Current debt		-			100,000
Total current liabilities		203,507			322,857

Long-term deferred revenue		27,423			20,109
Other long-term liabilities		75,280			73,558

Shareholders' equity:
Common stock (250,000 shares authorized, 61,626 and 61,192 shares issued and outstanding)		616			612
Additional paid-in-capital		690,728			679,241
Accumulated deficit		(182,195	)		(196,795	)
Accumulated other comprehensive income		6,100			1,053
Total shareholders' equity		515,249			484,111
Total liabilities and shareholders' equity	$	821,459		$	900,635

See accompanying notes to condensed consolidated financial statements.

INTERMEC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(thousands of dollars)

(unaudited)

	Six Months Ended
	June 29,			July 1,
	2008			2007 (as restated)

Cash and cash equivalents at beginning of year	$	237,247		$	155,027

Cash flows from operating activities:
Net earnings		15,428			2,215
Net loss from discontinued operations		-			1,283
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities
of continuing operations:
Depreciation and amortization		7,842			6,190
Change in prepaid pension costs, net		918			(780	)
Deferred taxes		7,295			3,527
Stock-based compensation and other		4,997			2,953
Gain on sale of property, plant and equipment		(2,873	)		(530	)
Excess tax benefits from stock-based payment arrangements		(1,340	)		(1,181	)
Changes in operating assets and liabilities:
Accounts receivable		31,823			3,686
Inventories		(27,481	)		4,135
Other current assets		147			(1,397	)
Accounts payable and accrued expenses		(21,754	)		(9,794	)
Payroll and related expenses		(3,192	)		(6,648	)
Deferred revenue		11,908			2,425
Other long-term liabilities		(1,730	)		(4,317	)
Other operating activities		428			(1,219	)
Net cash provided by operating activities of continuing operations		22,416			548

Cash flows from investing activities of continuing operations:
Capital expenditures		(5,779	)		(5,474	)
Proceeds from the sale of property, plant and equipment		5,497			-
Purchases of investments		(760	)		(1,355	)
Sale of investments		28,515			1,493
Patent legal fees		(778	)		(652	)
Other investing activities		-			(406	)
Net cash provided by (used in) investing activities of continuing operations		26,695			(6,394	)

Cash flows from financing activities of continuing operations:
Repayment of debt		(100,000	)		-
Excess tax benefits from stock-based payment arrangements		1,340			1,181
Stock options exercised		3,595			3,042
Other financing activities		1,559			1,008
Net cash (used in) provided by financing activities of continuing operations		(93,506	)		5,231

Effect of exchange rate changes on cash and cash equivalents		6,162			3,822
Net cash provided by investing activities of discontinued operations		-			1,601

Resulting increase (decrease) in cash and cash equivalents		(38,233	)		5,423

Cash and cash equivalents at end of period	$	199,014		$	159,535

See accompanying notes to condensed consolidated financial statements.

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Basis of Presentation

Our interim financial periods are based on a thirteen-week internal accounting calendar. In our opinion, the accompanying condensed consolidated balance sheets, interim statements of operations and statements of cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The financial statements include the accounts of Intermec and our subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments in which we exercise significant influence but do not exercise control and are not the primary beneficiary are accounted for using the equity method. Investments in which we are not able to exercise significant influence over the investee are accounted for under the cost method. Preparing our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and financial data included in the accompanying notes to the financial statements. Actual results and outcomes may differ from our estimates and assumptions.

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K, as amended, for the year-ended December 31, 2007 (the “Annual Report on Form 10-K for the year ended December 31, 2007”).

Reclassification and Correction of Error

Prior to the fourth quarter of 2007, we provided the effect of exchange rates on cash and cash equivalents as supplemental information within the Consolidated Statement of Cash Flows. We have determined that the effect of exchange rates on cash and cash equivalents should have been recorded as a reconciling item between beginning and ending cash and cash equivalents and accordingly have reclassified $3.8 million from “net cash provided by operating activities” within the Condensed Consolidated Statement of Cash Flows to “effect of exchange rate changes on cash and cash equivalents” for the six months ended July 1, 2007 to correct the error. Also, expenses incurred for research and development have been reclassified from selling, general and administrative expenses for the three and six months ended July 1, 2007 for comparability. Additionally, in the Condensed Consolidated Statement of Cash Flows for the six months ended July 1, 2007 we have reclassified $1.4 million of collection on notes receivable from investing activities of operations to investing activities of discontinued operations, and $1.3 million from Provision on bad debt to Other operating activities.

Accounting Changes

In April 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (FSP) No. FAS 142-3, Determination of the Useful Life of Intangible Assets. The final FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142, “Goodwill and Other Intangible Assets”. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. We are in the process of evaluating the impact FSP 142-3 will have on our consolidated financial statements.

In March 2008, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. SFAS No. 161 is effective for us beginning January 1, 2009. We are currently assessing the potential impact that adoption of SFAS No. 161 may have on our financial statements.

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment of FASB Statement No. 115. SFAS No. 159 permits entities to measure eligible financial assets, financial liabilities and firm commitments at fair value, on an instrument-by-instrument basis, that are otherwise not permitted to be accounted for at fair value under other generally accepted accounting principles. The fair value measurement election is irrevocable and subsequent changes in fair value must be recorded in earnings. We adopted SFAS No. 159 effective January 1, 2008 and elected to not adopt the fair value option for any financial assets or liabilities. The adoption did not have a material impact on our consolidated financial statements.

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Basis of Presentation (continued)

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement applies to all financial instruments that are being measured and reported on a fair value basis. As defined in this statement, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We adopted SFAS No. 157 effective January 1, 2008. The adoption of SFAS No. 157 did not have a material impact on our condensed consolidated financial statements. While SFAS 157 is effective in the first fiscal quarter of 2008, the FASB provided a one year deferral for the implementation with respect to other nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). We have deferred implementation of SFAS No. 157 for our nonfinancial assets and liabilities.

SFAS No. 157 requires financial assets and liabilities to be classified and disclosed in one of the following three categories:

§	Level 1: Inputs based on quoted market prices for identical assets or liabilities in active markets.

§	Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

§	Level 3: Unobservable inputs that are not corroborated by market data.

Our level 1 financial instrument values are based on quoted market prices in active markets for identical assets, which we use to value our certificates of deposit, money market funds and equity securities. Our level 2 financial instrument values are based on comparable sales, such as quoted market rates for similar contracts. We do not have any financial instruments that require valuation using level 3 inputs.

Our financial assets and liabilities subject to these fair value measurement provisions comprised the following (thousands of dollars):

								Balance as of
	Level 1		Level 2			Level 3		June 29, 2008
Money market funds	$	93,178				$		$	93,178
Certificates of deposit		14,649							14,649
Stock		293							293
Derivative instruments - assets			$	522					522
Total assets at fair value	$	108,120	$	522		$	-	$	108,642

								Balance as of
	Level 1		Level 2			Level 3		June 29, 2008
Derivative instruments - liabilites	$	-	$	(1,172	)	$	-	$	(1,172	)
Total liabilities at fair value	$	-	$	(1,172	)	$	-	$	(1,172	)

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Basis of Presentation (continued)

In September 2006, the FASB issued SFAS No. 158, Employer’s Accounting for Defined Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132(R). SFAS No. 158 has new provisions regarding the measurement date as well as certain disclosure requirements. Effective December 31, 2008, SFAS No. 158 will require us to measure plan assets and benefit obligations at fiscal year end. We currently perform this measurement at September 30 of each year. In addition, beginning in fourth quarter of 2007, SFAS No. 158 required that we eliminate the use of a three-month lag period when recognizing the impact of curtailments or settlements and instead, recognize these amounts in the period in which they occur. The provisions of SFAS No. 158 do not permit retrospective application. We expect to incur between $0.5 million and $1.0 million as an adjustment to retained earnings upon adoption of the remainder of this statement.

In September 2006, the Emerging Issues Task Force (“EITF”) issued EITF 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements (“EITF 06-04”), which we adopted on January 1, 2008. The Task Force concluded that an employer should recognize a liability for future benefits in accordance with SFAS No. 106, “Employers' Accounting for Postretirement Benefits Other Than Pensions” or Accounting Principles Board Opinion 12 (“Opinion 12”), “Classification and Disclosure of Allowances Disclosure of Depreciable Assets and Depreciation Deferred Compensation Contracts Capital Changes Convertible Debt and Debt Issued with Stock Warrants Amortization of Debt Discount and Expense or Premium” based on the substantive agreement with the employee. Upon adoption of EITF 06-4, as of January 1, 2008, we increased accumulated deficit $0.9 million, recognized a $1.4 million long-term liability, and recorded a tax effect of $0.5 million within long-term deferred tax assets.

In December 2007, the FASB issued SFAS No. 141R, Business Combinations, which will be effective on a prospective basis for all business combinations with an acquisition date on or after January 1, 2009with the exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies. This statement generally requires an acquirer to recognize the assets acquired, the liabilities assumed, contingent purchase consideration, and any noncontrolling interest in the acquiree, at fair value on the date of acquisition. SFAS No. 141R also requires an acquirer to expense most transaction and restructuring costs as incurred, and not include such items in the cost of the acquired entity. We are currently evaluating the impact of the adoption of SFAS No. 141R on our consolidated financial statements.

2. Inventories

Inventories comprise the following (thousands of dollars):

	June 29, 2008		December 31, 2007

Raw materials	$	70,018	$	65,257
Work in process		465		1,318
Finished goods		66,604		46,570
Inventories	$	137,087	$	113,145

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

3. Debt

We have an unsecured Revolving Credit Facility (the “Revolving Facility”) with a maximum amount available under the Revolving Facility of $50.0 million. Net of outstanding letters of credit and limitations on availability, we had borrowing capacity at June 29, 2008, of $46.9 million under the Revolving Facility. We made no borrowings under the Revolving Facility during 2008, and as of June 29, 2008, no borrowings were outstanding under this facility. As of June 29, 2008, we were in compliance with all financial covenants of the Revolving Facility. The Revolving Facility matures in October 2012.

We also have letter-of-credit reimbursement agreements totaling $3.9 million at June 29, 2008, and December 31, 2007.

During March 2008, we paid off our $100.0 million senior unsecured debt.

4. Provision for Income Taxes

The tax expense for the three and six months ended June 29, 2008, reflects an effective tax rate for continuing operations of 35.5 % and 35.9 %, respectively, compared to a U.S. statutory rate of 35%. Our expected effective tax rate for fiscal year 2008, including the impact of discrete items, is approximately 37%.

The tax expense for the three and six months ended July 1, 2007, reflects an effective tax rate for continuing operations of 36.7% and 54.9%, respectively, compared to a U.S. statutory rate of 35%. In the first quarter of 2007, the tax provision was increased primarily due to a reduction of foreign deferred tax assets as a result of recording a valuation allowance on a foreign net operating loss and the impact of changes in foreign tax rates.

5. Discontinued Operations

We completed our divestiture of the IAS businesses with the sale of the Cincinnati Lamb business in the first quarter of 2005 and the sale of the Landis Grinding Systems business in the fourth quarter of 2005. There was a net loss of $1.3 million from discontinued operations for the three and six months ended July 1, 2007. Final operations ceased on April 3, 2005 for our Cincinnati Lamb business and December 9, 2005 for our Landis Grinding Systems business.

6. Shares Used in Computing Earnings (Loss) per Share

Basic earnings (loss) per share are calculated using the weighted average number of common shares outstanding and issuable for the applicable period. Diluted earnings (loss) per share is computed using basic weighted average shares plus the dilutive effect of unvested restricted stock and outstanding stock options using the “treasury stock” method.

	Three Months Ended
	June 29, 2008		July 1, 2007
Weighted average shares - basic		61,103,147		60,250,995
Dilutive effect of unvested restricted shares and stock options		507,476		814,239
Weighted average shares - diluted		61,610,623		61,065,234


	Six Months Ended
	June 29, 2008		July 1, 2007
Weighted average shares - basic		61,030,212		60,120,507
Dilutive effect of unvested restricted shares and stock options		512,975		866,205
Weighted average shares - diluted		61,543,187		60,986,712

Our employees and directors held options to purchase 1,393,889 and 1,458,477 shares of our common stock for the three and six months ended June 29, 2008, respectively, and 717,061 and 721,681 shares for the three and six months ended July 1, 2007, respectively, that were not included in weighted average shares diluted because they were anti-dilutive to the diluted earnings per share computation. These options could become dilutive in future periods if the average market price of our common stock exceeds the exercise price of the outstanding options and we report net earnings.

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

7. Equity

For the three and six months ended June 29, 2008, we granted 701,250 options to employees with a Black-Scholes value of $8.52 an option, which will vest annually in even quantities over the next four years, and 35,483 options to Directors with a Black-Scholes value of $10.06 an option which will vest quarterly over four quarters. The Black-Scholes assumptions used for this calculation were as follows, except for the Directors where the Expected life in years used was 6.59:

	Three months ended			Six months ended
Fair value assumptions	June 29, 2008
Expected life in years		4.72			4.73
Expected volatility		40.19	%		40.81	%
Annual rate of dividends		0	%		0	%
Discount rate - bond equivalent yield		3.15	%		3.12	%

Our accumulated other comprehensive income comprised the following (thousands of dollars):

	June 29, 2008			December 31, 2007
Foreign currency translation adjustment, net of tax	$	14,269		$	8,842
Unamortized benefit plan costs, net of tax		(8,085	)		(7,884	)
Unrealized gain (loss) on securities, net of tax		(84	)		95
Accumulated other comprehensive income	$	6,100		$	1,053

Other comprehensive income for the three and six months ended June 29, 2008 and July 1, 2007, was as follows (thousands of dollars):

	Three Months Ended
	June 29, 2008			July 1, 2007
Net income	$	7,722		$	6,647
Other comprehensive income :
Change in equity due to foreign currency translation adjustments, net of tax		672			1,863
Unrealized (loss) on investment, net of tax		(54	)		-
Amortization of benefit plan costs, net of tax		(190	)		1,671
Other comprehensive income	$	8,150		$	10,181

	Six Months Ended
	June 29, 2008			July 1, 2007
Net income	$	15,428		$	2,215
Other comprehensive income:
Change in equity due to foreign currency translation adjustments, net of tax		5,427			1,934
Unrealized (loss) gain on investment, net of tax		(118	)		7
Amortization of benefit plan costs, net of tax		(201	)		2,634
Other comprehensive income	$	20,536		$	6,790

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

8. Segment Reporting

We design, develop, manufacture, integrate, sell, resell and service wired and wireless automated identification and data collection (“AIDC”) products, which include radio frequency identification (“RFID”) products, wired and wireless AIDC products, mobile computing products, barcode scanners, wired and wireless bar code printers and label media products. Our revenue also comes from license fees and royalty revenue from our intellectual property licenses. Our reportable segments comprise products and services. The product segment generates revenue from the design, development, manufacture, sale and resale of AIDC products, including RFID products and intellectual property licenses. The service segment generates revenue from customer support, product maintenance and other services related to the products and to systems integration.

The accounting policies of our two reportable segments are the same as those used to prepare our condensed consolidated financial statements. Performance and resource allocation are primarily measured by sales and standard gross profit. All other earnings, costs and expenses are aggregated and reported on a consolidated basis.

One distributor accounted for more than 10% of our revenues. Total sales to this distributor were $24.3 million and $49.1 million for the three and six months ended June 29, 2008, and $22.7 million and $41.0 million three and six months ended July 1, 2007, respectively.

The following table sets forth our operations by reportable segment (millions of dollars):

	Three Months Ended				Six Months Ended
	June 29, 2008		July 1, 2007		June 29, 2008		July 1, 2007
Revenues:
Product	$	180.5	$	169.9	$	360.0	$	311.4
Service		37.8		40.6		75.0		78.4
Total	$	218.3	$	210.5	$	435.0	$	389.8

Gross profit:
Product	$	72.3	$	61.2	$	144.1	$	110.5
Service		16.6		20.0		32.2		35.2
Total	$	88.9	$	81.2	$	176.3	$	145.7

The following table sets forth our revenues by product lines (millions of dollars):

		Three Months Ended				Six Months Ended
		June 29, 2008		July 1, 2007		June 29, 2008		July 1, 2007
Revenues:
	Systems and solutions	$	129.3	$	117.6	$	255.2	$	211.1
	Printer and media		51.2		52.3		104.8		100.3
	Service		37.8		40.6		75.0		78.4
	Total	$	218.3	$	210.5	$	435.0	$	389.8

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

9. Commitments and Contingencies

Provisions for estimated expenses related to product warranties are made at the time products are sold. These estimates are established using historical information on the nature, frequency, and average cost of warranty claims. We actively study trends of warranty claims and take action to improve product quality and minimize warranty claims. The following table indicates the change in our warranty accrual included in current liabilities (thousands of dollars):

	Period Ended
	June 29, 2008			July 1, 2007
Beginning Balance	$	4,305		$	6,800
Payments		(1,205	)		(1,998	)
Increase in liability (new warranties issued)		1,382			1,557
Ending Balance	$	4,482		$	6,359

We have entered into a variety of agreements with third parties that include indemnification clauses, both in the ordinary course of business and in connection with our divestitures of certain product lines. These clauses require us to compensate these third parties for certain liabilities and damages incurred by them.

FASB Interpretation No. 45, “Guarantors’ Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” requires that we estimate and record the fair value of guarantees as a liability. We do not believe that we have any significant exposure related to such guarantees and therefore have not recorded a liability as of June 29, 2008, or December 31, 2007. We have not made any significant indemnification payments as a result of these clauses.

We currently, and from time to time, are subject to claims and lawsuits arising in the ordinary course of business. Such claims and lawsuits may take the form of counter claims in lawsuits we bring to enforce our rights. The ultimate resolution of currently pending proceedings is not expected to have a material adverse effect on our business, financial condition, results of operations or liquidity.

In June 2008, our Cedar Rapids, Iowa facilities were flooded, and we incurred damages to both a facility that we own and one that we lease. A portion of these damages were covered by insurance to the extent reasonable. While the flood caused significant damage, we were able to redirect the work done by our Cedar Rapids groups to temporary locations, and therefore the flood did not cause a significant interruption on our business. During the three and six months ended June 29, 2008, we had $5.1 million in clean up costs and property damages that were offset by $4.0 million of insurance for a net pre-tax charge of $1.1 million.

10. Restructuring Charges

In July 2008, we committed to a business restructuring plan intended to reduce our cost structure and streamline operations. Pursuant to this plan, we will relocate the final assembly of our product lines from Everett, Washington, to Venture Corporation Limited, a global electronics services provider. We also will consolidate two U.S. service depots to existing locations in Charlotte, North Carolina, and Monterey, Mexico and transfer our on-site field service repair to a third party supplier.

This plan will be implemented over the next 9 to 12 months and will reduce our workforce by approximately 260 employees. We currently employ approximately 2,300 employees worldwide.

The total restructuring costs are expected to be in a pre-tax range of $7.5 million to $9.0 million, including employee termination costs of approximately $3.5 million, $0.5 million of non-cash asset impairment and $3.5 million to $5.0 million of other transitional costs. We expect to record approximately $6.0 million to $7.0 million of this restructuring charge in the second half of 2008, and expect that the balance will be recorded in 2009. We anticipate that all of the severance related and periodic transitional costs will be cash expenditures.

INTERMEC, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

11. Pension and Other Postretirement Benefit Plans

The information in this note represents the net periodic pension and post-retirement benefit costs and related components in accordance with SFAS 132(R), “Employers’ Disclosures about Pensions and Other Postretirement Benefits (as amended).” The components of net pension and postretirement periodic benefit cost (credit) for the three and six months ended June 29, 2008, and July 1, 2007, is as follows (thousands of dollars):

	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Other Postretirement Benefit Plans
Three Months Ended June 29, 2008, and July 1, 2007	2008			2007			2008			2007			2008		2007

Service cost	$	366		$	453		$	-		$	-		$	-	$	-
Interest cost		2,705			2,678			666			664			44		44
Expected Return on Plan Assets		(2,871	)		(2,611	)		(903	)		(862	)		-		-
Amortization and Deferrals:
Transition asset		-			-			(43	)		(43	)		-		-
Actuarial loss		349			942			-			105			-		-
Prior service cost		144			144			-			-			-		-
Net pension and postretirement periodic benefit cost (credit)	$	693		$	1,606		$	(280	)	$	(136	)	$	44	$	44

Six Months Ended June 29, 2008, and July 1, 2007
Service cost	$	733		$	905		$	-		$	-		$	-	$	-
Interest cost		5,410			5,356			1,331			1,308			88		88
Expected Return on Plan Assets		(5,742	)		(5,222	)		(1,807	)		(1,698	)		-		-
Amortization and Deferrals:
Transition asset		-			-			(85	)		(85	)		-		-
Actuarial loss		697			1,884			-			207			-		-
Prior service cost		289			289			-			-			-		-
Net pension and postretirement periodic benefit cost (credit)	$	1,387		$	3,212		$	(561	)	$	(268	)	$	88	$	88

During the quarter ended June 29, 2008, we contributed approximately $2.7 million to our pension and other postretirement benefit plans, comprising $1.4 million in benefits paid pertaining to unfunded U.S. defined benefit plans, $0.7 million in matching contributions to our 401(k) plan, and $0.6 million in contributions to our foreign pension plans.

During the six months ended June 29, 2008, we contributed approximately $5.6 million to our pension and other postretirement benefit plans, comprising $2.8 million in benefits paid pertaining to unfunded U.S. defined benefit plans, $1.6 million in matching contributions to our 401(k) plan, and $1.2 million in contributions to our foreign pension plans. Benefits paid pertaining to our other postretirement benefit plans were not material during the three and six month periods ended June 29, 2008. We expect to contribute approximately $6.2 million to these plans during the remainder of 2008, of which $3.6 million relates to benefit payments on our unfunded U.S. defined benefit plans, $1.4 million in matching contributions to our 401(k) plan, $1.2 million in contributions to our foreign pension plans and $0.2 million in benefit payments pertaining to our other postretirement benefit plans.

In September 2006, the EITF issued EITF 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements,” which we adopted on January 1, 2008. The Task Force concluded that an employer should recognize a liability for future benefits in accordance with SFAS No. 106, “Employers' Accounting for Postretirement Benefits Other Than Pensions” or Opinion 12, “Classification and Disclosure of Allowances Disclosure of Depreciable Assets and Depreciation Deferred Compensation Contracts Capital Changes Convertible Debt and Debt Issued with Stock Warrants Amortization of Debt Discount and Expense or Premium” based on the substantive agreement with the employee.

We have endorsement split-dollar life insurance policy agreements, which we own and control, with a group of employees. Each of these agreements was entered into as a separate agreement between us and the employee, and we endorsed a portion of the death benefits to the employee’s beneficiary. Under the guidance of EITF 06-4 these agreements represent a post retirement plan, and we have accrued a liability for the present value of the future death benefit in accordance with SFAS No. 106, for our endorsement split-dollar life insurance policies.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements and Risk Factors

Forward-looking statements contained in this filing are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 (alternatively: Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) and are dependent upon a variety of important factors that could cause actual results to differ materially from those reflected in such forward-looking statements.

Forward-looking statements include but are not limited to statements about: maintaining or improving our revenues, gross margins or profits of our continuing operations, for the current period or any future period; competing effectively with our current products and planned products, and introducing new products; effectively completing restructuring activities, including the closure of certain facilities and redeployment of related functions; maintaining or reducing expenses; maintaining or improving operational efficiency; increasing product development capacity; using our investment in research and development to generate future revenue; and the applicability of accounting policies used in our financial reporting. When used in this document and in documents it references, the words “anticipate,” “believe,” “will,” “intend,” “project” and “expect” and similar expressions as they relate to Intermec or our management are intended to identify such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this quarterly report.

Forward-looking statements involve and are dependent upon certain risks and uncertainties and are not guarantees of future performance. A number of factors can impact our business and determine whether we can or will achieve any forward-looking statement made in this report. Any one of these factors could cause our actual results to differ materially from those expressed or implied in a forward-looking statement. We outline these risk factors in reports that we file with the SEC, in press releases and on our website, www.intermec.com. You are encouraged to review the discussion below in this Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the Risk Factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2007, and the Risk Factors set forth in Part II, “Item 1A. Risk Factors” of our Quarterly Report on Form 10-Q for the period ended March 30, 2008, which discuss risk factors associated with our business.

Results of Operations

The following discussion compares our results of operations for the three and six months ended June 29, 2008, and July 1, 2007. Results of operations and percentage of revenues were as follows (millions of dollars):

	Three Months Ended						Six Months Ended
	June 29, 2008			July 1, 2007			June 29, 2008			July 1, 2007
	Amounts			Amounts			Amounts			Amounts
Revenues	$	218.3		$	210.5		$	435.0		$	389.8
Costs and expenses:
Cost of revenues		129.4			129.3			258.8			244.1
Research and development		17.1			16.5			33.7			33.0
Selling, general and administrative		59.5			52.3			118.1			105.3
Flood related charges		1.1			-			1.1			-
Total costs and expenses		207.1			198.1			411.7			382.4
Operating profit from continuing operations		11.2			12.4			23.3			7.4
Interest, net		0.8			0.1			0.7			0.4
Earnings from continuing operations, before income tax		12.0			12.5			24.0			7.8
Provision for income tax		4.3			4.6			8.6			4.3
Earnings from continuing operations, net of tax		7.7			7.9			15.4			3.5
Loss from discontinued operations, net of tax		0.0			(1.3	)		0.0			(1.3	)
Net earnings	$	7.7		$	6.6		$	15.4		$	2.2

	Percent of Revenues			Percent of Revenues			Percent of Revenues			Percent of Revenues
Revenues
Costs and expenses:
Cost of revenues		59.3	%		61.4	%		59.5	%		62.6	%
Research and development		7.9	%		7.8	%		7.7	%		8.5	%
Selling, general and administrative		27.2	%		24.8	%		27.2	%		27.0	%
Flood related charges		0.5	%		-			0.2	%		-
Total costs and expenses		94.9	%		94.1	%		94.6	%		98.1	%
Operating profit from continuing operations		5.1	%		5.9	%		5.4	%		1.9	%
Interest, net		0.4	%		-			0.1	%		0.1	%
Earnings from continuing operations, before income tax		5.5	%		5.9	%		5.5	%		2.0	%
Provision for income tax		-			-			-			-
Earnings from continuing operations, net of tax		3.5	%		3.8	%		3.6	%		0.9	%
Loss from discontinued operations, net of tax		-			-			-			-
Net earnings		3.5	%		3.1	%		3.6	%		0.6	%

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Revenues

Revenues by category and geographic region and as a percentage of total revenues from continuing operations for the three and six months ended June 29, 2008, and July 1, 2007, as well as the same three and six months revenue changes were as follows (millions of dollars):

	Three Months Ended
	June 29, 2008					July 1, 2007					Change			Percentage Change
	Amount		Percent of Revenues			Amount		Percent of Revenues
Revenues by product line:
Systems and solutions	$	129.3		59.2	%	$	117.6		55.9	%	$	11.6			9.9	%
Printer and media		51.2		23.5	%		52.3		24.9	%		(1.1	)		(2.1	%)
Service		37.8		17.3	%		40.6		19.2	%		(2.8	)		(6.8	%)
Total revenues	$	218.3		100.0	%	$	210.5		100.0	%	$	7.8			3.7	%

Revenues by geographic region:
North America	$	112.6		51.6	%	$	108.0		51.3	%	$	4.6			4.3	%
Europe, Middle East and Africa
(EMEA)		76.1		34.9	%		68.5		32.6	%		7.5			10.9	%
All others		29.6		13.6	%		34.0		16.1	%		(4.4	)		(12.8	%)
Total revenues	$	218.3		100.0	%	$	210.5		100.0	%	$	7.8			3.7	%

Total revenue increased $7.8 million for the three months ended June 29, 2008 compared to the prior year period, from the $10.5 million increase in product revenue, offset by a $2.8 million decrease in service revenue. The increase in product revenue was attributable to a $11.6 million increase in systems and solution products, primarily as a result of revenue growth in North America. The $1.1 million decline in printer and media product revenue is due to lower revenue in Latin America, partially offset by revenue growth in EMEA (Europe, Middle East and Africa). Sequentially, product and service revenue were both up slightly from the first quarter of 2008.

The decrease in quarterly service revenues of $2.8 million, or 6.8%, is primarily attributable to a decrease in North America as a result of lower custom software and below normal break fix time and material revenues.

Geographically, revenues in North America and EMEA increased $4.6 million, or 4.3%, and $7.5 million, or 10.9%, respectively, over the corresponding prior-year period. The increases were primarily attributable to increased hardware demand in both regions, with new product introductions driving a majority of the growth. The changes in foreign currency conversion rates favorably impacted EMEA revenue by $8.3 million as compared to prior year period.

In the three months ended June 29, 2008 we observed longer purchase decision making time frames among large enterprise customers. Thus far, this appears to have resulted in a delay, rather than a cancellation, of customer projects. We believe that customers in our target markets will continue to invest in projects intended to enhance mobile worker productivity but they may subject these projects to closer scrutiny and longer decision-making processes, in response to uncertainty in the general economic outlook.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

	Six Months Ended
	June 29, 2008					July 1, 2007					Change			Percentage Change
	Amount		Percent of Revenues			Amount		Percent of Revenues
Revenues by product line:
Systems and solutions	$	255.2		58.7	%	$	211.1		54.2	%	$	44.1			20.9	%
Printer and media		104.8		24.1	%		100.3		25.7	%		4.5			4.5	%
Service		75.0		17.2	%		78.4		20.1	%		(3.4	)		(4.3	%)
Total revenues	$	435.0		100.0	%	$	389.8		100.0	%	$	45.2			11.6	%

Revenues by geographic region:
North America	$	226.7		52.1	%	$	199.1		51.1	%	$	27.6			13.9	%
Europe, Middle East and Africa
(EMEA)		154.0		35.4	%		131.5		33.7	%		22.5			17.1	%
All others		54.3		12.5	%		59.2		15.2	%		(4.9	)		(8.2	%)
Total revenues	$	435.0		100.0	%	$	389.8		100.0	%	$	45.2			11.6	%

Total revenue for the six months ended June 29, 2008, increased $45.2 million or 11.6%, primarily due to a $48.6 million, or 15.6%, increase in product revenues, partially offset by $3.4 million, or 4.3%, decrease in service revenues. The increase in product revenues was due to the $44.1 million increase in systems and solution products and a $4.5 million increase in printer and media products. The product revenue growth is primarily a result of the 20.8% growth in North America and 18.8% growth in EMEA. Product revenue for the rest of the world decreased 7.8%, primarily as a result of lower printer revenue in Latin America.

The decrease in six month service revenues of $ 3.4 million, or 4.3 %, was primarily attributable to the slightly lower contract revenue in the first quarter ended April 1, 2008, combined with lower year-to-date custom software and break fix time and material revenues.

Geographically, revenues in North America and EMEA increased $27.6 million, or 13.9%, and $22.5 million, or 17.1%, respectively, over the corresponding prior-year period. The increases were primarily attributable to increased hardware demand in both regions, with new product introductions driving a majority of the growth. The changes in foreign currency conversion rates favorably impacted EMEA revenue by $15.3 million as compared to prior year period.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Gross Profit

Gross profit and gross margin by revenue category for the three and six months ended June 29, 2008 and July 1, 2007, were as follows (millions of dollars):

	Three Months Ended										Six Months Ended
	June 29, 2008					July 1, 2007					June 29, 2008					July 1, 2007
	Gross Profit		Gross Margin			Gross Profit		Gross Margin			Gross Profit		Gross Margin			Gross Profit		Gross Margin
Product	$	72.3		40.0	%	$	61.2		36.0	%	$	144.1		40.0	%	$	110.5		35.5	%
Service		16.6		44.0	%		20.0		49.3	%		32.2		42.9	%		35.2		44.9	%
Total gross profit
and gross margin	$	88.9		40.7	%	$	81.2		38.6	%	$	176.3		40.5	%	$	145.7		37.4	%

The total gross profit for the three and six months ended June 29, 2008, increased by $7.7 million and $ 30.6 million, respectively, compared to the corresponding prior year periods. The increases are attributable to product revenue growth in the North America and EMEA regions, as well as at least 400 basis point improvements in product gross margins in the respective periods. The increase in product gross margins is primarily due to new product introductions, favorable manufacturing absorption on higher volumes and product cost reductions.

Service gross profit decreased $3.4 million and $3.0 million for the three and six months ended June 29, 2008, respectively, primarily from lower revenue.

Research and Development

	Three months ended						Six months ended
	June 29, 2008		July 1, 2007		Change from prior year		June 29, 2008		July 1, 2007		Change from prior year
Research and development expense	$	17.1	$	16.5	$	0.6	$	33.7	$	33.0	$	0.7

The total research and development expenses were $17.1 million and $33.7 million for the three and six months ended June 29, 2008, respectively, compared with research and development expenses of $16.5 million and $33.0 million for the corresponding prior-year period.

Selling, General and Administrative

	Three months ended							Six months ended
	June 29, 2008		July 1, 2007		Change from prior year			June 29, 2008		July 1, 2007		Change from prior year
Selling, general and administrative expense	$	59.5	$	52.3		$	7.2	$	118.2	$	105.4	$	12.8

The total selling, general and administrative (“SG&A”) expenses were $59.5 million and $118.2 million for the three and six months ended June 29, 2008, respectively, compared with SG&A expenses of $52.3 million and $105.4 million for the corresponding prior-year period. The increase in SG&A expense in the second quarter of 2008 is primarily a result of foreign exchange translation losses and the related impact of international costs translated to US dollars at less favorable exchange rates, higher costs related to information systems as a result of our ERP upgrade, higher selling and marketing costs, and higher labor costs. The higher SG&A expense was partially offset by a $2.9 million gain from the sale of property. The second quarter of 2007 SG&A expense included approximately $2.0 million of other operating gains.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Flood related charges

Interest, Net

	Three months ended							Six months ended
	June 29, 2008		July 1, 2007		Change from prior year			June 29, 2008		July 1, 2007		Change from prior year
Interest (expense) income, net	$	0.8	$	0.1		$	0.7	$	0.7	$	0.4	$	0.3

Net interest income was $0.8 million and $0.7 million for the three and six months ended June 29, 2008, compared to net interest income of $0.1 million and $0.4 million for the corresponding prior-year period.

Restructuring Announcement

As described in Item 1 of Part 1, “Financial Statements – Note 10 – “Restructuring Charges,” (“Note 10”) in July, 2008 we announced a restructuring plan relating to the relocation of product final assembly, consolidation of U.S. service depots and transfer of on-site field service repair to a third party supplier. This restructuring plan reflects our strategy to transform our supply chain. Please refer to Note 10 for additional information about the estimated restructuring charges and when they are expected to be recorded.

Provision for Income Taxes

	Three months ended								Six months ended
	June 29, 2008		July 1, 2007		Change from prior year				June 29, 2008		July 1, 2007		Change from prior year
Provision for (Benefit from) income taxes	$	4.3	$	4.6		$	(0.3	)	$	8.6	$	4.3	$	4.3

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Liquidity and Capital Resources

Cash, cash equivalents and short-term investments as of June 29, 2008, totaled $199.3 million, compared to $265.5 million as of December 31, 2007. Operating activities for the six months ended June 29, 2008 provided $22.4 million of cash flow, primarily resulting from customer receipts of $535.3 million, partially offset by inventory purchases of $409.4 million and employee payments of $103.9 million. Investing activities for the six months ended June 29, 2008, provided $26.7 million related primarily to the sale of investments totaling $28.5 million. Financing activities for the six months ended June 29, 2008, used $93.5 million, primarily for the repayment of $100 million of debt in March, 2008.

Net of outstanding letters of credit and limitations on minimum availability, we had borrowing capacity at June 29, 2008, of $46.9 million under the Revolving Facility. We made no borrowings under the Revolving Facility during the second quarter of 2008, and as of June 29, 2008, no borrowings were outstanding under the Revolving Facility. As of June 29, 2008, we were in compliance with the financial covenants of the Revolving Facility.

The key terms of the Revolving Facility are as follows:

Loans will bear interest at a variable rate equal to (at our option) (i) LIBOR plus the applicable margin, which ranges from 0.60% to 1.00%, or (ii) the Bank’s prime rate, less the applicable margin, which ranges from 0.25% to 1.00%. If an event of default occurs and is continuing, then the interest rate on all obligations under the Revolving Facility may be increased by 2.0% above the otherwise applicable rate, and the Bank may declare any outstanding obligations under the Revolving Facility to be immediately due and payable.

·	A fee ranging from 0.60% to 1.00% on the maximum amount available to be drawn under each letter of credit that is issued and outstanding under the Revolving Facility will be required. The fee on the unused portion of the Revolving Facility ranges from 0.125% to 0.20%.

·	Certain of our domestic subsidiaries have guaranteed the Revolving Facility.

·	The Revolving Facility contains various restrictions and covenants, including restrictions on our ability and the ability of our subsidiaries to consolidate or merge, make acquisitions, create liens, incur additional indebtedness or dispose of assets.

·	Financial covenants include a Maximum Leverage test and a Minimum Tangible Net Worth test, each as defined in the Revolving Facility.

Management believes that cash and cash equivalents on hand, combined with projected cash flow from operations and available borrowings under our Revolving Facility will be sufficient to fund our operations, research and development efforts, anticipated capital expenditures, liabilities, commitments, and other capital requirements, for at least the next twelve months.

Contractual Obligations

Our contractual commitments as of June 29, 2008, have not changed materially from those disclosed in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2007.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to foreign exchange rate risk with respect to our foreign operations and from foreign currency transactions.

Due to our global operations, our cash flows and earnings are exposed to foreign exchange rate fluctuations. When appropriate, we may attempt to limit our exposure to changing foreign exchange rates by entering into short-term foreign currency exchange contracts. As of June 29, 2008, we held short-term contracts for the purpose of hedging foreign currency cash flows with an aggregate notional amount of $39.2 million.

Except as noted in the preceding paragraph, as of June 29, 2008, there have been no material changes in information provided in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2007, which contains a complete discussion of our material exposures to interest rate and foreign exchange rate risks.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the CEO and CFO, an evaluation was performed on the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on that evaluation, management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of June 29, 2008.

An evaluation was also performed under the supervision and with the participation of management, including the CEO and CFO, of any change in our internal controls over financial reporting that occurred during the last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. That evaluation did not identify any change in our internal controls over financial reporting that occurred during the latest fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We currently, and from time to time, are subject to claims and lawsuits arising in the ordinary course of business. Such claims and lawsuits may take the form of counterclaims in lawsuits we bring to enforce our rights. The ultimate resolution of currently pending proceedings is not expected to have a material adverse effect on our business, financial condition, results of operations or liquidity.

ITEM 1A. RISK FACTORS

You are encouraged to review the discussion of Forward Looking Statements and Risk Factors appearing in this report at Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2007, and the factors discussed in Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 30, 2008 (the “First Quarter Form 10-Q”), which could materially affect our business, financial condition or operating results. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2007, and in the First Quarter Form 10-Q, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c)	Issuer Purchases of Equity Securities

NONE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a)	The Company’s Annual Meeting of Shareholders was held on May 23, 2008.

(b)	At the Annual Meeting, the following nominees were elected directors for terms expiring at the annual meeting in 2009 and when their successors are elected and qualified. The votes were as follows:

	For		Withheld
Patrick J. Byrne		55,934,090		215,419
Gregory K. Hinckley		55,284,119		865,390
Lydia H. Kennard		55,284,637		864,872
Allen J. Lauer		55,900,388		249,122
Stephen P. Reynolds		55,905,559		243,950
Steven B. Sample		55,794,536		354,973
Oren G. Shaffer		55,282,804		866,706
Larry D. Yost		55,278,839		870,670

(c)	Proposal 2, an advisory proposal to ratify the appointment of Deloitte & Touche LLP as independent auditors for 2008, was approved by the vote set forth below:

	Number of Votes
For		55,656,843
Against		426,697
Abstain		65,969
Broker non-votes		0

(d)	Proposal 3, to approve the Intermec, Inc. 2008 Employee Stock Purchase Plan, was approved by the vote set forth below.

	Number of Votes
For		45,922,742
Against		248,900
Abstain		5,493,433
Broker non-votes		4,484,434

(e)	Proposal 4, to approve the Intermec 2008 Omnibus Incentive Plan, was approved by the vote set forth below.

	Number of Votes
For		39,132,193
Against		7,015,141
Abstain		5,517,740
Broker non-votes		4,484,435

ITEM 6. EXHIBITS


	10.1		Intermec, Inc. 2008 Omnibus Incentive Plan, as amended effective July 9, 2008
	10.2		Form of Employee Stock Option Grant Notice and Stock Option Agreement under the Intermec, Inc. 2008 Omnibus Incentive Plan
	10.3		Form of Employee Restricted Stock Unit Agreement under the Intermec, Inc. 2008 Omnibus Incentive Plan
	10.4		Intermec, Inc. 2008 Long-Term Performance Share Program under the Intermec, Inc. 2008 Omnibus Incentive Plan
	10.5		Form of Employee Long-Term Performance Share Program Agreement under the Intermec, Inc. 2008 Omnibus Incentive Plan
	10.6		Director Compensation Program under the Intermec, Inc. 2008 Omnibus Incentive Plan
	10.7		Form of Stock Option Grant Notice and Stock Option Agreement for Non-Employee Directors under the Intermec, Inc. 2008 Omnibus Incentive Plan
	10.8		Intermec, Inc. Director Deferred Compensation Plan
	10.9		Intermec, Inc. 2008 Employee Stock Purchase Plan, approved by stockholders May 23, 2008 and effective July 1, 2008
	31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated as of August 6, 2008
	31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated as of August 6, 2008
	32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated as of August 6, 2008
	32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated as of August 6, 2008

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Intermec, Inc.
	(Registrant)

		/s/ Lanny H. Michael
		Lanny H. Michael
		Chief Financial Officer

		August 6, 2008

EX-31.1 2 exhibit31_1.htm EXHIBIT31_1 exhibit31_1.htm

Exhibit 31.1

CERTIFICATION

I, Patrick J. Byrne, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Intermec, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 6, 2008

/s/ Patrick J. Byrne
Patrick J. Byrne

Chief Executive Officer

EX-31.2 3 exhibit31_2.htm EXHIBIT31_2 exhibit31_2.htm

Exhibit 31.2

CERTIFICATION

I, Lanny H. Michael, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Intermec, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 6, 2008

/s/ Lanny H. Michael
Lanny H. Michael

Chief Financial Officer

EX-32.1 4 exhibit32_1.htm EXHIBIT32_1 exhibit32_1.htm

Exhibit 32.1

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350,

CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

In connection with the Quarterly Report on Form 10-Q of Intermec, Inc. (the “Company”) for the period ended June 29, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Patrick J. Byrne, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Patrick J. Byrne
Patrick J. Byrne
Chief Executive Officer
August 6, 2008

EX-32.2 5 exhibit32_2.htm EXHIBIT32_2 exhibit32_2.htm

Exhibit 32.2

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350,

CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

In connection with the Quarterly Report on Form 10-Q of Intermec, Inc. (the “Company”) for the period ended June 29, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lanny H. Michael, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lanny H. Michael
Lanny H. Michael
Chief Financial Officer
August 6, 2008

EX-10.1 6 ex10_1.htm EXHIBIT10_1 ex10_1.htm

Exhibit 10.1

INTERMEC, INC.

2008 OMNIBUS INCENTIVE PLAN

(As Amended and Restated Effective July 9, 2008)

SECTION 1. PURPOSE

The purpose of the Intermec, Inc. 2008 Omnibus Incentive Plan is to attract, retain and motivate employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its Related Companies by providing them with the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of the Company's stockholders.

SECTION 2. DEFINITIONS

Certain capitalized terms used in the Plan have the meanings set forth in Appendix A.

SECTION 3. ADMINISTRATION

3.1	Administration of the Plan

The Plan shall be administered by the Board or the Compensation Committee, which shall be composed of two or more directors, each of whom shall qualify as a "non employee director" within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act (or any successor definition adopted by the Securities and Exchange Commission), an "outside director" within the meaning of Section 162(m), and an "independent director" as defined under the New York Stock Exchange listing standards.

3.2	Delegation

Notwithstanding the foregoing, the Board or the Compensation Committee may delegate responsibility for administering the Plan, including with respect to designated classes of Eligible Persons, to different committees consisting of one or more members of the Board, subject to such limitations as the Board deems appropriate, except with respect to Awards to Participants who are subject to Section 16 of the Exchange Act or Awards to officers who are or may become Covered Employees. Members of any committee shall serve for such term as the Board may determine, subject to removal by the Board at any time. To the extent consistent with applicable law, the Board or the Compensation Committee may authorize one or more officers of the Company to grant Awards to designated classes of Eligible Persons, within limits specifically prescribed by the Board or the Compensation Committee; provided, however, that no such officer shall have or obtain authority to grant Awards to himself or herself or to any person subject to Section 16 of the Exchange Act. Further notwithstanding the foregoing, all discretionary (i.e., non-formulaic) Awards to "non-employee directors" within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act (or any successor definition adopted by the Securities and Exchange Commission) shall be granted or administered by a committee comprised solely of "independent directors" as defined under the New York Stock Exchange listing standards. All references in the Plan to the "Committee" shall be, as applicable, to the Board, the Compensation Committee or any other committee or any officer to whom the Board or the Compensation Committee has delegated authority to administer the Plan.

3.3	Administration and Interpretation by Committee

(a) Except for the terms and conditions explicitly set forth in the Plan and to the extent permitted by applicable law, the Committee shall have full power and exclusive authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan, to (i) select the Eligible Persons to whom Awards may from time to time be granted under the Plan; (ii) determine the type or types of Award to be granted to each Participant under the Plan; (iii) determine the number of shares of Common Stock to be covered by each Award granted under the Plan; (iv) determine the terms and conditions of any Award granted under the Plan; (v) approve the forms of notice or agreement for use under the Plan; (vi) determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Common Stock or other property or canceled or suspended; (vii) determine whether, to what extent and under what circumstances cash, shares of Common Stock, other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant, subject to Section 409A and in accordance with Section 6.3 of the Plan; (viii) interpret and administer the Plan and any instrument or agreement entered into under the Plan; (ix) establish such rules and regulations as it shall deem appropriate for the proper administration of the Plan, including as described in Section 17.6 of the Plan; (x) delegate ministerial duties to such of the Company's employees as it so determines; and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

(b) In no event, however, shall the Board or the Committee have the right, without stockholder approval, to (i) cancel or amend outstanding Options or SARs for the purpose of repricing, replacing or regranting such Options or SARs with Options or SARs that have a purchase or grant price that is less than the purchase or grant price for the original Options or SARs except in connection with adjustments provided in Section 14, or (ii) issue an Option or amend an outstanding Option to provide for the grant or issuance of a new Option on exercise of the original Option.

(c) The effect on the vesting of an Award of a Company-approved leave of absence or a Participant's reduction in hours of employment or service shall be determined by the Company's chief human resources officer or other person performing that function or, with respect to directors or executive officers subject to the reporting requirements of Section 16(a) of the Exchange Act, by the Compensation Committee, whose determination shall be final.

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(d) Decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, any Participant, any stockholder and any Eligible Person. A majority of the members of the Committee may determine its actions.

SECTION 4. SHARES SUBJECT TO THE PLAN

4.1	Authorized Number of Shares

Subject to adjustment from time to time as provided in Section 14.1, the aggregate maximum number of shares of Common Stock available for issuance under the Plan shall be:

(a) 3,650,000 shares; plus

(b) (i) any authorized shares not issued or subject to outstanding awards under the Company's 2004 Omnibus Incentive Compensation Plan, the 2002 Director Stock Option and Fee Plan, the 2001 Stock Incentive Plan and the 1999 Stock Incentive Plan (the "Prior Plans") as of the Effective Date and (ii) any shares subject to outstanding awards under the Prior Plans as of the Effective Date that subsequently cease to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and nonforfeitable shares), up to an aggregate maximum of 4,764,363 shares.

Shares issued under the Plan shall be drawn from authorized and unissued shares or shares now held or subsequently acquired by the Company as treasury shares.

4.2	Share Usage

(a) Shares of Common Stock covered by an Award shall not be counted as used unless and until they are actually issued and delivered to a Participant. If any Award lapses, expires, terminates or is canceled prior to the issuance of shares thereunder or if shares of Common Stock are issued under the Plan to a Participant and thereafter are forfeited to or otherwise reacquired by the Company, the shares subject to such Awards and the forfeited or reacquired shares shall again be available for issuance under the Plan. Any shares of Common Stock (i) tendered by a Participant or retained by the Company as full or partial payment to the Company for the purchase price of an Award or to satisfy tax withholding obligations in connection with an Award, or (ii) covered by an Award that is settled in cash, or in a manner such that some or all of the shares of Common Stock covered by the Award are not issued, shall be available for Awards under the Plan. The number of shares of Common Stock available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional shares of Common Stock or credited as additional shares of Common Stock subject or paid with respect to an Award.

(b) The Committee shall also, without limitation, have the authority to grant Awards as an alternative to or as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company.

- 3 - -

(c) Notwithstanding anything in the Plan to the contrary, the Committee may grant Substitute Awards under the Plan. Substitute Awards shall not reduce the number of shares authorized for issuance under the Plan. In the event that an Acquired Entity has shares available for awards or grants under one or more preexisting plans not adopted in contemplation of such acquisition or combination, then, to the extent determined by the Committee, the shares available for grant pursuant to the terms of such preexisting plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to holders of common stock of the entities that are parties to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the number of shares of Common Stock authorized for issuance under the Plan; provided, however, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of such preexisting plans, absent the acquisition or combination, and shall only be made to individuals who were employees of the Acquired Entity prior to such acquisition or combination. In the event that a written agreement between the Company and an Acquired Entity pursuant to which a merger or consolidation is completed is approved by the Board and that agreement sets forth the terms and conditions of the substitution for or assumption of outstanding awards of the Acquired Entity, those terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with Rule 16b-3 under the Exchange Act, and the persons holding such awards shall be deemed to be Participants.

(d) Notwithstanding the other provisions in this Section 4.2, the maximum number of shares that may be issued upon the exercise of Incentive Stock Options shall equal the aggregate share number stated in Section 4.1, subject to adjustment as provided in Section 14.1.

4.3	Limitations

Subject to adjustment as provided in Section 14.1, the aggregate number of shares that may be issued pursuant to Awards granted under the Plan (other than Awards of Options or Stock Appreciation Rights) that contain no restrictions or restrictions based solely on continuous employment or services over fewer than three years (except in the event of Termination of Service) shall not exceed 10% of the aggregate maximum number of shares specified in Section 4.1. In addition, if and to the extent the Committee accelerates vesting or exercisability of an Award or otherwise acts to waive or lapse any restriction on an Award, other than in connection with a Participant's death, Disability or Retirement or a Change of Control, the shares covered by such Committee action shall similarly count towards the foregoing 10% limitation.

SECTION 5. ELIGIBILITY

An Award may be granted to any employee, officer, director, consultant, agent, advisor or independent contractor of the Company or a Related Company whom the Committee from time to time selects. The foregoing are "Eligible Persons."

- 4 - -

SECTION 6. AWARDS

6.1	Form, Grant and Settlement of Awards

The Committee shall have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan. Such Awards may be granted either alone or in addition to or in tandem with any other type of Award. Any Award settlement may be subject to such conditions, restrictions and contingencies as the Committee shall determine.

6.2	Evidence of Awards

Awards granted under the Plan shall be evidenced by a written, including an electronic, instrument that shall contain such terms, conditions, limitations and restrictions as the Committee shall deem advisable and that are not inconsistent with the Plan.

6.3

Deferrals

The Committee may permit or require a Participant to defer receipt of the payment of any Award if and to the extent set forth in the instrument evidencing the Award at the time of grant. If any such deferral election is permitted or required, the Committee, in its sole discretion, shall establish rules and procedures for such payment deferrals, which may include the grant of additional Awards or provisions for the payment or crediting of interest or dividend equivalents, including converting such credits to deferred stock unit equivalents; provided, however, that the terms of any deferrals under this Section 6.3 shall comply with all applicable law, rules and regulations, including, without limitation, Section 409A.

6.4	Dividends and Distributions

Participants holding Awards may, if the Committee so determines, be credited with dividends paid with respect to the underlying shares or dividend equivalents while the Awards are so held in a manner determined by the Committee in its sole discretion. The Committee may apply any restrictions to the dividends or dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of Common Stock, Restricted Stock or Stock Units. Notwithstanding the foregoing, the right to any dividends or dividend equivalents declared and paid on the number of shares underlying an Option or Stock Appreciation Right may not be contingent, directly or indirectly, on the exercise of the Option or a Stock Appreciation Right, and an Award providing a right to dividends or dividend equivalents declared and paid on the number of shares underlying an Option or a Stock Appreciation Right, the payment of which is not contingent upon, or otherwise payable on, the exercise of the Option or a Stock Appreciation Right, must comply with or qualify for an exemption under Section 409A.

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SECTION 7. OPTIONS

7.1	Grant of Options

The Committee may grant Options designated as Incentive Stock Options or Nonqualified Stock Options.

7.2	Option Exercise Price

The exercise price for shares purchased under an Option shall be at least 100% of the Fair Market Value of the Common Stock on the Grant Date, except in the case of Substitute Awards.

7.3	Term of Options

Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Option shall be ten years from the Grant Date.

7.4	Exercise of Options

The Committee shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable, any of which provisions may be waived or modified by the Committee at any time.

To the extent an Option has vested and become exercisable, the Option may be exercised in whole or from time to time in part by delivery, as directed by the Company, to the Company or a brokerage firm designated or approved by the Company of a properly executed stock option exercise agreement or notice, in a form and in accordance with procedures established by the Company, setting forth the number of shares with respect to which the Option is being exercised, the restrictions imposed on the shares purchased under such exercise agreement or notice, if any, and such representations and agreements as may be required by the Committee, accompanied by payment in full as described in Sections 7.5 and 12. An Option may be exercised only for whole shares and may not be exercised for less than a reasonable number of shares at any one time, as determined by the Committee.

7.5	Payment of Exercise Price

The exercise price for shares purchased under an Option shall be paid in full, as directed by the Company, to the Company or a brokerage firm designated or approved by the Company by delivery of consideration equal to the product of the Option exercise price and the number of shares purchased. Such consideration must be paid before the Company will issue the shares being purchased and must be in a form or a combination of forms acceptable to the Committee for that purchase, which forms may include:

(a) cash;

- 6 - -

(b) check or wire transfer;

(c) having the Company withhold shares of Common Stock that would otherwise be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;

(d) tendering (either actually or, so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by attestation) shares of Common Stock owned by the Participant that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;

(e) so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, and to the extent permitted by law, delivery of a properly executed exercise agreement or notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of proceeds to pay the Option exercise price and any withholding tax obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board (i.e., a "cashless" exercise); or

(f) such other consideration as the Committee may permit.

7.6	Effect of Termination of Service

The Committee shall establish and set forth in each instrument that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service, any of which provisions may be waived or modified by the Committee at any time, provided that any such waiver or modification shall satisfy the requirements for exemption under Section 409A.

If the exercise of the Option following a Participant's Termination of Service, but while the Option is otherwise exercisable, would be prohibited solely because the issuance of Common Stock would violate either the registration requirements under the Securities Act or the Company's insider trading policy, then the Option shall remain exercisable until the earlier of (a) the Option Expiration Date and (b) the expiration of a period of three months (or such other period of time as determined by the Committee in its sole discretion) after the Participant's Termination of Service during which the exercise of the Option would not be in violation of the Securities Act or the Company's insider trading policy requirements.

7.7	Incentive Stock Option Limitations

Notwithstanding any other provisions of the Plan, the terms and conditions of any Incentive Stock Options shall in addition comply in all respects with Section 422 of the Code, or any successor provision, and any applicable regulations thereunder. Individuals who are not employees of the Company or one of its parent or subsidiary corporations (as such terms are defined for purposes of Section 422 of the Code) may not be granted Incentive Stock Options. To the extent the aggregate Fair Market Value of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year exceeds $100,000 (or, if different, the maximum limitation in effect at the time of grant under the Code), such portion in excess of $100,000 shall be treated as a Nonqualified Stock Option. If any Participant shall make any disposition of shares of Common Stock issued pursuant to the exercise of an Incentive Stock Option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions), such Participant shall notify the Company of such disposition within ten days thereof.

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SECTION 8. STOCK APPRECIATION RIGHTS

8.1	Grant of Stock Appreciation Rights

The Committee may grant Stock Appreciation Rights to Participants at any time on such terms and conditions as the Committee shall determine in its sole discretion. An SAR may be granted in tandem with an Option or alone ("freestanding"). The grant price of a tandem SAR shall be equal to the exercise price of the related Option. The grant price of a freestanding SAR shall be established in accordance with procedures for Options set forth in Section 7.2. An SAR may be exercised upon such terms and conditions and for the term as the Committee determines in its sole discretion; provided, however, that, subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the SAR, the maximum term of a freestanding SAR shall be ten years, and in the case of a tandem SAR, (a) the term shall not exceed the term of the related Option and (b) the tandem SAR may be exercised for all or part of the shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option, except that the tandem SAR may be exercised only with respect to the shares for which its related Option is then exercisable.

8.2	Payment of SAR Amount

Upon the exercise of an SAR, a Participant shall be entitled to receive payment in an amount determined by multiplying: (a) the difference between the Fair Market Value of the Common Stock on the date of exercise over the grant price of the SAR by (b) the number of shares with respect to which the SAR is exercised. At the discretion of the Committee as set forth in the instrument evidencing the Award, the payment upon exercise of an SAR may be in cash, in shares, in some combination thereof or in any other manner approved by the Committee in its sole discretion.

8.3	Post-Termination Exercise

The Committee shall establish and set forth in each instrument that evidences a freestanding SAR whether the SAR shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service, any of which provisions may be waived or modified by the Committee at any time, provided that any such waiver or modification shall satisfy the requirements under Section 409A.

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SECTION 9. STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS

9.1	Grant of Stock Awards, Restricted Stock and Stock Units

The Committee may grant Stock Awards, Restricted Stock and Stock Units on such terms and conditions and subject to such repurchase or forfeiture restrictions, if any, which may be based on continuous service with the Company or a Related Company or the achievement of any performance goals, as the Committee shall determine in its sole discretion, which terms, conditions and restrictions shall be set forth in the instrument evidencing the Award. Notwithstanding the foregoing, any Stock Awards, Restricted Stock and Stock Units subject to performance goals shall have a performance period of at least one year.

9.2	Issuance of Shares

Upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Stock Units, or upon a Participant's release from any terms, conditions and restrictions of Restricted Stock or Stock Units, as determined by the Committee, and subject to the provisions of Section 12, (a) the shares of Restricted Stock covered by each Award of Restricted Stock shall become freely transferable by the Participant, and (b) Stock Units shall be paid in shares of Common Stock or, if set forth in the instrument evidencing the Awards, in cash or a combination of cash and shares of Common Stock. Any fractional shares subject to such Awards shall be paid to the Participant in cash.

SECTION 10. PERFORMANCE AWARDS

10.1	Performance Shares

The Committee may grant Awards of Performance Shares, designate the Participants to whom Performance Shares are to be awarded and determine the number of Performance Shares and the terms and conditions of each such Award. Performance Shares shall consist of a unit valued by reference to a designated number of shares of Common Stock, the value of which may be paid to the Participant by delivery of shares of Common Stock or, if set forth in the instrument evidencing the Award, of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. Performance Shares shall have a performance period of at least one year.

Subject to Section 15 and Section 17.5, the amount to be paid under an Award of Performance Shares may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.

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10.2	Performance Units

The Committee may grant Awards of Performance Units, designate the Participants to whom Performance Units are to be awarded and determine the number of Performance Units and the terms and conditions of each such Award. Performance Units shall consist of a unit valued by reference to a designated amount of property other than shares of Common Stock, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. Performance Units shall have a performance period of at least one year.

Subject to Section 15 and Section 17.5, the amount to be paid under an Award of Performance Units may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.

SECTION 11. OTHER STOCK OR CASH-BASED AWARDS

Subject to the terms of the Plan and such other terms and conditions as the Committee deems appropriate, the Committee may grant other incentives payable in cash or in shares of Common Stock under the Plan.

SECTION 12. WITHHOLDING

The Company may require the Participant to pay to the Company the amount of (a) any taxes that the Company is required by applicable federal, state, local or foreign law to withhold with respect to the grant, vesting or exercise of an Award ("tax withholding obligations") and (b) any amounts due from the Participant to the Company or to any Related Company ("other obligations") to the extent such amounts are not "deferred compensation" within the meaning of Section 409A. The Company shall not be required to issue any shares of Common Stock or otherwise settle an Award under the Plan until such tax withholding obligations and other obligations are satisfied.

The Committee may permit or require a Participant to satisfy all or part of the Participant's tax withholding obligations and other obligations by (a) paying cash to the Company, (b) having the Company withhold an amount from any cash amounts otherwise due or to become due from the Company to the Participant, (c) having the Company withhold a number of shares of Common Stock that would otherwise be issued to the Participant (or become vested, in the case of Restricted Stock) having a Fair Market Value equal to the tax withholding obligations and other obligations, or (d) surrendering a number of shares of Common Stock the Participant already owns having a value equal to the tax withholding obligations and other obligations. To the extent required to avoid adverse financial accounting consequences to the Company, the value of the shares so withheld or tendered may not exceed the employer's minimum required tax withholding rate.

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SECTION 13. ASSIGNABILITY

No Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the performance of an obligation or for any other purpose) or transferred by a Participant or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and distribution, except to the extent permitted by the Company, the Participant may designate one or more beneficiaries on a Company-approved form who may exercise the Award or receive payment under the Award after the Participant's death. During a Participant's lifetime, an Award may be exercised only by the Participant. Notwithstanding the foregoing and to the extent permitted by Section 422 of the Code, the Committee, in its sole discretion, may permit a Participant to assign or transfer an Award subject to such terms and conditions as the Committee shall specify.

SECTION 14. ADJUSTMENTS

14.1	Adjustment of Shares

In the event, at any time or from time to time, a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders other than a normal cash dividend, or other change in the Company's corporate or capital structure results in (a) the outstanding shares of Common Stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or kind of securities of the Company or (b) new, different or additional securities of the Company or any other company being received by the holders of shares of Common Stock, then the Committee shall make proportional adjustments in (i) the maximum number and kind of securities available for issuance under the Plan; (ii) the maximum number and kind of securities issuable as Incentive Stock Options as set forth in Section 4.2; (iii) the maximum number and kind of securities set forth in Section 15.4; and (iv) the number and kind of securities that are subject to any outstanding Award and the per share price of such securities, without any change in the aggregate price to be paid therefor. The determination by the Committee, as to the terms of any of the foregoing adjustments shall be conclusive and binding.

Notwithstanding the foregoing, the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services rendered, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding Awards. Also notwithstanding the foregoing, a Change of Control shall not be governed by this Section 14.1 but shall be governed by Section 14.2.

14.2	Change of Control

Notwithstanding any other provision of the Plan to the contrary, unless the Committee shall determine otherwise in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, in the event of a Change of Control:

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(a) All outstanding Awards, other than Awards identified in Section 14.2(b), shall become fully and immediately vested and exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, immediately prior to the Change of Control and shall terminate at the effective time of the Change of Control, and any such Awards constituting "deferred compensation" within the meaning of Section 409A shall be paid within 60 days following the effective date of the Change of Control; provided, however, that with respect to a Change of Control that is a Business Combination, such Awards, other than Awards constituting "deferred compensation" within the meaning of Section 409A, shall become fully and immediately vested and exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent such Awards are not converted, assumed or replaced by the Successor Company.

For the purposes of this Section 14.2(a), an Award shall be considered converted, assumed or replaced by the Successor Company if following the Business Combination the option or right confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Business Combination, the consideration (whether stock, cash or other securities or property) received in the Business Combination by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the Business Combination is not solely common stock of the Successor Company, the Committee may, with the consent of the Successor Company, provide for the consideration to be received upon the exercise of the Option, for each share of Common Stock subject thereto, to be solely common stock of the Successor Company substantially equal in fair market value to the per share consideration received by holders of Common Stock in the Business Combination. The determination of such substantial equality of value of consideration shall be made by the Committee, and its determination shall be conclusive and binding.

(b) The target payout opportunities attainable under all outstanding Stock Awards and Stock Units with restrictions based on performance criteria, Performance Shares, and Performance Units shall be deemed to have been fully earned based on targeted performance being attained as of the effective date of the Change of Control, and such Awards shall be paid within 60 days following the effective date of the Change of Control.

(c) Notwithstanding the foregoing, the Committee, in its sole discretion, may instead provide in the event of a Change of Control that is a Business Combination that a Participant's outstanding Awards shall terminate upon or immediately prior to such Business Combination and that such Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (x) the value of the per share consideration received by holders of Common Stock in the Business Combination, or, in the event the Business Combination does not result in direct receipt of consideration by holders of Common Stock, the value of the deemed per share consideration received, in each case as determined by the Committee in its sole discretion, multiplied by the number of shares of Common Stock subject to such outstanding Awards (to the extent then vested and exercisable or whether or not then vested and exercisable, as determined by the Committee in its sole discretion) exceeds (y) if applicable, the respective aggregate exercise price or grant price for such Awards.

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14.3	Further Adjustment of Awards

Subject to Section 14.2, the Committee shall have the discretion, exercisable at any time before a sale, merger, consolidation, reorganization, liquidation, dissolution or change of control of the Company, as defined by the Committee, to take such further action as it determines to be necessary or advisable with respect to Awards. Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise, lifting restrictions and other modifications, and the Committee may take such actions with respect to all Participants, to certain categories of Participants or only to individual Participants. The Committee may take such action before or after granting Awards to which the action relates and before or after any public announcement with respect to such sale, merger, consolidation, reorganization, liquidation, dissolution or change of control that is the reason for such action.

14.4	No Limitations

The grant of Awards shall in no way affect the Company's right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

14.5	Fractional Shares

In the event of any adjustment in the number of shares covered by any Award, each such Award shall cover only the number of full shares resulting from such adjustment.

14.6	Section 409A

Notwithstanding anything in this Plan to the contrary, (a) any adjustments made pursuant to this Section 14 to Awards that are considered "deferred compensation" within the meaning of Section 409A shall be made in compliance with the requirements of Section 409A and (b) any adjustments made pursuant to this Section 14 to Awards that are not considered "deferred compensation" subject to Section 409A shall be made in such a manner as to ensure that after such adjustment the Awards either (i) continue not to be subject to Section 409A or (ii) comply with the requirements of Section 409A.

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SECTION 15. SECTION 162(m) PROVISIONS

15.1	Terms of Section 162(m) Awards Generally

Notwithstanding any other provision of the Plan, the Compensation Committee may, at the time of grant of an Award (other than an Option or Stock Appreciation Right) to a Participant who is then a Covered Employee or is likely to be a Covered Employee as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award, specify that all or any portion of such Award is intended to satisfy the requirements for performance-based compensation under Section 162(m). With respect to each such Award, the Compensation Committee shall establish, in writing, that the vesting and/or payment pursuant to the Award shall be conditioned on the attainment for the specified Performance Period of specified performance targets related to designated performance goals for such period selected by the Compensation Committee from among the Performance Criteria specified in Section 15.2. Such performance goals shall be set by the Compensation Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m), or any successor provision thereto, and the regulations thereunder.

15.2	Performance Criteria

If an Award is subject to this Section 15, then the lapsing of restrictions thereon and the distribution of cash, shares of Common Stock or other property pursuant thereto, as applicable, shall be subject to the achievement of one or more objective performance goals established by the Committee, which shall be based on the attainment of specified levels of one of or any combination of the following "performance criteria" for the Company as a whole or any business unit of the Company, as reported or calculated by the Company: net earnings or net income (before or after taxes); earnings per share (basic or fully diluted); net sales growth or bookings growth; revenues; operating profit or income (including or excluding depreciation, amortization, extraordinary items, restructuring charges or other expenses); return measures (including, but not limited to, return on assets, capital, net capital utilized, equity or sales); working capital; cash flow (including, but not limited to, operating cash flow, free cash flow or cash flow return on capital); earnings before or after taxes, interest, depreciation and/or amortization; gross or operating profit; cost control; strategic initiatives; market share; improvements in capital structure; productivity ratios; share price (including, but not limited to, growth measures and total stockholder return); expense targets; margins; operating efficiency or margins; capital efficiency; strategic targets; economic profit; employee or customer satisfaction, services performance, subscriber, cash management or asset management metrics; working capital targets; cash value added ("CVA"); or market or economic value added ("EVA") (together, the "Performance Criteria").

Such performance goals also may be based on the achievement of specified levels of Company performance (or performance of an applicable affiliate or business unit of the Company) under one or more of the Performance Criteria described above relative to the performance of other corporations. The Compensation Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in the Company’s annual report to stockholders for the applicable year, (f) acquisitions or divestitures, (g) foreign exchange gains and losses, and (h) gains and losses on asset sales. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that satisfies the requirements for "performance-based compensation" within the meaning of Section 162(m), or any successor provision thereto.

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15.3	Compensation Committee Certification and Authority

After the completion of each Performance Period, the Compensation Committee shall certify the extent to which any Performance Criteria has been satisfied, and the amount payable as a result thereof, prior to payment, settlement or vesting of any Award subject to this Section 15. Notwithstanding any provision of the Plan other than Section 14, with respect to any Award that is subject to this Section 15, the Compensation Committee may adjust downward, but not upward, the amount payable pursuant to such Award, and the Compensation Committee may not waive the achievement of the applicable performance goals except in the case of the death or Disability of the Covered Employee.

The Compensation Committee shall have the power to impose such other restrictions on Awards subject to this Section 15 as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for "performance-based" compensation with the meaning of Section 162(m).

15.4	Maximum Awards

Subject to adjustment from time to time as provided in Section 14.1, no Covered Employee may be granted Awards other than Performance Units subject to this Section 15 in any thirty-six month period with respect to more than 2,250,000 shares of Common Stock for such Award, and the maximum dollar value payable with respect to Performance Units or other awards payable in cash subject to this Section 15 granted to any Covered Employee in any one calendar year is $5,000,000.

The Committee shall have the power to impose such other restrictions on Awards subject to this Section 15 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), or any successor provision thereto.

SECTION 16. AMENDMENT AND TERMINATION

16.1	Amendment, Suspension or Termination

The Board or the Compensation Committee may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that, to the extent required by applicable law, regulation or stock exchange rule, stockholder approval shall be required for any amendment to the Plan; and provided, further, that any amendment that requires stockholder approval may be made only by the Board. Subject to Section 16.3, the Committee may amend the terms of any outstanding Award, prospectively or retroactively.

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16.2	Term of the Plan

Unless sooner terminated as provided herein, the Plan shall terminate ten years from the Effective Date. After the Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan's terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than ten years after the earlier of (a) adoption of the Plan by the Board and (b) the Effective Date.

16.3	Consent of Participant

The amendment, suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant's consent, materially adversely affect any rights under any Award theretofore granted to the Participant under the Plan. Any change or adjustment to an outstanding Incentive Stock Option shall not, without the consent of the Participant, be made in a manner so as to constitute a "modification" that would cause such Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to Section 14 shall not be subject to these restrictions.

SECTION 17. GENERAL

17.1	No Individual Rights

No individual or Participant shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Participants under the Plan.

Furthermore, nothing in the Plan or any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate a Participant's employment or other relationship at any time, with or without cause.

17.2	Issuance of Shares

Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue or deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless, in the opinion of the Company's counsel, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity.

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The Company shall be under no obligation to any Participant to register for offering or resale or to qualify for exemption under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made.

To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of shares of Common Stock, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

17.3	Indemnification

Each person who is or shall have been a member of the Board, or a committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Section 3 of the Plan, shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company's approval, or paid by such person in satisfaction of any judgment in any such claim, action, suit or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person's own behalf, unless such loss, cost, liability or expense is a result of such person's own willful misconduct or except as expressly provided by statute.

The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person may be entitled under the Company's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or of any power that the Company may have to indemnify or hold harmless.

17.4	No Rights as a Stockholder

Unless otherwise provided by the Committee or in the instrument evidencing the Award or in a written employment, services or other agreement, no Award, other than a Stock Award, shall entitle the Participant to any cash dividend, voting or other right of a stockholder unless and until the date of issuance under the Plan of the shares that are the subject of such Award.

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17.5	Compliance with Laws and Regulations

(a) In interpreting and applying the provisions of the Plan, any Option granted as an Incentive Stock Option pursuant to the Plan shall, to the extent permitted by law, be construed as an "incentive stock option" within the meaning of Section 422 of the Code, although the Company makes no representations that Options granted as Incentive Stock Options will maintain such qualification.

(b) Notwithstanding anything contained in the Plan to the contrary, the Company intends that any and all Awards and compensation payable under the Plan shall satisfy the requirements for exemption from, or compliance with, Section 409A and that all terms and provisions shall be interpreted to satisfy such requirements. If the Committee determines that an Award, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant to become subject to Section 409A, the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan and any Award granted under the Plan so that the Award qualifies for exemption from or compliance with Section 409A. Awards not deferred under Section 6.3 and not otherwise exempt from the requirements of Section 409A are intended to qualify for the short-term deferral exemption to Section 409A, and payment shall be made as soon as administratively feasible after the Award became vested, but in no event shall such payment be made later than 2½ months after the end of the calendar year in which the Award becomes vested unless otherwise permitted under the exemption provisions of Section 409A.

Furthermore, any payment or distribution that is to be made under the Plan (or pursuant to an Award under the Plan) to a Participant who is a "specified employee" of the Company within the meaning of that term under Section 409A and as determined by the Committee, on account of a "separation from service" within the meaning of that term under Section 409A, may not be made before the date which is six months after the date of such "separation from service," unless the payment or distribution is exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise.

Notwithstanding any other provision in the Plan, the Committee makes no representations that Awards granted under the Plan shall be exempt from, or comply with, Section 409A and makes no undertaking to preclude Section 409A from applying to Awards granted under the Plan.

17.6	Participants in Other Countries or Jurisdictions

Without amending the Plan, the Committee shall have the authority to adopt, amend or rescind such modifications, procedures or subplans under the Plan as may be necessary or desirable to comply with provisions of the laws or regulations of other countries or jurisdictions in which the Company or any Related Company may operate or where Participants may reside.

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17.7	No Trust or Fund

The Plan is intended to constitute an "unfunded" plan. Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.

17.8	Successors

All obligations of the Company under the Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all the business and/or assets of the Company.

17.9	Severability

If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee's determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

17.10

Choice of Law and Venue

The Plan, all Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving effect to principles of conflicts of law. Participants irrevocably consent to the nonexclusive jurisdiction and venue of the state and federal courts located in the State of Washington.

SECTION 18. EFFECTIVE DATE

The effective date (the "Effective Date") is the date on which the Plan is approved by the stockholders of the Company. If the stockholders of the Company do not approve the Plan within 12 months after the Board's adoption of the Plan, any Incentive Stock Options granted under the Plan will be treated as Nonqualified Stock Options.

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Appendix A to 2008 Omnibus Incentive Plan

Definitions

As used in the Plan,

"Acquired Entity" means any entity acquired by the Company or a Related Company or with which the Company or a Related Company merges or combines.

"Award" means any Option, Stock Appreciation Right, Stock Award, Restricted Stock, Stock Unit, Performance Share, Performance Unit, dividend equivalent, cash-based award or other incentive payable in cash or in shares of Common Stock as may be designated by the Committee from time to time.

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

"Business Combination" has the meaning set forth in the definition of "Change of Control."

"Cause," unless otherwise defined in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means dishonesty, fraud, serious or willful misconduct, unauthorized use or disclosure of confidential information or trade secrets, or conduct prohibited by law (except minor violations), in each case as determined by the Company's chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Compensation Committee, whose determination shall be conclusive and binding.

"Change of Control," unless the Committee determines otherwise with respect to an Award at the time the Award is granted or unless otherwise defined for purposes of an Award in a written employment, services or other agreement between the Participant and the Company or a Related Company, means the occurrence of any of the following events:

(a) an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding shares of Common Stock (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); excluding, however, the following: (1) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (4) any acquisition pursuant to a transaction which complies with clauses (i), (ii) and (iii) set forth in subsection (c) of this definition of "Change of Control";

A-1

(b) Individuals who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a member of the Board subsequent to the Effective Date, whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be considered a member of the Incumbent Board; or

(c) The consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"); excluding, however, such a Business Combination pursuant to which

(i) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Company Transaction will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be;

(ii) no Person (other than any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company or such corporation resulting from such Business Combination) will beneficially own, directly or indirectly, 30% or more of, respectively, the outstanding shares of the corporation resulting from such Business Combination or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors except to the extent that such ownership existed with respect to the Company prior to the Business Combination; and

(iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination will have been members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) The consummation of a complete liquidation or dissolution of the Company.

Where a series of transactions undertaken with a common purpose is deemed to be a Business Combination, the date of such Business Combination shall be the date on which the last of such transactions is consummated. Notwithstanding the foregoing, with respect to any Award or Awards constituting "deferred compensation" within the meaning of Section 409A, an event otherwise constituting a Change of Control (as defined above) shall not constitute a Change of Control for purposes of payment of an Award unless such event is also a "change in control event" within the meaning of Section 409A.

A-2

"Code" means the U.S. Internal Revenue Code of 1986, as amended from time to time.

"Committee" has the meaning set forth in Section 3.2.

"Common Stock" means the common stock, par value $.01 per share, of the Company.

"Company" means Intermec, Inc., a Delaware corporation.

"Compensation Committee" means the Compensation Committee of the Board.

"Covered Employee" means a "covered employee" as that term is defined for purposes of Section 162(m)(3) of the Code or any successor provision.

"Disability," unless otherwise defined by the Committee for purposes of the Plan in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means permanent and total disability as determined for purposes of the Company's Long-Term Disability Plan or such other plan under which the Participant is covered. Notwithstanding the foregoing, with respect to Incentive Stock Options, "Disability" shall have the meaning attributed to that term for purposes of Section 422 of the Code.

"Early Retirement," unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means retirement from employment with the Company or a Related Company in circumstances in which the employee would be entitled to receive such retirement benefits under the pension plan of the Company or a Related Company under which such employee is covered, as applicable.

"Effective Date" has the meaning set forth in Section 18.

"Eligible Person" means any person eligible to receive an Award as set forth in Section 5.

"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended from time to time.

"Fair Market Value" means the closing price for the Common Stock on any given date during regular session trading on the New York Stock Exchange, or if not trading on that date, such price on the last preceding date on which the Common Stock was traded, unless determined otherwise by the Committee using such methods or procedures as it may establish. In the absence of an established market for the Common Stock, Fair Market Value shall be determined in good faith by the Committee. Notwithstanding the preceding, for federal, state, and local income tax withholding and reporting purposes and for such other purposes as the Committee deems appropriate, Fair Market Value shall be determined by the Committee in accordance with uniform and nondiscriminatory standards adopted by it from time to time.

A-3

"Grant Date" means the later of (a) the date on which the Committee completes the corporate action authorizing the grant of an Award or such later date specified by the Committee and (b) the date on which all conditions precedent to an Award have been satisfied, provided that conditions to the exercisability or vesting of Awards shall not defer the Grant Date.

"Incentive Stock Option" means an Option granted with the intention that it qualify as an "incentive stock option" as that term is defined for purposes of Section 422 of the Code or any successor provision.

"Incumbent Board" has the meaning set forth in "Change of Control."

"Nonqualified Stock Option" means an Option other than an Incentive Stock Option.

"Normal Retirement," unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means retirement from active employment with the Company or a Related Company in circumstances in which the employee would be entitled to receive such retirement benefits under the retirement or pension plan of the Company or a Related Company under which such employee is covered, as applicable.

"Option" means a right to purchase Common Stock granted under Section 7.

"Option Expiration Date" means the last day of the maximum term of an Option.

"Parent Company" means a company or other entity which as a result of a Change of Control owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries.

"Participant" means any Eligible Person to whom an Award is granted.

"Performance Award" means an Award of Performance Shares or Performance Units granted under Section 10.

"Performance Criteria" has the meaning set forth in Section 15.2.

"Performance Period" means the period of time during which the Performance Criteria must be met in order to determine the degree of payout and/or vesting with respect to an Award. The Compensation Committee may establish different Performance Periods for different Participants, and the Compensation Committee may establish concurrent or overlapping Performance Periods.

A-4

"Performance Share" means an Award of units denominated in shares of Common Stock granted under Section 10.1.

"Performance Unit" means an Award of units denominated in cash or property other than shares of Common Stock granted under Section 10.2.

"Plan" means the Intermec, Inc. 2008 Omnibus Incentive Plan, as amended from time to time.

''Related Company" means any corporation in which the Company owns, directly or indirectly, at least 50% of the total combined voting power of all classes of stock, or any other entity (including, but not limited to, partnerships and joint ventures) in which the Company owns, directly or indirectly, at least 50% of the combined equity thereof. Notwithstanding the foregoing, for purposes of determining whether any individual may be a Participant for purposes of any grant of Incentive Stock Options, the term "Related Company" shall have the meaning ascribed to the term "subsidiary" in Section 424(f) of the Code, and for purposes of determining whether any individual may be a Participant for purposes of any grant of Options or Stock Appreciation Rights, the term "Related Company" shall mean any "Service Recipient" as that term is defined for purposes of Section 409A.

"Restricted Stock" means an Award of shares of Common Stock granted under Section 9, the rights of ownership of which are subject to restrictions prescribed by the Committee.

"Retirement," unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means Normal or Early Retirement.

"Section 162(m)" means Section 162(m) of the Code, including any proposed and final regulations and other guidance issued thereunder by the Department of the Treasury and/or the Internal Revenue Service.

"Section 409A" means Section 409A of the Code, including any proposed and final regulations and other guidance issued thereunder by the Department of the Treasury and/or the Internal Revenue Service.

"Securities Act" means the U.S. Securities Act of 1933, as amended from time to time.

"Stock Appreciation Right" or "SAR" means a right granted under Section 8.1 to receive the excess of the Fair Market Value of a specified number of shares of Common Stock over the grant price.

"Stock Award" means an Award of shares of Common Stock granted under Section 9, the rights of ownership of which are not subject to restrictions prescribed by the Committee.

"Stock Unit" means an Award denominated in units of Common Stock granted under Section 9.

A-5

"Substitute Awards" means Awards granted or shares of Common Stock issued by the Company in assumption of, or in substitution or exchange for, awards previously granted by an Acquired Entity.

"Successor Company" means the surviving company, the successor company or Parent Company, as applicable, in connection with a Change of Control.

"Termination of Service," unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means a termination of employment or service relationship with the Company or a Related Company for any reason, whether voluntary or involuntary, including by reason of death, Disability, Early Retirement, Normal Retirement or for Cause. Any question as to whether and when there has been a Termination of Service for the purposes of an Award and the cause of such Termination of Service shall be determined by the Company's chief human resources officer or other person performing that function or, with respect to directors and executive officers subject to the reporting requirements of Section 16(a) of the Exchange Act, by the Compensation Committee, whose determination shall be conclusive and binding. Transfer of a Participant's employment or service relationship between the Company and any Related Company shall not be considered a Termination of Service for purposes of an Award. Unless the Compensation Committee determines otherwise, a Termination of Service shall be deemed to occur if the Participant's employment or service relationship is with an entity that has ceased to be a Related Company. A Participant's change in status from an employee of the Company or a Related Company to a non-employee director, consultant, advisor, or independent contractor of the Company or a Related Company or a change in status from a non-employee director, consultant, advisor or independent contractor of the Company or a Related Company to an employee of the Company or a Related Company, shall not be considered a Termination of Service.

"Vesting Commencement Date" means the Grant Date or such other date selected by the Committee as the date from which an Award begins to vest.

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EX-10.2 7 ex10_2.htm EXHIBIT10_2 ex10_2.htm

Exhibit 10.2

Intermec, Inc.

6001 36th Avenue West

Everett, WA 98203-1264

INTERMEC, INC.

2008 OMNIBUS INCENTIVE PLAN

NONQUALIFIED STOCK OPTION GRANT NOTICE

(FOR U.S. OPTIONEES)

Intermec, Inc. (the “Company”) hereby grants to you an Option (the “Option”) to purchase shares of the Company's Common Stock under the Company's 2008 Omnibus Incentive Plan (the “Plan”). The Option is subject to all the terms and conditions set forth in this Stock Option Grant Notice (this “Grant Notice”) and in the Stock Option Agreement and the Plan, which are incorporated into this Grant Notice in their entirety. Capitalized terms that are not defined herein shall have the meanings assigned to such terms in the Plan.

[Name]	Option Number:	[option number]
[Address]	Option Plan:	2008
	Grant Date:	[date]
	Option Shares:	[number]
	Exercise Price (per Share):	[price]
	Type of Option:	Nonqualified Stock Option

Vesting and Exercisability Schedule: The Option shall, subject to the provisions of the Plan, become vested and exercisable in installments on the dates set forth below and shall remain cumulatively exercisable until the Option Expiration Date indicated, subject to earlier expiration in the event of your Termination of Service as set forth in the Stock Option Agreement:

Number of Shares	Date Option May First Be Exercised	Option Expiration Date
[number]	[date]	[date]
[number]	[date]	[date]
[number]	[date]	[date]
[number]	[date]	[date]

Additional Terms/Acknowledgement: You acknowledge receipt of, and understand and agree to, this Grant Notice and the Stock Option Agreement. You further acknowledge that as of the Grant Date, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire understanding between you and the Company regarding the Option and supersede all prior oral and written agreements on the subject. You also acknowledge that you have received the Plan and the plan summary for the Plan. You are encouraged to review the Company’s most recent annual report and proxy statement, which may be found at www.intermec.com.

IN WITNESS WHEREOF, this Grant Notice has been executed by you and by the Company through its duly authorized officer, all as of the Grant Date indicated above.

	Intermec, Inc.


	By:
		Patrick J. Byrne
		Chief Executive Officer and President


	Participant:
Dated:

IMPORTANT
PLEASE ACCEPT ELECTRONICALLY OR
SIGN AND RETURN PROMPTLY

	[Name]

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INTERMEC, INC.

2008 OMNIBUS INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

(FOR U.S. OPTIONEES)

Pursuant to your Stock Option Grant Notice (the “Grant Notice”) and this Stock Option Agreement (this “Agreement”), the Company has granted you an Option under its 2008 Omnibus Incentive Plan (the “Plan”) to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice (the “Shares”) at the exercise price indicated in your Grant Notice.

Capitalized terms that are not defined herein shall have the meanings assigned to such terms in the Plan. The Plan shall control in the event there is any express conflict between the Plan and the Grant Notice or this Agreement and with respect to such matters as are not expressly covered herein.

The details of the Option are as follows:

1. Vesting and Exercisability. Subject to the limitations contained herein, the Option will vest and become exercisable as provided in your Grant Notice, except that, unless otherwise provided in the Grant Notice or this Agreement, vesting will cease upon your Termination of Service and the unvested portion of the Option will terminate.

2. Securities Law Compliance. Notwithstanding any other provision of this Agreement, you may not exercise the Option unless the Shares issuable upon exercise are registered under the Securities Act or, if such Shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of the Option must also comply with other applicable laws and regulations governing the Option, and you may not exercise the Option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

3. Independent Tax Advice. You should obtain independent tax advice prior to exercising the Option and prior to the disposition of any Shares. The Option is intended to be a Nonqualified Stock Option, as that term is defined in the Plan.

4. Methods of Exercise. Subject to the provisions of this Agreement, the vested portion of the Option may be exercised, in whole or in part, at any time during the term of the Option by giving written notice of exercise to the Company on the form furnished by the Company for that purpose or, to the extent applicable, by written notice to a brokerage firm designated or approved by the Company, specifying the number of Shares subject to the Option to be purchased. Each exercise must encompass at least one installment or 100 Shares, whichever is less.

The exercise price for Shares to be purchased upon exercise of all or a portion of the Option shall be paid in any combination of the following:

(a) in cash in United States dollars (by certified or bank check or such other instrument payable to the order of “Intermec, Inc.” as the Company may accept);

(b) if permitted by the Company, by having the Company withhold Shares that would otherwise be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the Shares being purchased under the Option;

(c) if permitted by the Company, by tendering (either actually or by attestation) shares of Common Stock owned by you that have an aggregate Fair Market Value equal to the aggregate exercise price of the Shares being purchased under the Option;

(d) to the extent permitted by applicable law, by delivering a properly executed exercise notice, together with irrevocable instructions to a broker, to deliver promptly to the Company the aggregate amount of proceeds to pay the Option exercise price, and, if requested by you or required by law to be withheld by the Company, the amount of any federal, state, local and foreign withholding taxes, all in accordance with the regulations of the Federal Reserve Board; or

(e) by any other method permitted by the Committee.

5. Treatment upon Termination of Employment or Service Relationship.

(a) General Rule. In the event of your Termination of Service for any reason other than Retirement, Disability, death or for Cause, you may thereafter exercise the Option, to the extent it was vested on the date of termination, on or before the earlier of three months from the date of such Termination of Service or the Option Expiration Date; provided, however, that if you die within such three-month period, any unexercised Option held by you shall, notwithstanding the expiration of such three-month period, continue to be exercisable to the extent to which it was vested at the time of death for a period of 12 months from the date of such death or until the Option Expiration Date, whichever period is shorter.

(b) Retirement. In the event of your Termination of Service by reason of Retirement, you (or your estate or personal representative) may thereafter exercise the Option, to the extent it was vested on the date of Retirement, until the Option Expiration Date or, if earlier, 12 months from the date of your death. “Retirement” means “Normal Retirement” or “Early Retirement” as defined in the Plan.

(c) Disability. In the event of your Termination of Service by reason of Disability, you may thereafter exercise the Option, to the extent it was vested on the date of termination, for a period of three years from the date of such Termination of Service or until the Option Expiration Date, whichever period is shorter; provided, however, that if you die within such period, any unexercised portion of the Option shall, notwithstanding the expiration of such period, continue to be exercisable to the extent to which it was vested at the time of death for a period of 12 months from the date of such death or until the Option Expiration Date, whichever period is shorter. “Disability” means your permanent and total disability as more specifically defined in the Plan.

(d) Death. In the event of your Termination of Service due to death, the vested portion of the Option may thereafter be exercised for a period of 12 months from the date of such death or until the Option Expiration Date, whichever period is shorter, in accordance with the following schedule:

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Time from Grant Date to Death		Percentage of Option Exercisable by Estate
Less than 1 year		33%
1 year to 2 years		67%
More than 2 years		100%

(e) Cause. The Option, both the vested and unvested portion, will automatically expire at the time the Company first notifies you of your Termination of Service for Cause, unless the Committee determines otherwise. If your employment or service relationship is suspended pending an investigation of whether you will be terminated for Cause, all your rights under the Option likewise will be suspended during the period of investigation. If any facts that would constitute termination for Cause are discovered after your Termination of Service, any Option you then hold may be immediately terminated by the Committee.

(f) Other. Notwithstanding the foregoing provisions of this Paragraph 5, if exercise of the vested portion of the Option following your Termination of Service during the applicable time period above would be prohibited solely because the issuance of Shares upon exercise of the Option would violate the registration requirements under the Securities Act or the Company's insider trading policy, then the Option shall remain exercisable until the later of the expiration of (i) the applicable time period set forth above and (ii) a three-month period during which exercise of the Option would not be violation of the Securities Act or the Company's insider trading policy requirements, but in no event later than the Option Expiration Date.

It is your responsibility to be aware of the date on which the Option terminates.

6. Limited Transferability. You may transfer all or a portion of the Option by way of gift to any family member, provided that any such transferee shall agree in writing with you (or any successor optionee) and the Company, as a condition to such transfer, to be bound by the provisions of all agreements and other instruments, including without limitation, the Plan, and shall agree in writing to such other terms as the Company may reasonably require to assure compliance with applicable federal and state securities and other laws. For purposes of the preceding sentence, "family member" shall include any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationship, any person sharing your household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the optionee) control the management of assets, and any other entity in which these persons (or the optionee) own more than 50% of the voting interests. The Option shall be exercisable, subject to the terms of the Plan, only by you, your guardian or legal representative, or any person to whom such option is transferred pursuant to this paragraph, it being understood that the term "holder" and "optionee" include such guardian, legal representative and other trustee. If such transfer is made to a family member, there may be additional tax consequences at the time of transfer, and the Company will not be responsible for such tax consequences.

7. Change of Control. The effect of a Change of Control on the Option shall be governed by the terms of a Company change of control policy or agreement as then in effect and applicable to the Option. In the event no policy or agreement addresses the effect of a Change of Control on the Option, the terms of the Plan shall govern.

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8. Withholding Taxes. No later than the date as of which an amount first becomes includable in your gross income for federal income tax purposes or otherwise with respect to any portion of the Option, you shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state or local, and foreign taxes of any kind required by law to be withheld by the Company with respect to such amount. Unless otherwise determined by the Committee, the minimum amount of statutory withholding obligations may be settled with unrestricted Shares having a Fair Market Value on the date of the exercise of the Option equal to the amount of taxes required by law to be withheld, including Shares issuable upon exercise of a Stock Option that gives rise to the withholding requirement. Tax withholding in excess of the statutory minimum amount may not be satisfied in Shares but may, if desired, be paid in cash. The obligations of the Company under the Plan shall be conditional on such payment or arrangements having been made, and the Company and its Related Companies shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due you.

9. Stockholder Rights. No Shares subject to the Option shall be issued until full payment therefore, including applicable withholding taxes, has been made. You shall have all of the rights of a stockholder of the Company with respect to Shares subject to the Option (including, if applicable, the right to vote the Shares and the right to receive dividends, if any) when you have given written notice of exercise and have paid the exercise price and applicable withholding taxes in full for such Shares.

10. Adjustments. If as a result of any adjustment to the shares or number of shares subject to this Agreement made pursuant to Section 14 of the Plan, any fractional share would be issuable under this Agreement, such fractional share shall be canceled without the payment of any consideration to you.

11. Voluntary Nature of Plan and Awards Granted Thereunder/No Employment or Service Contract. The Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement. Grants of Options and other Awards under the Plan are made from time to time in the sole discretion of the Committee. The grant of the Option or other Award does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if Options have been granted repeatedly in the past. You acknowledge that future grants under the Plan, if any, will be at the sole discretion of the Committee, including the timing of any grant, the number of shares subject to the Option, the vesting provisions, and the exercise price. The grant of an Option to you in any year shall give you neither any right to similar grants in future years nor any right to be retained in the employ or other service of the Company or a Related Company, such employment or service relationship being terminable to the same extent as if the Plan and this Agreement were not in effect. The right and power of the Company and its Related Companies to dismiss or discharge you is specifically and unqualifiedly unimpaired by this Agreement.

You acknowledge that your participation in the Plan is voluntary and the value of the Option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or its Related Companies, and which is outside the scope of any employment or other contract you may have, unless such contract specifically provides otherwise. As such, you understand that the Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-term service awards, pension or retirement benefits, or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or its Related Companies.

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12. Data Privacy Rights. If employed by a Related Company, you authorize and direct such Related Company or any agent of the Company or such Related Company administering the Plan or providing plan recordkeeping services to disclose to the Company or any of its Related Companies such information and data as it shall request in order to facilitate the grant of the Option and the administration of the Plan, and you waive any data privacy rights you may have with respect to such information. By accepting this Agreement, you authorize the Company and the Related Company by which you are employed, if applicable, to store and transmit such information in electronic form.

13. Option Expiration. It is the present practice of the Company to provide participants in the Plan, solely as a courtesy and not as a Company policy, with written or oral notification of the imminent expiration of any Option having monetary value. You acknowledge that the Company and its subsidiaries and agents shall have no liability or responsibility in the event you should fail to receive any such "courtesy notice" and the Option expires unexercised. You acknowledge that the obligation to monitor the schedule of exercisability and expiration of the Option evidenced by this Agreement, and to procure current quotations regarding the market value of the Shares, is solely your obligation and not that of the Company or any subsidiary or affiliate by which you are employed or the agents of either of them.

14. Notices. Each notice relating to this Agreement shall be in writing and delivered in person or by mail to the Company at its office, 6001 36th Avenue West, Everett, WA 98203-1264, to the attention of the Company's Secretary, or at such other address as may be furnished to you in writing. All notices to you or other person or persons then entitled to exercise any right pursuant to this Agreement shall be delivered to you or such other person as you or such other person may specify in writing to the Secretary of the Company by a notice delivered in accordance with this paragraph.

15. Electronic Notices. The Company may, in its sole discretion, decide to deliver any documents related to the Option granted under, and participation in, the Plan or future options (if any) that may be granted under the Plan by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

16. Entire Agreement/Choice of Law and Venue. The terms and conditions of this Agreement and the Grant Notice and the Plan, both of which are incorporated by reference herein, comprise the whole terms and conditions between you and the Company with respect to the subject matter of the Grant Notice and this Agreement, and shall be governed by and construed in accordance with the laws of the State of Washington, U.S.A., without reference to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by the grant of this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Washington, U.S.A., and agree that such litigation shall be conducted only in the courts of Washington, U.S.A., or the federal courts for the United States for the Western District of Washington, and no other courts where this grant is made and/or to be performed.

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The Company hereby reserves the right to alter, amend, modify, restate, suspend or terminate the Plan and this Agreement in accordance with Section 16.1 of the Plan, but no such subsequent amendment, modification, restatement or termination of the Plan or this Agreement shall adversely affect in any material way your rights under this Agreement without your consent. This Agreement shall be subject, without further action by the Company or you, to such amendment, modification or restatement.

The provisions of the Grant Notice and this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

17. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon each successor of the Company and, to the extent specifically provided therein and in the Plan, shall inure to the benefit of and shall be binding upon your heirs, legal representatives, and successors and upon any person to whom a transfer of the Option permitted by Paragraph 6 of this Agreement has been made.

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EX-10.3 8 ex10_3.htm EXHIBIT10_3 ex10_3.htm

Exhibit 10.3

INTERMEC, INC.

2008 OMNIBUS INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

This Restricted Stock Unit Agreement (the “Agreement”) is made as of ________________, 2008 between Intermec, Inc., a Delaware corporation (the “Company”), and [Name] (the “Participant” or "you").

WHEREAS, the Company’s 2008 Omnibus Incentive Plan (the “Plan”) was adopted by the Board of Directors of the Company on March 19, 2008, and approved by the stockholders of the Company on May 23, 2008; and

WHEREAS, [If applicable: as an inducement to you to remain in the employ of the Company or one of its Related Companies (collectively, the “Company”),] the Company desires to award you restricted Stock Units (as that term is defined in the Plan) in accordance with the terms and conditions of the Plan and this Agreement.

NOW, THEREFORE, in consideration of the premises, the mutual covenants hereinafter set forth, and other good and valuable consideration, the Company and you hereby agree as follows:

1. Award. The Company hereby grants you [If applicable:, as a matter of separate inducement and agreement, and not in lieu of salary or other compensation for services,] an Award of [__________] restricted Stock Units (“RSUs”) comprising the right to receive shares of the Common Stock, par value $.01 per share, of the Company (the “Common Stock”) on the terms and conditions hereinafter set forth (the “Awarded Shares”), such number of Awarded Shares to be subject to adjustment as provided in Section 14.1 of the Plan. You shall have no obligation to pay the Company additional consideration for the Awarded Shares. The Grant Date for the RSUs is __________, 2008.

The Plan, a copy of which has been made available to you, is incorporated herein by reference and is made part of this Agreement as if fully set forth herein. By accepting the Award, you also acknowledge receipt of the Plan and the plan summary for the Plan. You are encouraged to review the Company's most recent annual report and proxy statement, which may be found at www.intermec.com. Capitalized terms used in this Agreement which are not defined herein shall have the meanings assigned to such terms in the Plan, it being understood that the terms “restricted Stock Units” and “RSUs” shall mean and refer to the right to receive only the Awarded Shares. This Agreement is subject to, and the Company and you agree to be bound by, all of the terms and conditions of the Plan as the same exist at the time this Agreement became effective. The Plan shall control in the event there is any express conflict between the Plan and the terms hereof and with respect to such matters as are not expressly covered in this Agreement. The Company hereby reserves the right to alter, amend, modify, restate, suspend or terminate the Plan and this Agreement in accordance with Section 16.1 of the Plan, but no such subsequent amendment, modification, restatement, or termination of the Plan or this Agreement shall adversely affect in any material way your rights under this Agreement without your written consent. This Agreement shall be subject, without further action by the Company or you, to such amendment, modification or restatement.

2. Restriction Period. Subject to the provisions of Paragraph 3 of this Agreement, there shall be a Period of Restriction (the “Restriction Period”) beginning on the Grant Date and ending on the third anniversary of the Grant Date (the “Vesting Date”). Except as otherwise provided in Paragraph 3 hereof, all RSUs still subject to restriction on the date of your Termination of Service shall be forfeited by you.

Page 1 of 5

3. Termination Due to Death or Disability or Change of Control. Notwithstanding any other provision of this Agreement, all RSUs granted hereunder still subject to restriction shall become fully vested and free of all restrictions to the full extent of the original grant upon the occurrence of either of the following events: (a) your Termination of Service by reason of death or (b) your Termination of Service by reason of Disability. The effect of a Change of Control on the RSUs shall be governed by the terms of a Company change of control policy or agreement as then in effect and applicable to the RSUs. In the event no policy or agreement addresses the effect of a Change of Control on the RSUs, the terms of the Plan shall govern.

4. Nontransferability. Until the earlier of (a) the end of the Restriction Period with respect to any of the RSUs granted hereunder or (b) the vesting of such RSUs in accordance with the provisions of this Agreement or the Plan, you shall not be permitted to sell, assign, transfer, pledge, or otherwise encumber the RSUs or the Awarded Shares.

5. Form and Timing of Payment. If and when the Restriction Period ends with respect to RSUs awarded hereunder without a prior forfeiture of such RSUs, or if and when RSUs vest pursuant to the provisions of Paragraph 3 hereof, and subject to the payment of withholding taxes as provided in Paragraph 7 hereof, the Company will direct its transfer agent to issue to you within thirty (30) days after such event, in uncertificated form, the number of unrestricted shares of Common Stock equal to the number of RSUs as to which the Restriction Period has ended or that have vested pursuant to Paragraph 3.

6. Rights as a Stockholder. Except as otherwise provided in this Agreement or the Plan, you shall not have any rights of a stockholder with respect to the RSUs or, prior to vesting, the Awarded Shares.

7. Withholding Taxes. No later than the date as of which an amount first becomes includable in your gross income for federal income tax purposes with respect to any Awarded Shares, you shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local, or foreign taxes of any kind required by law to be withheld by the Company with respect to such amount. Unless otherwise determined by the Committee, withholding obligations (up to the minimum statutory amount required to be withheld by the Company) may be settled with shares of Common Stock, including the Awarded Shares that give rise to the withholding requirement or shares of Common Stock already owned by you. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and its Related Companies shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to you. You, therefore, hereby unconditionally and irrevocably elect, notwithstanding anything to the contrary in this Paragraph 7 or elsewhere in this Agreement, to satisfy any and all federal, state, local, and foreign taxes of any kind that may be withheld by the Company in connection with your Awarded Shares (the “Withholding Taxes”) by electing one of the following options; provided that in all cases, the Company shall have the right to receive not less than the minimum amount of the Withholding Taxes that the Company is required by law to withhold (the “Mandatory Withholding Taxes”); and further provided that an amount equal to the Mandatory Withholding Taxes in respect of any cash payment to you shall be withheld from any such cash payment:

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OPTION 1:

Authorizing and directing the Company to deduct from the total number of shares of Common Stock issued and deliverable to you pursuant to this Agreement the number of shares having a value equal to the Mandatory Withholding Taxes.

OPTION 2:

Paying to the Company in cash an amount up to the Withholding Taxes but not less than the Mandatory Withholding Taxes.

OPTION 3:

Tendering to the Company the number of unrestricted shares of Common Stock owned by you prior to the date on which Withholding Taxes are due and having a value equal to the Mandatory Withholding Taxes.

In the event that none of the payment options set forth above is specified, your election shall be deemed to be Option 1, and the Company shall proceed accordingly. The Company may refuse to deliver the Awarded Shares if you fail to comply with your obligations in connection with the Withholding Taxes as described in this Paragraph 7.

Regardless of any action the Company takes with respect to any or all Withholding Taxes, you acknowledge that the ultimate liability for all Withholding Taxes legally due by you is and remains your responsibility and that the Company (a) makes no representations or undertakings regarding the treatment of any Withholding Taxes in connection with any aspect of the RSUs, including the grant, lapse of the Restriction Period or other vesting of the RSUs, the subsequent sale of shares of Common Stock received upon lapse of the Restriction Period or other vesting of the RSUs, if any, and the receipt of any dividends or dividend equivalents; and (b) does not commit to structure the terms of the Award or any aspect of the Award to reduce or eliminate your liability for Withholding Taxes.

8. Miscellaneous

(a) You understand and acknowledge that you are one of a limited number of employees of the Company and its Related Companies who have been selected to receive grants of RSUs and that your Award is considered Company confidential information. You hereby covenant and agree not to disclose the Award of RSUs pursuant to this Agreement to any other person except (i) your immediate family and legal or financial advisors who agree to maintain the confidentiality of this Agreement, (ii) as required in connection with the administration of this Agreement and the Plan as it relates to this Award or under applicable law, and (iii) to the extent the terms of this Award have been publicly disclosed.

(b) The grant of RSUs to you in any year shall give you neither any right to similar grants in future years nor any right to be retained in the employ or service of the Company or its Related Companies, such employment being terminable to the same extent as if the Plan and this Agreement were not in effect. The right and power of the Company and its Related Companies to dismiss or discharge you is specifically and unqualifiedly unimpaired by this Agreement.

Page 3 of 5

(c) Each notice relating to this Agreement shall be in writing and delivered in person or by mail to the Company at its office, 6001 36th Avenue West, Everett, WA 98203-1264, to the attention of the Company’s Secretary or at such other address as the Company may specify in writing to you by a notice delivered in accordance with this paragraph. All notices to you shall be delivered to you at your address specified below or at such other address as you may specify in writing to the Secretary of the Company by a notice delivered in accordance with this Paragraph 8(c).

(d) This Agreement, including the provisions of the Plan incorporated by reference herein, comprises the whole Agreement between the parties hereto with respect to the subject matter hereof, and shall be governed by and construed in accordance with the laws of the State of Washington, U.S.A., without reference to principles of conflicts of law. This Agreement shall become effective when it has been executed or accepted electronically by the Company and you. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by the grant of this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Washington, U.S.A., and agree that such litigation shall be conducted only in the courts of Washington, U.S.A., or the federal courts for the United States for the Western District of Washington, and no other courts where this grant is made and/or to be performed.

(e) This Agreement shall inure to the benefit of and be binding upon each successor of the Company and, to the extent specifically provided herein and in the Plan, shall inure to the benefit of and shall be binding upon your heirs, legal representatives, and successors.

(f) If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining provisions of this Agreement.

(g) This Agreement may be executed in separate counterparts, each of which when so executed and delivered will be an original, but all of which together will constitute one and the same instrument. In pleading or proving this Agreement, it will not be necessary to produce or account for more than one such counterpart.

(h) Payments made pursuant to this Agreement are intended to qualify for an exception from Section 409A of the Code. Notwithstanding any other provision in this Agreement and the Plan, the Company, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify this Agreement and/or the Plan so that the RSUs granted to you qualify for exemption from or comply with Section 409A; provided, however, that the Company makes no representations that the RSUs shall be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to the RSUs. Also notwithstanding the foregoing, if at the time of a scheduled Vesting Date, including one provided for under Paragraph 3 of this Agreement, you are a "specified employee" of the Company within the meaning of that term under Section 409A and as determined by the Company, and payment would be treated as a payment made on "separation from service" within the meaning of that term under Section 409A, then, if such delayed commencement is otherwise required in order to avoid a prohibited distribution under Section 409A, the payment shall be delayed until the date which is six months after the date of such separation from service or if earlier the date of your death.

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IN WITNESS WHEREOF, this Agreement is executed by you and by the Company through its duly authorized officer or officers as of the day and year first above written.

	INTERMEC, INC.


	By:
		Patrick J. Byrne
		Chief Executive Officer and President

Dated:	PARTICIPANT:
	(One of the boxes under Paragraph 7 must be checked)



	[NAME]

Page 5 of 5

EX-10.4 9 ex10_4.htm EXHIBIT10_4 ex10_4.htm

Exhibit 10.4

Intermec, Inc.

2008 Long-Term Performance Share Program


Name of Program		The program will be called the Intermec, Inc. 2008 Long-Term Performance Share Program, and will be considered a “sub-plan” under the 2008 Omnibus Incentive Plan (the “Plan”).

Purpose		The primary purposes of the program are to: · Reward officers and key employees for the overall success of Intermec, Inc. (the “Company”) as reflected through the Company’s financial performance and stock price; and · Provide a competitive long-term incentive program.

Effective Date		The original effective date of the program is May 23, 2008. The program will remain in effect until terminated by the Compensation Committee (the “Committee”) of the Board.

Performance Period		The performance period under the program is three years, with the first performance period running from January 1, 2008 to December 31, 2010.

Grant Frequency		A new three-year performance period will begin annually, which will create overlapping performance periods.

Size of Awards		Target awards will be established for each participant, denominated in shares. Target award levels will be approved annually by the Committee.

Program Structure		Participants can earn from 0 percent to 200 percent of their target shares based on Company financial performance.

Performance Measure(s)		Before the commencement of each performance period, the Committee shall select performance measures from those set forth in Section 15 of the Plan. The Committee may choose to include or exclude any of the events set forth in Section 15 of the Plan to the evaluation of performance for such period.

Dividends		Dividends, if any, declared during the performance period will be converted into additional performance shares, based on each participant’s target award.

Form and Timing of Payout		Payouts will be made in shares of the Company’s common stock within 74 days after the end of the performance period.

Page 1 of 2

Certain Terminations of Employment		In the event of a participant’s death, disability, or retirement at age 65 or later, pro rata awards based on the number of full months worked during the performance period will be calculated. Such awards will be based on goal achievement over the entire performance period. Awards in these situations will be calculated and paid after the end of the performance period. In the case of death, however, the performance during the next-ending performance period after death will be calculated as the performance for all open performance periods. Amounts paid on account of death will be paid to a beneficiary designated by the participant. If no beneficiary has been designated, amounts will be paid to the participant’s estate.

Other Terminations of Employment		In the event of a termination of employment not constituting a disability, death, or retirement, as discussed above, the participant will forfeit any right to any payout for all performance periods in progress under the program.

Tax Withholding		The Company has the right to deduct any taxes or statutory deductions required by law to be withheld from all payments under the program.

Change in Capitalization		Any change in capitalization which results in a material change in the value of the Company’s common stock (e.g., special dividend, spin-off) will result in an adjustment in the number of shares earned at target to reflect the recapitalization. While individual recapitalization “events” will be assessed by the Committee on a case-by-case basis, the overriding objective will be to avoid rewarding or penalizing participants specifically as a function of the event.

Change in Control		If a change in control occurs (as defined in the Plan), then all outstanding award cycles will automatically vest and be paid out (in cash) at the target level or the actual performance level as of the change in control, whichever is higher.

Accounting Considerations		The employer must recognize an expense for compensation over the performance period. An estimated expense is accrued by amortizing the initial value of the awards and any subsequent appreciation over the performance period based upon preestablished goals. The approach to expensing may change.

Tax Considerations		The Company will receive a tax deduction in the year in which the actual payout is determinable. The employee must report taxable income in the year the award is paid.

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EX-10.5 10 ex10_5.htm EXHIBIT10_5 ex10_5.htm

Exhibit 10.5

Intermec, Inc.

2008 Long-Term Performance Share Program

Agreement for the Performance Period

January 1, [YEAR] through December 31, [YEAR]

This Performance Share Unit Agreement (the “Agreement”) is made as of %%OPTION_DATE%-%, between Intermec, Inc., a Delaware corporation (the “Company”) and %%FIRST_NAME%-% %%MIDDLE_NAME%-% %%LAST_NAME%-% (the “Participant”).

WHEREAS, the Intermec, Inc. 2008 Omnibus Incentive Plan (the “Plan”) was adopted by the Board of Directors of the Company on March 19, 2008, and was approved by the stockholders of the Company on May 23, 2008; and

WHEREAS, the Committee has adopted the 2008 Long-Term Performance Share Program (the “Program”) as a sub-plan of the Plan and authorized the Award represented by this Agreement;

NOW, THEREFORE, in consideration of the premises, the mutual covenants hereinafter set forth, and other good and valuable consideration, the Company and the Participant hereby agree as follows:

Article 1. Award

The Participant is hereby awarded, as a matter of separate inducement and agreement, and not in lieu of salary or other compensation for services, %%TOTAL_SHARES_GRANTED,’999,999,999’%-% Performance Share Units (the “Target Award”), on the terms and conditions hereinafter set forth. The number of Performance Share Units (“PSUs”) that the Participant may earn under this Agreement shall range from 0% to 200% of the Target Award (the “Awarded Shares”), as determined by the achievement of the performance measures set forth in Article 3 of this Agreement. The Awarded Shares shall be paid in shares of the common stock, par value $.01 per share, of the Company (the “Common Stock”) as set forth in Article 6 of this Agreement. The Participant shall have no obligation to pay the Company additional consideration for the Awarded Shares.

The Plan and the Program, copies of which have been made available to the Participant, are incorporated herein by reference and made part of this Agreement as if fully set forth herein. Capitalized terms used in this Agreement that are not defined herein shall have the meanings assigned to such terms in the Plan and the Program. This Agreement is subject to, and the Company and the Participant agree to be bound by, all of the terms and conditions of the Plan and the Program as the same exist at the time this Agreement became effective. The Plan and the Program shall control in the event there is any express conflict between the terms hereof and the Plan or the Program and with respect to such matters as are not expressly covered in this Agreement. The Company hereby reserves the right to alter, amend, modify, restate, suspend or terminate the Plan, the Program and this Agreement in accordance with Section 12 of the Plan, but no such subsequent amendment, modification, restatement, or termination of the Plan, the Program or this Agreement shall adversely affect in any material way the Participant’s rights under this Agreement without the Participant’s written consent. This Agreement shall be subject, without further action by the Company or the Participant, to such amendment, modification, or restatement.

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Article 2. Performance Period

For all purposes of this Agreement, “Performance Period” means January 1, [YEAR 1] through December 31, [YEAR 3].

Article 3. Achievement of Performance Measures

The number of Awarded Shares to be earned under this Agreement shall be based upon the achievement of the following Performance Measures set by the Committee: The weighted percentage of achievement of (a) the average percentage of attainment of Revenue (calculated as net Revenue as reported under GAAP) (“Revenue”) over the Performance Period and (b) the average percentage of achievement of Diluted Earnings Per Share from continuing operations (calculated on a GAAP basis) (“Diluted EPS”) over the Performance Period. The achievement shall be determined in accordance with the following schedules, with ultimate payout of Awarded Shares to be weighted 30% as to the Revenue Performance Measure and 70% as to the Diluted EPS Performance Measure:

Revenue (30% Weight)

Fiscal Year		Target Revenue ($M)
[YEAR 1]		$
[YEAR 2]
[YEAR 3]

Performance Level	3-Year Average Revenue as % of Target	Payout as % of Target
Maximum	≥[1__]%	200%
	[1__]%	180%
	[1__]%	160%
	[1__]%	140%
	[1__]%	120%
Target	100%	100%
	[__]%	82%
	[__]%	64%
	[__]%	46%
	[__]%	28%
Threshold	[__]%	10%
	<[__]%	0%

Page 2 of 7

Diluted EPS (70% Weight)

Fiscal Year		Target Diluted EPS
[YEAR 1]		$
[YEAR 2]
[YEAR 3]

Performance Level	3-Year Average Diluted EPS as a % of Target	Payout as a % of Target
Maximum	[1__]% or >	200%
	[1__]%	180%
	[1__]%	160%
	[1__]%	140%
	[1__]%	120%
Target	100%	100%
	[__]%	82%
	[__]%	64%
	[__]%	46%
	[__]%	28%
Threshold	[__]%	10%
	<[__]%	0%

The number of Awarded Shares earned for achievement above threshold levels but between the levels shown above will be calculated using interpolation.

In evaluating the achievement of each measure as of the end of each fiscal year in the performance period, the Committee will adjust the calculation of the Attainment Level to exclude restructuring or reorganization costs (as defined in accordance with U.S. GAAP) incurred in any fiscal year in the performance period to the extent that related savings from the program will occur in a future fiscal year, and will include these costs in the period in which, and to the extent that, cost savings are anticipated during the performance period.

Article 4. Termination Provisions

Except as provided below, a Participant shall be eligible for payment of Awarded Shares, as determined in Section 3, only if the Participant’s employment with the Company, a Subsidiary or Affiliate continues through the end of the Performance Period.

In the event of a Participant’s Disability or Retirement at age 65 or later during the Performance Period, a pro rata payment will be made for the number of full months worked during the Performance Period, based on achievement of the Performance Measures over the entire Performance Period. In the case of death, payment shall be calculated and paid as provided in the Program.

In the event of a Change of Control (as defined in the Plan), all outstanding Awards will automatically vest and be paid out in cash at the Target Award level or the actual performance level as of the Change of Control, whichever is higher. Notwithstanding any provision of this Agreement or the Plan to the contrary, in the event such Change of Control does not constitute a "change in control event" within the meaning of Section 409A of the Internal Revenue Code and the regulations thereunder, the cash payment of Awards described in the preceding sentence shall be made within 74 days following the close of the Performance Period.

Page 3 of 7

Article 5. Rights as a Stockholder

During the Performance Period, the Participant shall have no rights of a stockholder with respect to the PSUs or the Awarded Shares. Notwithstanding the foregoing, the Participant shall be entitled to receive any dividend equivalents declared by the Board, as provided in the Program.

Article 6. Form and Timing of Payment

Except as set forth in Article 4, payment of Awarded Shares shall be made in the form of shares of Common Stock within seventy-four (74) calendar days following the close of the Performance Period.

Article 7. Nontransferability

PSUs may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. The Participant’s rights under this Agreement shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s legal representative.

Article 8. Administration

It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan, the Program and this Agreement, all of which shall be binding upon the Participant.

Article 9. Withholding Taxes

No later than the date as of which an amount first becomes includable in the gross income of the Participant for federal income tax purposes with respect to any Awarded Shares, the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local, or foreign taxes of any kind required by law to be withheld by the Company with respect to such amount. Unless otherwise determined by the Committee, withholding obligations (up to the minimum statutory amount required to be withheld by the Company) may be settled with shares of Common Stock, including the Awarded Shares that give rise to the withholding requirement or shares of Common Stock already owned by the Participant. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and its Subsidiaries and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant. Participant, therefore, hereby unconditionally and irrevocably elects, notwithstanding anything to the contrary in this Article 9 or elsewhere in this Agreement, to satisfy any and all federal, state, local, and foreign taxes of any kind that may be withheld by the Company in connection with Participant’s Awarded Shares (the “Withholding Taxes”) by electing one of the following options; provided that in all cases, the Company shall have the right to receive not less than the minimum amount of the Withholding Taxes that the Company is required by law to withhold (the “Mandatory Withholding Taxes”); and further provided that an amount equal to the Mandatory Withholding Taxes in respect of any cash payment to Participant shall be withheld from any such cash payment:

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OPTION 1:

Authorizing and directing the Company to deduct from the total number of shares of Common Stock issued and deliverable to Participant pursuant to this Agreement the number of shares having a value equal to the Mandatory Withholding Taxes.

OPTION 2:

Paying to the Company in cash an amount up to the Withholding Taxes but not less than the Mandatory Withholding Taxes.

OPTION 3:

Tendering to the Company the number of unrestricted shares of Common Stock owned by the Participant prior to the date on which Withholding Taxes are due and having a value equal to the Mandatory Withholding Taxes.

In the event that none of the payment options set forth above is specified, the Participant’s election shall be deemed to be Option 1, and the Company shall proceed accordingly. The Company may refuse to deliver the shares of Common Stock if the Participant fails to comply with his or her obligations in connection with the Withholding Taxes as described in this Article 9.

Regardless of any action the Company takes with respect to any or all Withholding Taxes, the Participant acknowledges that the ultimate liability for all Withholding Taxes legally due by the Participant is and remains the Participant’s responsibility and that the Company (i) make no representations or undertakings regarding the treatment of any Withholding Taxes in connection with any aspects of the PSUs, including the grant or vesting of the PSUs, the subsequent sale of shares of Common Stock received upon vesting of the PSUs, if any, and the receipt of any dividends or dividend equivalents; and (ii) do not commit to structure the terms of the Award of any aspect of the Award to reduce or eliminate the Participant’s liability for Withholding Taxes.

Article 10. Miscellaneous

A. The Participant understands and acknowledges that the Participant is one of a limited number of employees of the Company and its Subsidiaries and Affiliates who have been selected to receive grants of PSUs and that the Participant’s Award is considered Company confidential information. The Participant hereby covenants and agrees not to disclose the Award of PSUs pursuant to this Agreement to any other person except (i) the Participant’s immediate family and legal or financial advisors who agree to maintain the confidentiality of this Agreement, (ii) as required in connection with the administration of this Agreement and the Plan as it relates to this Award or under applicable law, and (iii) to the extent the terms of this Award have been publicly disclosed.

Page 5 of 7

B. The grant of PSUs to the Participant in any year shall give the Participant neither any right to similar grants in future years nor any right to be retained in the employ of the Company or its Subsidiaries or Affiliates, such employment being terminable to the same extent as if the Program and this Agreement were not in effect. The right and power of the Company and its Subsidiaries and Affiliates to dismiss or discharge the Participant is specifically and unqualifiedly unimpaired by this Agreement.

C. Each notice relating to this Agreement shall be in writing and delivered in person or by mail to the Company at its office, 6001 36th Avenue West, Everett, WA 98203-1264, to the attention of the Company’s Secretary or at such other address as the Company may specify in writing to the Participant by a notice delivered in accordance with this paragraph. All notices to the Participant shall be delivered to the Participant at the Participant’s address specified below or at such other address as the Participant may specify in writing to the Secretary of the Company by a notice delivered in accordance with this paragraph.

D. This Agreement, including the provisions of the Plan and the Program incorporated by reference herein, comprises the whole Agreement between the parties hereto with respect to the subject matter hereof, and shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflicts of law. This Agreement shall become effective when it has been executed or accepted electronically by the Company and the Participant. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant of the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Washington, U.S.A., and agree that such litigation shall be conducted only in the courts of Washington, U.S.A., or the federal courts for the United States for the Western District of Washington, and no other courts where this grant is made and/or to be performed.

E. This Agreement shall inure to the benefit of and be binding upon each successor of the Company and, to the extent specifically provided herein and in the Plan and the Program, shall inure to the benefit of and shall be binding upon the Participant’s heirs, legal representatives, and successors.

F. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining provisions of this Agreement.

G. This Agreement may be executed in separate counterparts, each of which when so executed and delivered will be an original, but all of which together will constitute one and the same instrument. In pleading or proving this Agreement, it will not be necessary to produce or account for more than one such counterpart.

H. The Company may, in its sole discretion, decide to deliver any documents related to the PSUs granted under, and participation in, the Program or future PSUs that may be granted under the Program by electronic means or to request the Participant’s consent to participate in the Program by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Program through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

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IN WITNESS WHEREOF, this Agreement is executed by the Participant and by the Company through its duly authorized officer as of the day and year first above written.

	INTERMEC, INC.


	By:	/s/ Patrick J. Byrne
		Patrick J. Byrne


	PARTICIPANT:
	(One of the boxes under Article 9 must be checked)

IMPORTANT
PLEASE ACCEPT ELECTRONICALLY OR
SIGN AND RETURN PROMPTLY

	%%FIRST_NAME%-%
	%%MIDDLE_NAME%-%
	%%LAST_NAME%-%

Page 7 of 7

EX-10.6 11 ex10_6.htm EXHIBIT10_6 Unassociated Document

Exhibit 10.6

DIRECTOR COMPENSATION PROGRAM UNDER THE

INTERMEC, INC. 2008 OMNIBUS INCENTIVE PLAN

The following provisions set forth the terms of the compensation program (the "Program") for nonemployee directors of Intermec, Inc. (the "Company") under the Intermec, Inc. 2008 Omnibus Incentive Plan (the "Plan"). The following terms are intended to supplement, not alter or change, the provisions of the Plan, and in the event of any inconsistency between the terms contained herein and in the Plan, the Plan shall govern. All capitalized terms that are not defined herein shall be as defined in the Plan.

1.	Eligibility

Each director of the Company elected or appointed to the Board who is not otherwise an officer or employee of the Company or a Related Company (a "Director") shall be eligible to receive the Awards set forth in the Program.

2.	Option Grants

(a)

Timing and Number of Shares Subject to Option Grants

(i) Annual Option Grants. Immediately after the 2008 Annual Meeting of Stockholders and at each Annual Meeting of Stockholders thereafter, each Director shall automatically be granted a Nonqualified Stock Option to purchase shares of Common Stock with a Black-Scholes value of $80,000, with any fractional share rounded to the nearest whole share (0.5 to be rounded up) (each, an "Annual Option Grant").

(ii) Initial Option Grants. Any person who becomes a Director at any time of the year other than the date of the Annual Meeting of Stockholders shall automatically be granted a Nonqualified Stock Option to purchase shares of Common Stock for a pro rata portion of the value of the most recent preceding Annual Option Grant, based on the time remaining in the one-year period following the date of the previous Annual Meeting of Stockholders, such grant to be effective on the date he or she becomes a Director (an "Initial Option Grant").

(iii) Makeup Option Grants. Immediately after the 2008 Annual Meeting of Stockholders, each Director shall automatically be granted a Nonqualified Stock Option to purchase shares of Common Stock for a pro rata portion of the value of the Annual Option Grant made on the same date, based on the time between January 1, 2008 and the date of the 2008 Annual Meeting of Stockholders (each, a "Makeup Option Grant").

(b)

Exercise Price of Options.

Annual Option Grants, Initial Option Grants and Makeup Option Grants shall have a per share exercise price equal to the Fair Market Value of the Common Stock on the Grant Date of the Option.

(c)

Option Vesting and Exercisability

Options granted at the Annual Meeting of Stockholders shall vest and become exercisable in four equal installments (subject to adjustment for fractional shares) on the first business day of each fiscal quarter of the Company, beginning on the Grant Date. Options granted on a day other than the date of the Annual Meeting of Stockholders shall vest and become exercisable in equal installments (subject to adjustment for fractional shares) on the Grant Date and the first business day of each fiscal quarter of the Company, if any, that occurs up to, and including, the first quarter of the year in which the next Annual Meeting of Stockholders occurs. Notwithstanding the forgoing, Makeup Option Grants made pursuant to Section 1(a)(iii) shall vest and become exercisable in three installments (subject to adjustment for fractional shares) on the first business day of each fiscal quarter of the Company, beginning on the Grant Date. The first installment will be equal to one half of the Makeup Option Grant; the second and third installments will be equal to one quarter of the Makeup Option Grant.

Page 1 of 4

(d)

Term of Options

Each Option shall expire seven years from the Grant Date thereof, but shall be subject to earlier termination as follows:

(i) In the event that a Director ceases to be a Director of the Company for any reason other than the death of the Director, the unvested portion of any Option granted to the Director shall terminate immediately, and the vested portion of the option may be exercised by the Director only within three years after the date he or she ceases to be a Director of the Company or prior to the date on which the Option expires by its terms, whichever is earlier.

(ii) In the event of the death of a Director, the unvested portion of any Option granted to the Director shall become fully vested and exercisable, and the option may be exercised only within three years after the date of death of the Director or prior to the date on which the Option expires by its terms, whichever is earlier, by the personal representative of the Director's estate, the person(s) to whom the Director's rights under the option have passed by will or the applicable laws of descent and distribution, or any beneficiary designated pursuant to Section 13 of the Plan.

(e)

Exercise of Options

Options shall be exercised by giving the required notice to the Company (or a brokerage firm designated or approved by the Company), stating the number of shares of Common Stock with respect to which the Option is being exercised, accompanied by payment in full for such Common Stock, which payment may be, to the extent permitted by applicable laws and regulations, in whole or in part, (a) in cash or check; (b) by having the Company withhold shares of Common Stock that would otherwise be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option; (d) by tendering (either actually or by attestation) shares of Common Stock owned by the Director that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option; (e) if and so long as the Common Stock is registered under the Exchange Act, by delivery of a properly executed exercise notice, together with irrevocable instructions to a broker, to promptly deliver to the Company the amount of proceeds to pay the exercise price, all in accordance with the regulations of the Federal Reserve Board.

3.	Restricted Deferred Stock Unit Grants

(a)

Timing and Number of Restricted Deferred Stock Units

(i) Annual Restricted Deferred Stock Unit Grants. Immediately after the 2008 Annual Meeting of Stockholders, and at each Annual Meeting of Stockholders thereafter, each Director shall automatically be granted restricted deferred stock units with a value of $80,000, based on the Fair Market Value of the Common Stock on the Grant Date, with any fractional share rounded to the nearest whole share (0.5 to be rounded up) (each, an "Annual Restricted Deferred Stock Unit Grant"); provided, that any person who becomes a Director at any time of the year other than the date of the Annual Meeting of Stockholders shall receive a pro rata portion of the value of the most recent preceding Annual Restricted Deferred Stock Unit Grant, based on the time remaining in the one-year period following the date of the previous Annual Meeting of Stockholders, such grant to be effective on the date he or she becomes a Director.

Page 2 of 4

(ii) Makeup Restricted Deferred Stock Unit Grant. Immediately after the 2008 Annual Meeting of Stockholders, each Director shall automatically receive a pro rata portion of the value of the Annual Restricted Deferred Stock Unit Grant made on the same date, based on the time between January 1, 2008 and the date of the 2008 Annual Meeting of Stockholders.

(b)

Mandatory Deferrals of Restricted Deferred Stock Units

All restricted deferred stock unit grants that Directors are entitled to receive under the Program shall automatically be deferred into and shall be subject to the terms and conditions of the Company's Director Deferred Compensation Plan or any similar successor plan thereto (the "Deferred Compensation Plan").

(c)

Vesting of Restricted Deferred Stock Units

All restricted deferred stock unit awards granted under the Program shall be fully vested as of the date of the next Annual Meeting of Stockholders following the Grant Date, assuming the Director's continued service on the Board during such period. In the event of a Director's termination of service prior to the vesting of restricted deferred stock units, such units shall automatically be forfeited to the Company.

4.	Terms and Conditions of Payment of Fees

(a)

Retainer Fees

There shall automatically be granted each year to each Director retainer fees of $40,000. In addition, a non-executive Director serving as Chairman of the Board shall be paid an additional retainer of $150,000 for the twelve month period ending June 30, 2008 and $120,000 for each twelve month period thereafter. This additional retainer payable to the Chairman of the Board shall automatically be deferred into a stock account under the Deferred Compensation Plan. In addition, the Chairs of the Audit and Compliance Committee, Compensation Committee and Governance and Nominating Committee shall each be paid an additional annual retainer of $15,000, $10,000 and $10,000, respectively; provided that the Chairman of the Board, when also acting in the capacity of the Chair of the Governance and Nominating Committee, shall not receive any additional retainer, but if another director is appointed to the position of Chair of the Governance and Nominating Committee, he or she shall receive an additional retainer of $10,000.

(b)

Meeting Fees

Each Director shall automatically receive an attendance fee of $2,000 for each physical or telephonic meeting of the Board or a committee of the Board that the Director attended.

(c)

Payment of Fees

Except as otherwise set forth above, all retainer fees and meeting fees shall be paid in cash quarterly, after the end of the quarter in which earned. Notwithstanding the foregoing and except as otherwise set forth above, Directors may elect to receive any retainer fees and meeting fees in shares of Common Stock in accordance with Section 4(d) below or may defer retainer fees and meeting fees into cash or stock accounts under the Deferred Compensation Plan.

(d)

Share Election and Issuance of Shares

(i) Share Election. A Director may make a share election ("Share Election") to receive in the form of Common Stock all of his or her retainer fees or meeting fees earned in each calendar year that are otherwise payable in cash. The shares of Common Stock (and cash in lieu of fractional shares) issuable pursuant to a Share Election shall be issued quarterly in accordance with Section 4(d)(ii). The Share Election must be in writing and delivered to the Secretary of the Company on or prior to December 31 of the calendar year preceding the calendar year in which the applicable retainer fees or meeting fees are to be earned; provided, however, that any Director who commences service on the Board on or subsequent to January 1 of a calendar year may make a Share Election during the 30-day period immediately following the commencement of his or her directorship. A Share Election, once made, shall be irrevocable for the calendar year with respect to which it is made and shall remain in effect for future calendar years, unless revoked in writing or modified by a subsequent Share Election with respect to future calendar years. Such subsequent Share Election must be made on or prior to December 31 of the calendar year preceding the calendar year in which such revocation shall take effect and in accordance with the provisions hereof.

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(ii) Issuance of Shares. Shares of Common Stock issuable to a Director pursuant to this Section 4 shall be issued to such Director on the first business day following the end of each calendar quarter. The total number of shares of Common Stock to be issued shall be determined by dividing (x) the dollar amount of the Director's retainer fees and meeting fees for the preceding calendar quarter to which a Share Election applies by (y) the Fair Market Value of the Common Stock on the date such retainer fees or meeting fees would otherwise have been paid in cash. In no event shall the Company be required to issue fractional shares. In the event that a fractional share of Common Stock would otherwise be required to be issued, an amount in lieu thereof shall be paid in cash based on the Fair Market Value of such fractional share on the last business day of the preceding calendar quarter.

5.	Change of Control

Upon a Change of Control, (a) all Options outstanding as of the date of such Change of Control, and which are not then exercisable and vested, shall immediately become fully exercisable and vested; (b) the restrictions applicable to any restricted deferred stock unit grants shall lapse, and such restricted deferred stock unit grants shall become free of all restrictions and become fully vested and transferable; and (c) fees earned in respect of the calendar quarter in which the Change of Control occurs shall be paid in cash as soon as practicable.

Amendment

The Board may amend the provisions contained herein in such respects as it deems advisable. Any such amendment shall not, without the consent of the Director, impair or diminish any rights of a Director or any rights of the Company under an Award.

Provisions of the Plan (including any amendments) not discussed above, to the extent applicable to Directors, shall continue to govern the terms and conditions of Awards granted to Directors.

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EX-10.7 12 ex10_7.htm EXHIBIT10_7 ex10_7.htm

Exhibit 10.7

Intermec, Inc.

6001 36th Avenue West

Everett, WA 98203-1264

DIRECTOR COMPENSATION PROGRAM UNDER THE

INTERMEC, INC. 2008 OMNIBUS INCENTIVE PLAN

NONQUALIFIED STOCK OPTION GRANT NOTICE

(FOR NONEMPLOYEE DIRECTORS)

Intermec, Inc. (the “Company”) hereby grants to you an Option (the “Option”) to purchase shares of the Company's Common Stock pursuant to the terms of the Director Compensation Program (the “Program”) under the Company's 2008 Omnibus Incentive Plan (the “Plan”). The Option is subject to all the terms and conditions set forth in this Stock Option Grant Notice (this “Grant Notice”) and the attached Stock Option Agreement, the Program and the Plan, which are incorporated into this Grant Notice in their entirety. Capitalized terms that are not defined herein shall have the meanings assigned to such terms in the Program and the Plan.

[Name]	Option Number:	[option number]
[Address]	Option Plan:	2008
	Grant Date:	[date]
	Option Shares:	[number]
	Exercise Price (per Share):	[price]
	Type of Option:	Nonqualified Stock Option

Vesting and Exercisability Schedule: The Option shall, subject to the provisions of the Program, become vested and exercisable in installments on the dates set forth below and shall remain cumulatively exercisable until the Option Expiration Date indicated, subject to earlier expiration in the event you cease to be a Director of the Company as set forth in the Stock Option Agreement:

Number of Shares	Date Option May First Be Exercised	Option Expiration Date

[number]	[date]	[date]
[number]	[date]	[date]
[number]	[date]	[date]
[number]	[date]	[date]

Additional Terms/Acknowledgement: You acknowledge receipt of, and understand and agree to, this Grant Notice and the Stock Option Agreement. You further acknowledge that as of the Grant Date, this Grant Notice, the Stock Option Agreement, the Program and the Plan set forth the entire understanding between you and the Company regarding the Option and supersede all prior oral and written agreements on the subject. You also acknowledge that you have received the Program, the Plan and the plan summary for the Plan. You are encouraged to review the Company’s most recent annual report and proxy statement, which may be found at www.intermec.com.

IN WITNESS WHEREOF, this Grant Notice has been executed by you and by the Company through its duly authorized officer, all as of the Grant Date indicated above.

	Intermec, Inc.


	By:
		Patrick J. Byrne
		Chief Executive Officer and President


	Participant:
Dated:


IMPORTANT
PLEASE ACCEPT ELECTRONICALLY OR
SIGN AND RETURN PROMPTLY

	[Name]

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DIRECTOR COMPENSATION PROGRAM UNDER THE

INTERMEC, INC. 2008 OMNIBUS INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

(FOR NONEMPLOYEE DIRECTORS)

As set forth in the attached Stock Option Grant Notice (the “Grant Notice”) and this Stock Option Agreement (this “Agreement”), the Company has granted you an Option pursuant to the Director Compensation Program (the “Program”) under the Intermec, Inc. 2008 Omnibus Incentive Plan (the “Plan”) to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice (the “Shares”) at the exercise price indicated in your Grant Notice.

Capitalized terms that are not defined herein shall have the meanings assigned to such terms in the Program and the Plan. The Program and the Plan shall control in the event there is any express conflict between the Plan and the Grant Notice or this Agreement and with respect to such matters as are not expressly covered herein.

The details of the Option are as follows:

1. Vesting and Exercisability. Subject to the limitations contained herein, the Option will vest and become exercisable as provided in your Grant Notice, except that, unless otherwise provided in this Agreement, vesting will cease upon your ceasing to be a Director of the Company and the unvested portion of the Option will terminate.

4. Methods of Exercise. Subject to the provisions of this Agreement, the vested portion of the Option may be exercised, in whole or in part, at any time during the term of the Option by giving written notice of exercise to the Company on the form furnished by the Company for that purpose, or, to the extent applicable, by written notice to a brokerage firm designated or approved by the Company, specifying the number of Shares subject to the Option to be purchased. Each exercise must encompass at least one installment or 100 Shares, whichever is less.

The exercise price for Shares to be purchased upon exercise of all or a portion of the Option shall be paid in any combination of the following:

(a) in cash in United States dollars (by certified or bank check or such other instrument payable to the order of “Intermec, Inc.” as the Company may accept);

(b) by having the Company withhold Shares that would otherwise be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the Shares being purchased under the Option;

(c) by tendering (either actually or by attestation) shares of Common Stock owned by you that have an aggregate Fair Market Value equal to the aggregate exercise price of the Shares being purchased under the Option;

(d) by delivering a properly executed exercise notice, together with irrevocable instructions to a broker, to deliver promptly to the Company the aggregate amount of proceeds to pay the Option exercise price, and, if requested by you or required by law to be withheld by the Company, the amount of any federal, state, local and foreign withholding taxes, all in accordance with the regulations of the Federal Reserve Board; or

(e) by any other method permitted by the Committee.

5. Treatment upon Termination of Services as a Director.

(a) General Rule. In the event you cease to be a Director of the Company for any reason other than your death, you may exercise the Option, to the extent it was vested on the date you cease to be a Director, on or before the earlier of three years from the date of such termination or the Option Expiration Date.

(b) Death. In the event you cease to be a Director of the Company due to your death, the unvested portion of the Option shall become fully vested and exercisable, and the Option may thereafter be exercised for a period of three years from the date of death or until the Option Expiration Date, whichever period is shorter.

It is your responsibility to be aware of the date on which the Option terminates.

6. Limited Transferability. You may transfer all or a portion of the Option by way of gift to any family member, provided that any such transferee shall agree in writing with you (or any successor optionee) and the Company, as a condition to such transfer, to be bound by the provisions of all agreements and other instruments, including without limitation, the Program and the Plan, and shall agree in writing to such other terms as the Company may reasonably require to assure compliance with applicable federal and state securities and other laws. For purposes of the preceding sentence, "family member" shall include any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationship, any person sharing your household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the optionee) control the management of assets, and any other entity in which these persons (or the optionee) own more than 50% of the voting interests. The Option shall be exercisable, subject to the terms of the Plan, only by you, your guardian or legal representative, or any person to whom such option is transferred pursuant to this paragraph, it being understood that the term "holder" and "optionee" include such guardian, legal representative and other trustee. If such transfer is made to a family member, there may be additional tax consequences at the time of transfer, and the Company will not be responsible for such tax consequences.

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7. Stockholder Rights. No Shares subject to the Option shall be issued until full payment therefor has been made. You shall have all of the rights of a stockholder of the Company with respect to Shares subject to the Option (including, if applicable, the right to vote the Shares and the right to receive dividends, if any) when you have given written notice of exercise and have paid the exercise price for such Shares.

8. Adjustments. If as a result of any adjustment to the shares or number of shares subject to this Agreement made pursuant to Section 14 of the Plan, any fractional share would be issuable under this Agreement, such fractional share shall be canceled without the payment of any consideration to you.

9. Voluntary Nature of Plan and Awards Granted Thereunder/No Employment or Service Contract. The Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement. Grants of Options and other Awards under the Plan are made from time to time in the sole discretion of the Committee. The grant of the Option or other Award does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if Options have been granted repeatedly in the past. You acknowledge that future grants under the Plan, if any, will be at the sole discretion of the Committee, including the timing of any grant, the number of shares subject to the Option, the vesting provisions, and the exercise price. The grant of an Option to you in any year shall give you neither any right to similar grants in future years nor any right to be retained in the employ or other service of the Company or a Related Company, such employment or service relationship being terminable to the same extent as if the Plan and this Agreement were not in effect. The right and power of the Company and its Related Companies to dismiss or discharge you is specifically and unqualifiedly unimpaired by this Agreement.

10. Data Privacy Rights. If employed by a Related Company, you authorize and direct such Related Company or any agent of the Company or such Related Company administering the Plan or providing plan recordkeeping services to disclose to the Company or any of its Related Companies such information and data as it shall request in order to facilitate the grant of the Option and the administration of the Plan, and you waive any data privacy rights you may have with respect to such information. By accepting this Agreement, you authorize the Company and the Related Company by which you are employed, if applicable, to store and transmit such information in electronic form.

11. Option Expiration. It is the present practice of the Company to provide participants in the Plan, solely as a courtesy and not as a Company policy, with written or oral notification of the imminent expiration of any Option having monetary value. You acknowledge that the Company and its subsidiaries and agents shall have no liability or responsibility in the event you should fail to receive any such "courtesy notice" and the Option expires unexercised. You acknowledge that the obligation to monitor the schedule of exercisability and expiration of the Option evidenced by this Agreement, and to procure current quotations regarding the market value of the Shares, is solely your obligation and not that of the Company or any subsidiary or affiliate by which you are employed or the agents of either of them.

12. Notices. Each notice relating to this Agreement shall be in writing and delivered in person or by mail to the Company at its office, 6001 36th Avenue West, Everett, WA 98203-1264, to the attention of the Company's Secretary, or at such other address as may be furnished to you in writing. All notices to you or other person or persons then entitled to exercise any right pursuant to this Agreement shall be delivered to you or such other person as you or such other person may specify in writing to the Secretary of the Company by a notice delivered in accordance with this paragraph.

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13. Electronic Notices. The Company may, in its sole discretion, decide to deliver any documents related to the Option granted under, and participation in, the Plan or future options (if any) that may be granted under the Plan by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

14. Entire Agreement. The terms and conditions of this Agreement and the Grant Notice, the Program and the Plan, which are incorporated by reference herein, comprise the whole terms and conditions between you and the Company with respect to the subject matter of the Grant Notice and this Agreement and shall be governed by and construed in accordance with the laws of the State of Washington, U.S.A., without reference to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by the grant of this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Washington, U.S.A., and agree that such litigation shall be conducted only in the courts of Washington, U.S.A., or the federal courts for the United States for the Western District of Washington, and no other courts where this grant is made and/or to be performed. The Committee may amend the terms and conditions of this Agreement at any time, prospectively or retroactively, to the extent permitted by the Plan.

The Company hereby reserves the right to alter, amend, modify, restate, suspend or terminate the Program, the Plan and this Agreement in accordance with Section 16.1 of the Plan, but no such subsequent amendment, modification, restatement or termination of the Plan, the Program or this Agreement shall adversely affect in any material way your rights under this Agreement without your consent. This Agreement shall be subject, without further action by the Company or you, to such amendment, modification or restatement.

The provisions of the Grant Notice and the Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

15. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon each successor of the Company and, to the extent specifically provided therein and in the Plan, shall inure to the benefit of and shall be binding upon your heirs, legal representatives, and successors and upon any person to whom a transfer of the Option permitted by Paragraph 6 of this Agreement has been made.

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EX-10.8 13 ex10_8.htm EXHIBIT10_8 ex10_8.htm

Exhibit 10.8

INTERMEC, INC.

DIRECTOR DEFERRED COMPENSATION PLAN

1. Introduction.

(a) Purpose. The purposes of the Intermec, Inc. Director Deferred Compensation Plan (the "Plan"), which is an amendment and restatement of the 2002 Director Stock Option and Fee Plan), are to further long-term growth of the Company by providing members of the Board of Directors of Intermec, Inc., a Delaware corporation (the "Company"), who are neither officers nor employees of the Company, the ability to defer receipt of their compensation, keeping their financial interests aligned with the Company, thereby providing them with a long-term incentive to remain in the service of the Company and increase their efforts for the success of the Company. The Plan is also intended to assist the Company in attracting experienced and qualified candidates to become members of the Board. The Plan is intended to be a continuation of the deferral components of the 2002 Director Stock Option and Fee Plan, as amended effective November 13, 2007 (the "2002 Plan").

(b) Effective Date. The Plan is effective as of the date of the Company's 2008 Annual Meeting of Stockholders (the "Effective Date"), provided that the Plan will become effective only if Company's stockholders approve the 2008 Omnibus Incentive Plan at that meeting. The Plan is also effective with respect to all amounts under the 2002 Plan deferred on or after January 1, 2005 that remain unpaid as of the Effective Date. All amounts earned and vested as of December 31, 2004 shall continue to be governed by the terms of the 2002 Plan in place as of December 31, 2004 or any earlier applicable date in accordance with then applicable Internal Revenue Service ("IRS") guidance. All amounts earned or vested from January 1, 2005 through the day before the Effective Date shall be governed by this Plan, as modified by the operations of the Plan during such period in accordance with Section 409A and then applicable IRS guidance (including transition relief). No amendment to the Plan on and after January 1, 2005 is intended to, nor shall it be deemed to, apply to other than the terms and conditions of the Plan in effect prior to January 1, 2005 unless expressly provided by such amendment.

2. Definitions.

"2002 Plan" has the meaning set forth in Section 1(a).

"Account" means a Cash Account or a Share Account.

"Adverse Tax Consequences under Section 409A" means the accelerated inclusion of taxable income, 20% additional tax rate and associated interest charge that shall apply to any deferred compensation of a Director under Section 409A(a)(1)(B) of the Code.

"Affiliated Company" means (a) any corporation that is a member of a controlled group of corporations (as defined in Section 414(b) of the Code) that includes the Company, and (b) any trade or business that is under common control (as defined in Section 414(c) of the Code) with the Company.

"Beneficiary" means the person, trust or other entity designated by the Director to receive payment under the Plan in the event of the Director's death.

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

"Cash Account" means the bookkeeping account established by the Company for the deferral of Fees by Directors that shall be credited with earnings pursuant to Section 4(b) hereof.

"Change of Control" means a change (a) in the ownership of the Company (acquisition by one or more persons acting as a group, of more than 50% of the total voting power or fair market value of the Company); (b) in the effective control of the Company (acquisition or acquisitions during a 12-month period ending on the date of the last acquisition, by one or more persons acting as a group, of 30% or more of the voting power of the Company or replacement of a majority of the members of the Board during any 12-month period, not endorsed by the majority of the Board prior to the appointment or election); or (c) in the ownership of a substantial portion of the assets of the Company, in each case as provided in Section 409A and the regulations thereunder and interpretations thereof, as the same may be applicable from time to time.

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"Claimant" has the meaning set forth in Section 9(a).

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

"Common Stock" means the common stock, par value $.01 per share, of the Company.

"Company" has the meaning set forth in Section 1(a).

"Deferral Election" means an election pursuant to Section 3 hereof to defer receipt of Fees into a Share Account or Cash Account.

"Deferred Amounts" mean the amounts credited to a Director's Share Account or Cash Account pursuant to a Deferral Election or otherwise pursuant to Section 4.

"Director" means a member of the Board who is neither an officer nor an employee of the Company. A Director of the Company shall not be deemed to be an employee of the Company solely by reason of the existence of a consulting contract between such Director and the Company or any subsidiary thereof pursuant to which the Director agrees to provide consulting services as an independent consultant to the Company or its subsidiaries on a regular or occasional basis for a stated consideration. The term "Director" as used in the Plan shall include any person who may hereafter become an advisory director of the Company, as that term is used in the Company's By-Laws.

"Disability" and its derivations such as "Disabled" mean either of the following: (a) the Director is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months; or (b) the Director is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Director's company. Notwithstanding the foregoing, a Director shall be deemed to have a Disability or to be Disabled if the Director (i) has been determined to be totally disabled by the Social Security Administration or (ii) has been determined to be disabled in accordance with the Director's company's disability insurance program, but only if the definition of "disability" under that program complies with the requirements of Treasury Regulation Section 1.409A-3(i)(4).

"Effective Date" has the meaning set forth in Section 1(b).

"Fair Market Value" or "FMV" means, as of any given date, the closing price reported for the Common Stock during normal business hours on the New York Stock Exchange for such date, if traded thereon, or, if not traded thereon, on a national securities exchange, if traded thereon, or, if not traded thereon, the average of the high and low or closing bid and asked prices reported on another reporting system that provides such information on the applicable date, the preceding trading day, the next succeeding trading day, or an average of trading days, as determined by the Board in its discretion. In the event the Common Stock is not publicly traded at the time a determination of its value is required to be made hereunder, the determination of its Fair Market Value shall be made by the Board in such manner as it deems appropriate.

"Fees" means Retainer Fees and Meeting Fees.

"Investment Options" means the investment options made available by the Board under the Plan, as may be modified from time to time. The Director may change a selection by submitting a new election to the Board on a form approved by the Board. Any such selection shall take effect in the calendar quarter next succeeding the quarter in which the election form is received by the Board, and shall continue in effect thereafter until changed in accordance with the foregoing sentence. The Director's selection of an Investment Option and the crediting or debiting of amounts to a Director's Cash Account based on such selection shall not be considered or construed as an actual investment in any such Investment Option. A Director's Cash Account balance shall at all times be a bookkeeping entry only.

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"Meeting Fees" means fees scheduled to be paid to a Director for attendance at Board or committee meetings.

"Plan" has the meaning set forth in Section 1(a).

"Plan Administrator" means the Board or such delegate as the Board prescribes pursuant to Section 19(a).

"Retainer Fees" means the annual retainer scheduled to be paid to a Director for the calendar year and additional annual fees scheduled to be paid to a Director for serving as Chairman of the Board or as Chair of a Board committee.

"Section 409A" means Section 409A of the Code.

"Share Account" means the bookkeeping account established by the Company for the deferrals of Fees by Directors, which shall be credited with Share Units pursuant to Section 4(a).

"Share Unit" means a share of Common Stock credited as a bookkeeping entry to a Director's Share Account. Each Share Unit shall represent the right to receive one share of Common Stock.

"Unforeseeable Emergency" means a severe financial hardship to the Director resulting from an illness or accident of the Director, the Director's spouse, the Director's Beneficiary or the Director's dependent (as defined in Code Section 152(a)), without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)); loss of the Director's property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Director. For example: (a) the imminent foreclosure of or eviction from the Director's primary residence may constitute an Unforeseeable Emergency; (b) the need to pay for medical expenses, including nonrefundable deductibles, as well as for the costs of prescription drug medication may constitute an Unforeseeable Emergency; (c) the need to pay for the funeral expenses of a spouse, a Beneficiary or a dependent (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)) may constitute an Unforeseeable Emergency. The purchase of a home and the payment of college tuition are not Unforeseeable Emergencies. The determination of whether an Unforeseeable Emergency has occurred shall be based on the facts and circumstances of the individual Director's situation and shall be determined by the Plan Administrator.

3. Terms and Conditions of Deferral Elections.

(a) In General. Each Director may irrevocably elect annually to defer receiving all or a portion of (i) the shares of Common Stock that would otherwise be issued in connection with the Director's retainer fees or meeting fees in respect of a calendar year, (ii) the shares of Common Stock that would otherwise be issued upon a Director's election to receive cash retainer fees or meeting fees in shares of Common Stock, or (iii) a Director's cash retainer fees or meeting fees in respect of a calendar year that are not subject to an election to receive such fees in shares of Common Stock (a "Deferral Election"). Each Deferral Election shall state the amount of cash or stock that the Director is electing to defer. A Director who has made a Deferral Election with respect to shares of Common Stock shall have the number of shares of Common Stock that are the subject of the Deferral Election credited to a Share Account in the form of Share Units. A Director who has made a Deferral Election with respect to Meeting Fees that are not subject to a Share Election shall have the amount of deferred fees credited to a Cash Account.

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(b) Timing of Deferral Election. The Deferral Election shall be in writing and delivered to the Secretary of the Company on or prior to December 31 of the calendar year preceding the calendar year in which the applicable Fees are to be earned; provided, however, that a Director who commences service on the Board on or subsequent to January 1 of a calendar year may make a prospective Deferral Election during the 30-day period immediately following the commencement of his or her directorship, and, accordingly, such Deferral Election shall apply only with respect to compensation paid for services to be performed subsequent to the Deferral Election. A Deferral Election, once made, shall be irrevocable for the calendar year with respect to which it is made and shall remain in effect for future calendar years unless revoked or modified by a subsequent Deferral Election with respect to future calendar years on or prior to December 31 of the calendar year preceding the calendar year in which such revocation shall take effect and in accordance with the provisions hereof. No subsequent Deferral Election may be made with respect to Fees earned during the current calendar year or prior calendar years.

4. Crediting of Accounts.

(a) Share Accounts. Each Share Account shall be deemed to be invested in shares of Common Stock. Whenever regular cash dividends are paid by the Company on outstanding Common Stock, there shall be credited to the Director's Share Account additional Share Units equal to (i) the aggregate dividend that would be payable on outstanding shares of Common Stock equal to the number of Share Units in such Share Account on the record date for the dividend, divided by (ii) the Fair Market Value of the Common Stock on the payment date of the dividend.

(b) Cash Accounts. Each Director's Cash Account shall be credited with earnings, gain or loss, on the last day of each calendar quarter. The earnings on each Cash Account shall be deemed invested in the Investment Options chosen by each Director at the time of his or her Deferral Election and modified thereafter pursuant to such rules and procedures as the Board may establish in its discretion. Earnings shall be calculated on the basis of the average daily balance in the Cash Account during the calendar quarter.

(d) Status of Accounts. The Share Account and Cash Account shall not be funded, and all Deferred Amounts shall be held in the general assets of the Company and be subject to the claims of general creditors of the Company.

5. Payment of Deferred Amounts.

(a) Commencement of Payment. Except as otherwise provided in this Section 5, a Director's Deferred Amounts shall become payable in the January following the year in which the Director separates from service as a Director; provided, however, that if a Director is also providing services to the Company or an Affiliated Company as an independent contractor, his or her Deferred Amounts cannot be paid until he or she has separated from service both as a Director and as an independent contractor. Payments from a Cash Account shall be paid in cash. Payments from a Share Account shall be made by converting Share Units into Common Stock on a one-for-one basis, with payment of fractional shares to be made in cash based on the Fair Market Value of such fractional share on the last market day of the preceding calendar quarter.

(b) Timing of Payments. Subject to Sections 5(c) and (d), each Director shall elect in his or her Deferral Election to receive payment of his or her Deferred Amounts in the event the Director separates from service as a Director (for reasons other than death, Disability or Unforeseeable Emergency) either in a lump sum or in two to 15 substantially equal annual installments. Effective January 1, 2009, a Director may elect to change such form of payment only under the following conditions:

(i) The election does not take effect until as least 12 months after the date on which the election is made; and

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(ii) The payment with respect to which such election is made shall be deferred for a period of not less than five years from the date such payment would otherwise have been paid (or in the case of any method of installment payments, each of which are treated as a single payment for purposes of Section 409A, five years from the date the first installment was scheduled to be paid).

With respect to each of the calendar years that include December 31, 2007 and December 31, 2008, respectively, the Directors were and will be given the ability to elect to change such form of payment without regard to the limitations imposed in the foregoing subsections (i) and (ii) above, to the full extent permitted by applicable all applicable Treasury regulations, IRS rulings and other guidance governing the transition period under Section 409A.

(c) Payment Upon Death, Disability or Unforeseeable Emergency. In the event of a Director's death, payment of the remaining portion of the Director's Deferred Amounts shall be made to the Director's Beneficiary (or, if no Beneficiary has been designated, to the Director's estate or other legal representative) in a lump sum. Payment shall be made to a Director in a lump sum in the event of Disability or upon the occurrence of an Unforeseeable Emergency. A Director who experiences a Disability or an Unforeseeable Emergency may request a payment from his or her Accounts under the Plan by submitting a request in writing to the Secretary of the Company for presentation to the Board. Such request shall specify the date of the occurrence of such Disability or Unforeseeable Emergency and the amount of the payment requested. A distribution based on an Unforeseeable Emergency is limited to the amount reasonably necessary to satisfy the emergency need and may include amounts necessary to pay any federal, state or local income tax penalties reasonably anticipated to result from the distribution. Payment under this Section 5(c) shall be made on or before the 90th day immediately following the event that triggers such payment. A Director's Deferral Election shall be cancelled for the remainder of any calendar year in which he or she receives a distribution based on an Unforeseeable Emergency.

(d) Delay in Payments Allowed by Plan Administrator. To the extent permitted by Treasury Regulation Section 1.409A-2(b)(7), a delay in payments shall be allowed under the Plan if the Plan Administrator determines that the amount would not be deductible under Code § 162(m) or if the payment would violate federal securities laws or other applicable laws.

6. Limitation of Rights.

(a) No Right to Continue as a Director. Neither the Plan nor the making of a Deferral Election nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the Company shall retain a Director for any period of time or at any particular rate of compensation.

(b) No Stockholder's Rights. A Director who has made a Deferral Election (or his or her representative) shall have no rights as a stockholder with respect to any Share Units with respect to a Deferral Election until the date of the actual issuance to him or her (or such representative) of shares of Common Stock (either through the Company's Direct Registration System or by certification), and, except as expressly provided by the terms of the Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date such shares are issued.

7. Effect of Certain Changes in Capitalization. In the event of any change in corporate capitalization (such as a stock split), any corporate transaction (such as any merger, consolidation or separation (including a spinoff)), any other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the Board shall equitably adjust the Share Account to reflect any such transaction and shall make such substitution or adjustments in the aggregate number and kind of shares reserved for issuance under the Plan.

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8. Change of Control. Notwithstanding anything in the Plan to the contrary, upon the occurrence of a Change of Control:

(a) All Share Units credited to a Share Account shall be converted into Common Stock and, together with all Deferred Amounts credited to a Cash Account, shall be transferred within 90 days of the Change of Control to each Director; and

(b) Fees earned in respect of the calendar quarter in which the Change of Control occurs shall be paid in cash as soon as practicable.

9. Claims Procedures.

(a) Presentation of Claim. Any Director or Beneficiary (such Director or Beneficiary being referred to in this Section as a "Claimant") may deliver to the Board a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after the Claimant received such notice. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

(b) Notification of Decision. The Board shall consider a Claimant's claim within a reasonable time, and shall notify the Claimant in writing:

(i) That the Claimant's requested determination has been made, and that the claim has been allowed in full; or

(ii) That the Board has reached a conclusion contrary, in whole or in part, to the Claimant's requested determination, in which case such notice shall state (1) the specific reason(s) for the denial of the claim, or any part of it, and (2) the specific references to pertinent provisions of the Plan on which such denial was based.

(c) Legal Action. Compliance with the foregoing provisions of this Section 9 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under the Plan.

10. Amendment; Termination.

(a) Amendment. The Board may at any time and from time to time alter, amend or suspend the Plan in whole or in part; provided, however, that no amendment which is required by any regulation, law or stock exchange rule to be approved by stockholders shall be effective unless it is approved by the stockholders of the Company entitled to vote thereon. Notwithstanding the foregoing, no amendment shall affect adversely any of the rights of any Director, under any option or under any election theretofore in effect under the Plan, or with respect to Deferred Amounts, without such Director's consent.

(b) Termination. The Plan shall continue for an indefinite period of time unless earlier terminated by the Board. Notwithstanding the Plan's termination, amounts shall be delivered pursuant to any Deferral Election made prior to the Plan's termination in accordance with such election. Deferral Elections may not be made for any Director retainer fees or meeting fees that would be paid following the date of the termination of the Plan.

11. Nontransferability. No right or interest of any Director in Deferred Amounts shall be transferable by a Director other than (a) by will or by the laws of descent and distribution, or (b) pursuant to the same rules and procedures that apply to a qualified domestic relations order (as defined in the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended). All rights with respect to Deferred Amounts shall be exercisable, during the Director's lifetime, only by the Director or by the guardian or legal representative of the Director or an alternate payee pursuant to a qualified domestic relations order.

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12. Beneficiaries. The Board shall establish such procedures as it deems appropriate for a Director to designate a Beneficiary to whom any amounts payable in the event of a Director's death are to be paid. Directors shall make a beneficiary election with respect to Deferred Amounts at the same time that a Deferral Election is made.

13. Compliance With Law, Etc. Notwithstanding any other provision of the Plan or agreements made pursuant hereto, the Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock under the Plan prior to fulfillment of all of the following conditions:

(a) listing, or approval for listing upon notice of issuance, of such shares on the New York Stock Exchange or such other securities exchange or NASDAQ as may at the time be the principal market for Common Stock;

(b) any registration or other qualification of such shares of the Company under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification that the Board shall, in its absolute discretion upon the advice of counsel, deem necessary or advisable; and

(c) the obtaining of any other consent, approval or permit from any state or federal governmental agency, which the Board shall, in its absolute discretion after receiving the advice of counsel, determine to be necessary or advisable.

14. Compliance With Section 409A. The Plan is intended to comply with the requirements of Section 409A (including all applicable Treasury regulations, IRS rulings and other guidance). Notwithstanding any provision to the Plan or agreements made pursuant to the Plan, the Plan shall be interpreted, operated and administered in a manner consistent with this intention, so as to avoid the Adverse Tax Consequences under Section 409A.

15. Notice. Any written notice to the Company required by any of the provisions of the Plan shall be addressed to the Secretary of the Company and shall become effective when it is received.

16. Governing Law. The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Delaware, without reference to principles of conflict of laws, and shall be construed accordingly.

17. Headings. The headings of sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Plan.

18. Administration.

(a) In General

(i) Administrator. The Plan shall be administered by the Plan Administrator. The Plan Administrator shall have the right to delegate its authority to administer the Plan to the Governance and Nominating Committee or another Board committee consisting solely of independent Directors.

(ii) Discretionary Authority. The Plan Administrator shall have and exercise all discretionary and other authority to control and manage the operation and administration of the Plan, except such authority as is specifically allocated otherwise by or under the terms hereof, and shall have the power to take any action necessary or appropriate to carry out such responsibilities. Without limiting the foregoing, and in addition to the authority and duties specified elsewhere herein, the Plan Administrator shall have the discretionary authority to (1) construe, interpret and apply the terms and provisions of the Plan, (2) prescribe such rules and regulations, and issue such directives, as it deems necessary or appropriate for the administration of the Plan, and (3) make all other determinations and decisions as it deems necessary or appropriate for the administration of the Plan. The Plan Administrator may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent it deems expedient.

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(iii) No Conflicts. No Director who represents or is authorized to act on behalf of (or who is a member of) the Administrator or the Board may decide, determine or act on any matter that affects the distribution, nature or method of settlement of solely such Director's retirement benefit under the Plan, except in exercising an election available to that Director in his or her capacity as a Director.

(b) Finality of Determination. Except as with respect to appeals of claim denials under Section 9, the determination of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan shall be final, binding and conclusive on all persons and shall be given the greatest deference permitted by law. Any determination by the Board in connection with the Plan shall be final, binding and conclusive on all persons and shall be given the greatest deference permitted by law.

(c) Expenses. All expenses that are necessary to operate and administer the Plan shall be paid by the Company; however, such expenses may be allocated across Directors' Accounts if the Company so chooses.

(d) Disputed Payee or Act. If any dispute arises regarding the person to whom payment or delivery of any sums or property should be made by the Company or regarding any act to be performed the Company may, in its sole discretion, retain such payment and postpone the performing of such act until final adjudication of such dispute has been made in a court of competent jurisdiction or otherwise to the satisfaction of the Company or until the Company has been indemnified against loss to its satisfaction.

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EX-10.9 14 ex10_9.htm EXHIBIT10_9 ex10_9.htm

Exhibit 10.9

INTERMEC, INC.

2008 EMPLOYEE STOCK PURCHASE PLAN

(Effective July 1, 2008)

1.	ESTABLISHMENT OF PLAN.

Intermec, Inc., a Delaware corporation (the "Company"), proposes to grant options ("Options") for purchase of the Company's common stock, $.01 par value ("Common Stock"), to eligible employees of the Company and its Designated Subsidiaries (as hereinafter defined) pursuant to this Employee Stock Purchase Plan (this "Plan"). This Plan includes two components: a Code (as defined below) Section 423(b) Plan and a non-Code Section 423(b) Plan. For purposes of this Plan, "parent corporation" and "subsidiary" (collectively, "Subsidiaries") shall have the same meanings as "parent corporation" and "subsidiary corporation" set forth in Sections 424(e) and 424(f), respectively, of the Internal Revenue Code of 1986, as amended (the "Code"). In addition, for purposes of this Plan, “Affiliate” shall mean an entity, other than a Subsidiary, in which the Company has a controlling interest.

The Company intends this Plan to qualify as an "employee stock purchase plan" under Section 423 of the Code (including any amendments or successor provisions to such Section), but makes no representation of such status nor undertaking to maintain such status. In addition, this Plan document authorizes the grant of options under a non-Code Section 423(b) Plan which does not qualify under Section 423(b) of the Code pursuant to rules, procedures or sub-plans adopted by the Committee (as defined in Section 4 of this Plan) (or its designate) designed to achieve tax, securities law or other objectives for eligible employees and the Company. Except as otherwise indicated herein, the non-Code Section 423(b) Plan will operate and be administered in the same manner as the Code Section 423(b) Plan.

2.	STOCK SUBJECT TO PLAN.

A total of 1,500,000 shares of the Common Stock is reserved for issuance under this Plan. Such number shall be subject to adjustments effected in accordance with Section 16 of this Plan. Any shares of Common Stock that have been made subject to an Option that cease to be subject to the Option (other than by means of exercise of the Option), including, without limitation, in connection with the cancellation or termination of an Option, shall again be available for issuance in connection with future grants of Options under this Plan.

PURPOSE.

The purpose of this Plan is to provide employees of the Company and its designated Subsidiaries or Affiliates, as that term is defined in Section 5 of this Plan ("Designated Subsidiaries"), with a convenient means of acquiring an equity interest in the Company through payroll deductions (or, if payroll deductions are not permitted under local laws, through other means specified by the Committee and as part of the non-Code Section 423(b) Plan), to enhance such employees' sense of participation in the affairs of the Company and Subsidiaries and Affiliates.

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4.	ADMINISTRATION.

This Plan shall be administered by a committee (the "Committee") appointed by the Company's Board of Directors (the "Board") consisting of at least two members, who need not be members of the Board and who may be eligible to participate in the Plan. The Committee shall initially be the Compensation Committee of the Board. Subject to the provisions of this Plan, the Committee shall have exclusive authority, in its discretion, to determine all matters relating to Options granted under this Plan, including all terms, conditions, restrictions, and limitations of Options and to determine all factual matters relevant to the Plan and its administration; provided, however, that all participants granted Options under an offering pursuant to the Code Section 423(b)(5) shall have the same rights and privileges within the meaning of Code Section 423(b)(5) except as required by applicable law. The Committee shall also have exclusive authority to interpret this Plan and may from time to time adopt rules and regulations of general application for this Plan's administration. The Committee shall have the discretion to determine whether eligible employees of the Company or a Designated Subsidiary shall participate in the Code Section 423(b) Plan or the non-Code Section 423(b) Plan. Additionally, the Committee has the discretion to adopt rules regarding the Plan administration to conform to local laws or to enable eligible employees of the Company and Designated Subsidiaries to participate in the Plan. The Committee may also adopt rules, procedures or sub-plans applicable to particular Designated Subsidiaries or locations, which sub-plans may be designed to be outside the scope of Code Section 423. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules and procedures regarding the handling of payroll deductions, payment of interest and handling of stock certificates which vary according to local requirements as part of the non-Code Section 423(b) Plan. The Committee has the authority to suspend or limit participation in the non-Code Section 423(b) Plan for any reason, including administrative or economic reasons. The Committee's exercise of discretion and interpretation of this Plan, its rules and regulations, and all actions taken and determinations made by the Committee pursuant to this Plan shall be conclusive and binding on all parties involved or affected. The Committee may delegate administrative duties to employees of the Company or to independent contractors, as it deems advisable. All expenses incurred in connection with the administration of this Plan shall be paid by the Company and the Designated Subsidiaries; provided, however, that the Committee may require a participant to pay any costs or fees in connection with the sale by the participant of shares of Common Stock acquired under this Plan.

5.	ELIGIBILITY.

For all purposes of this Plan, the term “Designated Subsidiaries” shall mean those entities of the Company, including any Subsidiaries or Affiliates, which may hereafter be determined by the Committee or the Board to be Designated Subsidiaries for participation in the Plan. For purposes of the Code Section 423(b) Plan only, such Designated Subsidiaries must be Subsidiaries as defined in Section 1 of the Plan. Such determination of Designated Subsidiaries may permit participation in this Plan of all of the eligible employees working for the Designated Subsidiary or, with respect to the non-Code Section 423(b) Plan, only those eligible employees who work for a Designated Subsidiary in a particular country or countries as determined by the Committee or the Board. A Designated Subsidiary will cease to be a Designated Subsidiary on the earlier of (i) the date the Committee or the Board determines that such entity is no longer a Designated Subsidiary or (ii) with respect to the Code Section 423(b) Plan only, such Designated Subsidiary ceases for any reason to be a "parent corporation" or "subsidiary corporation" as defined in Sections 424(e) and 424(f), respectively, of the Code.

Any employee of the Company or the Designated Subsidiaries is eligible to participate in the Plan for any Offering Period (as hereinafter defined) under this Plan except the following:

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(a) employees who, together with any other person whose stock would be attributed to such employee pursuant to Section 424(d) of the Code, own stock or hold options to purchase stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or any of its Subsidiaries or who, as a result of being granted Options under this Plan would own stock or hold options to purchase stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or any of its Subsidiaries;

(b) employees whose employment terms are covered by a collective bargaining agreement in situations where the applicable union or other collective bargaining unit has either refused to bargain with respect to this Plan as an employee benefit (having been specifically requested to do so by the Company or a Subsidiary) or has considered this Plan as a potential employee benefit and has rejected this Plan or has otherwise determined that employees which such union or other bargaining unit represents may not participate in this Plan, provided the exclusion of such employees is not prohibited under applicable local law;

(c) employees who are citizens of a country which prohibits foreign corporations from granting stock options to any of its citizens; and

(d) no employee of the Company or a Designated Subsidiary shall be eligible to participate in the non-Code Section 423(b) Plan if he or she is an officer or director of the Company subject to the requirements of Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) with respect to the Company’s securities.

6.	OFFERING PERIODS.

The offering periods of this Plan (individually, an "Offering Period") shall be of periods not to exceed the maximum period permitted by Section 423 of the Code. Unless and until determined otherwise by the Committee or the Board, (a) Offering Periods shall commence on January 1, April 1, July 1 and October 1 of each calendar year, and (b) each Offering Period shall consist of one three-month purchase period (individually, a "Purchase Period") during which payroll deductions of the participants are accumulated under this Plan or, if payroll deductions are not permitted under local law, during which other means of contribution, specified by the Committee pursuant to the non-Code Section 423(b) Plan, are collected. The first day of each Offering Period is referred to as the "Offering Date." The last day of each Purchase Period is referred to as the "Purchase Date." Subject to the requirements of Section 423 of the Code, the Committee or the Board shall have the power to change the duration of Offering Periods or Purchase Periods with respect to future offerings.

7.	PARTICIPATION IN THIS PLAN.

Eligible employees may become participants in an Offering Period under this Plan on the first Offering Date by delivering an enrollment form provided by the Company to the administrator for this Plan at the facility of the Company or the Designated Subsidiary by which the participant is employed (the "Local Administrator") not later than the 15th day of the month (or if such day is not a business day for the Company or the applicable Subsidiary, on the immediately preceding business day) before such Offering Date unless a later time for filing the enrollment form authorizing payroll deductions or other contributions is set by the Committee for all eligible employees with respect to a given Offering Period. Once an employee becomes a participant in the Plan with respect to an Offering Period, such employee will automatically participate in the Offering Period commencing immediately following the last day of the prior Offering Period unless the employee withdraws from this Plan or terminates further participation in the Offering Period as set forth in Sections 13 and 14 below. Such participant is not required to file any additional enrollment form in order to continue participation in this Plan, except that the Committee may require the filing of new enrollment forms by participants who transfer to another facility of the Company or a Designated Subsidiary.

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8.	GRANT OF OPTION ON ENROLLMENT.

Enrollment by an eligible employee in this Plan with respect to an Offering Period will constitute the grant by the Company to such employee of an Option to purchase on the Purchase Date up to that number of shares of Common Stock of the Company, and any fraction of a share, determined by dividing (a) the amount accumulated in such employee's payroll deduction account during the Purchase Period ending on such Purchase Date by (b) the Purchase Price as that term is defined in Section 9; provided, however, that the number of shares which may be purchased pursuant to an Option may in no event exceed the number of shares determined in the manner set forth in Section 11(b) of the Plan or such other maximum number of shares as may be specified in the future by the Committee in lieu of the limitation set forth in Section 11(b).

9.	PURCHASE PRICE.

The purchase price per share (the "Purchase Price") at which a share of Common Stock will be sold in any Purchase Period shall be no less than 85 percent of the fair market value of such share on the Purchase Date; provided that the Committee may change the Purchase Price to be anywhere from eighty-five percent (85%) to one hundred percent (100%) of the fair market value of a Share on the Offering Date or the Purchase Date.

For purposes of this Plan, the term "fair market value" on a given date shall be the closing price for the Common Stock on any given date during regular session trading on the New York Stock Exchange, or if not trading on that date, such price on the last preceding date on which the Common Stock was traded. If there is no regular trading market for the Common Stock, the fair market value of the Common Stock shall be as determined by the Committee in its sole discretion, exercised in good faith. The Committee may change the manner in which the Purchase Price is determined with respect to future offerings if such changed manner of computation is announced prior to the first day of the first Offering Period to be affected by such change.

10.	PURCHASE OF SHARES; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF SHARES.

(a) Funds contributed by each participant for the purchase of shares under this Plan shall be accumulated by regular payroll deductions made during each Offering Period, unless payroll deductions are not permitted under local laws as determined by the Committee, in which case the participant may contribute by such other means as specified by the Committee and as part of the non-Code Section 423(b) Plan. The deductions shall be made as a percentage of the participant's Compensation in 1 percent increments comprising not less than 1 percent and not more than 15 percent of Compensation, provided that the Committee may, in its sole discretion, set a lower percentage of Compensation as the maximum allowable deduction. As used herein, except as provided in the following sentence, "Compensation" shall mean all base salary, wages, cash bonuses, commissions, and overtime; provided, however, that, for purposes of determining a participant's Compensation, any election by such participant to reduce his or her regular cash remuneration under Sections 125 or 401(k) of the Code or pursuant to a nonqualified deferred compensation plan shall be treated as if the participant did not make such election. "Compensation" does not include severance pay, hiring and relocation allowances, pay in lieu of vacation, automobile allowances, imputed income arising under any Company group insurance or benefit program, income received in connection with stock options, or any other special items of remuneration including any bonus, commission, or fee which, in the judgment of the Committee, is paid to a participant for the accomplishment of a particular non-ordinary course transaction or circumstance. The Committee shall have the discretion to determine what constitutes Compensation for participants outside the United States. Payroll deductions shall commence on the first payday following the Offering Date and shall continue through the last payday of the Offering Period unless sooner altered or terminated as provided in this Plan.

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(b) A participant may lower (but not increase) the rate of payroll deductions or contribution during an Offering Period by filing with the Local Administrator a new authorization for payroll deductions or other contributions, in which case the new rate shall become effective for the next payroll period commencing more than 15 days after the Local Administrator's receipt of the authorization and shall continue for the remainder of the Offering Period unless changed as described below. Such change in the rate of payroll deductions or contribution may be made at any time during an Offering Period, but not more than one change may be made effective during any Offering Period. Notwithstanding the foregoing, a participant may lower the rate of payroll deductions or contribution to zero for the remainder of the Offering Period. A participant may increase or decrease the rate of payroll deductions or contribution for any subsequent Offering Period by filing with the Local Administrator a new authorization for payroll deductions or other contributions not later than the 15th day of the month (or if such date is not a business day, the immediately preceding business day) before the beginning of such Offering Period. A participant who has decreased the rate of withholding or contribution to zero will be deemed to continue as a participant in the Plan until the participant withdraws from the Plan in accordance with the provisions of Section 13 or his or her participation is terminated in accordance with the provisions of Section 14. A participant shall have the right to withdraw from this Plan in the manner set forth in Section 13 regardless of whether the participant has exercised his or her right to lower the rate at which payroll deductions or contributions are made during the applicable Offering Period.

(c) All payroll deductions made for or contributions received from a participant will be credited to his or her account under this Plan and deposited with the general funds of the Company, except as may be required by applicable law. No interest will accrue on payroll deductions or contributions, except as may be required by applicable law. All payroll deductions or contributions received or held by the Company may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions or contributions, except as may be required by applicable law.

(d) On each Purchase Date, provided that the participant has not terminated employment in accordance with Section 14 or has not submitted to the Local Administrator a signed and completed withdrawal form, in either case on or before the 15th day (or if such day is not a business day, on the immediately preceding business day) of the last month of the Offering Period in accordance with Section 10(b) or Section 13 of this Plan, or the Plan has not been terminated prior to the date referred to in the foregoing clause, the Company shall apply the funds then in the participant's account to the purchase at the Purchase Price of whole and any fractional share of Common Stock issuable under the Option granted to such participant with respect to the Offering Period to the extent that such Option is exercisable on the Purchase Date.

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(e) During a participant's lifetime, such participant's Option to purchase shares hereunder is exercisable only by him or her. The participant will have no interest or voting right in shares covered by his or her Option until such Option has been exercised.

11.	LIMITATIONS ON RIGHTS TO PURCHASE.

(a) No participant shall be entitled to purchase stock under this Plan at a rate which, when aggregated with his or her rights to purchase stock under all other employee stock purchase plans of the Company or any Subsidiary, exceeds $25,000 in fair market value determined as of the Offering Date (or such other limit as may be imposed by the Code) for each calendar year in which the employee participates in this Plan. The Company shall have the authority to take all necessary action, including but not limited to, suspending the payroll deductions of any participant, in order to ensure compliance with this Section.

(b) The number of shares which may be purchased by any employee on the first Purchase Date to occur in any calendar year may not exceed the number of shares determined by dividing $25,000 (or such other limit as may be imposed by the Code) by the fair market value (as defined in Section 9) of a share of Common Stock on the first day of the Offering Period in which such Purchase Date occurs. The number of shares which may be purchased by any employee on any subsequent Purchase Date which occurs in the same calendar year (as that referred to in the preceding sentence) shall not exceed the number of shares determined by performing the calculation described below, with all computations to be made to the nearest ten thousandth of a whole share of Common Stock or one hundredth of one cent, as the case may be.

Step One: The number of shares purchased by the employee during any previous Offering Period which occurred in the same calendar year shall be multiplied by the fair market value (as defined in Section 9) of a share of Common Stock on the first day of such previous Offering Period in which such shares were purchased.

Step Two: The amount determined in Step One shall be subtracted from $25,000.

Step Three: The amount determined in Step Two shall be divided by the fair market value (as defined in Section 9) of a share of Common Stock on the first day of the Offering Period in which the subsequent Purchase Date (for which the maximum number of shares which may be purchased is being determined by this calculation) occurs. The quotient so obtained shall be the maximum number of shares which may be purchased by any employee on such subsequent Purchase Date.

Subject to the limitations of Section 423 of the Code, the Committee may from time to time determine that a lower maximum number of shares may be purchased on any given Purchase Date in lieu of the maximum amounts described above in this Section 11, in which case the number of shares which may be purchased by any employee on such Purchase Date may not exceed such different limitation.

(c) If the number of shares to be purchased on a Purchase Date by all employees participating in this Plan exceeds the number of shares then available for issuance under this Plan, then the Company will make a pro rata allocation of the remaining shares in as uniform a manner as shall be reasonably practicable and as the Committee shall determine to be equitable. In such event, the Company shall give written notice of such reduction of the number of shares to be purchased under a participant's Option to each participant affected thereby.

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(d) Any payroll deductions or contributions accumulated in a participant's account which are not used to purchase stock due to the limitations in this Section 11 shall be returned to the participant as soon as practicable after the end of the applicable Purchase Period without interest, except as otherwise required by local law.

12.	EVIDENCE OF STOCK OWNERSHIP.

Promptly following each Purchase Date, the number of full and fractional shares of Common Stock purchased by each participant shall be deposited into an account established in the participant's name at a stock brokerage or other financial services firm designated or approved by the Committee (the "Plan Financial Agent"). Unless otherwise provided by law, unless a participant elects to sell or gift shares acquired under the Plan, such shares must be retained in an account with the Plan Financial Agent for a period of twenty-one (21) months following the Purchase Date, or some other time period required by the Code or specified by the Committee, even in the event that the participant terminates his or her employment with the Company; provided, however, that if the Option was granted under the non-Code Section 423(b) Plan, the shares of Common Stock acquired under the Option are not subject to such holding period. With respect to full (but not fractional) shares for which the Code Section 423(a) holding period has been satisfied, the participant may move those shares to another account of the participant's choosing or request those shares be transferred to the participant in book entry form through the Company's direct registration system or that a stock certificate for full (but not fractional) shares be issued and delivered to him or her.

13.	WITHDRAWAL.

(a) Each participant may withdraw from an Offering Period under this Plan by signing and delivering to the Local Administrator a written notice to that effect on a form provided for such purpose. Such withdrawal may be elected at any time on or prior to the 15th day of the last month (or if such date is not a business day, the immediately preceding business day) of an Offering Period, provided that a later withdrawal may be permitted by the Committee under the non-Code Section 423(b) Plan, if necessary or advisable under local law.

(b) Upon withdrawal from this Plan, the accumulated payroll deductions or contributions of the participant not theretofore utilized for the purchase of shares of Common Stock on a Purchase Date shall be returned to the withdrawn participant, without interest (except as otherwise required under local laws), and his or her participation in this Plan shall terminate. In the event a participant voluntarily elects to withdraw from this Plan, he or she may not resume his or her participation in this Plan during the same Offering Period, but he or she may participate in any subsequent Offering Period by filing a new authorization for payroll deductions or other contributions in the same manner as set forth above for initial participation in this Plan.

14.	TERMINATION OF EMPLOYMENT; LEAVE OF ABSENCE.

Termination of a participant's employment for any reason, including retirement, death, or the failure of a participant to remain an eligible employee, immediately terminates his or her participation in this Plan. In such event, except as provided in Section 15, the payroll deductions or contributions credited to the participant's account will be returned to him or her or, in the case of his or her death, to his or her beneficiary or heirs, without interest, except as otherwise required under local laws. For purposes of this Section 14, an employee will not be deemed to have terminated employment or failed to remain in the continuous employ of the Company or any of its Subsidiaries in the case of any leave of absence approved by the Committee, provided that (a) such leave does not exceed 3 months, or (b) if such leave is longer than 3 months, the employee's right to reemployment is provided either by statute or by contract. If the period of leave exceeds 3 months and the employee's right to reemployment is not provided either by statute or by contract, the employment relationship is deemed to terminate on the first day immediately following such three-month period. For purposes of this Section 14, an employee will not be deemed to have terminated employment or failed to remain in the continuous employ of the Company or any of its Subsidiaries in the case of transfer between or amongst the Company and any Subsidiary.

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15.	RETURN OF PAYROLL DEDUCTIONS.

In the event a participant's interest in this Plan is terminated by withdrawal, termination of employment, or otherwise, or in the event this Plan is terminated by the Board, the Company shall promptly deliver to the participant all payroll deductions and contributions of the participant to the Plan which have not yet been applied to the purchase of stock unless such termination of participation occurs later than the 15th day of the final month of the Offering Period (or if such date is not a business day, on the preceding business day), or the latest date permitted for withdrawal by the Committee in which event such payroll deductions and contributions will be utilized to purchase Common Stock for the participant. No interest shall accrue on the payroll deductions of a participant in this Plan, except as otherwise required under local laws.

16.	CAPITAL CHANGES.

In the event that at any time or from time to time a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders other than a normal cash dividend, or other change in the Company's corporate or capital structure results in (a) the outstanding shares of Common Stock or any securities exchanged therefor or received in their place being exchanged for a different number or class of securities of the Company or of any other corporation or (b) new, different, or additional securities of the Company or of any other corporation being received by the holders of shares of Common Stock, then the Committee, in its sole discretion, shall make such equitable adjustments as it shall deem appropriate in the circumstances in the maximum number and kind of shares of stock subject to this Plan as set forth in Sections 1 and 2, the number and kind of shares subject to outstanding Options, and the Purchase Price. The determination by the Committee as to the terms of any of the foregoing adjustments shall be conclusive and binding.

17.	NONASSIGNABILITY.

Neither payroll deductions nor other contributions credited to a participant's account nor any rights with regard to the exercise of an Option or to receive shares under this Plan may be assigned, transferred, pledged, or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 24 hereof) by the participant. Any such attempt at assignment, transfer, pledge, or other disposition shall be void and without effect.

18.	REPORTS AND STATUS OF ACCOUNTS.

Individual accounts will be maintained by the Plan Financial Agent for each participant in this Plan. The Plan Financial Agent shall send to each participant promptly after the end of each Purchase Period a report of his or her account setting forth with respect to such Purchase Period the total payroll deductions or other contributions accumulated, the number of whole and any fractional share purchased, and the per share price thereof, and also setting forth the total number of shares (including any fractional share) then held in his or her account. Neither the Company nor any Designated Subsidiary shall have any liability for any error or discrepancy in any such report.

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19.	NO RIGHTS TO CONTINUED EMPLOYMENT; NO IMPLIED RIGHTS.

Neither this Plan nor the grant of any Option hereunder shall confer any right on any employee to remain in the employ of the Company or any Subsidiary or restrict the right of the Company or any Subsidiary to terminate such employee's employment. The grant of any Option hereunder during any Offering Period shall not give a participant any right to similar grants thereafter.

20.	EQUAL RIGHTS AND PRIVILEGES.

All eligible employees shall have equal rights and privileges with respect to the Code Section 423(b) Plan except as required by applicable law so that the Code Section 423(b) Plan qualifies as an "employee stock purchase plan" within the meaning of Section 423 or any successor provision of the Code and the related regulations.

21.

NOTICES.

All notices or other communications by a participant to the Company under or in connection with this Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

22.	AMENDMENT OF PLAN.

This Plan may be amended by the stockholders of the Company. The Board may also amend this Plan in such respects as it shall deem advisable; however, stockholder approval will be required for any amendment that will increase the total number of shares as to which Options may be granted under this Plan, or, but for such shareholder approval, cause the Code Section 423(b) Plan to fail to continue to qualify as an "employee stock purchase plan" under Section 423 of the Code.

23.	TERMINATION OF THE PLAN.

The Company's stockholders or the Board may suspend or terminate this Plan at any time. No Options shall be granted during any period of suspension of this Plan.

24.	DEATH OF PARTICIPANT.

In the event of a participant's death prior to the delivery to him or her (or to the Plan Financial Agent on his or her behalf) of any shares or cash held by the Company for the account of the participant, and to the extent permitted by local law, the Company shall deliver such shares or cash to the executor or administrator of the estate of the participant.

25.	CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.

The Company shall not be required to issues Shares with respect to an Option unless the exercise of such Option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange or automated quotation system upon which the shares may then be listed, and shall be further subject to the approval of the Company with respect to such compliance.

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26.	EFFECTIVE DATE.

The Plan which has been adopted by the Company’s Board of Directors shall become effective on July 1, 2008, subject to stockholder approval.

27.	GOVERNING LAW.

Except to the extent that provisions of this Plan are governed by applicable provisions of the Code or any other substantive provision of federal law, this Plan shall be construed in accordance with, and shall be governed by, the substantive laws of the State of Delaware without regard to any provisions of Delaware law relating to the conflict of laws.

± ± ± ±

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